Crain's Cleveland Business

PANDEMIC PERSEVERANCE Gervasi Vineyard’s revenue evaporated when restaurants closed. We look at how it’s adjusting.

LOOK BACK: Trends come and go, but The Flats keep on rolling. PAGE 19

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CRAINSCLEVELAND.COM I APRIL 6, 2020

COPING WITH COVID-19

FLATTENING THE CURVE WHILE AT WORK

Splitting shifts, removing doors, stocking up on soap: Manufacturers strive to keep workplaces safe

BY RACHEL ABBEY MCCAFFERTY

See WORKING on Page 18

NUTHAWUT SOMSUK/ISTOCK

The idea of work in the age of COVID-19 brings some disparate images to mind.

Office workers holed up at home, juggling teleconference calls and child care. Health care workers on the front lines, serving long, dangerous hours with insufficient protective gear.

But what about everybody else?

In Ohio at least, there are quite a few businesses that fall under the “essential” category that exempts them from the stay-athome part of the stay-at-home order. That includes everyone from manufacturers to construction crews to grocery store clerks. What

should those employers be doing to keep their employees safe?

Manufacturers are one category of companies largely considered essential in Ohio. There are a number of steps companies can take to protect the employees in their plants.

One big thing manufacturers can do to encourage social distancing is to split their shifts, from one into two or three, said Ethan Karp, president and CEO of Magnet, the manufacturing advocacy and growth network. Not only does that decrease the number of employees onsite at any given time, it isolates crews from one another.

ENERGY

REAL ESTATE

Plummeting energy prices bring windfalls, challenges

Pandemic roils the apartment market

Sending workers home spurs spiral in usage

BY DAN SHINGLER

The pandemic crisis is wreaking havoc with energy markets across the nation and in Northeast Ohio, where it’s creating both windfalls and potential losses for businesses, not to mention headaches.

If you buy your power based on the daily rates in the spot market, and can still find a use for it, it’s a good time to purchase power. If

you previously bought ahead to give yourself predictable rates, or hoping to lock in a low price … ouch.

The price of power is as low as many folks have ever seen, including some who have been watching it closely for decades.

And it’s got multiple weights pushing it down possibly further still.

See ENERGY on Page 15

NEWSPAPER

VOL. 41, NO. 13 l COPYRIGHT 2020 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

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Industry looks to adapt to a suddenly uncertain landscape

BY STAN BULLARD

John J. Carney, a principal of downtown Cleveland apartment building owner Landmark Management, said including a short video of one of the company’s four buildings in emails to prospective tenants is suddenly so last year.

Instead, one of the sons of high-profile developer John J. Carney said live video tours are the firm’s newest marketing technique as Landmark and other apartment building owners grapple with homebound prospects

during the pandemic.

“Our leasing staff just started taking people on tours on FaceTime on their iPads,” Carney said, noting that “they thought of it. I didn’t. It wasn’t something we did before this, and I think it will become a standard of the Price industry.”

Welcome to marketing techniques for apartments during the COVID-19 pandemic. Landlords of downtown Cleveland apartments say the fast-growing downtown

apartment market is continuing to garner prospective tenants despite government-mandated steps to slow the virulent disease’s spread.

Doug Price, CEO of Willoughby-based K&D Group, said people moving to Northeast Ohio from out of town for new jobs, assignments or schooling are continuing to search for places to stay.

See APARTMENTS on Page 15

FOCUS | LEGAL AFFAIRS  What the lawyers see: Q&As with six NEO attorneys on the challenges ahead for the legal community. PAGE 8 Protecting vulnerable workers: Psychiatric disabilities in the workplace are commonly misunderstood. PAGE 12

4/3/2020 3:52:38 PM

COPING WITH COVID-19 | HEALTH CARE

Hospitals are prepping for big financial losses in pandemic Ohio health systems could suffer a monthly hit of $1.2 billion during the COVID-19 surge BBY LYDIA COUTRÉ

Although hospitals are preparing to care for a huge number of patients in the anticipated COVID-19 surge, that demand won’t translate to more dollars for health care systems.

As they begin treating these more costly, higher-acuity patients and postpone more profitable elective surgeries, health systems across the country are bracing for significant financial losses.

The Ohio Hospital Association estimates a $1.2 billion negative financial impact to Ohio hospitals every month — a number expected to increase, said OHA spokesman John Palmer. For perspective, the total revenue for Ohio hospitals averages about $48 billion annually.

In addition to the cost implications of shifting away from nonessential surgeries and procedures, hospitals are grappling with increasing prices in the supply chain for the equipment they desperately need to treat COVID-19 patients. Plus, hospitals, like all businesses, are seeing effects

from the volatility of the financial markets.

“The financial implications for a hospital in particular, it’s the worst of all worlds, at least temporarily,” said Mary Ann Freas, chief financial officer for Southwest General.

As the coronavirus outbreak highlights cash-flow constraints, Moody’s in March revised the 2020 outlook for the nonprofit hospital and health care sector from stable to negative, adding that the sector will likely see lower cash flow compared with last year, although it’s too early for specific estimates.

The state and federal governments are working to support hospitals. For instance, Ohio Treasurer Robert Sprague launched the Variable Rate Demand Obligation (VRDO) Stabilization Program, which aims to provide added liquidity and ease the financial pressure hospitals face as they respond to the pandemic.

The $2 trillion coronavirus aid package known as the CARES Act, passed by Congress and signed by President Donald Trump in March, allows hospitals to receive an ad-

vance on expected future Medicare reimbursement and allocates $100 billion to reimburse eligible health care providers for related expenses or lost revenues directly attributable to COVID-19. These and other positive provisions in the act should provide liquidity support, but Moody’s still expects the coronavirus to have a “significant negative impact” on hospitals’ cash flow in 2020.

Freas encouraged hospitals to take advantage of the provisions in the CARES Act, as well as any flexibility they have in their lines of credit with their banking institution or flexibility with pension payments.

“We’re also reaching out to our vendors,” she said. “Will they either let us delay payment or reduce our costs for this period of time? And they’ve been receptive.”

Richard Gundling, senior vice president of health care financial practices for the Healthcare Financial Management Association, recommended hospitals look at their revenue cycles and focus on past services where they’re still owed money so they can

convert receivables into cash to pay employees and buy supplies.

“It’s sort of that block-and-tackling,” he said. “You know, how do I make some of those assets that are owed to me into cash? How do I collect on them now? As any business would do.”

Mike Szubski, University Hospitals’ CFO, said the challenge for UH and many other hospitals and health care systems is the delay in payers reimbursing for services rendered while insurers evaluate claims. The wait is a typical reality for health care providers, but he suggested trying to expedite those payments given the financial pressures hospitals currently face.

He pointed to one payer who reached out with a “creative idea” around potentially advancing periodic payments based on prior volumes.

“Freeing up those monies back to the providers as quickly as possible would be a tremendous benefit, especially in today’s world with health care systems being challenged on available cash and cash flow,” he said.

While all of these approaches will

certainly help, Palmer said many hospitals are going to have to make decisions looking at their largest expenses, which is the labor portion, and overall operations. Some health systems in the state have implemented furloughs for administrative staff, as well as some on the clinical side for those who work in elective or nonessential surgeries and procedures, he said.

Others have shut down administrative buildings to help redirect costs.

“You can cut your labor, you can keep the lights off, but, I mean, at the end of the day under this COVID/ coronavirus, their whole facility is going to have to be dedicated to treating this,” Palmer said. “And so it is going to be very challenging for many hospitals to navigate that.”

Many of Ohio’s 236 hospitals already are economically challenged, operating on tight margins and with limited cash on hand. According to OHA, 68 hospitals in the state have an operating margin below 2%, and 52 are at or below 0% operating margins.

See HOSPITALS on Page 15

PANDEMIC PERSEVERANCE

Gervasi adapts to the ‘new normal’ About 90% of vineyard’s revenue evaporated when restaurant dining rooms were closed. Layoffs of 300 employees followed What was meant to be a 10-year anniversary celebration for Canton’s Gervasi Vineyard will instead go down as one of the toughest times of Scott Swaldo’s career.

Swaldo is Gervasi’s general manager and co-owner of GV Destinations, the Gervasi parent company that also operates the nearby Italian restaurant The Twisted Olive.

With Gov. Mike DeWine ordering restaurant dining rooms to shutter at the close of business March 15 to fight the spread of COVID-19, Swaldo said about 90% of the company’s revenue evaporated. The layoff of 300 of 350 employees quickly followed.

The 55-acre Gervasi estate, which

just last year wrapped up a $10 million-plus expansion that added new luxury hotel suites and a distillery to its already-expansive operation, makes much of its income on weddings and events, several of which have been canceled or postponed for the start of the spring season. The hotel itself is still open, but occupancy took a nosedive even before the stayat-home order issued a week after Ohio’s hospitality industry mostly shut down.

It’s not just due to concerns over personal safety amid the pandemic.

A major draw for hotel guests is the restaurant, which is obviously not open to the public.

“We have a lot of things we produce. All the tours are canceled, all

“I THINK THERE IS THIS PERCEPTION: WHEN THIS IS OVER, THINGS OPEN UP AND EVERYTHING’S BACK TO NORMAL. BUT IT’S GOING TO TAKE MANY, MANY MONTHS TO RECOVER.”

CONTRIBUTED

BBY JEREMY NOBILE

——Scott Swaldo, general manager and co-owner of GV Destinations

the private events we were hosting for guests,” Swaldo said, noting those with weddings scheduled for May are still holding on to their dates for now.

“This is affecting our business in a pretty dramatic way.”

“As experts in real-estate law, we know the value of our

Beachwood address.”

Mayor Martin S. Horwitz •Mayor@BeachwoodOhio.com •216.292.1901

WWW.BEACHWOODOHIO.COM

Like many restaurants and bars, Gervasi and The Twisted Olive pivoted to focus on takeout and delivery options. While providing some income, those simply won’t provide a sustainable stream of revenue, Swaldo said.

That’s why several restaurants that originally offered deliveries and takeout have since stopped. In many ways, Swaldo said, it’s an option to simply keep a core group of staff employed, both for their personal benefit and to have workers in place for when the business can operate more normally.

Even though the hope is to rehire lost staffers in the future, there’s no guarantee those people won’t have taken other jobs. Having adequate staff when business returns to normal — whenever that is — is one of Swaldo’s many concerns.

With no clear evidence on how long the pandemic might last, planning for the future becomes all the more complicated.

Swaldo said the business has always operated “fiscally responsibly” and he’s confident they’ll make it through the pandemic-induced economic downturn with some capital that’s been saved up, absorbing and offsetting the losses already incurred.

He’s hopeful some stimulus money could provide further help.

But what happens when the business officially reopens is a worry he can’t put aside.

“I think there is this perception: When this is over, things open up and everything’s back to normal,” he said.

“But it’s going to take many, many months to recover.”

One factor is whether customers return, not just to Gervasi but to restaurants in general.

“Will the people come back?

When? Will people have money to spend on tourism because they took a personal financial hit?” Swaldo wondered. “Can we build staff back up? Some want to come back now.

But with the extended layoff, we will definitely lose people through that.

“We will have to rebuild staff and adjust to whatever the new business levels are,” he added, “not to mention recover from the financial loss.”

Despite the challenges, the company is trying to make the best of the situation.

Swaldo said there has been an outpouring of support from the community in recent weeks. Tips given by customers during takeout and delivery are being divvied up for impacted employees, many of whom have been provided family meals by the restaurant. And Gervasi’s new craft distillery has been converted to produce hand sanitizer, with the first several batches at least to be donated to local hospital and medical groups.

“The graciousness and support of our staff that got laid off, the staff still here and our loyal fans and community has been really wonderful,” Swaldo said. “We are grateful for that.

“We are trying to transition from crisis management to how we temporarily adapt to our new normal, manage inside of it and keep looking ahead for what might be next,” he added. “We are coming out the other side of this, I’m confident of that. But it will be a process.”

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

2 | CRAIN’S CLEVELAND BUSINESS | April 6, 2020

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COPING WITH COVID-19 | SPORTS BUSINESS

No ‘blueprints to follow’ for massive sports shutdown

Teams must be as nimble as ever in working with fans, while grappling with big revenue drops BBY KEVIN KLEPS

Cleveland’s three major professional sports teams combine to bring in about $1 billion in annual revenues.

So what happens when sports are shut down — likely for at least a few months — because of the COVID-19 pandemic? The implications are almost endless.

A loss of games means teams don’t bring in their typical seven-figure hauls for each scheduled contest, and it leaves networks that pay millions or billions for the broadcast rights with glaring holes in their lineups. The players likely will be forfeiting sizable chunks of their paychecks and, worse yet, the part-time workers who staff the arenas, ballparks and stadiums are out income that in their case often isn’t disposable.

“So often, there are best practices and blueprints to follow,” a team source told Crain’s. “There are none for this.”

The Browns, Cavs and Indians, like all teams, are trying to be as flexible as possible with customers whose lives might have been upended by the pandemic.

The deadline for Browns season-ticket holders to renew their seats for 2020 was March 6, or five days before Utah Jazz center Rudy Gobert’s positive COVID-19 diagnosis sent the sports world reeling and was the catalyst for the NBA suspending its season.

With the majority of their season-ticket holders already having made their renewal decisions before the crisis really hit home for many Americans, the Browns have altered their approach during a period in which fans would ordinarily be given a little more time before they’re officially dropped from the core customer group.

“Although regular payments are scheduled for Wednesday, April 1, we are making several flexible options available to all Season Ticket Members who may need to adjust their plans due to extenuating circumstances surrounding the coronavirus,” David Jenkins, the Browns’ chief operating officer, wrote in a letter to season-ticket holders on March 24.

The majority of the Cavs’ Wine & Gold United members, a group of about 10,000 season-ticket holders, are on monthly payment plans. The club told Crain’s the group had the option of deferring their March payments until the end of April, but most chose to continue on as scheduled.

The Cavs, who had five home games remaining when the NBA suspended its season, are giving customers with single-game seats the option of keeping their tickets in case the contests are played, asking for a refund or receiving a credit for a future game.

The Indians, meanwhile, are “hitting pause” on collecting money from their season-ticket holders (a group of 6,600 accounts and 13,000 full-season equivalents), vice president of sales and service Tim Salcer said.

“We are working closely with the league, and at this time we remain committed to playing as many games as possible,” Salcer added. “We are working on developing a contingency plan in the event any games are canceled.”

The Corner would have been packed for the Cleveland Indians’ regular-season opener on March 26, but the game was postponed because of the COVID-19 crisis. | JOE ROBBINS/GETTY IMAGES

Follow the money A look at the national TV deals for the NFL, NBA and MLB: NFL: The league has nine-year contracts with Fox ($1.1 billion per year), CBS ($1 billion annually) and NBC ($950 million per year) that run through 2022. A deal with ESPN (more than $1 billion per year) expires after the 2021 season. Fox is also paying more than $3 billion for five years (2018-22) of “Thursday Night Football.”

NBA: ESPN and Turner are paying a combined $24 billion for a nine-year deal ($2.67 billion annually) that expires after the 2024-25 season.

The Cavs had played 36 of their 41 scheduled home games when the NBA suspended its season on March 11. | JASON MILLER/GETTY IMAGES

‘So many tentacles’ With Major League Baseball possibly not starting its season until July or later, the better question seems to be: How many games will be canceled for a league that had been scheduled to begin its campaign on March 26?

Patrick Rishe, the director of the sports business program at Washington University in St. Louis, used Team Marketing Report’s Fan Cost Index to calculate how costly cancellations would be to each club.

Multiplying the Indians’ 2019 average attendance of 22,008 by TMR’s estimate of a per-fan spend of $54.91 (which includes an average-priced ticket, plus some food, beverage, merchandise and parking expenses for a group of four), Rishe estimates that each home date could be worth $1.2 million to the Tribe. Twenty lost home games, thus, would result in a $24 million blow, and that’s before broadcast rights, sponsorships and other factors are considered. (It should be pointed out, though, that any loss in games would bring a reduction in payroll.)

The Cavs’ tally, according to Rishe’s formula, is even higher, at $2.1 million per home game. The figure, however, is inflated by a per-fan spending estimate of $119.52 that is based on the team’s 2018-19 ticket prices, before a price drop that followed a 19-win season.

“That’s just one component,” Rishe said of the game-day revenues. “There are so many tentacles to these losses.”

Two of the biggest are revenues tied to ticket sales and broadcast rights.

The Indians, because of timing (with the start of their season being delayed for months) and baseball’s reliance on local revenues, figure to have the most to lose of Cleveland’s big three teams.

In April 2019, Forbes estimated the Tribe’s total revenue at $282 million.

A quarter of that — $69 million — was via projected gate receipts.

Forbes also estimated the Cavs’ ticket revenue at $69 million, which accounted for 23% of the club’s projected total revenue of $300 million.

The Cavs, though, had played 36 of their 41 home games before the NBA

MLB: ESPN ($700 million per year), Fox ($525 million annually) and Turner ($325 million per year) have contracts that run through the 2021 season. A new seven-year deal with Fox ($728.6 million per year) begins in 2022.

SOURCE: MEDIA REPORTS

called a temporary halt to its season.

Forbes projects the Browns’ ticket sales at $53 million, which is a much smaller slice (13%) of an estimated revenue haul of $399 million.

The Browns have the most leeway of the three, thanks to the NFL’s regular season not kicking off until September.

They also get most of their revenue — a whopping $274.3 million in the fiscal year that ended in March 2019, according to the Green Bay Packers’ annual report — from the league’s distribution of national revenues.

‘Everybody is in the same boat’ The bulk of that money is tied to the NFL’s massive broadcast deals. CBS, ESPN, Fox and NBC pay the league about $4.7 billion per year, and the tally soars past $6 billion when the $1.5 billion DirecTV chips in for Sunday Ticket rights are included.

The NBA gets almost $2.7 billion annually from ESPN and Turner, and MLB receives nearly $1.6 billion per year from ESPN, Fox and Turner.

Possibly more significant for the Cavs and Indians are respective deals with the Sinclair-owned Fox Sports Ohio and SportsTime Ohio.

The Cavs receive $35 million to $38 million annually from Fox Sports Ohio, and the deal is slated to run out after the 2020-21 season.

The Indians, who led baseball in average prime-time ratings on STO last season, get more than $40 million per year from the network, via a deal that, according to sources, extends through 2027.

The cancellation of games — the Cavs had 16 contests remaining, and the Indians could lose a lot more — would bring force majeure clauses into play.

The clauses, which address the loss of games because of extraordinary events, are “relatively standard” in broadcasting contracts, said Lee Berke, a sports media consultant who has been involved in many such deals in his career.

The loss of games, the Northeast Ohio native said, can result in “very difficult negotiations” between the team and the network, and the network and the distributors.

The cable, satellite and streaming companies that strike deals with the networks are promised a certain number of games, and would be in line to get money back if a minimum threshold isn’t met, said Patrick Crakes, a former Fox Sports senior vice president who operates his own consulting firm.

“Is everybody going to be whole on this? No,” Crakes said.

Insurance can make up for some of the teams’ broadcast losses, and Berke and Crakes said the deals are so valuable to the three parties — the teams, networks and distributors — that they should be willing to work with each other on potential solutions.

Deals between the networks and the distributors often are in the threeto five-year range, Crakes said, and agreements between the teams and the networks often extend for a decade or more.

“Everybody is in the same boat, and my guess is, given the enormity of the situation that we’re in right now, that everybody will work really hard to make accommodations for everybody else,” Berke said.

Regional sports networks such as FSO and STO are “more exposed” than other broadcast entities, Berke said, because their schedules rely almost entirely on games.

The lucrative TV deals are why the analysts with whom Crain’s spoke believe playing games without fans would, in the words of Matt Balvanz, allow teams to “weather the storm” until some semblance of normalcy returns.

Balvanz, a senior VP of analytics for Navigate Research, also wonders if fans will initially be hesitant to attend games in the early going because of lingering concerns about getting sick.

Rishe, the Washington University professor, agrees.

“Even if they were to play home games, I think you’re going to see attendance declines,” he said of the possibility of baseball teams starting play in two or three months.

Kevin Kleps: kkleps@crain.com, (216) 771-5256, @KevinKleps April 6, 2020 | CRAIN’S CLEVELAND BUSINESS | 3

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When the COVID-19 pandemic forced schools to switch to remote learning, Cuyahoga Community College knew many of its students would struggle to find the tools they needed, said Megan O’Bryan, vice president of development and president of the Tri-C Foundation.

Many students have phones, O’Bryan said, but lack a computer.

That makes taking an online course much more difficult. So the college and the foundation immediately began working with donors and local vendors to get computers into students’ hands. Tri-C organized drivethrough pickups of computers for qualifying students, handing out about 150 in just the first week.

Tri-C isn’t alone in its efforts to support students’ needs beyond the academic during the COVID-19 pandemic. Colleges and universities across the region have stepped up to provide needed technology, small direct grants and other support in recent weeks. For instance, Cleveland State University also has handed out hundreds of computers and Hiram College raised more than $100,000 for a student resource fund.

In recent years, colleges and universities already have put a stronger focus on supporting students holistically, recognizing that challenges outside the classroom extend to performance inside it. State funding for schools is dependent on retention and completion. For many, this is an extension of that work.

At Tri-C, the college has expanded its student emergency fund, making additional appeals to donors as the pandemic has progressed. The fund was established in 2017 to help students meet short-term needs like utilities or groceries.

“We’ve seen those needs drastically increase due to COVID-19, as you can imagine,” O’Bryan said.

Tri-C began expanding the fund on March 23. In the first week and a half, the college awarded 192 grants.

By comparison, in the 2018-19 academic year, Tri-C funded 125 students total.

The University of Akron’s emergency aid program is set up to help students facing some sort of unexpected crisis, like a job loss or a health concern, said ZipAssist director Alison Doehring. The funds granted are to be used for needs ranging from rent assistance to childcare.

Typically, the university hears from a

few students a week, she said. Since the pandemic began, the university has been hearing from a couple students each day.

The applications for funding have helped Akron identify additional areas of need because of COVID-19, Doehring said. The university has seen increased need for its food bank program; while it’s not offering its walk-in program, the university is putting together care packages of food and hygiene items that can be requested online.

The personal connection such funds offer is critical at Baldwin Wallace University in Berea, too. The uni-

“EVEN THOUGH (STUDENTS ARE) NOT ON CAMPUS, WE’RE STILL A COMMUNITY. WE’RE STILL HERE TO SUPPORT THEM.” — Christy Burke Walkuski, director of Baldwin Wallace University’s Brain Center for Community Engagement

versity had started planning an emergency fund for students in the fall, and a donor had already expressed interest, so it was able to ramp up those efforts quickly when COVID-19 began spreading, said Christy Burke Walkuski, director of the university’s Brain Center for Community Engagement.

The university contacts every student who applies, whether or not they qualify for a grant, and shares relevant resources in their community.

“Certainly, the funding is really the foundation here, but I think also, just this personal outreach and letting students know we’re here, we can help them connect them to resources,” Walkuski said. “Even though they’re not on campus, we’re still a community. We’re still here to support them.”

The University of Mount Union in Alliance is considering all of its students vulnerable in light of the pandemic, so it has created a program to connect its undergraduates with a point person at the school. The university already reaches out to students struggling academically after midterms, said Michelle Gaffney, associate dean of students, but it wanted a concentrated way to connect with all its undergraduates during this crisis.

“We just felt like we are not so big that we can’t call every single student and reach out to them and make sure they know that we were concerned for them,” she said. “We know this is a

difficult transition. We’re in it with them. We’re struggling, too.”

The university has about 2,000 undergraduate students; the program was optional for graduate students, Gaffney said. The program is primarily being staffed by the university’s student success and student affairs departments, as well as volunteers from other departments. The aim is to help students solve a variety of problems, from shipping them personal belongings from their dorms to getting them in touch with virtual tutors.

Colleges and universities have also had to consider how to work with students who needed to remain on campus.

About 100 students are still living on Hiram’s campus, said Liz Okuma, the school's vice president and dean of students. Some of the students opted to stay on campus because their permanent homes weren’t going to be conducive to learning, if there were too many other people who would be trying to live and learn and work there. Others wanted to stay on campus because returning home could have meant potentially exposing someone with a health issue to the virus.

Students who are still living on campus are able to pick up to-go containers of hot food at the dining hall, and the college is also providing students with “snack bags,” she said.

“While they’re here, we want to make sure they’re as comfortable as possible,” Okuma said.

Kent State University still has some students — about 60 — staying on its campus, said Lamar Hylton, interim vice president for student affairs. That population includes international students, as well as students without a home to return to. Typically, about 6,000 students live on Kent’s campus.

The university’s response has adapted as the pandemic has grown and changed, Hylton said.

For example, when its students were returning from study-abroad programs in the pandemic’s early days, Kent State paid for furnished apartments and dropped off groceries so students could isolate.

“So we’re really trying to meet the needs of students in the current context of the pandemic and try to be responsive to how the dynamics of where we are in the pandemic are affecting or impacting our students,” Hylton said.

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

4 | CRAIN’S CLEVELAND BUSINESS | APRIL 6, 2020

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Sweeping changes could be lasting for businesses

EDITORIAL

Our health future T

he country’s short-term economic problems are daunting: 6.6 million new unemployment insurance claims reported last week, on top of 3.3 million the prior week, a combination that the Congressional Budget Office projects will produce an unemployment rate of more than 10% (and maybe a lot more) during the second quarter, with GDP declining more than 7%.

Those 6.6 million new claims were about 10 times larger than in any single week during the Great Recession from 2007 to 2009. It’s understandable and appropriate that our focus is on the short term, as with the various stimulus packages passed at the federal level, and Ohio lawmakers moving to open up the state’s $2.7 billion rainy-day fund. Those are the right moves to address an economic challenge that’s bigger than any of us have seen.

While we focus on the near term to prevent an economic calamity, we also should consider long-term goals in Ohio so we’re better prepared for the next crisis.

Let’s focus on one for now. There will be more later, as we make sense of how our current situation is changing our future.

One clear takeaway from Ohio Gov. Mike DeWine’s THOSE 6.6 MILLION NEW daily briefings on the coroCLAIMS WERE ABOUT 10 navirus pandemic is that TIMES LARGER THAN IN Ohio needs to step up the of investing in public ANY SINGLE WEEK DURING pace health. He was quite explicTHE GREAT RECESSION it about it in one briefing, saying, “One of the lessons FROM 2007 TO 2009. from this pandemic ... (is) there’s going to be a consensus. We’ve got to fund consistently year after year public health and do a much better job.”

As the Columbus Dispatch pointed out last week, an analysis from the Health Policy Institute of Ohio shows that health departments in our state receive less funding for emergency preparedness than nearly every other state and Washington, D.C. The state ranks 48th for emergency preparedness dollars per capita, according to the Columbus-based institute. Ohio’s $13-per-person spending is higher only than Arizona ($10), Nevada ($8) and Missouri ($7).

The state Controlling Board last month provided an addi-

tional $15.6 million to the Ohio Department of Health to get supplies to professionals battling the coronavirus. That’s a good start. But in addition to funding public health more vigorously, we also need to change the culture around it, and help people understand that investments in that area raise our living standards and put our economy in a position to grow.

Tom Campanella, an associate professor of health economics at Baldwin Wallace University, told The Dispatch, “The areas that public health focuses on, most people in effect can’t touch or feel. So you don’t have the visibility from that standpoint and consequently, from a political standpoint, it doesn’t get the attention that it needs, which results in a lack of funding.”

That’s a cycle that must be broken. We expect the governor and the Legislature to make it a future priority.

High places T

his isn’t necessarily the time to extol the virtues of politics, but let’s make an exception for the case of DeWine knowing just which buttons to push to do something right for the state and the nation.

The governor went all the way to the top — that is, President Donald Trump — by placing a call to the White House asking for a favor. After the U.S. Food and Drug Administration gave only limited authority for Columbus-based Battelle to deploy its technology to sterilize face masks in bulk so they can be reused by health workers, DeWine criticized the decision as “reckless” — an uncharacteristic display of anger from the governor — and publicly called out the agency. Then, he called Trump, who called FDA commissioner Stephen Hahn, and by the end of the day on Sunday, March 29, Battelle had the broader FDA clearance it needed. Importantly, DeWine knew to criticize the bureaucrats involved in the matter while offering support for the president’s desire to get things done.

Trump subsequently told this story twice to national reporters. It’s a win all around — for health care workers, Battelle and a governor who was able to cut through red tape quickly in another display of decisive leadership.

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

On a bright, sunny Tuesday morning in September 2001, the world turned upside down. Coordinated terrorist attacks on U.S. soil left 2,977 people dead and a nation on edge.

We rallied in the aftermath, but for those not directly impacted by 9/11, the disruption to our daily lives wasn’t profound. We were back to the grind almost Elizabeth immediately. Air travel became more McINTYRE cumbersome. We had a war to worry about. But the day-to-day seemed surprisingly normal.

How we and our families learned, lived, interacted and worked stayed pretty much the same.

The coronavirus pandemic today is far different. As of Thursday, April 2, nearly 92% of the U.S. population was under stay-at-home orders, including in Ohio, where Gov. Mike DeWine extended his statewide order until May 1. That decree, which started on March 23, closes nonessential businesses in the state.

We are hunkered down in our homes, working remotely by day, “Zooming” into meetings and communicating via text and conference call. And by night we entertain ourselves and our families.

When we do go out — and the weather has given us plenty of reason to do that lately — we’re keeping our social distance, even when walking our dogs. Social distance. Think about that. We’d never heard of it a few short weeks ago and now “social distancing” is a well-used verb.

We don’t know how all this will change the way we work and interact, but I am convinced it will change the way we run our businesses, especially white-collar workplaces.

With the services sector now making up roughly 80% of GDP, it’s easy to come to that conclusion. Thanks to technology, almost half of adult employees work outside the workplace at least once a month, according to a Pew Research Center survey in 2014.

Consider that survey was done six years ago. In just the last few weeks, COVID-19 has forced sweeping changes that will be transformational and, for most businesses, lasting. A shock like this forces behavioral changes.

Businesses that were slow to adopt work-from-home policies have been forced to incorporate them literally overnight.

And, in most cases, I’d bet they are finding that working remotely does not grind business to a halt.

Communication among individuals, teams and the entire company continues, thanks to chat and instant messaging tools like Slack and Microsoft Teams. Video conferencing software — think Zoom and Google Hangouts — allows for virtual meetings where screens can be shared and participants can see each other. If anything, I believe we at Crain’s are actually communicating more and better in the past few weeks, and I know that will carry over into the next few years and beyond.

When the stay-at-home orders are relaxed and we can return to work, how many businesses will allow more employees to telecommute regularly? What will change? Fewer in-person meetings? Business travel reductions? Smaller office footprints?

I’ve talked to a number of business leaders in the last week who say they believe their way of doing business will change, long term, for the better because of the adaptations COVID-19 forced.

What do you think? Please let me know how your company is currently adapting during the coronavirus pandemic and what changes you envision when the crisis ends. You can email me at emcintyre@crain.com.

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.

6 | CRAIN’S CLEVELAND BUSINESS | April 6, 2020

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OPINION

IT’S ALL IN THE DELIVERY!

Since 1959

PERSONAL VIEW

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Innovation, empathy are dynamic duo of leadership during crisis

BY MARIANNE CROSLEY

A little over a month ago, the Cleveland Leadership Center hosted its annual Accelerate 2020: Citizens Make Change civic pitch competition. On that evening, very few of us had coronavirus in our vocabulary as we milled with the 700 people gathered to celebrate innovation. It was an evening of high energy and optimism and oddly foreshadowed the critical need for innovation that would consume the lives of our leaders in the days to follow as they grappled with the onslaught of the pandemic.

We are all witnessing that the most effective leaders at this moment are innovating like never before. They are also developing great empathy. This combination of innovation and empathy is the dynamic duo of leadership in the era of coronavirus.

As my organization and so many others adapt to reaching our constituents virtually, we have witnessed a yearning for human connection, a search for comfort that the challenges being faced are universal — an understanding that no one is alone. And we have witnessed so much gratitude for the gift of forced prioritization as we rebalance time with loved ones and the need to problem-solve and be forward thinking in our work.

We continuously hear that this vicious virus exercises no discretion in choosing its prey. As it sickens many, it rocks the worlds of our community’s leaders in every sector. These very people on whom we depend to guide us forward are learning their toughest leadership lessons in the absurd daily experiment of how to battle against a microscopic pathogen. There is no guidebook to be found about how to lead in a pandemic — but I am sure someone will seize the opportunity to write one. Undoubtedly, we will need to apply its lessons again.

We often challenge our leaders to become comfortable operating in the gray. It is hard to imagine anything grayer than our current time. Our leaders are being called upon to find new paths for survival while creating new pathways to success.

It is hard not to be mired in the moment when dealing with revised financial projections, pressing decisions about furloughs and layoffs, and meeting the critical needs faced by clients and constituents. It is hard to be strategic when the landscape is constantly shifting. But

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the call is not to simply manage in the moment. The call is to vision beyond it. To do so requires that combination of innovation and empathy.

Leaders that are plowing the path forward are doing so with empathy and innovation. They are reinventing their business models and adapting their leadership styles.

Crosley is They are sensitive to their teams, president and stakeholders and the larger commuCEO of nity and are trying to find ways to Cleveland support all of these individuals.

Leadership They are thinking of their communiCenter. ties first and themselves last.

We are hearing inspiring reports of leaders acting with empathy to make a difference, to offer hope to others. A retired nonprofit leader ordered pizzas from Ohio City Pizzeria, a social enterprise of the West Side Catholic Center, and delivered them to every hub of the health care provider Neighborhood Family Service Centers. A board chair picked up dinners from EDWIN’S, another social enterprise, for her nonprofit’s leadership team and invited board members to park outside the homes during delivery and honk to applaud the team’s efforts to keep the arts organization afloat.

A CLC alum is leading a fundraising campaign to pay for carryout from local restaurants to serve first responders and the families of frontline health care workers; another is donating to nonprofits money saved from gas, parking, lunches and coffees.

Across our community, individuals are answering the Greater Cleveland Food Bank’s call to distribute food and the call of the American Red Cross to donate blood.

Inspiring stories abound, and they invite us to write our own story of how we make a difference.

There is no doubt that this savage microbe will inflict great suffering. Yet we can take some solace in the fact that every crisis in history was time-limited: Crises do not endure forever. This crisis is no different. Every crisis has an uncertain outcome. This crisis is no different.

As one seasoned leader told me, to lead to tomorrow, we must conquer the fear of uncertainty we experience today. That demands an innovative mind and an empathetic heart.

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We all can agree it is important to get the country back to business, as President Donald Trump has said.

First and foremost, we must take seriously as our civic duty the preventive measures that have become as familiar as household words. I have faith in the advice of officials such as Dr. Anthony Fauci and Dr. Francis Collins at the National Institutes of Health.

The $2 trillion COVID-19 relief bill is a step in the right direction. On the surface, it seems to take care of small businesses and working families; however, in providing support, the Treasury should focus on making loans and structuring them appropriately.

Congress and the Trump administration have a generational opportunity to save our economy if we can learn from TARP and other past mistakes and focus first on aiding not just the biggest companies and second on making the right kinds of loans to businesses. Since nobody has a crystal ball, what is being included in legislation doesn’t factor in how long the economic downturn from this crisis will last. Yet, in lending, duration has significant meaning.

In lending, terms such as maturity and interest rates are clearly established. It would be impossible to equitably and efficiently set those terms across all the industries affected by COVID-19. Industries are likely to vary

in the speed and scale of their recovery. Therefore, the most easily measured, yet fair, metric for setting repayment terms and interest rates would be revenue-based, an effective approach that may be novel for government but is time-tested in the private sector.

Revenue-based loans most often Rosen is co-CEO are used to provide funding in exchange for receiving payments in of Resilience Capital Partners the form of a set percentage of revenues. Doing so ensures that a strugin Beachwood. gling company isn’t starved by being forced to use needed cash to pay back loans. Instead, the loans continue until the capital provided, plus an agreed-to percentage, is repaid, typically within five years.

Such an approach would work for both large and small businesses recovering from the COVID-19 crisis.

It would give them time to recover, avoid choking them off while they still are recovering and ensure that everyone’s interests are aligned. It’s a smart approach to use during our recovery from the COVID-19 pandemic.

Congress should give the administration the flexibility to use such common-sense approaches to get the country back to business.

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LEGAL AFFAIRS

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Crain’s asked a number of regional law firm leaders to weigh in on a legal industry survey intended to collect a range of perspectives on how firms are viewing some of the top trends and challenges their businesses face today.

We invited a variety of Northeast Ohio lawyers to participate who were recently installed in positions such as managing partner, partner-in-charge and similar roles, and came out with a group of six who agreed to share their insights.

Each individual was asked the same five questions, ranging from their plans for growth and the headwinds to it to how the COVID-19 outbreak could impact revenues. A sixth, optional question was framed as a “respondent’s choice,” which this allowed the survey-taker to “ask” themselves a question on something they wanted to speak to further.

What follows here is a sample of the full survey, which you can find in its entirety for each respondent at crainscleveland.com. — Jeremy Nobile

THE RESPONDENTS BROUSE McDOWELL  Daniel Glessner, managing partner PAGE 9

OGLETREE, DEAKINS, NASH, SMOAK & STEWART  Bruce Hearey, Cleveland managing shareholder PAGE 9

SCHNEIDER SMELTZ SPIETH BELL  David Lenz, managing partner PAGE 10

WESTON HURD  Daniel Richards, managing partner PAGE 10

SINGERMAN, MILLS, DESBERG & KAUNTZ CO.  Ronald Teplitzky, president PAGE 12

HAHN LOESER & PARKS  Craig Owen White, Cleveland partner-in-charge PAGE 12

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COVID-19? REVENUES? DIVERSITY? WE ASKED AREA LAW FIRMS FOR THEIR VIEW OF INDUSTRY CHALLENGES

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Sec ma adv

FOCUS | LEGAL AFFAIRS

nly

BROUSE McDOWELL

OGLETREE, DEAKINS, NASH, SMOAK & STEWART

Daniel Glessner, managing partner

Bruce Hearey, Cleveland managing shareholder

 What do you see as the greatest headwind or challenge to growing firm revenue today?

As our client base grows and client needs evolve, we continue to seek additional talent to enhance our client offerings. It is our top priority to remain at the forefront of regulatory and legal developments and to keep pace with the ever-changing, diverse legal Glessner needs of our clients. Therefore, finding appropriate candidates to complement our existing service offerings will continue to be a key challenge in 2020. Further to this, the residual effects of the coronavirus will likely present challenges as we continue to help clients navigate these unchartered waters and get back to business as usual.

 What do you see as the greatest headwind or challenge to growing firm revenue today?

Obviously, I have to point to an increasing competition for our services. Firms are consolidating, other firms are seeking talent and in-house legal departments are looking to handle more work on their own. All of this accentuates Hearey the need for us to maximize our strengths: providing wide-ranging expertise at a tremendous value.

 How is the COVID-19 pandemic impacting your finances or billable hours?

We will all likely feel the financial impact of this pandemic for months to come, so this is a critical time for us to come together to support each other. We are focused right now on helping clients navigate the business implications of this pandemic. While we anticipate new legal work related to coronavirus-related issues, we will likely see a shift away from some other matters as clients reprioritize their legal needs in the interim.

This will inevitably impact billable hours, which we are prepared to deal with. What do you think will be an emerging trend in the legal services business this year and why?

With new regulations across a number of industries, including technology, health care and energy, to name a few, clients are primarily turning to outside counsel to help navigate their most complex, high-risk matters. This includes advice in specialty areas such as cybersecurity, environmental law, and health care regulatory and compliance, bond insurance and now, advice related to the implications of the evolving COVID19. In particular, we anticipate an emergence of

insurance coverage claims and thorough policy reviews to counteract business loss as a result of this pandemic.  Like the profession overall, the regional legal market continues to struggle with diverse representation. What’s something you’re doing to improve diversity and inclusion in your firm or office?

Brouse places great emphasis on its strong culture, continually evolving to meet the needs of the communities and clients we serve. We formed a Diversity and Inclusion Committee that focuses efforts on recruiting, retaining, promoting a diverse population and staffing matters with talented, diverse teams. Women make up 35% of the firm’s partners, 50% of our executive committee and 50% of our administrative leadership team. We encourage our attorneys and professional staff to join and develop diversity programs that represent the distinct makeup of the firm, and we’re proud to advance and sponsor numerous organizations and events that promote diversity.  What would you say is one upside and one downside for lawyers/firms based in the Northeast Ohio region? In other words, what about being in this market helps or hurts you?

As a 100-year-old law firm based in the region, we have developed long-standing client relationships and community ties. Clients have gotten to know us personally over many years, giving them the confidence that we are responsive to their needs and well-informed about region-specific issues that affect their businesses. We have attorneys dedicated to industries highly concentrated in the region, including manufacturing, technology, oil/ gas, real estate and health care, and are close to issues affecting these industries. While we advise clients nationally, we do not have a physical office presence outside of the northern Ohio region, which could deter potential clients.

 How is the COVID-19 pandemic impacting your finances or billable hours?

It is too early to tell the overall impact. Certainly, as a labor and employment firm, we have been very active of late in counseling and answering many serious questions employers have for now and going forward. Whether this activity continues, it is hard to say. But with many state and federal courts and agencies bringing a halt to their matters, the litigation part of our services may understandably slow down for the next several weeks.  What do you think will be an emerging trend in the legal services business this year and why?

For sure, alternative legal service providers present a big challenge, coupled with the increasing role that technology and artificial intelligence play. All of these continue to be a pressing force on the traditional law firm model.

These forces have impacted the legal market for years, and each year they become more sophisticated.  Like the profession overall, the regional legal market continues to struggle with diverse representation. What’s something you’re doing to improve diversity and inclusion in your firm or office?

Our diversity specialist — a full-time dedicated professional — helps to leverage industry research and data to sustain the strong business case for diversity and inclusion.

Areas of data collection include hiring/attrition data, promotion statistics, RFP/RFI/pitch team metrics, programming evaluations and national benchmarking to compare our metrics to national averages.

Additionally, infrastructure, to include a firmwide diversity and inclusion steering committee and office ambassadors in each of our 53 offices, was developed to support all these initiatives and to help facilitate inclusiveness and belonging.  What would you say is one upside and one downside for lawyers/firms based in the Northeast Ohio region? In other words, what about being in this market helps or hurts you?

One upside is a terrific legal market, with several if not many global and local firms spurring each other on to offer greater and deeper expertise at significant value. As for a downside, our air travel services, the ability to get to many places we need to be quickly and affordably, is an increasing problem.  [RESPONDENT’S CHOICE] Anything else to add about the Northeast Ohio legal market?

The quality and professionalism of lawyers in Cleveland is truly impressive, and the role legal services plays in the city’s economy and the robustness of downtown cannot be overstated. Decades ago, law firms in the U.S. fled certain downtown areas. Thankfully, that never happened in Cleveland. Almost all of the significant area firms are still based downtown and the legal sector should receive credit for that.

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 What do you see as the greatest headwind or challenge to develop new or increase current growing firm revenue today?

Our firm has a 150-year history of choosing to remain relatively small by number of attorneys, but we have always sought to grow our own talent and client base. In Cleveland’s legal market, there are plenty of attorneys capable of doing excellent work, so client experience is the key differentiator.

As we develop our skills to meet emerging legal Lenz challenges faced by businesses, nonprofits and individuals in the northeastern Ohio marketplace, our top challenge and priority must be continuing to adapt our firm’s strong legacy of personal client service to the needs and expectations of a new generation of clients.

 Like the profession overall, the regional legal market continues to struggle with diverse representation. What’s something you’re doing to improve diversity and inclusion in your firm or office?

Cleveland is a tremendously diverse community, and reflecting that diversity is both good for our firm’s long-term health and the right thing to do. Every time we hire, we want someone who will be part of the firm’s growth for the next 20-50 years, so we have to keep diversity in mind. We have made progress in this area, but still have room to improve. We have striven to be inclusive through raising young attorneys to full partner quickly and adding an executive committee in support of our managing partner to ensure more voices and perspectives are heard.

 How is the COVID-19 pandemic impacting your finances or billable hours?

The simple answer is that it’s too early to tell. We have been pleased with how seamlessly we have been able to shift to remote operations while maintaining service levels that our clients expect from our attorneys. Many of our attorneys are trusted planning advisers to business owners and families, and the extreme circumstances of local and global markets and risks to personal health have driven increased demand for our services. Recognizing that cash flow and payment arrangements for some clients may evolve to accommodate their realities, we are optimistic we will be able to sustain solid financial performance.

 What would you say is one advantage or disadvantage to being based in Northeast Ohio?

A primary advantage of being in northeastern Ohio is that Cleveland enjoys a great legal market with strong attorneys who are collegial and supportive of our city. Northeastern Ohio’s fine higher-education institutions continue to feed talent into our legal and business community. However, our greatest disadvantage is that we still are not seeing as much growth in the market as we would like. Decline in population in northeastern Ohio makes competition for clients more strenuous and could lead to a downward cycle for our local economy where businesses leave and we are unable to attract new investment here.

 What do you think will be an emerging trend in the legal services business this year and why?

Firms have been moving toward facilitating telecommuting, videoconferencing, and cloud-based secure file management in various speeds in recent years. COVID-19 has revealed the need for these options immediately and whether firms were ready with them. As each firm lives through and emerges from the COVID-19 crisis, reflection on and investment in technology use will be a major theme in 2020. Clients may come to view videoconference as a new normal, reducing the costs and delays of travel for in-person meetings, and longerterm law firms may be re-evaluating their need for and use of office space.

 [RESPONDENT’S CHOICE] What else have you learned managing through the COVID-19 crisis?

We have learned the importance of community. While being physically separated, I have found it crucial to keep our whole team connected through near-daily communications, both to ensure that remote workflow is smooth and to minimize anxiety about the financial future amid great personal and economic uncertainty. As we stay connected to each other, we also reach out. We have long emphasized community volunteerism by our attorneys, and the nonprofit sector is seeing huge strains right now. As counsel, board members and volunteers, we are looking to help Cleveland and its institutions get through this and bounce back even stronger.

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 What do you see as the greatest headwind or challenge to growing firm revenue today?

Staying safe, operational and productive during the COVID-19 crisis has quickly become the greatest challenge for firms. Aside from the issues related to the pandemic, firms need to be efficient and need to become specialists in their fields of practice. Forming and building client relationships has also become more challenging. When I started practicing law, most clients were within a Richards 30-minute drive. Today, many clients are spread out all over the country. As such, attorneys need to get on an airplane to visit clients and to attend panel counsel meetings and trade-group functions to get to know and stay relevant to the people who are responsible for hiring attorneys and law firms.  How is the COVID-19 pandemic impacting your finances or billable hours?

I formed a task force early on to get Weston Hurd ready.

Thanks to the dedication and outstanding teamwork of our attorneys and staff, we are fully operational in a mostly remote environment. Our attorneys have been keeping in constant contact with clients, staff and each other. Thus far, we have been very busy with our normal work as well as with legal issues related to the crisis. I have been communicating with managing partners around the area and around the country. Most are anticipating a downturn in revenue. We are doing what we can to minimize the impact. We are closely monitoring the situation and as time progresses, we will adjust as needed.

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 What do you think will be an emerging trend in the legal services business this year and why?

COVID-19 is a game-changer. Out of necessity, the entire legal industry is becoming much more comfortable with remote operation and videoconferencing for client meetings, depositions and court appearances. Overhead management is a huge part of law firm success. I think that the steps which

law firms are taking now to work through the difficulties caused by COVID-19 will result in a new normal in which we look differently at office space needs, travel and use of technology.  Like the profession overall, the regional legal market continues to struggle with diverse representation. What’s something you’re doing to improve diversity and inclusion in your firm or office?

Diversity and inclusion is in our DNA at Weston Hurd. We are proud of the fact that we had one of the first female managing partners of any Northeast Ohio law firm. We have a diversity and inclusion committee and we have increased our recruiting efforts with an emphasis on talent and inclusion. We spent a good deal of time over the past year on long-term planning and we are committed to continuously improving our diversity and inclusion as part of our strategic plan.  What would you say is one upside and one downside for lawyers/firms based in the Northeast Ohio region? In other words, what about being in this market helps or hurts you?

Northeast Ohio is one of the nation’s top legal markets. We have a solid business community and it is a great place to live and raise a family. Weston Hurd opened our first office in the Terminal Tower in 1925, where we remained until 2006. We have been in Erieview Tower since, but we are on the verge of moving our Cleveland operation to a great new downtown location which will be announced shortly. We have a thriving office in Columbus, but we do not have offices outside of the state. As such, we are 100% focused on being a go-to Ohio firm for our nationwide client base. Our firm has made it through the Great Depression, World War II, the 1970s energy crisis, 9/11, the Great Recession and now the COVID-19 crisis by serving the needs of this market. We don’t spend much time focusing on the downsides. Instead, we focus on ways to adjust to remain successful in the place we all call home.

10 | CRAIN’S CLEVELAND BUSINESS | APRIL 6, 2020

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© 2020 Fifth Third Bank, National Association. Member FDIC. Images courtesy of the Fifth Third Bank Museum Archives and Cincinnati Museum Center.

FOCUS | LEGAL AFFAIRS SINGERMAN, MILLS, DESBERG & KAUNTZ CO.

Ronald Teplitzky, president As a firm, we know that we want to look more like ``What do you see as the greatest headwind or America than we do today We plan to redouble our challenge to growing firm revenue today? efforts to become more diverse and inclusive. Clients The uncertainty of the U.S. (and Northeast Ohio) are demanding that and, by the way, it is also the economy will be the greatest challenge. The right thing to do. We want to grow our female and impact of the COVID-19 outbreak is undeniable. minority associate attorney and partner ranks to meet The real question will be how quickly the economy the needs of our firm moving into the future. Small to will bounce back. I also wonder what the “new midsize firms have long struggled with diversity and normal” will look like as the economy recovers. Will inclusion. It is now time to “get it right.” working remotely become the new standard? Will Zoom videoconferences “replace” travel for faceTeplitzky ``What would you say is one upside and one to-face meetings? I think that we will all be better downside for lawyers/firms based in the Northeast Ohio on the other side of the crisis, but time will tell as to how region? In other words, what about being in this market business and the legal market will change. helps or hurts you?

One upside would be the terrific law schools in Cleveland ``How is the COVID-19 pandemic impacting your and in Ohio. The talent pool for newly minted lawyers is finances or billable hours? outstanding. In addition, many of these new lawyers want Like all well-run businesses, I think that law firms should to stay in our region. Cleveland is “cool” again. People want be focused on conserving cash and protecting borrowing to live and work here. Another upside is the affordability of availability on their available lines of credit. No one knows how living in Northeast Ohio, which allows us to keep our rates long the pandemic will last, and preparing, conservatively, for for legal services lower than other larger, more expensive a longer disruption makes a lot of sense. If we all come out marketplaces. One downside of our region has been the of this sooner, all the better. My advice would be to prepare recent consolidation of a number of small to midsized firms for the worst but hope for the best. As for legal work, we into larger firms — although I am sure this is not unique to are blessed to be in a service business, and we believe that the Northeast Ohio region. As the first generation of lawyers our legal services will be needed as business gets back up at smaller firms age, those firms struggle to transition to the and running. Forbearance agreements, lease amendments, next generation and often make the choice to join larger litigation and estate planning would appear to be the areas firms. This consolidation means that there are now fewer that will be very active. boutique firms in the local marketplace from which to choose. ``What do you think will be an emerging trend in the legal services business this year and why? ``[RESPONDENT’S CHOICE] What do you think the legal I think that estate planning will be a huge growth area in market in Northeast Ohio will look like as we come out of the next few years. I read that (prior to the outbreak) 10,000 the COVID-19 disruption?

Americans were retiring every day. Many people have put off I think that business in general, and the legal market in estate planning (and retirement planning) and the current particular, will be up for the challenge. My belief is that the crisis is likely to refocus them. There are clearly not enough downturn came so quickly, and the turnaround will also estate planning lawyers practicing to meet these increased come very quickly. The court systems will likely be backed needs. Firms will need to embrace technology to meet the up for some time to come, but they will adapt. Transactions huge need. I would also suspect that estate planning lawyers may struggle initially, but they will return soon. We will will be in high demand as we move past the outbreak. all have learned a lot in this crisis. While it is hard to see past the current suffering that individuals and businesses ``Like the profession overall, the regional legal market are enduring, America (and Northeast Ohio) have shown continues to struggle with diverse representation. resilience time and time again. I have no doubt that we will What’s something you’re doing to improve diversity and all step up (and step forward) into the post-coronavirus era. inclusion in your firm or office?

HAHN LOESER & PARKS

Craig Owen White, Cleveland partner-in-charge ``What do you see as the greatest headwind or challenge to growing firm revenue today?

Law firms have to stay relevant and responsive to the needs of their clients. This global pandemic adds a layer of complexity to the delivery of legal services. Law firms must ensure the health and safety of their personnel and clients while merging traditional operating methodologies with technology and remote operating formats.

The COVID-19 pandemic is reshaping our society White as well as our business models and procedures.

Law firms have to keep an eye on their own cash flow and bottom lines, yet be sensitive and responsive to the pressures imposed upon their clients. ``How is the COVID-19 pandemic impacting your finances or billable hours?

Whatever the circumstances, we assist our clients in meeting the complex issues of the times. The COVID-19 pandemic is no exception. Our primary focus and concern is serving our clients’ needs while preserving a healthy work environment for our professionals and staff. Law firms are an essential service, yet we respect the recommendations of our public leaders and health officials and, accordingly, our teams have transitioned to working remotely. Our billings and finances remain strong and we are confident that the relationships with our clients that have sustained us for over 100 years will endure. ``What do you think will be an emerging trend in the legal services business this year and why?

A re-emphasis on professionalism, given that law firms exist to serve their clients’ needs. They will become more innovative, more proactive and efficient in delivering basic services at competitive prices, providing valueadded services and support to meet their clients’ evolving challenges and concerns, like data privacy and security.

Law firms that respond to their clients’ needs and invest in technology and processes that align and seamlessly interface

their operations with those of their clients will be at a competitive advantage. Look for more AI, computer learning and secondments to tie law firms together with their clients. ``Like the profession overall, the regional legal market continues to struggle with diverse representation. What’s something you’re doing to improve diversity and inclusion in your firm or office?

Diversity is in our DNA. Hahn Loeser was founded in 1920 as a home for lawyers precluded from practicing at Cleveland’s more established law firms because of their religion. A century later, our culture embraces diversity and inclusion, which we strive to reflect in our hiring practices, professional development and client services. Our clients also are increasingly diverse as we serve clients across the nation and around the world. As we continue our commitment to these core values, we are expanding our Diversity and Inclusion Committee and our Women’s Leadership Initiative to promote inclusiveness within our firm, the legal profession and our society. ``What would you say is one upside and one downside for lawyers/firms based in the Northeast Ohio region? In other words, what about being in this market helps or hurts you?

One downside is perception. Northeast Ohio is perceived by outsiders as neither competitive nor on the cutting edge of innovation. We know better. The major upside for area law firms is that Cleveland’s legal community is still one of the best and dynamic in our country, offering young lawyers unparalleled training and experience. That experience and training, combined with our firm’s deep roots with area businesses, civic groups, communities and governments, is part of the secret sauce to our success. And it underscores our commitment to Cleveland. We are proud to be one of fewer than 200 century-old-businesses in Northeast Ohio.

How to protect workers with mental health issues BBY DOUGLAS J. GUTH

About one in four adults experiences some form of mental health impairment, defined by the National Alliance of Mental Illness as “a medical condition that disrupts a person’s thinking, feeling, mood, ability to relate to others and daily functioning.” Though a stock definition may provide some clarity, psychiatric disabilities in the workplace are both very common and frequently misunderstood.

The Americans with Disabilities Act (ADA) — a civil rights law that prohibits discrimination against individuals with disabilities, whether physical or mental — offers applicants and employees with mental health issues two main rights: a right to privacy and a right to a job accommodation unless this causes the employer undue hardship.

Nor can workers be obligated to disclose a psychiatric disability unless they request a job accommodation. For a position requiring a medical exam, the offer can only be withdrawn if a candidate can’t perform their essential functions without an accommodation or their disability poses a safety issues.

“A person can be mentally ill and it doesn’t rise to the level of disability,” noted Bonnie Kristan, office managing shareholder at Littler Mendelson.

“Their symptoms are under control and it’s not affecting their work. The law looks at if you’re impaired in a major life activity.”

The terms “psychiatric disability” and “mental illness” are used interchangeably. Mental illness is usually considered in a medical context, while psychiatric disability is more common in legal or policy terms to refer to impairments covered by ADA guidelines. Anxiety disorder, depression, bipolar disorder and schizophrenia are just a few examples of psychiatric diagnoses protected by the disabilities act.

Mental health conditions vary, even as the stigma facing this population can affect their employment prospects.

Individuals with these disabilities are frequently deemed unfit — or even dangerous — for work, despite the vast majority getting better thanks to improved treatments and services.

“There’s a stigma against treatment, so people don’t go,” said Kristan. “With physical disabilities, they’re more readily apparent or objective. But if someone says, ‘I can’t get up in the morning,’ employers aren’t going to see that.”

Engaging in best practices Mental illness is often colloquially termed as an “invisible disability” despite the profound effect it can have on an individual’s day-to-day life. Someone with a mental health issue may appear perfectly fit, but experience interpersonal conflicts with a supervisor or have chronic tardiness problems.

The ADA classifies disability as “a physical or mental impairment that substantially limits one or more major life activities.” Job applicants or employees in this criteria have workplace rights, a definition broadened by the ADA Amendments Act of 2008, which placed a spectrum of psychiatric disabilities under the larger disability umbrella.

“To qualify, a mental disability will impact someone’s ability to sleep, think

Kristan

Turocy

critically or control their emotions or behaviors,” said Mary Turocy, director of public affairs and civic engagement with the Ohio Civil Rights Commission, a state agency that investigates charges of discrimination in employment and other areas of public life.

“We tend to see a lot more where there’s a perceived disability under the ADA,” she added. “Someone can have anxiety and depression that doesn’t majorly impact their life, but there’s people in their workplace calling them crazy. The perception that mental illness is a disability can be discriminatory even if that person doesn’t have a diagnosed disability.”

In the case of a job accommodation, a health provider — never the employer — must determine whether a worker has a disability. A company has to engage in what’s called an “interactive process” with a hire when an accommodation is requested or when the employer reasonably knew the employee was disabled and an accommodation necessary. Generally, the interactive process is triggered by an employee, who will then suggest an appropriate accommodation. If the reason for accommodation is not obviously visible, as part of the interactive process an employer may request that a health provider verify the need for accommodation.

According to the ADA, accommodations change the work environment, enabling a disabled individual to work.

The Job Accommodation Network lists dozens of accommodation ideas, from noise-canceling headsets for improved attentiveness, to ergonomic equipment for those with cumulative trauma disorders. Someone managing treatment may be allowed a flexible appointment schedule or frequent breaks to take needed medication.

The connection between disability and accommodation must be clear, though no two scenarios are alike, noted Turocy: The commission might find probable cause if a paper supply company bars a veteran’s emotional support animal, while a restaurant worker requesting that accommodation may encounter a rockier path to an agreement.

“The accommodations we get are mostly cognitive, like a person needing a darker room because they don’t like bright lights,” Turocy said. “Employers can get in trouble if they think it’s something an employee wants, not needs, and act on that reluctance. Figuring that out is the job of a medical professional.”

Kristan said it’s an employer’s duty to keep an open mind throughout the accommodation process.

“Don’t make assumptions or have preconceived notions on how a diagnosis does or doesn’t effect someone,” she said. “You don’t have to give an employee everything they ask for, but you should listen to them in good faith.”

Contact Douglas J. Guth: clbfreelancer@crain.com

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FOCUS | LEGAL AFFAIRS | ADVISER

401(k) plans aren’t immune to COVID-19 BBY JULIA ANN LOVE, EDWARD REDDER AND LEAH MORGAN SINGLETON

President Donald Trump signed the CARES Act, a $2 trillion rescue package to provide economic relief amid the COVID-19 outbreak, on March 27. Republicans and Democrats united to greenlight the nation’s largest-ever economic relief plan. | JIM WATSON/AFP VIA GETTY IMAGES

Pandemic throws companies into alphabet soup of employment laws BBY ANN-MARIE AHERN

of employees who are laid off.

This is no easy time to be an emSo, for employer. Over the course of just a few ployers contemdays, businesses that may have plating layoffs, it is critical to fully been previously thriving have been jarred by mandated closures, supassess the CARES Act to determine ply-chain challenges and the pros- Ahern leads the pect of a steep decline in revenue employment law whether a layoff would truly reforecasts. Many employers sudden- practice group ly find themselves contemplating at McCarthy, sult in cost savlayoffs that, just weeks ago, were not Lebit, Crystal & ings in light of Liffman. how such a decieven a remote possibility.

Under the best of circumstances, sion could imnavigating layoffs is complex, given pact the small-​ the myriad state and federal statutes business loan forgiveness. governing employment law, each Another newly enacted law that seemingly with its own non-self-ex- should be considered in any deciplanatory acronym. In the current sion-making is the Families First environment, especially with new Coronavirus Response Act and its laws being pushed through to extension of the Family Medical quickly respond to the pandemic, it Leave Act (FMLA), which provides is critical to consider all of the laws protected leave for employees who governing the workplace before are directly or indirectly affected by making any decisions. the virus. Layoff decisions cannot Indeed, in an effort to curtail be based on absence from the workmass layoffs (beyond the millions of place due to a qualifying circumunemployment filings we've already stance, such as the employee’s own seen), The House and Senate COVID-19 illness, his or her abpassed, and President Donald sence to support a family member Trump signed into law, the $2 tril- who has the virus, or to care for a lion Coronavirus Aid, Relief and child whose school or daycare is Economic Security Act (CARES closed due to the virus.

Beyond understanding the FOR EMPLOYERS CONTEMPLATING LAYOFFS, new laws passed IT IS CRITICAL TO FULLY ASSESS THE CARES ACT in response to TO DETERMINE WHETHER A LAYOFF WOULD the pandemic, employers TRULY RESULT IN COST SAVINGS IN LIGHT OF should carefully HOW SUCH A DECISION COULD IMPACT THE consider any emSMALL-BUSINESS LOAN FORGIVENESS. ployment decision against the Act). Unprecedented and the largest backdrop of existing laws governing government relief act in history, the the workplace. Below is a list of the CARES Act, among other things, laws most likely implicated by the make a small business loan avail- current employment environment. able to employers of fewer than 500 employees for the purposes of ``Fair Labor Standards Act (FLSA) maintaining payroll and paying cer- governs pay practices for exempt tain other debts and expenses. Im- and nonexempt employees. There portantly, the law contains a provi- are many aspects of this law that sion for some of the loaned funds to may apply. Any decision not to pay a be completely or partially forgiven, salaried, exempt employee must be depending, in part, on the number viewed against this backdrop to

avoid losing exempt status. Similarly, for a nonexempt employee, any decrease in pay for hours already worked would constitute a wage and hour violation. ``Americans with Disabilities Act (ADA) requires employers to make a reasonable accommodation for an employee with a disability. Employers that are maintaining operations as an “essential business” should be mindful to recognize requests for accommodations. Employees who request to be excused from work due to a medical condition that renders them immuno-compromised are likely covered under the ADA. Similarly, in response to an employee who shares that coming to work under these circumstances would exacerbate a pre-existing mental health condition such as anxiety, an employer should engage in an interactive process to determine what accommodations can be made. `Occupational ` Safety and Health Act (OSHA) protects employees who refuse to come to work due to a reasonable expectation that doing so will cause serious physical harm or death due to an imminent threat. These employees may legally refuse work. ``ADEA, Title VII and ORC 4112 prohibit decisions to lay off based on age, sex, race or any other protected category. ``Worker Adjustment and Retraining Notification Act (the WARN Act) requires employers over a certain size to give employees advance notice of the possibility of a mass layoff.

As employers face challenging decisions in the weeks and months to come, they should be mindful of the wide array of potential areas to misstep. It is critical to be up to the minute on the current state of the law and to broadly consider all employment law statutes as difficult employment decisions are implemented.

COVID-19 has wreaked havoc on the economy and financial markets, creating unprecedented financial burdens for employers and their employees. Many employers face difficult decisions to remain viable, including reducing work schedules and furloughing or terminating employees.

Those employees, in turn, face loss of pay and the potential for increased cost-sharing obligations for maintaining and accessing health care.

Against this backdrop, plan sponsors should evaluate what, if any, changes they should take with respect to their 401(k) plans to grant broader participant access to funds and ensure ongoing compliance.

401(k) plan design considerations Cares Act Relief On March 27, President Donald Trump signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act provides optional retirement plan relief to allow: ``Coronavirus-related distributions to certain impacted individuals during 2020 of up to an aggregate of $100,000 that are not subject to the 10% early withdrawal penalty, may be included in income over three years and may be repaid on a tax-free basis during a three-year period. ``For the remainder of 2020, enhanced loan limits for certain impacted individuals of the lesser of $100,000 or 100% of the vested account balance, and a one-year delay of loan repayments from the date of enactment through the end of 2020 `Suspension ` of the required minimum distribution requirements during 2020 ``The distribution and loan provisions largely mirror relief provided in response to Hurricane Katrina and we expect similar regulatory guidance under the CARES Act. Other existing options The CARES Act relief supplements, but does not replace, other existing in-service withdrawal options. Accordingly, plan sponsors should examine existing fund access options available under their plans, such as participant loans, hardship distributions and other in-service distribution options, and how these options may be enhanced. For instance, plan sponsors may want to consider increasing the number of loans available, lengthening the cure period as permitted under applicable regulations, allowing for suspension of repayments during unpaid leaves of up to one year, and expanding contribution sources for hardship withdrawals. However, plan sponsors should keep in mind that they may have only limited ability to revert to the current plan provisions once changes are made.

Employer contributions Plan sponsors should evaluate their capacity to continue to meet employer contribution obligations. There may be alternatives to amend 401(k) plans to eliminate or freeze these types of contributions now, before the contributions accrue.

Love is a partner leading Thompson Hine’s employee benefit and executive compensation practice in Cleveland.

Redder is a partner in that practice group based in Columbus and Morgan Singleton is counsel in the practice and based in Atlanta.

Partial termination Workforce changes made in response to the pandemic may inadvertently trigger a partial plan termination that requires full vesting of affected participants. While the determination requires a facts-and-circumstances analysis, a partial plan termination generally occurs automatically if more than 20% of the total plan participants are laid off in a year.

Impact on nondiscrimination testing Plan sponsors should also evaluate how workforce changes may impact nondiscrimination testing results and the steps needed to pass nondiscrimination tests. Nondiscrimination testing can also be negatively impacted when participants who are not highly compensated employees stop deferring into the 401(k) plan to increase their take-home pay.

Fiduciary considerations Plan investments At the same time that employees may need to access their funds, the financial markets — and many plan investments — have endured precipitous declines in value. Plan fiduciaries must remain vigilant in fulfilling their fiduciary duties. Investment performance over the short term should not drive a knee-jerk reaction. Fiduciaries have a duty to communicate with plan participants regardless of social distancing and work-from-home arrangements. As such, 401(k) plan fiduciaries should review and consider the continued prudence of their fiduciary processes, confer with the plan’s independent investment adviser and consider investment education opportunities to assist participants in navigating volatile markets.

Service providers Plan fiduciaries should be in contact with plan service providers and trustees regarding continuance of service in the event of absenteeism in their workforces. Now is the time to discuss emergency disaster plans.

Blackout periods While it’s common to have a blackout period during which participants are not able to change investments due to a plan merger or other similar event, fiduciaries should evaluate whether to proceed with any planned actions that will result in a blackout period during this volatile time.

14 | CRAIN’S CLEVELAND BUSINESS | April 6, 2020

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APARTMENTS

From Page 1

“That part of the market is intact,” Price said, at least until the market for professional hires dries up. He noted that the recently completed Residences at Terminal Tower apartments in the city’s most iconic structure is 70% leased after opening last fall. That is no small accomplishment during the winter months, which are the doldrums for the apartment business, though little snowfall this winter likely helped.

However, K&D, which also has a substantial suburban portfolio, has noticed that the market of Northeast Ohio tenants looking to move to change apartment buildings or communities, or be closer to work or downsize, has disappeared.

Meantime, Ezra Stark, chief operating officer of Stark Enterprises of Cleveland, said his company is continuing to see prospects for The Beacon, 515 Euclid Ave., the first highrise residential building constructed in downtown Cleveland in 40 years.

Although talk of rent forgiveness has flared in the media with joblessness skyrocketing as nonessential businesses were ordered to close and restaurants were reduced to carryout operations, it’s not a topic commercial landlords like to embrace.

Ralph McGreevy, executive vice president of the Northern Ohio Apartment Association trade group,

ENERGY

From Page 1

First, there are the inputs. The price of the new favored fuel used to make a lot of electricity, natural gas, is in the tank. The price of gas on the spot market has hit $1.60 per mcf (not good news for Ohio’s shale drillers, who never have gotten top dollar). In the past few years, the price of gas has become closely connected to the price of electricity, and now it’s helping to force electric rates down.

Then there’s demand, or rather a lack of it. Demand for electricity sank along with the hearts of about 10 million workers who now use their juice at home, because their place of business has turned off the lights.

“Making a grilled cheese sandwich at home is not going to offset someone forging things for automotive parts when they stop,” said Matt Brakey, an energy consultant and president of Chagrin Falls’ Brakey Energy.

Finally, there’s the outlook for the future, which has also gone missing.

No one has any idea what to expect, whether it’s two or three months of pain, or much more, or when the nation’s economy will be restarted.

So, if you could put lightning in a bottle, now would be the time to stock up. Power has been selling at prices as low as 1.8 cents per kilowatt hour, said Brakey, who added these are the lowest prices he’s ever seen.

Prices below 2 cents are startling, and 1.8 cents is unheard of, or at least it used to be, Brakey said.

They may go lower still before rising later this year, but will still likely remain relatively low, he predicted.

However, like most folks, Brakey is reluctant to make any guesses in a sea with waves he can’t see over.

“I don’t know what tomorrow is going to look like, let alone coming up with reasonable expectations of how consumption is going to change over the short, medium and long term,” he said.

The Beacon at 515 Euclid Ave. is the first high-rise apartment built in downtown Cleveland in four decades. | DAVID KORDALSKI/CRAIN’S CLEVELAND BUSINESS

said he has fielded about a dozen calls from members who wonder what steps to take with vast numbers of suddenly unemployed renters.

“I ask them what kind of person they are,” McGreevy said, “and if they are willing to help someone caught up in this. However, it’s easy for me to say that. I don’t have loan payments coming due like most building owners do.”

Instead, Stark focused on his company’s efforts to win state and government support for getting lenders to waive mortgage payments. He said he had been in contact directly with Ohio Lt. Gov. Jon Husted and both of Ohio’s U.S. senators on the topic.

The commercial industry got high-profile support for its quest with Gov. Mike DeWine’s order of April 1,

“MAKING A GRILLED CHEESE SANDWICH AT HOME IS NOT GOING TO OFFSET SOMEONE FORGING THINGS FOR AUTOMOTIVE PARTS WHEN THEY STOP.”

Buyers of big power — blocks of a megawatt or more, often with their own substations onsite — like to have predictable costs. To get them, they often hedge their electricity purchases, Brakey said. They buy electricity with future contracts at a set cost, and they buy some electricity in the open markets. That way they never have to worry about their power costs fluctuating too much.

That’s all well and good in a sane world, but not today, Brakey said. If a big public facility or plant that made such purchases is shuttered today, it’s still got all of that power it bought on contract. If it doesn’t use it, that power is automatically sold on the spot market.

“If you paid 3.3 per kilowatt hour and it ends up clearing (today) for 1.8 cents … you’re on the hook for a penny and a half per kilowatt hour for kilowatt hours you don’t even use,” Brakey said.

Most big power users that are shut down either couldn’t be reached or didn’t want to talk about their current power predicament. The Cleveland Cavaliers declined to comment, for instance, and the Indians said they purchased their power at a fixed rate ahead of time and didn’t want to discuss it.

Solon-based NOPEC, a big nonprofit aggregator of power that purchases electricity and natural gas for many area municipalities, also purchases ahead of time, but fortunately is able to sell all of the power it has prepurchased to its customers.

“Our situation, believe it or not, is we need a little more power right now,” NOPEC executive director Chuck Keiper said.

The communities NOPEC serves largely use their power for residential customers, not industry, and most of those residential customers are now home with the lights and TV on, Keiper explained.

NOPEC is still offering prices that are lower than what most other electric companies offer, but is lagging

——Matt Brakey, energy consultant and president of Brakey Energy

Bloomberg reported huge drops in power prices in New York, California and New England for the week ended March 25, and anticipated the Texas market to be the next to drop.

Bloomberg’s analyst expressed surprise that demand was holding up in the Midwest, though.

Well, April Fool’s — the price drops here have hit and been startling, Brakey noted, and not always good news for businesses.

Many larger businesses buy their power on long-term contracts.

They’re looking at daily prices far below what they’ve contracted to pay for electricity, but Brakey said that’s a small problem compared to what others face.

The real pain is being felt by businesses that hedged their power cost, but now are shuttered. That could be a big manufacturer whose plant is closed, possibly because they supply the now-stalled big automakers, and “public accommodations that aren’t grocery stores,” Brakey said.

asking lenders not to foreclose on small businesses and commercial real estate owners ailing from Ohio’s stay-at-home order and encouraging landlords to suspend rent collection for 90 days, perhaps tacking the amount on at the end of the lease term.

However, note that DeWine’s signed order technically asks for pauses; it does not speak to the existing legal rights of lenders, borrowers or tenants.

At the same time, the federal CARES Act suspends foreclosures and rents for 90 days on properties with federally backed loans. Ohio Supreme Court Chief Justice Maureen O’Connor has asked municipal courts to limit eviction proceedings.

And Cleveland Council president Kevin Kelley has requested that Cleveland Municipal Court suspend evictions due to the virus.

Stark said that without lender restraint it would not be possible for most real estate owners and developers to provide rent waivers because they would still have to meet debt service payments.

Scott Wolstein, chairman of Wolstein Group and owner of the Flats East Bank Apartments he developed with his mother, Iris Wolstein, said the big thing to watch for during the pandemic is people “taking advantage” of the ability to skip mortgage or rent payments regardless of their ability to pay.

“We’re in a unique situation,” Wolstein said. “This is very different from the (2008) financial crisis, when there was no liquidity. Capital has been available and lots of cash is on hand in the country. We had everything stop due to the pandemic. You’ve had good businesses close and not everyone can endure a protracted shutdown.”

However, the real estate development market is likely to be stymied, at least as far as projects on the drawing board go.

“I’ve seen people leave money on the table to drop loan requests,” Wolstein said. “Unless it’s a loan for a project that’s very far along, you won’t see it. And part of that is because property owners have to deal with the current situation.”

Price agreed.

“The world has changed in the last two weeks,” Price said. “We were looking for new projects. We’re not doing that now.” He added he believes it likely that early stage apartment projects will drop off the drawing board all over town.

Due to his company’s eight-building presence in downtown Cleveland, Price feels that leasing of empty retail space — common on the first floor of mixed-use, apartment and office buildings all over, and harder than suburban store leasing — will further dry up.

Stan Bullard: sbullard@crain.com, (216) 771-5228, @CrainRltywriter

HOSPITALS

behind the low prices seen on the spot market for large blocks of power.

But Keiper said its price always lags behind the market a bit.

That’s because NOPEC tries to smooth out fluctuations in power prices by blending what it buys on the current market with its previous contractual purchases, Keiper said.

That means its future prices will likely go down as it catches up with current market conditions.

The whole situation leaves big power users with decision to make, not the least of which is whether to buy power in advance, hoping to lock in some of the current prices, or wait to see if they fall even further.

It’s no small issue, either. A big restaurant can use 200,000 to 300,000 kWh of power per year and a large grocery store could use a million kWh, said Paul Nero, co-founder and CEO of Integrity Energy, an electricity broker in Cleveland.

“It is a great time to lock in,” Nero said. “How much lower will it go, I don’t know. From everything I’ve read, producers can’t make money at these levels.”

Integrity has been shut down for the crisis, but Nero said it may restart operations in the next week or so, with a skeleton crew and offsite workers, because it wants to work with clients in the current, extraordinary market.

Electricity prices may indeed go lower. Brakey expects demand to fall further still, and Keiper said he’s stopped thinking there’s a floor when it comes to power prices. He added he learned his lesson on that from natural gas, which was driven down from already low prices when the nation’s shale drilling boom flooded the markets with methane.

“If you’d have asked me that about gas when it was $4 (per mcf ), I’d have said it couldn’t go lower. But it did.

That’s how I look at electricity now,” Keiper said.

Szubski said he’s confident that UH’s strong financial foundation, including a conservative asset-allocation policy for its investment portfolio and a great relationship with banking partners from which the system has accessed capital during this process, will help it weather the challenges.

“There are hospitals around the country that are really struggling right now to stay open,” he noted.

“Thankfully, we’re not in that situation, but that’s not to say that there aren’t pressures that are being put upon us.”

After the crisis, hospitals will have to quickly switch gears to accommodate all the many delayed procedures and surgeries that will be rescheduled. A patient can wait a few months for a total knee replacement but will likely come back. The question is balancing the expenses hospitals face now with the wait for those patients to return, Gundling said.

J.B. Silvers, a health care finance professor at Case Western Reserve University, said he expects that, collectively, the country will do whatever is needed to keep hospitals in business during the crisis.

“The real question is what will that mean in terms of their accounting profits and their margins and their bond requirements in the long term, from an accounting point of view,” he said. “So you can keep somebody going by funneling more cash into them, but if at the end of the day, they violated their bond covenants and they show major losses, accounting losses, then they’re going to have to live with that over the long term.”

Dan Shingler: dshingler@crain.com, (216) 771-5290, @DanShingler

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

From Page 2

April 6, 2020 | CRAIN’S CLEVELAND BUSINESS | 15

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AKRON REAL ESTATE

New Amazon distribution site spurs apartment developments Richfield developer says modular construction process allows for quick completion and versatility in buildings BBY DAN SHINGLER

To build more than 160 apartments for future Amazon workers in Akron, a Richfield builder and developer is using the same modular construction techniques that allowed China to erect a 1,000-bed hospital in just 10 days.

He’s also willing to take the apartment building now under construction apart if someone here needs the modular units he’s using for a health care facility in response to the COVID-19 crisis, said Todd Tober, president of Tober Building Co. “I would absolutely take that idea to the decision-makers ... and I don’t think it would be that difficult,” Tober said, adding that he would need approval from the IRS, since the apartment project is being funded with $7 million in federal tax credits.

Unless and until that happens, though, Tober said he’s moving forward with construction on the second phase of his Stoney Pointe development near the former Rolling Acres Mall, which is being converted into a 700,000-square-foot Amazon distribution center.

Tober figures the online retailer’s project means there’s going to be a need for new housing in that part of town.

Amazon initially said it would need 1,500 employees for the facility, which is under construction, but media outlets reported in February that the company’s needs might have doubled to 3,000 workers at the Akron site.

Tober Building Co. makes its modular units indoors and they are later assembled at building sites. Each module is 16 feet wide and can be up to 40 feet long. Their versatility enables several building sizes and configurations. | CONTRIBUTED PHOTOS

Since then, Amazon has said the COVID-19 crisis is increasing its needs and that it will be hiring 100,000 additional workers nationwide, though it has not said if that will increase its number of Akron workers further.

“I don’t know specifically yet; I just know there’s a giant shortage of affordable housing,” Tober said, when asked how many employees he thinks Amazon ultimately may hire in Akron.

Tober added he’s already been

able to easily lease out new apartments at Stony Pointe, where he finished the first phase of development, 68 apartments, in 2019.

“We leased those out in less than three months,” Tober said.

Phase II of the project will be another 45 units, which should be completed in mid-May after only seven months of construction.

The same project would have taken about a year using traditional construction methods, Tober said, but it’s on a faster pace because he’s us-

ing prefabricated modules that are built offsite.

Tober also said he’s planning another 120 apartments nearby, on Vernon Odom Boulevard, a stone’s throw away from Stoney Pointe and less than a mile from the Amazon facility. If financing comes through as expected, Tober said, he’ll break ground on that project, yet to be named, later this year.

The apartments are one- and two-bedroom units, priced so that someone making between $10 and $20 an hour can afford them, with one-bedroom units leasing for about $800 a month, Tober said, explaining that he sought a price point of 30% of a potential tenant’s likely pay.

It’s a good spot for apartments generally, or at least it is now with Amazon there, said Jerry Fiume, managing director of SVN|Summit Commercial Real Estate Group in Fairlawn.

Fiume said he recently secured and began heavily marketing vacant land nearby for apartments — spurred to do so by Amazon’s plans.

Fiume said he’s listing a 15-acre site on Mull Avenue near the Amazon center for $1.5 million and a smaller, 2.4-acre site nearby on Vernon Odom for $440,000.

Both sites already are zoned for apartments, he said.

“All of a sudden, I went from ‘I wouldn’t mess with this parcel’ to

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contract and consumer business lines are manufactured.

After his father died in 1987, Stuart Glauberman became president. Jay Glauberman died suddenly in 2004 and Stuart consolidated ownership to his family.

He said the loss of his father and his brother, both at relatively young ages, made him reconsider his future.

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MANUFACTURING

Next generation takes the reins at Malco Products E-commerce brings additional opportunities to maker of specialty cleaning products BBY KAREN FARKAS

Seth Glauberman and his sister, Lauren Osina, never planned to work at Malco Products Inc., an automotive cleaning and consumer specialty products manufacturing company founded by their grandfather and later led by their father.

Glauberman was a professional driving instructor and a freestyle skiing coach in Colorado. Osina was planning to teach.

But in 2004, Glauberman decided to move home and began his career at Barberton-based Malco Products.

Eight years later, he was joined by Osina. Now, Glauberman leads the 66-year-old company, while Osina is its digital marketing manager.

Their father, Stuart Glauberman, stepped down in January and named his son president. The elder Glauberman said his father, Murray, would have been proud.

“My father always felt that success without succession is failure,” Stuart Glauberman said. “It was his goal” to

“I THINK WE HAVE A LOT OF OPPORTUNITY TO EXPAND AUTO DETAILING, FOR THE PROFESSIONAL AND ENTHUSIAST.” ——Seth Glauberman, Malco Products president

have his family continue the business.

While the company does not release revenue figures, Malco Products sells its products in more than 70 countries and employs 250 at facilities in Barberton, Akron and Alliance.

Its divisions include automotive cleaning, detailing and paint refinishing products and consumer specialty cleaning products.

Malco Products also manufactures a broad range of household and automotive products for other companies.

The company remains open following Gov. Mike DeWine’s recent orders related to the coronavirus because it manufactures sanitizing and cleaning products.

Murray Glauberman started the company in 1953, investing $1,300 to open a janitorial cleaning products company in a garage in Akron. He enlisted the help of his father, Abraham, and brother, Lionel.

The first product he developed was a leather and plastic cleaner, which is still one of the company’s best-selling products.

He also created floor cleaners and dish detergents. The business expanded to janitorial supply houses throughout the nation.

Inspired by the growth of full-service gas stations, the company then moved into products sold to independent owners, including oil and gas additives, garage maintenance chemicals and hand cleaners.

By 1969, Malco Products had

moved into a large plant in Barberton, expanding manufacturing and distribution. But in the late 1970s, Lionel Glauberman wanted to sell the business.

“My dad bought my uncle’s share of the business by taking on real debt for the first time,” Stuart Glauberman recalled. “It would have been much easier to sell it than maintain it for me and my brother.”

Stuart Glauberman joined the company in 1973, and his brother Jay joined a few years later.

“When I joined the company, it was primarily automotive and consumer products,” Stuart Glauberman said. “I built it to 50% to 60% contract manufacturing for Fortune 500 companies in the consumer products area.”

In 1982, the company expanded by purchasing trademarks that led to the manufacture of name-brand consumer household cleaning and polishing products. A year later, it purchased a former Firestone synthetic rubber plant in Akron, where

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CRAIN’S CLEVELAND BUSINESS

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Workers assemble pre-fabricated units at the Stoney Pointe II apartment complex in Akron. The project will consist of 45 units. The first phase of the development has 68 apartments.

now ‘I’m all over this parcel,’ ” Fiume said of how Amazon has changed the equation for land in the area. “As far is it being a feasible investment, now it’s got some legs to it because of Amazon. I drove by that the other day and it’s crazy what’s going on up there. It’s going to be a huge complex … and that’s going to be a boon for Akron.”

Tober said he has long thought the site was a good spot for apartments, but he couldn’t make the numbers work until he started using modular construction techniques.

Tober makes the modules, which he calls “Tober Volume Elements” or “ToVees,” offsite.

Each module is 16 feet wide and can be up to 40 feet long, but they can be attached with or without walls between them, enabling nearly countless building sizes and configurations, Tober said.

By making them offsite, he keeps costs down, builds faster and is not constrained by Northeast Ohio weather, which can slow or even stop traditional construction projects during a harsh winter.

Malco Products has been run by the Glauberman family since 1953 and recently has gone through a leadership transition, with Seth Glauberman taking on the role of president. From left are Lauren Osina, Stuart Glauberman and Seth Glauberman. | CONTRIBUTED PHOTO

“My wife and I thought at some point in our lives we would move to Colorado, where our kids were,” he said. “But then my wife said that Seth was thinking of returning back to Akron to work in the family business.”

Seth Glauberman said one of the main reasons he joined Malco Products was he was never pressured to

do so. Before becoming president, he served 15 years as vice president of automotive sales.

The newly named president has his eye on the future.

“I think we have a lot of opportunity to expand auto detailing, for the professional and enthusiast,” he said.

“E-commerce opens up a lot of opportunities.”

His father said digital marketing has changed the business.

“We used to launch a product by throwing it on a wall with the hope it sticks,” said Stuart Glauberman. “Everything was about a push strategy to a distributor and hope there was success. Now, when we launch, there is a push-and-pull strategy. We can control the information and the image of the company all the way to the end user.”

Recently, the company signed an exclusive license with WD-40 Co. to manufacture and sell Carpet Fresh No Vacuum Quick Dry Foam products.

It also launched a product to add a

But Tober is building not just to create the apartments and the income stream they will generate. He said he’s also trying to prove a concept, in the hopes that more local developers will adopt modular construction and use his company to make their units, including for new hospitals and other health care facilities.

That’s also why Tober said he’s been happy to see China get so much attention for its ability to build a 1,000-bed hospital at what had previously been an unheard-of pace.

China largely has adopted modular construction, Tober noted, and its new hospital puts a spotlight on how well and quickly the method can be used.

“China has done some pretty amazing things with regards to modular and prefab construction. They’ve done some high-rise buildings, too,” he said.

The construction is all steel, which hospitals prefer because it’s noncombustible, Tober said.

“We could build an entire hospital offsite and truck it in and build it very quickly,” he added. “And we can go up to 20 stories in height.”

Tober Building at present can make four to five modular units in its factory per day and can assemble about 20 units per day onsite. Those numbers could be increased so that it could build and assemble about 10 units per day, which would require an expansion and about 300 new employees. But that’s what Tober hopes he can accomplish soon.

To build a hospital, though, he’d first need a hospital builder to tap him to make the units. That hasn’t happened yet, but interest has already begun to develop following the construction of the hospital in China.

“We recently got an inquiry from an architect that works for someone who builds hospitals, so there’s interest,” Tober said.

Dan Shingler: dshingler@crain.com, (216) 771-5290, @DanShingler ceramic coating to protect a vehicle’s paint finish and products to clean, restore and protect watercraft.

Osina’s role is to grow Malco Products’ digital marketing and brand awareness.

“I never really saw myself working at Malco,” she admitted, but she began working at the company in 2012 when she couldn’t find a full-time teaching position after earning her master’s degree.

“I’ve found my place here,” she said. “I am excited by the opportunity to grow the brand.”

Osina said Malco Products has been entrepreneurial and opportunistic regarding acquisitions and shown steady, gradual growth over time.

She added that the company’s strength in contract manufacturing comes from its development of a strong industry reputation for quality of service and competitive pricing.

Stuart Glauberman said he knows how rare it is for generations of a family to continue operating a business.

He said he began planning two years ago for his son to succeed him, and he continues to work at the company in an advisory position.

Contact Karen Farkas: clbfreelancer@crain.com

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Advertising Section

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Andrew M. Hanna joins Frantz Ward as an Associate in the Construction Practice Group. Drew has experience representing clients in construction defects, real estate law, condominium association law, homeowner’s association law, and mold litigation. In addition, he has assisted clients in non-profit corporate law, general business law, and bankruptcy. Drew earned his J.D. from Cleveland-Marshall College of Law and his B.A. from Denison University.

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LIST YOUR RETAIL SPACE HERE! April 6, 2020 | CRAIN’S CLEVELAND BUSINESS | 17

COPING WITH COVID-19

Rapid rollout of economic aid presents host of challenges Banks find they lack official guidance to balance quick turnaround with due diligence BBY KIM PALMER

The $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act stimulus bill, signed into law March 27, earmarked nearly $350 billion for new Small Business Administration (SBA) 7(a) loans, including the Paycheck Protection Program (PPP).

The program provides SBA-guaranteed, low-interest, tax-free loans through all FDIC-insured banks for businesses employing 500 or fewer workers that are experiencing “economic hardship” as a direct result of public health measures taken to minimize the COVID-19 outbreak.

As the U.S. Treasury encouraged business owners to begin applying for the loans starting April 3, and has promised turnaround times of “days not weeks,” there has been no official guidance for banks grappling with balancing those quick turns with traditional due diligence.

“It is a quick drumbeat when you can’t operate your business. There is not a lot of time to wait while the government passes legislation,” said Marty McGann, senior vice president of advocacy and strategic initiatives for the Greater Cleveland Partnership (GCP).

McGann said he is sympathetic to the “nonessential” businesses that have been forced to close since the state shutdown order in mid-March.

The goal of the CARES Act is to inject funds into the national economy immediately. Just two weeks into the stayat-home order, Ohio saw record numbers of unemployment claims. Federal programs like PPP, which provides a one-time loan equal to 2.5 times a company’s monthly payroll for eight weeks, not exceeding $10 million, are an essential economic safety net. If a company keeps employees on the payroll for eight weeks (between Feb. 15 and June 30) the loan becomes a nonrefundable grant.

“The goal is to get people through this challenge. Cash flow is their biggest concern,” McGann said.

According to a 31-page document published by the Treasury Department the night before the PPP’s initial rollout, “SBA will allow lenders to rely on certifications of the borrower in order to determine eligibility of the borrower” and “will be held harmless for borrowers’ failure to comply with program criteria.”

Most banks have been tight-lipped

WORKING

From Page 1

Overall, companies should look at their workstations and find ways to spread employees out. This may be less efficient, but now is not the time for efficiency. That’s a tough mental switch for manufacturers.

“For a manufacturer who has spent all this time being lean and efficient, this is definitely going against the grain, definitely deconstructing some of the steps they’ve taken for efficiency for safety,” Karp said.

Some manufacturers are keeping employees to particular parts of a plant, isolating workers from others.

They’re even taking extra steps to isolate the most essential employees, whose duties would be difficult to fill if they fell ill, such as maintenance personnel.

about how they interpret PPP’s shortcomings regarding possible liability.

Large financial institutions, like Chase Bank, have balked at the lack of clear guidance from Treasury. In a

statement to customers, Chase warned that the bank “will most likely not be able to start accepting applications on Friday, April 3.”

U.S. Rep. Anthony Gonzalez of

Ohio, who voted for the CARES Act, acknowledged the challenges of implementing legislation so quickly and said it was likely that with billions of dollars there will be a “bottleneck” effect. However, he contended it is more efficient to use banks to write the loans.

“The banks, by law, have to go through some due diligence, but that will be easy to do working with their existing client base,” he said.

Gonzalez, a Republican who represents Northeast Ohio, predicted that the program will be “oversubscribed” and require re-funding before the end of the crisis. He also said the banks, in order to move the money out quickly, may have to conduct the due diligence “on the back end” after the funds have been distributed.

“There absolutely will be challenges, but we need to get this money out as quickly as possible for businesses to be able to weather this storm,” he added.

The CARES Act, Gonzalez said, is a good place to start to work on the liquidity crunch and help businesses to build a bridge from “where we are here today to whenever we see our way out of this.”

Gonzalez predicted there will be another large funding package when Congress is back in session and the country understands more about the evolving situation caused by the pandemic.

“It is obvious that we are in the midst of a once-in-a-lifetime global health crisis. The goal is to make all that pain as temporary as humanly possible,” he said.

In addition to PPP, the CARES Act includes $562 million for loans and $10 billion for grants directly from the SBA, slated to roll out in conjunction with PPP. The Emergency Economic Injury Grant program provides an emergency advance of up to $10,000 for payroll costs or debts related to coronavirus business disruptions, in conjunction with an SBA Economic Injury Disaster Loan (EIDL).

“Business can only apply once for salary costs with Paycheck Protection Program. It is important that you don’t double dip,” cautioned Gilbert Goldberg, SBA’s Cleveland district director.

According to the SBA, after applying online — a process Goldberg said can be as quick as 10 minutes — the funds will be made available within three days. The $10,000 grant does not

There are plenty of other options for trying to reduce exposure among employees. Some manufacturers are looking to add clear shields between workers for additional protection, Karp said. Others are removing doors or keeping them open and switching to no-touch or lidless trash cans to reduce common touchpoints.

If employees have to work onsite, that doesn’t mean they have to work together. Even meetings among employees in the same building can be held using teleconference tools to minimize gatherings.

“Don’t act business as usual,” Karp advised.

These measures are important for employees’ safety and morale, Karp noted, but they also make smart business sense. Companies face shutdowns due to illness, of course, but also due to health inspections if they aren’t taking proper precautions.

Ultimately, companies need a plan for how they’ll respond if an employee or an employee’s family member gets ill. Even if this virus goes away soon, Karp said, he thinks companies should have a virus protection plan in place for the future. Having a standardized plan will make the shift easier if it’s necessary again, he noted.

Here are some more tips for employers, based on information from the Ohio Department of Health and the Centers for Disease Control and Prevention. `No. ` 1, employers need to make sure employees who are feeling sick stay home. And they need to stay there for a while. They can return when they meet these three guidelines: They’ve been fever- and symptom-free for at least 72 hours; symptoms have improved for at least 72 hours; and it has been at least seven days since their symptoms began. Those fever- and symptom-free

days should be without the use of medication. ``That means employers should have flexible, nonpunitive sick leave policies in place. Employees might have more need than ever to use it to care for themselves or family members. ``If a company uses temp employees, managers should talk to those staffing companies about the above sickleave policies and make sure they are aligned. ``Putting more physical space — at least 6 feet — between employees is recommended. That includes areas like break rooms. Employers should take special consideration of employees who could be higher risk, such as older adults or those with chronic medical conditions. ``Avoid having employees use the same equipment, desk or phones. If that’s not possible, clean and disinfect them before and after each use.

COVID-19 economic resources guide FEDERAL Small Business Administration (SBA) ``The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses. ``The SBA Economic Injury Disaster Loan covers small business operating expenses after a declared disaster. ``The U.S. Chamber of Commerce offers a guide to preparing and filing a loan for small businesses and self-employed individuals.

IRS People First Initiative ``The Employee Retention Credit is designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19. `The ` People First Initiative also allows for temporary payment postponement of IRS Installment Agreements. ``The Families First Coronavirus Response Act (the “FFCRA”) ``Tax credit for qualified sick leave wages ``Tax credit for qualified family leave wages ``Tax credit for qualified health plan expenses ``Credit for employer’s share of Medicare tax `Expanded ` Family and Medical Leave Act credits for self-employed individuals STATE OF OHIO ``SharedWork Ohio is a voluntary layoff-aversion program that allows workers to remain employed and employers to retain trained staff during times of reduced business activity. The Ohio Department of Job and Family Services (ODJFS) provides unemployment insurance benefits. ``The Ohio Bureau of Workers’ Compensation is allowing employers to delay installment payments due to COVID-19 hardship. Unpaid insurance premium installment amounts due for March, April and May for the current policy year can be deferred until June 1. ``The Ohio Department of Insurance (ODI) Grace Period for Health Insurance Premiums requires health insurers to provide the option of deferring premium payments, interest-free, for up to 60 days from each original premium due date. ``JobsOhio established the Workforce Retention Loan Program to provide qualifying JobsOhio client companies only with financial support to help them maintain employment levels during the pandemic. The program offers an unsecured, interest-free loan that allows monthly draws for payroll expense and is forgivable if employees are retained for six months. `Ohio ` bar and restaurant owners affected by COVID-19 can participate in the One-Time Liquor Buy Back to return high-proof liquor products purchased between Feb. 12 and March 15. This opportunity is also extended to those with temporary (F2) permits for events scheduled between March 12 and April 6. `The ` Local Initiatives Support Corp. will use the Verizon Small Business Recovery Fund to provide grants of up to $10,000 to businesses facing immediate financial pressure because of COVID-19, especially entrepreneurs of color, women-owned businesses and other enterprises in historically underserved communities that don’t have access to flexible, affordable capital.

have to be repaid even if the business is eventually denied for the EIDL. Companies struggling to make payroll for two weeks may worry that two months of a payroll loan will not be enough.

Kuna Bell, managing partner at Pease CPAs, said there are positive tax implications to PPP. “Businesses are still ahead if they take the PPP money and eventually end up not qualifying,” he said. “Then, it ends up being a deferral, which amounts to an interest-free loan from the federal government. If your business does collapse in the meantime, you have no liability.”

There is also an Employee Retention Credit that provides a refundable payroll tax credit for 50% of wages. That can be used until December 2020, but can’t be used with PPP. Bell shrugged off concerns that the PPP will not provide the stimulus needed during the pandemic.

“The people at the SBA will do their absolute best to make this program work,” he said. “I tell people to conserve cash because they need to plan for after this is all over.”

There is no question these programs and myriad others (see sidebar) are poised to inject much-needed cash into a stalled economy in the upcoming months. The questions are: Who will benefit, and will it be enough?

Laura Lawless, an attorney who specializes in employment law at Squire Patton Boggs, said these massive economic measures are being implemented at breakneck speed without guidance, which makes it very confusing for businesses. Companies without consultants can miss out.

“Nothing perfect has ever come from legislation rushed through in four business days — not a bill that is hundreds of pages long,” Lawless said.

Legislation like the CARES Act and the preceding Families First Coronavirus Act won’t be effective, she said, if businesses do not know how to or if they can apply for them. Employers making long-term financial and tax decisions might not have time to wait for the dust to clear, Lawless added.

Some businesses could make the decision before then to close their doors.

“They (businesses) are drinking from the firehose and we are the ones fielding the questions,” she said.

``In general, step up in terms of cleaning workplaces. Make disposable wipes available near commonly used surfaces so employees can clean them before each use, and pay special attention when cleaning high-touch areas like door handles and railings. ``Make sure there is adequate soap and water and hand sanitizer available for employees. ``Place reminders of safe social distancing tips, like posters, in areas employees are likely to see.

And remember: These tips are for employers where everyone is assumed to be well. If an employee is suspected or confirmed to have COVID-19, there are additional cleaning and disinfecting recommendations available from the CDC.

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

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

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CRAIN’S CLEVELAND LOOK BACK | CHANGING FACE OF THE FLATS

Like the Cuyahoga River, the Flats keep moving For the last 40 years, the story in the Flats has been one of renewal and transformation along the meandering path of the Cuyahoga River from Lake Erie to about 6 miles south. Although the river itself has often been described as the dividing line between Cleveland’s East and West sides, the bottom land below the bridges has tended to unite the town with affection on multiple levels and in different ways for succeeding generations.

Many cite the view of ore boats — six stories tall and as long as the Terminal Tower is tall — plying the river’s tight bends, bound for the steel mill, or huge barges heavy with stone, coal or cement headed for riverside open storage. For others, it’s where they learned to row. For many more, it is connected to their coming of age, from old rock clubs such as Peabody’s DownUnder to the mid-1980s, when both sides of the river bloomed with new uses in old buildings, from Sammy’s Restaurant on West 10th Street to Shooters and Nautica on the west bank. — Stan Bullard

``IN THEIR OWN WORDS “There are more people down here today. When we were kids and worked in the business, you could shoot a cannon on old River Road and not hit anyone.”

REPORTERS

——Kathy Petrick, president, Samsel Supply Co., 1235 Old River Road

“Because of geography, Cleveland was originally more of a river city than a lake city. (Blame the clay of the region’s lakefront cliffs.) It’s where the city The Flats East Bank development is the latest iteration of the long-standing entertainment district. | STAN BULLARD/CRAIN’S CLEVELAND BUSINESS began. It was the source In 1986, the west bank came to life ``THE HISTORY ``WHY IT MATTERS TODAY of a lot of the wealth as real estate developer Jeffrey Jathat made Cleveland the The Flats has a long history that cobs and two partners launched Long-term plans to connect the Flats dates to July 22, 1796, when lawyer Mo- what became the Nautica Entertainnear Old River Road to the Ohio Canal city it became in the ses Cleaveland and a team of surveyors ment District. Shooter’s by the River Corridor are on the cusp of being realearly 20th century.” landed at what’s now Settler’s Landing opened at that time. Other parts of ized with a bike and running path on ——Tom Yablonsky, executive vice president, Downtown Cleveland Alliance; executive director, Historic Gateway and Warehouse District development corporations

“I will never forget in the late 1980s, when I was boarding a flight to come home and talked to a man coming here on business from Atlanta who was excited about seeing the Flats.”

——Rustom Khoury, CEO, Westlake-based Carnegie Management & Development Co., who invested and sold multiple Flats sites in the 1980s.

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Park.

Saving that site became a big jumping-off point for the area’s redevelopment history.

In 1972, the late Herbert Strawbridge snatched ownership of that stretch of waterfront from a junkyard operator as the Higbee Department Store chairman began a redevelopment effort spanning the riverfront and the neighboring Warehouse District to West Ninth Street. Strawbridge is remembered with a memorial on West Superior Avenue next to the Veterans Memorial Bridge.

Another turning point in the Flats came when restaurateur Denise Fugo launched Sammy’s as a highend restaurant in 1980 in a building that had been part of Strawbridge’s domain.

the same building housed a succession of nightspots until it became the Music Box Supper Club. Later phases restored the Powerhouse, a remake of an abandoned former electric generating plant for the city’s trolleys that became The Windows on the River banquet center, and later the Greater Cleveland Aquarium. Jacobs was credited with bringing suburbanites to the Flats for the first time.

Meantime, multiple buildings on the east bank were vacated by manufacturing and other concerns in the 1980s and Old River Road became an entertainment district in its own right with more than a dozen bars, restaurants and nightspots. Many are nostalgic today as they recall dining at The Watermark, now Crooked River Brewery on Old River.

the Ohio and Erie Canal’s towpath trail that stretches to Zoar.

The Flats has become home to multiple recreation uses, from jet skis to kayaks and sculling crews. The Foundry, named for its original industrial use, is now a multimillion-dollar training center for high school rowing teams. Cleveland Metroparks has added the Merwin’s Wharf restaurant to the mix. Increasingly, the Flats is a place to exercise and enjoy the outdoors instead of working in a machine shop.

“Every city needs an entertainment district,” said Scott Wolstein, chairman of Wolstein Group of Cleveland and co-developer with his mother, Iris Wolstein, of the $500 million Flats East Bank Neighborhood on Old River north of Main. He said Flats East, East Fourth Street, Tremont and West 25th are key to retaining college grads in their hometown and attracting new talent in the city.

THE WEEK THE STATE OF THINGS: Ohio Department of Health director Dr. Amy Acton signed an order extending the state’s stay-at-home order until May 1. The order is similar to the previous one that closed all nonessential businesses and was set to expire Monday, April 6. Gov. Mike DeWine also announced the creation of an economic advisory board of experts who will help prepare the state as “we move forward and focus on the economic recovery.” Frank Sullivan, chairman and CEO of RPM International Inc. of Medina, will head the group.

PRESS PAUSE: Possible state budget cuts have, for now, held up plans to lend $70 million to Sherwin-Williams Co. as part of a state incentive package for the paint and coatings manufacturer to build a new downtown Cleveland

Dr. Amy Acton, director of the Ohio Department of Health, signed an order extending the state’s stay-at-home order until May 1 during a live public and press briefing. | SCREENSHOT FROM THE OHIO CHANNEL

headquarters building. The Ohio Development Services Agency put the interest-free loan package on hold as

the state considers cuts to make up for a loss of tax revenue as the economy slows.

PREP WORK: Cleveland Clinic and Case Western Reserve University are working together to temporarily convert the main building of their joint Health Education Campus on the Clinic’s main campus into a fully functioning surge hospital. At the site, caregivers will treat COVID-19 patients who don’t require high levels of care but need hospitalization, such as those who do not require ventilators or large amounts of oxygen.

ALPHA BET: Case Western Reserve University researchers have developed and are testing a tool to help individuals understand the relative risk of going anywhere in the country during the COVID-19 pandemic. The tool, dubbed alpha-Satellite, is driven by artificial intelligence and provides location-specific information.

Stan Bullard, senior reporter, Real estate/ construction. (216) 771-5228 or sbullard@crain.com Jay Miller, Government.

(216) 771-5362 or jmiller@crain.com Rachel Abbey McCafferty, Manufacturing/energy/ education. (216) 771-5379 or rmccafferty@crain.com Jeremy Nobile, Finance/legal/beer/cannabis.

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(216) 771-5290 or dshingler@crain.com Lydia Coutré, Health care/nonprofits.

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April 6, 2020 | CRAIN’S CLEVELAND BUSINESS | 19

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