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APRIL 8 - 14, 2019
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Akron One of the city’s most blighted neighborhoods getting a refresh Page 20
Scott Wolstein Page 23
CLEVELAND BUSINESS
The List Largest minority-owned businesses Page 18
REAL ESTATE
INSIDE THE ATHLON
Former Cleveland Athletic Club Building getting new life as mixed-use complex By Stan Bullard sbullard@crain.com @CrainRltyWriter
The first floor will remain devoted to retail, but most of the rest of the former Cleveland Athletic Club is being converted to apartments in its remake as The Athlon. At right, Tina Vespucci, vice president of J&S Management Co., handles leasing and tours at the 163-suite complex. (Photos by Stan Bullard)
At a place where uncounted victories — and losses — were tallied for decades in the last century, another win will take place the week of April 8 as the first tenants move into new apartments on the second and third floor of the old 15-story Cleveland Athletic Club Building. In this case, the victory is the first part of a $60 million project to turn the 1911-vintage building to active use a dozen years after its namesake private club closed. It adds 163 suites to the property, rechristened The Athlon, along with a floor of office space and restored storefronts. The building at 1118 Euclid Ave. is scheduled to be completed by late June, a feat achieved by the third group of investors to undertake the challenge. There was a good reason getting the project funded and built took so long, said Tony DiGeronimo, a principal of President Environmental Co., whose
family pitched in to make it a go as part of the project’s ownership with Cleveland Heights investor Ned Weingart and the Bobeck family, which owns Great Lakes Financial Group of Cleveland and the adjoining Huron Square apartment building, 1020 Huron Road. “This is the most difficult one,” said DiGeronimo. As the operator of Precision, which has handled the cleanup and demolition of old materials in multiple downtown office or hotel to apartment conversions, he should know. SEE ATHLON, PAGE 22
HEALTH CARE
GOVERNMENT
Charting their own course
Tax exemptions, credits will be expensive venture for state
Physician-owned Lake Health Beachwood Medical Center has single vision, big-name partners. Page 8 Entire contents © 2019 by Crain Communications Inc.
By Jay Miller jmiller@crain.com @millerjh
Tax exemptions and tax credits will cost the state of Ohio an estimated $19.2 billion over the next two years, according to a document that is part of the recently released, $69 billion biennial operating budget. The 2020-21 Tax Expenditure Report details 134 carve-outs in tax law — some reasonable, others less so.
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And some, critics on both the left and right say, are “loopholes” that benefit only small groups of influential taxpayers. Policy Matters Ohio (PMO), a liberal think tank, in a recent analysis said the value of taxes forgone to tax breaks will have grown by an estimated 17.7% between 2012 and 2021, adjusted for inflation, even as state spending on education, local governments and many human services has fallen. “Governor DeWine’s budget has some encouraging plans, especially
when it comes to investing in Ohio’s children,” said PMO senior project director Wendy Patton in analyzing the report. “Closing some of these loopholes could help raise the revenue we need to do that.” Some of the tax expenditures are part of the cultural and political DNA and unlikely to be removed. One of the largest exemptions in the report, for example, is the $5.4 billion in state sales taxes forgone for the sale of products that go into manufacturing other products. SEE CREDITS, PAGE 19
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Lincoln Electric is adding layers to its biz By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty
Welding products expert Lincoln Electric Co. is moving into additive manufacturing. But the way Lincoln Electric does additive manufacturing makes use of its expertise. Essentially, the company is “welding layer upon layer upon layer upon layer” of metal onto itself, creating predetermined shapes, explained Mike Whitehead, president of Lincoln Electric’s global automation, cutting and additive businesses. It may sound like a simple concept, but it’s difficult to perfectly layer those welds and make sure the layers are bonding correctly. And
“There’s a lot of challenges that go in with that, and there’s really no better company in the world to do it than a company that has expertise in welding.” — Mike Whitehead, president of Lincoln Electric’s global automation, on the company welding layers of metal onto itself
Lincoln Electric already makes the products needed for the process: the wire consumable, the controlling software and the automated welding equipment. “There’s a lot of challenges that go in with that, and there’s really no better company in the world to do it than a company that has expertise in welding,” Whitehead said. Lincoln Electric has been working
in large-scale metal additive manufacturing for about five years, but it was in more of a research-and-development function, Whitehead noted. Its newly established metal additive manufacturing service business will formalize Lincoln Electric’s role in the space. The formal launch will take place in mid-2019. Previously, Lincoln Electric had been doing work in its automation
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building and at Oak Ridge National Laboratory. But now, the company is in the process of building out a new additive manufacturing center at 26250 Bluestone Blvd. in Euclid, by the company’s headquarters. Lincoln has a long-term lease for the approximately 75,000-square-foot building, Whitehead said. The buildout started at the end of 2018. About a third of the building is already completed with office space and some existing robotic weld cells. Whitehead said more robotic weld cells, where the additive manufacturing is actually done, will be added in the next three years. Lincoln Electric has a group of about 10 engineers working in the additive manufacturing space, but Whitehead said he expects that to ramp up quickly
as the business expands. The metal additive manufacturing parts being made by Lincoln are large: excavator arms, propeller blades. For example, an excavator arm may be seven feet tall and 600 or 700 pounds, Whitehead noted. In comparison, products made through metal powder 3D printing tend to be much smaller, he said. There are different benefits to making those large parts in this way. For example, Whitehead said Lincoln Electric had been approached by the military in the past. The Navy was looking for a way to minimize the number of tools it needed to transport in order to fix its equipment. Large-scale metal additive manufacturing would let them take one robot that could make what they needed on site, he said. Customers can get their parts in less time — sometimes within days as opposed to months, Whitehead said — and the parts can be made with less waste. Large parts can be expensive to fabricate because they need to start with far more raw material than ends up in the part. With additive manufacturing, the products can be printed close to the final dimensions. The products still need some machining after they’re printed, said Whitehead. That’s where the company’s recent acquisition of Michigan-based Baker Industries Inc. comes into play, allowing Lincoln to serve as a single-source supplier for customers. Baker does both largeand small-scale machining, Whitehead said, often serving the automotive and aerospace industries. “From beginning to end now, we can really handle that,” he said. Baker also uses plastic 3D printing in its work and can bring that expertise to Lincoln Electric. While a lot of what Lincoln Electric has been doing so far has been creating experimental or prototype parts, Whitehead sees a lot of opportunity in additive manufacturing. And he thinks the large-scale metal parts market has been neglected. Lincoln Electric isn’t the only local entity that sees opportunity in this announcement. Lincoln Electric’s expansion into this space supports Northeast Ohio's becoming a “center of excellence” for additive manufacturing, said Jay Foran, senior vice president of industry and innovation at Team NEO. Additive manufacturing is one of the technologies Team NEO has focused on supporting in recent years. Being able to provide different types of additive manufacturing with different kinds of materials, from metal to polymer to ceramic, is a benefit to the region. Additive manufacturing, and the companies that are spinning out, starting up or maturing into the space, represents a “huge opportunity for Northeast Ohio,” said Rob Gorham, executive director of America Makes, the National Additive Manufacturing Innovation Institute in Youngstown. This kind of expertise is going to make what he called the “Tech Belt” of Northeast Ohio and western Pennsylvania more competitive. Lincoln Electric is a member of America Makes and has worked on some of the institute’s projects. Gorham said he hopes to see “Lincoln Electric times 100,” building a deep competency in the state rather than “one-off capabilities.” He said that’s what will help the state be successful as manufacturing becomes more digitized. “So Lincoln Electric’s just on the forefront of that,” Gorham said.
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Medicaid expansion boosts health centers By Lydia Coutré lcoutre@crain.com @LydiaCoutre
Since Ohio’s expansion of Medicaid, community health centers have been able to add locations, expand services, grow their staff and treat more patients. Federally qualified health centers (FQHCs) provide care regardless of one’s ability to pay. Uninsured patients are charged a nominal fee on a sliding scale. But now, as those patients gain coverage and the centers are able to bill for services, patient revenue is climbing. And FQHCs are reinvesting that money in growth and expansion. Ohio has 55 FQHC and FQHC lookalikes, comprising about 330 health care delivery sites. (Lookalikes do not receive Health Center Program funding but are eligible to apply to the Centers for Medicare and Medicaid Services (CMS) for reimbursement under FQHC Medicare and Medicaid payment methodologies.) Between 2013, before expansion, and 2016, the state’s centers increased that number of sites by 35%, grew staff by 47% and saw 25% more patients, said Julie DiRossi-King, chief operating officer of the Ohio Association of Community Health Centers. “Community health centers are certainly able to provide greater access to care because of Medicaid expansion,” DiRossi-King said. Neighborhood Family Practice, for instance, went from between 23% and 25% of its patients being unin-
sured to just 7%. “Thousands of additional people have coverage now, and they were no longer uninsured,” said Jean Polster, president and CEO of Ne i g h b o r h o o d Polster Family Practice. “Our sliding-scale fee begins at only $5. So you would go from paying somewhere between $5 to $25 for visit to us receiving for that same visit about $130. So when you compound that over thousands of visits, that gives us a better ability to expand our sites of service and our services within.” Since expansion, Neighborhood Family Practice has opened new sites and added dental and pharmacy services. Between 2012 and 2018, revenue and staff more than doubled at the health center. Polster said that growth is due to the confidence Medicaid expansion gave NFP that it had a sustainable business model. A recent report from the Commonwealth Fund found that health centers in Medicaid expansion states, compared to those in nonexpansion states, were more likely to report improvements in their financial stability and ability to provide affordable care to patients. They were more likely to offer medication-assisted treatment for opioid addition, provide counseling and other behavior health services and coordinate patient care with social service providers in the community.
“Essentially, when people have health insurance, it makes it easier for the provider because there’s increased revenues,” said Melinda Abrams, vice president and director of delivery system reform at The Commonwealth Fund, a nonprofit private foundation supporting independent health care research. “There’s also fewer deficits from nonpaying patients. So community health centers, they take all comers. They provide care to the insured and uninsured. So when they have more people who have health insurance, it makes it easier for them to innovate, to invest in technology, to hire new staff, train existing staff and adopt new models and approaches to care, such as integration with behavioral health.” Care Alliance Health Center saw its uninsured rate drop from 90% to 34%. As a result of expansion, the center has been able to hire more people, increase its revenue, see more patients, expand its behavioral health offerings and add wraparound services, such as care coordinators, said Eleace Sawyers, president and CEO of Care Alliance. At Akron-based AxessPointe Community Health Centers, before the expansion, patients paying on a sliding fee scale accounted for 70% to 80% of the center’s payer mix. Today, it’s down to 17%-18%. “What Medicaid expansion has done is allow us to add more Medicaid people, and the way that our funding works, the more Medicaid we have, it gives us more overall resources that will help us then take
care of the uninsured,” said Dr. Jay Williamson, board president for AxessPointe. “Through the federal program at our main sites, we get an enhanced Medicaid reimbursement for seeing Medicaid patients. … Then, what we do is we spread that out to take care of everyone in our system.” Asian Services in Action has been able to add staff to help take care of the growing number of mental health and substance-use disorder patients it’s been seeing. Elaine Tso, interim CEO at Asian Services in Action, doing business as the International Community Health Center, said the organization has been able to become more sustainable and financially stable in recent years. The Medicaid expansion has afforded Circle Health the opportunity to provide wraparound services that are not typically reimbursed, such as transportation, care coordination, connection to counseling and case management. Medicaid expansion has “absolutely” been beneficial, said Elizabeth Newman, president and CEO of Circle Health (formerly known as The Free Clinic of Greater Cleveland). “But it hasn’t been a silver bullet, either,” she added. “It hasn’t solved every challenge that we face.” For instance, centers in expansion states are more likely those in than nonexpansion states to report unfilled job openings for mental health professionals and social service providers. Nationwide, more than 1,300 FQHCs operate in more than 11,000 sites and provide comprehensive pri-
mary care to one out of every 12 Americans, according to the report. They’ve long enjoyed bipartisan support. The Commonwealth Fund report concludes that “Any further weakening of the (Affordable Care Act), like the enactment of Medicaid work requirements and other policies that restrict health insurance coverage, could increase the number of uninsured, thereby reducing health centers’ revenue from insurance and increasing costs.” Federal funding for health centers is set to expire in September. FQHC leaders stress that it’s critical for Congress to renew these funds, which DiRossi-King said provide 15%-20% of health centers’ overall operating budget. The various potential threats to FQHCs’ well-being — from loss of federal funding to loss of Medicaid expansion — are top of mind for centers’ leaders. “I think if expansion were to go away, it certainly would send health centers into a financial shock, if you will, and you would certainly see, without a doubt, a halt in all the growth that the community health center program and the health centers themselves have been able to make,” DiRossi-King said. “But I think in reality we would also see a clawback. They would be taking steps backwards and having these services either scaled back or end altogether or, worst-case scenario, some sites would have to close. It’s absolutely been instrumental in our ability to grow primary care capacity, and that includes helping our patients that are on the path to recovery.”
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Plans have been delayed for Dakar Studios, a Hollywood-inspired film studio slated for Bedford, but stakeholders assert that’s no indication of the fate of the project. Dakar Productions LLC was formed in Ohio to acquire property for the studio project currently centering on 17500 Rockside Road. That area features a 78,000-square-foot building last used by U.S. Bank as a regional mortgage lending office, plus dozens of acres of secluded property highly valued by production companies looking to keep their projects secret. According to a purchase agreement, the property, owned by Wisconsin holding company HIN LLC and valued at $4.59 million, per county records, was on track to be sold March 29. However, Arline Gant, a producer with Dakota P. Productions who’s spearheading the Dakar project, and her attorney, Mark Schildhouse, say the sale now has a tentative closing
Plans for the estimated $30 million to $40 million project in Bedford call for six soundstages to be built over the next three years, including one with a large pool for shooting ocean scenes. date of May 21. They said the change is because some elements of the deal have not been finalized, including a number of tax credits or abatements on future construction being lined up that officials have declined to discuss in detail because the deal has not yet been signed. “We’re just making sure every ‘I’ is dotted and ‘T’ crossed,” Gant said. Once a sale goes through, con-
struction can begin on a number of soundstages that will be connected to the existing building and made available for film and TV productions. Gant said some projects already are lined up for the fall, as the existing building could host some crews and projects as is, without the stages built out. Plans for the estimated $30 million to $40 million project in Bedford call for six soundstages to be built over the next three years, including one with a large pool for shooting ocean scenes. In its current state, the complete studio campus would include more than 100 acres of land in Bedford. A second, future construction phase calls for an additional soundstage in nearby Oakwood Village complete with a helipad. Gant has been lining up private investors because bank financing isn’t readily available for the project, which is a first for the newly formed Dakar Inc. and Gant’s team. But Gant said the capital is there. The deal simply needs to be finalized and inked. If pulled off, the studio would be one of a kind in Ohio and across the Midwest.
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New York firm hatches downtown office play By Stan Bullard
size secured by a uniform commercial code filing against the property. The 1020 Bolivar building, which housed operations of the former Ohio Bell Telephone Co. for more than 50 years, was most recently the home of the Ohio Means Jobs public employment agency. Operated by the City of Cleveland and Cuyahoga County with federal funds channeled through the state, the Cleveland office moved in 2017 to a newly renovated building at 1910 Carnegie Ave. Pietro pointed to Somera’s hiring of Vocon of Cleveland as its architect and Loomis Cos. of Euclid as its general contractor. “They did not bring in outside firms but selected local ones with credibility in the marketplace,” he said. Northeast Ohio is also not a new market for Somera. Although it has stagnated, the company owns the former Ohio Bell headquarters building, now the AT&T Building, at 48 Erieview Plaza in downtown Cleveland and bought from a lender and repositioned the former Ceres Corp. building in Strongsville. Schagrin said the 16-story, 48 Erieview building is better suited to a single tenant, while 1020 Bolivar is suited to multiple tenants from law firms to tech firms relocating from traditional suburban office space.
sbullard@crain.com @CrainRltywriter
A New York City-based real estate investment and development firm making a big bet on the new federal Opportunity Zone program plans to renovate the 1020 Bolivar Road office building, formerly the home of Ohio Means Jobs, into what it terms creative office space. Ian Ross, managing partner of Somera Road, said in a phone interview Wednesday, April 3, that his company plans to convert the four-story building, which has a parking garage on its ground floor, into “very cool creative work space that is a good fit for employees and companies of all shapes and sizes.” Ross said Somera has registered the undertaking as an Opportunity Zone project under the 2017 Federal Tax Cut and Jobs Act and raised funds for it from multiple investors. He said the financing also included a loan from A-10 Revolving Asset Financing of Boise, Idaho, to buy the property and invest in modernizing it. He declined to disclose the amount of the fund for the project or its proposed budget. The 1020 Bolivar Building, which takes its name from its address, is the site of a proposed repositioning to Matt Schagrin, a Somera Road vice creative office space by a New York City real estate investment firm. (Stan Bullard) president, said plans for the property include polishing the structure’s con- said. That’s because the firm started crete floors and installing a terrace out buying properties through acatop the structure that will overlook quiring distressed loans from lenders Progressive Field and, to its north, and obtaining ownership of the downtown’s skyline. The lobby will structures, many of which happen to be updated and contemporary fur- be in areas designated distressed and nishings installed, as well as first- included in Opportunity Zones. As class hallways, elevators and re- distressed loan portfolios have dried strooms. The top floor will be up, Somera has evolved its strategy to renovated to a state where it’s ready include underperforming properties. With an office for tenants to install portfolio of 6 million their own improve- “This site is ideal square feet, Somera ments, called has completed so“white-box level” by for people who called “creative ofreal estate types. live downtown or Schagrin and Rico fice projects” in dozPietro, a principal of who drive in from ens of markets Cushman & Wake- the suburbs to across the country. Pietro said in a field Cresco, a broThursday, April 4, kerage based in In- work.” phone interview that dependence that will Somera’s so far unrepresent the build- — Matt Schagrin, a Somera Tim Phillips Kurt Kappa Bonny Carroll Mitch Duale Scott Gnau ing, said tenants will Road vice president named project has President & CEO SVP, Chief Lending Officer VP, Treasury Commercial VP, Commercial Banking (216) 529-2602 (216) 529-2998 Management Officer Loan Officer Relationship Manager also be given what an advantage in its (216) 529-2622 (216) 529-2991 (216) 529-2996 they described as a generous physi- central location near East Ninth Street. “Most creative office space in the cal improvements allowance to help them defray the cost of outfitting new market,” Pietro said, “is in destinaoffices to their specific needs and de- tion locations such as the Flats or Warehouse District.” Moreover, the sires. The parking garage will remain in site is between downtown’s Historic place on the first floor for the use of Gateway and Playhouse Square disworkers in the upstairs office space. tricts, putting it “smack between two “There are two things happening dynamic neighborhoods,” he said. here,” Schagrin said. “You have masKristy Hull, a Newmark Knight sive apartment development in Frank managing director who focusAlix Kaufmann Matt Lay Kurt Lutz Anthony Yannucci Suzanne Hamilton downtown Cleveland. A lot of down- es on office space, said many users VP, Treasury VP, Commercial Banking VP, Commercial Banking VP, Commercial Real VP, Commercial Real town office space has been converted are looking for alternatives to tradiManagement Officer Relationship Manager Relationship Manager Estate Lending Officer Estate Lending Officer (216) 239-5842 (216) 239-5909 (330) 835-4264 (216) 529-5907 (216) 239-5906 to apartments. We have also seen tional downtown skyscrapers. “Everyone wants open, collaborasubstantial movement downtown from the suburbs to downtown, from tive space,” she said. “They want high NRP Group to the new product group ceilings and exposed space, and that Our Commercial Banking team is ready to of Progressive Corp. This site is ideal building has a lot of parking. You for people who live downtown or don’t get that in a high-rise office help your business succeed – with the right who drive in from the suburbs to building.” commercial banking and lending products, plus work.” However, she said the challenge Moreover, Somera’s acquisition of will be sprucing up the building’s exthe expertise to guide you every step of the way. 1020 Bolivar Road included two ad- terior and creating a safer atmojoining parking garages at 1064 and sphere near it. The 1020 Bolivar Building and the 1124 Bolivar. All told, Schagrin said, Tom Young VP, Commercial Banking there will be 400 parking spaces adjoining parking lots Somera said it Relationship Manager available for tenants of 1020 Bolivar. has acquired were previously owned (216) 529-2715 Ross said Somera has funded two by an affiliate of the Cleveland-based other Opportunity Zone projects and Frangos Group real estate firm. A believes 1020 Bolivar is the first proj- transfer of the property to Somera ect using Opportunity Zone funds to was not available in computerized Cuyahoga County land records by 5 close in Cleveland. “By the nature of what we do, we’re p.m. Thursday, April 4. However, invested in a lot of properties that are land records indicate the new lender in Opportunity Zone areas,” Ross has authorized a loan of undisclosed
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LegaL Notice
To merchants who have accepted Visa and Mastercard at any time from January 1, 2004 to January 25, 2019: Notice of a class action settlement of approximately $5.54-6.24 Billion. Si desea leer este aviso en español, llámenos o visite nuestro sitio web, www.PaymentCardSettlement.com. Notice of a class action settlement authorized by the U.S. District Court, Eastern District of New York. This notice is authorized by the Court to inform you about an agreement to settle a class action lawsuit that may affect you. The lawsuit claims that Visa and Mastercard, separately, and together with certain banks, violated antitrust laws and caused merchants to pay excessive fees for accepting Visa and Mastercard credit and debit cards, including by: • Agreeing to set, apply, and enforce rules about merchant fees (called default interchange fees); • Limiting what merchants could do to encourage their customers to use other forms of payment; and • Continuing that conduct after Visa and Mastercard changed their corporate structures. The defendants say they have done nothing wrong. They say that their business practices are legal and the result of competition, and have benefitted merchants and consumers. The Court has not decided who is right because the parties agreed to a settlement. The Court has given preliminary approval to this settlement.
The SeTTlemenT Under the settlement, Visa, Mastercard, and the bank defendants have agreed to provide approximately $6.24 billion in class settlement funds. Those funds are subject to a deduction to account for certain merchants that exclude themselves from the Rule 23(b)(3) Settlement Class, but in no event will the deduction be greater than $700 million. The net class settlement fund will be used to pay valid claims of merchants that accepted Visa or Mastercard credit or debit cards at any time between January 1, 2004 and January 25, 2019. This settlement creates the following Rule 23(b)(3) Settlement Class: All persons, businesses, and other entities that have accepted any Visa-Branded Cards and/or Mastercard-Branded Cards in the United States at any time from January 1, 2004 to January 25, 2019, except that the Rule 23(b)(3) Settlement Class shall not include (a) the Dismissed Plaintiffs, (b) the United States government, (c) the named Defendants in this Action or their directors, officers, or members of their families, or (d) financial institutions that have issued Visa-Branded Cards or Mastercard-Branded Cards or acquired Visa-Branded Card transactions or Mastercard-Branded Card transactions at any time from January 1, 2004 to January 25, 2019. The Dismissed Plaintiffs are plaintiffs that previously settled and dismissed their own lawsuit against a Defendant, and entities related to those plaintiffs. If you are uncertain about whether you may be a Dismissed Plaintiff, you should call 1-800-625-6440 or visit www.PaymentCardSettlement.com for more information.
WhaT merchanTS Will geT from The SeTTlemenT Every merchant in the Rule 23(b)(3) Settlement Class that does not exclude itself from the class by the deadline described below and files a valid claim will get money from the class settlement fund. The value of each claim will be based on the actual or estimated interchange fees attributable to the merchant’s Mastercard and Visa payment card transactions from January 1, 2004 to January 25, 2019. Pro rata payments to merchants who file valid claims for a portion of the class settlement fund will be based on: • The amount in the class settlement fund after the deductions described below, • The deduction to account for certain merchants who exclude themselves from the class, • Deductions for the cost of settlement administration and notice, applicable taxes on the settlement fund and any other related tax expenses, money awarded to the Rule 23(b)(3) Class Plaintiffs for their service on behalf of the Class, and attorneys’ fees and expenses, all as approved by the Court, and • The total dollar value of all valid claims filed. Attorneys’ fees and expenses and service awards for the Rule 23(b)(3) Class Plaintiffs: For work done through final approval of the settlement by the district court, Rule 23(b) (3) Class Counsel will ask the Court for attorneys’ fees in an amount that is a reasonable proportion of the class settlement fund, not to exceed 10% of the class settlement fund, to compensate all of the lawyers and their law firms that have worked on the class case. For additional work to administer the settlement, distribute the funds, and litigate any appeals, Rule 23(b)(3) Class Counsel may seek reimbursement at their normal hourly rates. Rule 23(b)(3) Class Counsel will also request (i) an award of their litigation expenses (not including the administrative costs of settlement or notice), not to exceed
$40 million and (ii) up to $250,000 per each of the eight Rule 23(b)(3) Class Plaintiffs in service awards for their efforts on behalf of the Rule 23(b)(3) Settlement Class.
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To receive payment, merchants must fill out a claim form. If the Court finally approves the settlement, and you do not exclude yourself from the Rule 23(b)(3) Settlement Class, you will receive a claim form in the mail or by email. Or you may ask for one at: www.PaymentCardSettlement.com, or call: 1-800-625-6440.
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and
oPTionS
Merchants who are included in this lawsuit have the legal rights and options explained below. You may: • File a claim to ask for payment. Once you receive a claim form, you can submit it via mail or email, or may file it online at www.PaymentCardSettlement.com. • Exclude yourself from the Rule 23(b)(3) Settlement Class. If you exclude yourself, you can individually sue the Defendants on your own at your own expense, if you want to. If you exclude yourself, you will not get any money from this settlement. If you are a merchant and wish to exclude yourself, you must make a written request, place it in an envelope, and mail it with postage prepaid and postmarked no later than July 23, 2019, or send it by overnight delivery shown as sent by July 23, 2019, to Class Administrator, Payment Card Interchange Fee Settlement, P.O. Box 2530, Portland, OR 97208-2530. Your written request must be signed by a person authorized to do so and provide all of the following information: (1) the words “In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation,” (2) your full name, address, telephone number, and taxpayer identification number, (3) the merchant that wishes to be excluded from the Rule 23(b) (3) Settlement Class, and what position or authority you have to exclude the merchant, and (4) the business names, brand names, “doing business as” names, taxpayer identification number(s), and addresses of any stores or sales locations whose sales the merchant desires to be excluded. You also are requested to provide for each such business or brand name, if reasonably available: the legal name of any parent (if applicable), dates Visa or Mastercard card acceptance began (if after January 1, 2004) and ended (if prior to January 25, 2019), names of all banks that acquired the Visa or Mastercard card transactions, and acquiring merchant ID(s). • Object to the settlement. The deadline to object is July 23, 2019. To learn how to object, visit www.PaymentCardSettlement.com or call 1-800-625-6440. Note: If you exclude yourself from the Rule 23(b)(3) Settlement Class you cannot object to the settlement. For more information about these rights and options, visit: www.PaymentCardSettlement.com.
if
courT aPProveS final SeTTlemenT
The
The
Members of the Rule 23(b)(3) Settlement Class who do not exclude themselves by the deadline will be bound by the terms of this settlement, including the release of claims against the released parties provided in the settlement agreement, whether or not the members file a claim for payment. The settlement will resolve and release claims by class members for monetary compensation or injunctive relief against Visa, Mastercard, or other defendants. The release bars the following claims: • Claims based on conduct and rules that were alleged or raised in the litigation, or that could have been alleged or raised in the litigation relating to its subject matter. This includes any claims based on interchange fees, network fees, merchant discount fees, no-surcharge rules, nodiscounting rules, honor-all-cards rules, and certain other conduct and rules. These claims are released if they already have accrued or accrue in the future up to five years following the court’s approval of the settlement and the resolution of all appeals. • Claims based on rules in the future that are substantially similar to – i.e., do not change substantively the nature of – the above-mentioned rules as they existed as of preliminary approval of the settlement. These claims based on future substantially similar rules are released if they accrue up to five years following the court’s approval of the settlement and the resolution of all appeals. The settlement’s resolution and release of these claims is intended to be consistent with and no broader than federal law
on the identical factual predicate doctrine. The release does not extinguish the following claims: • Claims based on conduct or rules that could not have been alleged or raised in the litigation. • Claims based on future rules that are not substantially similar to rules that were or could have been alleged or raised in the litigation. • Any claims that accrue more than five years after the court’s approval of the settlement and the resolution of any appeals. The release also will have the effect of extinguishing all similar or overlapping claims in any other actions, including but not limited to the claims asserted in a California state court class action brought on behalf of California citizen merchants and captioned Nuts for Candy v. Visa, Inc., et al., No. 1701482 (San Mateo County Superior Court). Pursuant to an agreement between the parties in Nuts for Candy, subject to and upon final approval of the settlement of the Rule 23(b) (3) Settlement Class, the plaintiff in Nuts for Candy will request that the California state court dismiss the Nuts for Candy action. Plaintiff’s counsel in Nuts for Candy may seek an award in Nuts for Candy of attorneys’ fees not to exceed $6,226,640.00 and expenses not to exceed $493,697.56. Any fees or expenses awarded in Nuts for Candy will be separately funded and will not reduce the settlement funds available to members of the Rule 23(b)(3) Settlement Class. The release does not bar the injunctive relief claims or the declaratory relief claims that are a predicate for the injunctive relief claims asserted in the pending proposed Rule 23(b)(2) class action captioned Barry’s Cut Rate Stores, Inc., et. al. v. Visa, Inc., et al., MDL No. 1720, Docket No. 05-md-01720MKB-JO (“Barry’s”). Injunctive relief claims are claims to prohibit or require certain conduct. They do not include claims for payment of money, such as damages, restitution, or disgorgement. As to all such claims for declaratory or injunctive relief in Barry’s, merchants will retain all rights pursuant to Rule 23 of the Federal Rules of Civil Procedure which they have as a named representative plaintiff or absent class member in Barry’s, except that merchants remaining in the Rule 23(b)(3) Settlement Class will release their right to initiate a new and separate action for the period up to five (5) years following the court’s approval of the settlement and the exhaustion of appeals. The release also does not bar certain claims asserted in the class action captioned B&R Supermarket, Inc., et al. v. Visa, Inc., et al., No. 17-CV-02738 (E.D.N.Y.), or claims based on certain standard commercial disputes arising in the ordinary course of business. For more information on the release, see the full mailed Notice to Rule 23(b)(3) Settlement Class Members and the settlement agreement at: www.PaymentCardSettlement.com.
The courT hearing abouT ThiS SeTTlemenT On November 7, 2019, there will be a Court hearing to decide whether to approve the proposed settlement. The hearing also will address the Rule 23(b)(3) Class Counsel’s requests for attorneys’ fees and expenses, and awards for the Rule 23(b) (3) Class Plaintiffs for their representation of merchants in MDL 1720, which culminated in the settlement agreement. The hearing will take place at: United States District Court for the Eastern District of New York 225 Cadman Plaza Brooklyn, NY 11201 You do not have to go to the Court hearing or hire an attorney. But you can if you want to, at your own cost. The Court has appointed the law firms of Robins Kaplan LLP, Berger Montague PC, and Robbins Geller Rudman & Dowd LLP as Rule 23(b)(3) Class Counsel to represent the Rule 23(b)(3) Settlement Class.
QueSTionS? For more information about this case (In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL 1720), you may: Call toll-free: 1-800-625-6440 Visit: www.PaymentCardSettlement.com Write to the Class Administrator: Payment Card Interchange Fee Settlement P.O. Box 2530 Portland, OR 97208-2530 Email: info@PaymentCardSettlement.com Please check www.PaymentCardSettlement.com for any updates relating to the settlement or the settlement approval process.
www.PaymentCardSettlement.com • 1-800-625-6440 • info@PaymentCardSettlement.com
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Green Block sees tech consulting niche in NEO By Jeremy Nobile jnobile@crain.com @JeremyNobile
As Northeast Ohio pursues a tech-inspired metamorphosis under a Blockland banner, a duo who worked together on the state’s rollout of OhioCrypto.com looks to build a business around spurring innovation at companies here and across the Midwest. Ari Lewis recently moved back to Cleveland from New York to start up the consultancy, dubbed Green Block Group, with Chris Berry, an Akron native stationed in Columbus who’s worked under John Boehner and, most recently, in the state treasury office under Josh Mandel. “We want to be long-term partners with clients,” Berry said. “It can be a startup working in Ohio City building the next unicorn to a manufacturing company trying to learn more about robotics and automation. How do you communicate with the general public? How do you build out? How do you talk with customers and investors? We want to be a holistic consultancy.” Tech consultants are a dime a dozen in the tech-heavy coastal areas. But Green Block could be a meaningful development in a region with heavy ties to old-school manufacturing that could possibly realize greater economic growth with a stronger tech sector — that’s the impetus of Blockland, after all. And as the tech scene here continues to develop, and other industries
Ari Lews
adapt to newer, modern ways of building products and conducting business, Lewis and Berry want to carve out a niche in helping companies achieve their tech-minded goals. Lewis is a co-founder of Grasshopper Capital, a venture capital firm investing in blockchain-focused companies originally slanted more toward cryptocurrency when it launched in 2017. Lewis is well-known in the crypto world for turning a combined $18,000 investment in tokens like Bitcoin and Ethereum into $1.4 million along with a fellow Case Western University graduate, which the two used to launch Grasshopper in their early 20s. In December, a majority stake in Grasshopper was sold to Token Capital Management, which recently launched Grasshopper Capital Fund
II LP. Lewis is still working for that firm part-time. He was also doing “innovation” consulting through The Sherman Group, through which he was hired to help Ohio develop a program for companies to pay taxes in Bitcoin via OhioCrypto.com, a first for any U.S. state. That’s where he began working with Berry in the treasury department. Berry began developing his own public relations and communications consultancy, Berry Strategies, upon leaving Mandel’s office at the end of the year with the change in administration. Those two entities have been merged as Green Block, which Berry and Lewis say will have a greater impact in Ohio than if they tried to pursue the same endeavor in Boston or Silicon Valley. Lewis will head up innovation efforts, while Berry oversees the communications front. “What we are hoping to do is combine those two experiences and world views and hopefully offer a way to better build brands and businesses,” Berry said, emphasizing the focus on Northeast Ohio. “What we found in Ohio is we are up against Silicon Valley and New York and Chicago. We think we can better help companies here own market share and be more competitive as the global marketplace grows.” Green Block will be jointly based in Cleveland and Columbus with a presence in New York as well. The goal is to hire additional people after they build up business.
“What we found in Ohio is we are up against Silicon Valley and New York and Chicago. We think we can better help companies here own market share and be more competitive as the global marketplace grows.” — Chris Berry, co-founder of Green Block Group
“Frankly, our competitors are now in the Midwest and not in Ohio. They are in Silicon Valley and New York and may have a price tag of a minimum of $20,000 a month for three
months. They have to charge that because they are paying salaries and for expensive office space,” Berry said. “We don’t have that. We live and work in Ohio and hope to offer experts and expertise and knowledge that can compete with the coasts, but right here.” Besides good timing with Blockland underway, which will likely translate to demand for their consulting work, Lewis bills his return to Cleveland, where he recently bought a house, as a tacit endorsement of the market’s overall potential. That’s noteworthy for an area that has struggled to retain tech startups, which could be a hurdle faced by Blockland itself. Some friends and family called him crazy for leaving New York to start a business in Northeast Ohio, but Lewis said he’s putting his money where his mouth is. “I really believe the next big companies are going to be built in the Midwest,” he said. He highlighted the economics of the cheaper cost of living and of doing business here compared to New York or California, as well as an underappreciated talent pool. “I also think with Blockland and what Bernie (Moreno) has done is trying to put Cleveland on the map in terms of tech, and I want to play a small role in that and move Cleveland to become the next technology hub, whether with blockchain or something else,” said Lewis. “We will hopefully play a small role in helping Cleveland maybe become the next Silicon Valley.”
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MAY 7 • 7:15 AM • ST. CLAIR BALLROOM At this breakfast event, discuss and learn more about some of the top issues facing Northeast Ohio, such as: ■ The region’s skilled labor shortage ■ The opioid epidemic and its impact on NEO’s workforce ■ Creating opportunities for ex-offenders as an economic and social imperative PANEL DISCUSSION MODERATOR:
Joe DiRocco
regional president, Fifth Third Bank
Crystal Bryant
director, Cuyahoga County Office of Reentry
Jeff Korzenik
chief investment strategist, Fifth Third Bank
Frank T. Sinito
CEO, The Millennia Companies; president, Millennia Housing Management Ltd.
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assistant vice president of program administration, OhioGuidestone ECONOMIC OVERVIEW
Jeff Korzenik
PRESENTED BY: PRODUCED BY:
chief investment strategist, Fifth Third Bank
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Despite big partners, Beachwood Medical Center takes its own path By Lydia Coutré
Lake Health Beachwood Medical Center is opening at the corner of Richmond Road and Chagrin Boulevard in the East Side suburb. (Photos by Tim Harrison for Crain’s)
lcoutre@crain.com @LydiaCoutre
From its inception, Lake Health Beachwood Medical Center has been about relationships. Relationships between the two dozen or so doctors who came together with a single vision of a specialty, for-profit, physician-owned hospital. A relationship with a private equity partner and another with Walden, a luxury inn and spa in Aurora that collaborated with these docs to help bring to life an intimate, calming hospital setting. Relationships with Lake Health as a health system partner and, more recently, a relationship with University Hospitals, which joined as a minority partner. And, beginning the week of April 8, relationships with patients when the full-service, acute-care hospital opens its doors at the corner of Richmond Road and Chagrin Boulevard. “The relationships are really important, and if you lose that in a small or big organization, you lose sort of everything,” said Dr. Reuben Gobezie, president of the medical staff at Lake Health Beachwood Medical Center. Gobezie, a local physician and surgeon who’s started various practices and has operated in many of the region’s health systems, is confident this new hospital will be different for patients and for physicians. Lake Health Beachwood Medical Center will specialize in orthopedics,
urology, spine and pain management. It features 24-hour emergency room services, diagnostic services and physical therapy. The 69,000-square-foot, two-story facility holds 12 exam rooms where physicians will practice and 24 in-patient rooms. Eight operating rooms and two procedure rooms are positioned in a ring around a central core that aims to improve efficiencies. The facility’s soft opening is set for the week of April 8. Leaders expect the hospital will be fully operational in June, by which point it will have completed the number of cases required for full accreditation by the government. Lake Health joined the project in late 2017 and developed it in partnership with the physicians and Manna Isle Ohio. As a majority owner, the system will manage the day-to-day operations along with the partner physicians. Leslie Manzo was appointed chief administrative officer. Bringing Lake Health into the proj-
ect was “easy,” Gobezie said. “It made sense for the physicians to look for a partner in the city of Cleveland because you have big hospital systems, as you know, who would not initially welcome competition,” Gobezie said. “And Lake had a reason to be in Cuyahoga County in their expansion and most importantly, again, their culture, their demonstrated culture is they have partnered — in their surgery center, the medical office building there — they partnered with private practice physicians historically.” Last month, University Hospitals acquired a minority interest in the hospital by purchasing a portion of Manna Isle’s interest, a move that Gobezie said he believes will be “really symbiotic and mutually helpful.” Although the hospital is now working with two of the region’s health systems, it has the potential to afford physicians a level of independence for which many have been searching. The physicians own the facility itself
A HILARIOUS HOT-BUTTON COMEDY APR 27 – MAY 19 | ALLEN THEATRE written by KAREN ZACARÍAS | directed by ROBERT BARRY FLEMING
and the management service organization that handles the administrative functions for the hospital, said Phillip Ciano, a partner in the law firm of Ciano and Goldwasser who represented the vast majority of the physicians involved in this project. “Many of these came from other systems or they had their own independent practices or still maintain their independent practices,” Ciano said. “But for the first time in their
Growth by Design
” .. dy. lever. e om nd c c l a u illf itty I.COM k S w “ nd INNAT C ht a CIN g i Br
professional existence, they have the opportunity to actually own a $40 million hospital asset and, also for the first time in their physician practice, have the opportunity to actually own the managed service organization that is going to provide services and billing to the hospital. So there’s a tremendous amount of independence that’s still available and investment opportunity for these physicians, which they’ve never had in
Northeast Ohio’s economic development engine at work
Team NEO will kick off the celebration of National Economic Development Week with “NEO Rising: Celebrating Today. Building Tomorrow,” an event from 4:30 p.m. to 7:30 p.m. May 2 at Embassy Suites, Independence.
NEO RISING will honor Team NEO’s Regional Economic Development Champions: • Tracey Nichols, Project Management Consultants LLC • Pat Kelly, FirstEnergy • Dr. Jay Gershen, Northeast Ohio Medical University
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4/4/19 3:40 PM
Dr. R stat
thei ing one
Chief administrative officer Leslie Manzo is shown in the lobby of the new Lake Health Beachwood Medical Center.
Dr. Reuben Gobezie, president of the medical staff, shows off one of the state-of-the-art operating rooms.
their prior employment either working independently or working with one of the big systems here in Ohio.”
Gobezie has taken what he’s learned in other hospital systems, as well as what’s worked in systems
The 69,000-square-foot, two-story facility holds 12 exam rooms and 24 in-patient rooms.
across the country and abroad, and applied it to Lake Health Beachwood Hospital, such as telemedicine with-
in the building, so he can consult with families in a conference room from the operating suite. He’ll have
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the ability to not simply send patients home with a stack of papers, but to email them their images and annotate what they’re seeing. The hospital was designed to minimize patients’ movement from room to room before and after surgery. Radiology will work closely with physicians, so they know quickly when a patient is done with their testing. With a goal of infection control, OR staff won’t be allowed to wear scrubs outside of the operating suite without first covering them up. Plus, they’ll wear sterile shoes that are washed regularly, rather than the shoes they wear outside the hospital. Because the hospital sits in an Orthodox Jewish area, leadership worked with local organizations to provide kosher food and offer a dedicated space for patients and families of that community. In every area of the hospital, Gobezie can point to how Lake Health Beachwood Medical Center is different. Central to all of it will be its relationships. “You’re only good as the strength of the relationships we have, whether it’s between the hospitals, between the leadership, between the patients, between the staff,” he said. Leadership hopes that patients will notice the difference. “The entrepreneurial spirit of this project, I think, is going to permeate through every aspect of the health care delivery system that you’ll see in this hospital, which will make it very unique from the typical institutional delivery of medicine here in Ohio,” Ciano said. “I think you’re really going to see and feel that, which is going to distinguish from what the consumers are used to in Ohio in health care delivery.”
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Opinion From the Editor
Law firm does good work with unclaimed funds
Editorial
Local matters The news about the news in Cleveland isn’t good. The Plain Dealer, the most important news source in the city, last week laid off 14 reporters, photographers and editors as part of staff reductions first announced in December. All 14 were members of Local 1 of the News Guild of the Communication Workers of America, and they accounted for about onethird of the unionized news staff at the newspaper. (The Plain Dealer is separate from the larger, nonunion Cleveland.com.) In his article about the layoffs, longtime PD reporter Tom Feran — himself one of those let go — noted that the downsizing “comes in advance of another round of layoffs that will take place in May, when the paper shifts page-production work to a centralized external system.” With the layoffs on April 1, the News Guild said, Cleveland “lost more than 475 years of institutional knowledge” from journalists who know and care deeply about the city. This is a loss for everyone who seeks to be an informed, engaged citizen and wants facts to help navigate our divisive, hyperpartisan political landscape. Cleveland is hardly unique in this atrophying of its journalistic muscle. As Pew Research reported last year, overall U.S. newsroom employment from 2008 to 2017 dropped by 23%, to 88,000 jobs from 114,000, basically because of one sector: newspapers, where newsroom employment fell 45%. Since 2004, The Washington Post noted, about 1,800 city newspapers have gone out of business. Journalism, especially at the local level, faces significant business headwinds, and only a mixture of innovation, collaboration, partnerships and smart startups will help preserve and, ultimately, strengthen the industry. We’re not impartial observers about the importance of local news, of course, but there’s plenty of research that shows a strong local media business is vital to holding public officials accountable, and for highlighting and contextualizing the concerns of a community. For instance, a September 2018 Brookings Institution study found that the loss of government monitoring resulting from a news-
paper closure is associated with higher government borrowing costs, wages and deficits, and “increased likelihoods of costly advance refundings and negotiated sales.” So what comes next? The local News Guild voted to extend its contract with The Plain Dealer through Feb. 28, 2021, and the paper’s remaining staff will continue to do high-level, important work. But we know, increasingly, that it’s not enough to fully serve the region with the information its residents need. Chris Horne, publisher of The Devil Strip in Akron and a 2019 John S. Knight Journalism Fellow at Stanford, last week published a strong essay on Medium, headlined “What we talk about when we talk about local,” with the subhead, “How we can make cities better by making local news better.” We strongly suggest you read it, not just if you care about local news, but if you’re concerned more broadly about the future of civic engagement. Horne, who is writing a book for Belt Publishing called “Let’s End the News as We Know It,” about reclaiming local news for its communities, writes that by improving local news, “we can strengthen the civic narrative to encourage more civic engagement and increase social capital, which helps cities tackle the problems they face.” He sees the future of local journalism “as community-owned local news co-ops, which belong to and are managed by the people who use and produce the work,” and The Devil Strip points to how that can work — when operated by people as smart and dedicated as Horne. There aren’t quick or easy answers here. The industry’s decline has taken place over a long period, though it has accelerated of late, even as the economy has expanded. Local news both reflects and shapes communities, and at Crain’s, we’re proud of our role in helping to drive conversation about what’s happening in Cleveland’s business community. The industry’s resurgence will require new approaches but also old, valued ones: listening carefully to readers’ concerns and reflecting them through deeply reported journalism.
Publisher and Editor: Elizabeth McIntyre (emcintyre@crain.com)
CLEVELAND BUSINESS
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Managing Editor:
Scott Suttell (ssuttell@crain.com)
Contact Crain’s:
216-522-1383
Read Crain’s online: crainscleveland.com
Irving Rosner knows well the harm that hate creates. His father lost seven siblings in the Holocaust. So when he and Patrick Perotti, who like Rosner is a partner at Dworken & Bernstein, sat down to consider where the law firm’s next charitable distribution would go, it turned into a very long conversation. The news today seems filled with hate crimes. Against Muslims. Against Jews. Against anyone considered “the other.” They’re targeted in places of worship, in schools and on sidewalks. After much discussion, Rosner and Perotti agreed the funds should benefit the anti-bias work being done at the Maltz Museum of Jewish Heritage in Beachwood. “Hate,” Rosner said, “might be the worst Elizabeth plague on society that there is.” McIntyre Last month, during the Maltz Museum’s 11th annual Stop the Hate Youth Speak Out essay contest awards ceremony, Rosner presented a check for $100,000 to support the museum’s mission to combat hate in all forms through anti-bias education. With that, the Maltz Museum joined the hundreds of charities and nonprofits that have benefited from Dworken & Bernstein’s use of an ancient law doctrine in class-action settlements known as cy pres, a shortened version of a French phrase meaning as nearly as possible. Perotti, who heads the class-action department at Dworken & Bernstein, discovered cy pres nearly two decades ago during the final settlement stages of a class-action case. There was money left over, which is not uncommon. Perotti said that in most class-action lawsuits, about 80% of money goes undistributed because people have died, moved, changed their names or never put in a claim. How many times have you gotten mail notifying you that you are part of a class-action lawsuit and simply tossed it in the trash either because you thought it was a scam or because it wasn’t worth the trouble to collect just a few dollars? Those dollars can add up fast. And leftover funds can be given to the government, returned to the wrongdoing corporation paying them, given to class members who filed claims in larger amounts, or, as Perotti discovered, distributed through cy pres as charity to indirectly touch the entire class, including those who did not claim their money. Since 2003, the firm has distributed more than $38 million in leftover class-action funds to charitable organizations in Ohio and throughout the country using cy pres. Dworken & Bernstein created a nonprofit called Ohio Lawyers Give Back to encourage the use of cy pres in class-action settlements. Nonprofit organizations are also encouraged to submit information at OhioLawyersGiveBack.org for consideration for inclusion in a future cy pres distribution. Perotti is a passionate advocate for the practice. Since discovering cy pres, he refuses to settle most class-action cases until defendants agree that leftover funds go to charities. He acknowledges that using the doctrine entails additional work that often drags out the settlement process. “I could settle a case, and not worry about cy pres, and I still got my one-third fee. … I’m not legally obligated to worry about the extra stuff,” he said. Ultimately, though, it comes down to something Perotti learned at a young age. “I was raised by a very positive, gracious and friendly Irish Catholic mother. All she ever told me was, ‘Patrick, you do the right thing,’ ” he said. And in the case of the Maltz Museum’s effort to stop hate, the right thing is to spend cy pres money on fighting the wrong thing.
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.
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Personal View
Hooking the next Amazon By Joshua Holmes
As a tech professional, I’m often asked why Amazon didn’t locate a second headquarters in Northeast Ohio. I’m reminded by those asking that our region has all the bait: a low cost of living, easy access to sports and cultural amenities, and relatively short commuter times. My answer is simple: We don’t have the tech talent. The next question I’m asked is how do we attract more talent. My answer is we need to learn how to compete. Our Cleveland Indians figured it out in the 1990s as a midmarket player that must compete for talent against teams in major markets. Its leaders knew they couldn’t buy their way into the World Series. They came to understand they needed to play Moneyball, which meant building a roster of players who could be relied on night after night to hit a great number of singles, doubles, triples and occasional home runs. The path to affordability was to acquire talent when young, nurture it in affordable ways and give it a platform to succeed. We need to look no further than Arlington, Va., which was originally chosen as one of the two second headquarters for Amazon, as its leaders had adopted this approach that’s now paying off. The Wall Street Journal recently examined why Amazon selected Arlington as its second headquarters. The bottom line was talent. The surprise for many was that a midmarket city offers tech talent at par with New York. How can that be true? An even closer examination reveals it was intentional. Once upon a time, Arlington’s leaders were living fat and happy on tax proceeds from its largest employer, the U.S. Department of Defense (DOD). That all changed when the last recession hit and, shortly thereafter, the DOD left town. Arlington quickly had more than 20% vacant office space and few candidates available to fill it. Wisely, its leaders realized that a Moneyball approach could solve its vacancy crisis and protect them from future devastation when a large employer leaves. To promote the needed change, its leaders looked at tax polices that impact the cost of doing business, so the midmarket city could compete for firms against the suburbs of cities like New York and San Francisco. Virginia’s corporate tax rate is 6%, well below regions with comparable proximity to big-city business. New Jersey and Connecticut have top rates of 9%, while California’s sits at 8.8% and New York’s at 6.5%.
Utilities, Similarly, Arlington’s effective including water, property-tax rate of less than 1% is are available lower than most metropolitan suburbs. These low rates helped Arlington compete for workers SVN SUMMIT COMMERCIAL and employers that Amazon now REAL ESTATE GROUP, LLC finds so attractive. CONTACT If Ohio’s legislators are commitJerry Fiume, SIOR, CCIM Holmes ted to making our state tech friend3009 Smith Road, Suite 25 Managing Director ly, they need to follow Virginia’s Akron, OH 44333 330-416-0501 example and effect the impactful changes within their Jerry.Fiume@svn.com (234) 231-0200 span of control. They can start by removing archaic past tax policies, such as the Ohio kilowatt-hour tax. Conceived nearly 20 years ago, this tax offers exemptions for certain types of super-high-energy intensive manufacturers, as legislators understood it would inadvertently hurt those industries. But as the data center market grows, this tax now serves as a large deSVNexAd-Liverpool-4-8.indd 1 terrent for keeping large-scale data centers from panding into Ohio. The Buckeye State has had some recent wins with the Amazon Web Services and potential Google data centers in Columbus, yet we otherwise remain far behind tech hubs like Texas, Georgia, Virginia and others. The cost of electricity in each state is a big reason for this difference. For a data center that might use 50 Here, it’s about more than just numbers. megawatts of power consistently all day, seven days a week, this tax equates to more than $1.5 million a year in additional operating expenses. At Ciuni & Panichi, we take a personal approach to This is just one of the critical reasons data centers head to other states. And while we think of data cenaccounting and auditing. One that’s built on ters as low in employment count, this is an outdated understanding and trust. When you work with us, you understanding of market dynamics. More data center can feel confident that you’ll get the highest level of companies are managed infrastructure in the cloud for clients that require high-employment-count staffattention. Most importantly, you’ll get expert guidance ing. These jobs have great salaries and benefits. These to help you achieve your definition of success. are long-term jobs that help bring high-income residents to areas where data centers are built. If our leaders are serious about attracting the next big tech company, we better remove the tax policies that prevent us from stocking the Northeast Ohio pond 216.831.7171 with tech talent. cp-advisors.com Otherwise, our region remains at risk of becoming stagnant.
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Nuclear bailout plan should fix wind-farm restrictions
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lengthened the setback distance, which is the distance from a wind turbine to a property line. It is now so great that few rural locations qualify for a turbine. The wind industry, unlike the electric utility, is not looking for a handout but rather a fair chance to compete. Any proposed nuclear bailout should include a fix to the wind turbine setback law. The bailout should also have a limit of, say, five years, to the $5 per month increase, along with a renewable-energy goal of 15% to 30% or more to the Ohio energy mix. (Oklahoma gets about 33% of its electricity from wind power. Why not Ohio?) FirstEnergy and a few Ohio legislators are currently working overtime to make the state look unfriendly to investors because a bailout will push electric rates higher. Worse yet, the state looks like it is run by people looking backward while companies such as Microsoft, Amazon, General Motors and others are looking for renewable energy to power and expand their businesses. Loud and clear, Ohio’s message seems to be: “Go somewhere else.” Wind power has the lowest production cost of any generation method, can lower electric bills and make Ohio look like a modern state looking to a bright future. We ignore this reality to our economic peril. Paul Dvorak Strongsville
3/29/19 11:55 AM
Where Relationships Count.
Holmes is managing partner of Lightspeed Hosting and CEO of technology developer Ethode, both based in Medina.
Letter to the Editor The March 25 article “Bailout chances may be good for FES plants” discussed how a bailout might fix the crumbling Davis-Besse and Perry nuclear plants. One proposal, the article tells, would add $5 per month to the bill of Ohio ratepayers for an unspecified period, or about $300 million per year. By itself, this is not a good solution to the problem because, aside from being crony capitalism, it just rewards the mismanagement of plant owner FirstEnergy Solutions. Still, it just might get a green light from the Ohio Legislature because FirstEnergy has greased the skids for its passage with generous donations to the re-election of key legislative members. Verify that for yourself at www.votesmart.org. The Union of Concerned Scientists also voiced objections to the bailout on five grounds: 1) Safety — Davis-Besse, says UCS, has one of the worst safety records in the United States. 2) Transparency — Demonstrate a need for economic support. 3) Flexibility — Financial support should be temporary and adjustable. 4) Strengthened renewable-energy and efficiency standards — FirstEnergy has worked for the opposite. 5) A commitment to impacted communities. Meanwhile, the wind industry in Ohio struggles to grow because of a late-night change in the laws, possibly due to similar FirstEnergy donations. The change
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WHEN CLEVELAND PUT AMERICA ON WHEELS
This 1916 Owen Magnetic has an electric-gas engine licensed from the Baker Motor Vehicle Co., one of more than 100 automakers that once called northern Ohio home. (Photographs by Peggy Turbett for Crain’s)
Remembering the bygone era when Cleveland stood as the ‘motor capital of the world’ By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty
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oday, Detroit is known as the Motor City. But it could be argued that there was a time when Cleveland was considered the “motor capital of the world,” said Chad Malkamaki, interpreter at the Cleveland History Center at University Circle. That was early on in the auto industry, from about 1895-1910, Malkamaki said. Northeast Ohio had the steel and rubber industries and an established transportation network, making it an ideal spot for auto manufacturing to grow. Cleveland manufacturers were focused on luxury vehicles, tending to make cars one at a time, Malkamaki said. When Henry Ford introduced his assembly line approach, which was more cost-effective than an emphasis on craftsmanship, Cleveland’s role in the auto industry changed forever. “By the 1930s and the Great Depression, the Cleveland car industry was pretty much gone,” Malkamaki said. But before that happened, there were more than 100 car manufacturers in the northern Ohio region, many of them located in the city of Cleveland. Some of Cleveland’s notable car manufacturers were Peerless Motor Co., the White Motor Co. (which started as a sewing machine maker) and the Chandler Motor Car Co. And then there was the Jordan Motor Car Co. Run by Ned Jordan, it was known for its advertising campaigns, which sold a lifestyle instead of the technology. And it was one of the first that marketed to women. “He was really looking at what was happening in popular culture to influence his car advertisements. And it really was ahead of its time,” Malkamaki said. The region was home to a lot of component manufacturers, as well. And some former Cleveland car companies lived on in other ways, transitioning to make other products, said Angie Lowrie, director of the Cleveland History Center. For example, Peerless closed its auto manufacturing plant during the Great Depression, but after Prohibition it reopened as a beer distributor, Lowrie said. The Cleveland History Center of the Western Reserve Historical Society has a vast collection of cars with Cleveland connections in its Crawford Auto-Aviation Museum, from those that were made in the city to those that were driven by well-known, local public figures. The museum regularly hosts “Crawford, Coffee & Cars” events for the public. The next one is April 20.
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The grille of a 1909 White Truck owned by Huffman Brothers Lumber Co. of Youngstown.
Medina native Bobby Rahal drove this 1982 March Cosworth Indy Car DFX-82C to victory when auto racing returned to Cleveland in 1982.
Left: This 1932 Peerless, with a 145-inch wheelbase, weighs in at 4,000 pounds — light for its size due to its unusual aluminum construction.
Above: The 1929 Jordan, priced at $2,745, used slick advertising to promote a lifestyle, as well as the quality of the eight-cylinder, six-passenger vehicle.
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Thought leadership shapes the conversation By Douglas J. Guth clbfreelancer@crain.com
In an age of digital upheaval, more B2B companies are using “thought leadership” in marketing to build reputation and strategically position themselves in the minds of potential customers. The concept is also becoming part of the marketing mix in manufacturing, traditionally a sales- and engineering-driven industry where the notion of promotion has always competed with a certain level of humility. “Most organizations aren’t used to standing up onstage telling the world about themselves,” said Jason Therrien, president of the Cleveland digital marketing agency thunder::tech. “But if you’re a good communicator, it’s amazing what you can do with the right tools.” Generally, thought leadership is about shaping the conversation around new ideas, as well as creating an ongoing dialogue on why those ideas are better. Therrien said a company simply shotgunning random content isn’t going to get the same traction as a competitor offering trend-defining research. “When there’s no value in it for the end customer, it seems promotional,” he observed. “Why should I as an audience care?”
Creating value for end users While many manufacturers are still developing general digital content for their products or processes, thought leadership is a potentially powerful feature of a larger marketing strategy. Increased comfort with online platforms — alongside a better understanding of how content
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RBB Systems uses thought-leadership messaging to offer information industrywide, not just to potential buyers of its circuit boards. (Contributed photo)
marketing informs the buyer’s journey — has more manufacturing companies seeing the promise of becoming thought leaders in their respective spaces, Therrien said. For some businesses, publishing a couple of white papers on products
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and services is sufficient. Manufacturers seeking to differentiate themselves will highlight broader core competencies, including industryrelated safety issues or additional valuable knowledge that customers learn to associate with a brand. OH_2018-19_ad_Crains.qxp_Layout 1
“Companies understand it can’t be all about themselves,” said Therrien. “They’re asking what the value is for the end audience.” When done right, thought Therrien leadership makes specialized expertise accessible and strengthens a business’ reputation. Manufacturers have told Crain’s they've also enjoyed a tangible sales impact after integrating thought leadership concepts into their approach to communications. RBB Systems, a producer of smallbatch circuit board assemblies with $10 million in annual sales, bills itself as “a business rooted in dedication and trust.” Far from shallow self-promotion, the company, located in Wooster, aims to offer valuable information to the industry as a whole rather than just to prospective clients. “Someone reading our messaging may fit our small batch later on,” said marketing coordinator Carrie Guenther. “They can trust us, even if they’re not a fit right now.” Blog posts on RBB’s website have an educational component, spotlighting alternative inventory methods or the management of a buyer’s legacy product portfolio. Meanwhile, a “meetrbb” hashtag on the company’s social media channels promotes the blog and points visitors to employee profiles and upcoming promotions. RBB president Jim Tennant said this multipronged thought leadership approach shows off the company’s culture, known internally as its “mojo.” “It’s a1:25 palpable difference that peo3/26/19 PM Page 1
ple feel,” he said. “That’s what we’re after with all of our marketing channels.” Via thought leadership, RBB looks for the right client fit rather than pushing a purchase order upon initial customer contact. The manufacturer has seen a higher percentage of warm leads convert to direct sales thanks to use of thought leadership principles. Tennant said people know his company for tackling “high-hassle” projects. “We’re the small-batch experts, and thought leadership has helped bring that across,” he said.
A rifle, not a shotgun A focus on thought leadership is a necessity today, considering company research is a major factor in buyers’ purchasing decisions, said Mike McDonald, executive vice president of SyncShow, a Cleveland B2B digital marketing firm. Customers look for anything that helps them reach a decision, including detailed research into industry issues or a deeper understanding of product applications where expertise is shared rather than sold. “As a customer, you’ll say, ‘This is a company leading the way, and I’m safe with them. They’re going to partner with me and bring me ideas,’ ” McDonald said. Joslyn Manufacturing Co. Inc. of Macedonia — an industrial thermoformer specializing in custom production of plastic components for a variety of industries — began a serious marketing push three years ago, motivated by the digital transformation’s ripple effect across all market sectors. SEE LEADERSHIP, PAGE 19
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What you might expect from your business advisory firm
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Union Metal is reborn with eye on 5G future By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty
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At the end of 2017, Union Metal Corp. in Canton shut its doors after more than a century of making traffic and light poles. Less than six months later, the company reopened under new ownership and a slightly new name: Union Metal Industries Corp. Union Metal makes steel and aluminum poles for lighting, traffic and signs, with a particular expertise in the decorative pole space. The company sits on about 50 acres on Maple Avenue in Canton, and it has about 400,000 square feet of plant and office space. American Industrial Acquisition Corp. in New York City bought Union Metal in May 2018. Union Metal was a good fit for a firm that often buys underperforming companies to turn around. It was a well-established company with more than a century of history, but mismanagement had led to its closure, said chief operating officer Larry Small. When Union Metal shut down in December 2017, Small said, there were about 250 hourly employees and 100 salaried employees. The company is significantly smaller today, he added, with 74 hourly employees, all of whom were previously with the company, and 20 salaried employees. A newly negotiated contract with the United Steelworkers, which began April 1, allows ownership to hire
new people, Small said. Marlon S. Williamson, staff representative with the United Steelworkers District 1, subdistrict 2, in Canton, got involved with Union Metal in late 2018 to help negotiate the fiveyear contract. Workers had agreed to significant wage concessions with the first, one-year contract, but the new one would help them make that up and then some, Williamson said. “The future remains to be seen, but, right now, both sides are getting along well,” he said. Union Metal is focused on profit now rather than revenue, said Jeff Sands, a turnaround consultant at Dorset Partners LLC. It’s about having a budget and a plan, instead of taking on unprofitable business. The company’s new cost structure means Union Metal only needs about half of the previous ownership’s revenue to be profitable, Sands noted. Dorset is a consulting firm working with American Industrial Acquisition Corp. that offers transitional management, such as Small. Though Small declined to share annual revenue, he said Union Metal started to see a positive EBITDA as early as September. Overall, the new Union Metal doesn’t want to be as big as the old company was. It wants to be more strategic in the jobs it takes and the business it pursues. For example, the company will target business east of the Mississippi River and from North Carolina north, as well as in California, Small said. “That’s where our strongest customers are and our strongest reps, so
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Local CEO links innovation institute to Northeast Ohio By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty
The Clean Energy Smart Manufacturing Innovation Institute wants to be known as the home for smart manufacturing. “The institute has an audacious goal of revitalizing manufacturing here in this country and abroad,” said CEO John Dyck. “And it’s focused on what I believe is the biggest of the challenges we face.” There’s a lot of talk about the value that smart manufacturing — the high-tech approach to manufacturing that makes use of sensors, software and more — can create. But the challenge is in the implementation of these technologies and in the data flow within organizations. And those are the challenges CESMII aims to address, said Dyck, who joined the institute in the summer of 2018. The manufacturing innovation institutes are a federal initiative to encourage research and development in advanced manufacturing. Ameri-
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ca Makes, the National Additive Manufacturing Innovation Institute in Youngstown, was the first. CESMII is the ninth institute, and Dyck is its first noninterim CEO. CESMII is based in Los Angeles, but it’s creating regional manufacturing centers across the country. It already has such hubs in California, Texas and New York, and it’s looking to create one in the Midwest, Dyck said. CESMII aims to support all manufacturing, but has found it’s important to have regional manufacturing centers to offer more industry-specific and geographic expertise. The Midwest location hasn’t been chosen yet, but those plans are expected to move forward within a year. “Not to have a presence in the Rust Belt is a huge strategic gap,” Dyck said. CESMII does already have one tie to the Midwest: Dyck himself, who lives in Northeast Ohio. Though he spends time in L.A., for personal reasons he didn’t want to relocate. And he’s already made himself, and CESMII’s resources, available locally. In March, Dyck spoke at a smart
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we’re going to work there for a while,” he explained. The biggest challenge so far has been getting the necessary certifications by state, Small said. Certifications for the light pole business don’t transfer with a sale, he noted, and each state has its own certifications. The previous ownership had certification for all 50 states, but since Union Metal’s current ownership has a more defined business plan, it isn’t seeking that, Small said. While he doesn’t rule out expanding Union Metal’s reach in the future, for now the company is focused on customer service, aiming to deliver its products on time. The company has a lot of history and it makes a quality product, said Randy Dominick, president of Traffic Systems & Technology in Manassas, Va. Traffic Systems & Technology is a
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Union Metal Industries Corp. makes traffic, lighting and other types of poles in its mill in Canton. (Contributed photo)
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“Not to have a presence in the Rust Belt is a huge strategic gap.” — John Dyck, CEO, Clean Energy Smart Manufacturing Innovation Institute
manufacturing cluster meeting for Team NEO, so members could learn more about the resources available through the institute. Team NEO has been working to create industry clusters around areas where the region can see an impact, such as smart manufacturing or additive manufacturing. In the smart manufacturing space, the idea is to support companies making products that fall under that umbrella, but also
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distributor of traffic-related products like poles, cameras and lighting fixtures that has been working with Union Metal since its start. Dominick and his family are from Canton, and his father worked at Union Metal before starting companies that included Traffic Systems & Technology. When Union Metal shut down, Dominick struggled to find manufacturers to fill the gap. “First of all, I was concerned for my business, because we do an awful lot of business with them,” Dominick said. “But I was equally concerned about all the individuals that were going to be without work.” When American Industrial Acquisition reopened Union Metal, he was interested but guarded. He said he wasn’t interested if the company was in it for the short term, and he wanted to make sure the quality would be
there. He’s been pleased so far. One area in which Small sees poLogistics tential for Union MetalCandor is the 5G Ad-4-8.indd space. There’s been a lot of conversation about how the technology to run 5G, which needs to be high in the air, will be spread throughout communities. “And we’re hoping it’s light poles and traffic poles,” Small said. While the technology would be placed inside the poles, those will have to be re-engineered to accommodate it. That’s something Union Metal was already working on before it closed in 2017, Small said. This summer, the company met with some of the carriers to discuss possibilities. Small said the company is trying to take its legacy and move it into the future with the adoption of 5G technology.
to encourage the adoption of such technologies. Team NEO is interested in connecting with the institute on a national level, not just because there’s a local connection, said Jay Foran, senior vice president for industry and innovation at Team NEO. About 20% of Northeast Ohio’s economic output is in manufacturing, Foran noted. Team NEO wants to see local manufacturers better embrace smart manufacturing technology to keep their edge in a competitive industry. “So this is as much a retention strategy as it is a growth strategy,” said Foran. CESMII has expertise and tools that Team NEO hopes to draw upon as it works to establish that cluster, he added. While a lot of the national innovation institutes focus heavily on research and development of the technologies on which they’re focused, CESMII is focused on adoption. “R&D is obviously a vital part of how technology works in manufacturing, but in the manufacturing IT space, in the space around data and the use of data to create value, that’s moving at a pace that R&D is struggling to keep up with,” Dyck said. He would know. Before joining CESMII, Dyck worked at vendors Rockwell Automation and General Electric and helped form manufacturing IT software startup ActivPlant.
He saw firsthand how slow the adoption of smart manufacturing technologies has been. Mike Yost, outreach adviser at CESMII, said the smart manufacturing movement needs to take inspiration from lean manufacturing initiatives. The focus in those is on how changes will improve capabilities at a plant. That should be the focus in the adoption of smart manufacturing, Yost said, not the actual technologies. CESMII aims to place manufacturers at the core of its work, bringing systems integrators, application vendors and academia in to support them. One way CESMII will be taking on these challenges is by creating a platform, or a basic set of technologies, for companies to use. The institute will be funding short-term projects designed to solve specific problems. Those projects will be funded up to $250,000 and take six months, Dyck said. They will be team-based and focused on a problem a manufacturer has presented. Systems integrators, vendors and academics will be brought together to solve the problem, and their solution will be made publicly available after the project, in something of an open-source or crowdsourced model. Dyck said this approach will also provide the creators of the solutions with recurring revenue as the solutions are downloaded and used. The innovation projects will begin in the second half of 2019.
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Adviser: Jim Rollins
Take stock of existing systems before investing in new Rapid advances in technology combined with a tight labor market are prompting an increasing number of manufacturers to consider investments in automation. These companies are under constant competitive pressure to increase efficiencies and manage costs, a challenge magnified as low unemployment levels make it difficult to find and retain the talent essential to running a modern manufacturing operation. The answer, in many executives’ view, is to increase their use of technology — and with good reason.
Rollins is partner-incharge for the assurance and tax services group at Meaden & Moore, headquartered in Cleveland.
Technology has the potential to bring a number of important benefits. Various types of tools can improve the speed and availability of useful
Few companies implement ERP systems in ways that make the most of all their functionality. More often, companies only launch the elements of an ERP system that are most important to them at implementation. decision-making information. They have the potential to increase labor productivity, reduce costs, reduce routine manual tasks, improve product quality and safety and reduce lead times.
However, that doesn’t mean every new investment in technology is a slam dunk. Before investing in new hardware or software, the first step for any manufacturer should be to ensure it is fully utilizing what it
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already has on hand. Nearly all but the smallest shops have already invested in enterprise resource planning (ERP). ERP systems are integrated systems that tie together all facets of operations, finance, sales, service, human resources, distribution and supply chain, streamlining and automating a number of key business processes. ERP systems have evolved considerably from their earliest days, when they focused on materials planning and basic computations. Companies that have invested in ERP systems likely have upgraded, supplemented or replaced those systems over the years. Few companies implement ERP systems in ways that make the most of all their functionality. More often, companies only launch the elements of an ERP system that are most important to them at implementation. Let’s face it, under the best of circumstances, an ERP implementation is difficult. It requires an enormous, well-planned, well-coordinated effort on the part of people throughout the organization, and it disrupts the current processes and procedures. It’s therefore common for a company to implement what matters most on the front end — with the best of intentions to leverage or deploy more of the system at some future point in time. Whatever the plan at the outset, changes in the business or in personnel over time often leave elements of an ERP system underutilized or even unused. That’s why it’s important to take a minute before rushing out to purchase new technology. It’s possible that existing systems may offer untapped potential, which should be explored in a thorough gap analysis. A gap analysis seeks to identify what a company wants or needs to accomplish and determines what technology it needs to achieve those objectives. Often, that leads to a decision to invest in new tools. First, though, every company should consider the possibility that it might already have some of the new capability it's looking to acquire. The company may still need to consider upgrades to hardware or software, or perhaps side systems to enhance an existing ERP, but those are often more cost-efficient approaches than replacing an entire ERP system. Advances in data analytics, dashboards and automation are creating new ways for companies to extract, manage and report information. In many cases, such tools can be used in tandem with existing systems without necessitating replacement of systems that work effectively. Improvements in internal control, for example, may be achievable with methods other than wholesale replacement of existing systems. Manufacturers are always looking for ways to improve their control environments, especially as they expand and grow their employees and locations. Ultimately, there may be a great deal a manufacturer can accomplish in deploying new technology when the endeavor begins with a robust analysis of what’s already inhouse.
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ARCHITECTURE
TAX Planning Group
AXT Company
CTION CONSTRU Jane Pool hasIte volo Salma Starlgn hasIte ACCOUNTING officte mpossitatint volo officte ARCHITECTURE BUILD volut BEST volut fugiaec tibus, mpossitatint Group Planning TAX sumqui temposa fugiaec tibus, sumqui AXT Company Salma Starlgn hasIte ndianti temposa ndianti hasIte volo Poolonserrumende Jane volo officte tint cus, se etmpossita doles doles onserrumende se et Salma Starlgn hasIte officte mpossitatint volut quaeceres quia doles doles cus, tibus, volo officte fugiaec erro volut fugiaec tibus, sumqui volorehendam quaeceres erro quia mpossitatint volut temposa aut moloratem sumqui temposa ndianti ende cus net aperibus dicta nem volorehendam aut moloratem fugiaec tibus, sumqui onserrum ndianti onserrumende se et cus, cus net aperibus dicta nem dolesendantiaesed temposa ndianti et dolesnditis seligenda doles cus, quaeceres erro doles quos doluptur sitatur ligenda nditis endantiaesed onserrumende se et s erro quia quaecere quia volorehendam aut m cus, molorate doles eproviduste volende riatum quos doluptur sitatur aut doles volorehendam m cus net aperibus molorate dicta nem verum expel ipicatenis eproviduste volende riatum quaeceres erro quia aperibus net cus nem ligenda nditis m dicta sed doluptatiunt volupta quam, verum expel ipicatenis volorehendam aut molorate nditis endantiae ligenda quos doluptur sed endantiae nem ommolup tatur? Quiaeperi auda doluptatiunt volupta quam, sitatur cus net aperibus dicta doluptur quos eproviduste volende sitatur sed pa cus inte repudionem quamus et ommolup tatur? Quiaeperi auda volende riatum ligenda nditis endantiae eprovidus verum expel ipicatenis riatum aut velluptam videlic ieniet pa cus in repudionem quamus et quos doluptur sitatur expel ipicatenis verum unt volupta quam, doluptati quam, hariam vero cus, audit aut velluptam videlic ieniet eproviduste volende riatum unt volupta doluptati tatur? Quiaeperi auda ommolup i auda optatquatem expla doluptatur hariam vero cus, audit quamus et Quiaeper verum expel ipicatenis tatur? ommolup pa cus in repudionem quam, et volupta quamus unt autatqui dolori ut facepro optatquatem em doluptati ieniet pa cus in repudion aut velluptam videlic i auda expla videlic ieniet ommolup tatur? Quiaeper velluptam audit aut cus, hariam vero quamus et r pa cus in repudionem hariam vero cus, audit optatquatem expla doluptatu r aut velluptam videlic ieniet optatquatem expla doluptatu autatqui dolori ut facepro ARCHITECTURE ACCOUNTING hariam vero cus, audit autatqui dolori ut facepro r optatquatem expla doluptatu autatqui dolori ut facepro Davis Design Davis Inc.
AXTCO.
Franki Henry hasIte TING ACCOUN volo officte ARCHITECTURE mpossitatint volut Davis Inc. fugiaec tibus, sumqui Davis Design temposa ndianti Paul Jones hasIte onserrumende se et Frank Henry hasIte volo officte doles dolestint cus, quaeceres erro volo officte volut mpossita quia volorehendam aut mpossitatint volut fugiaec tibus, moloratem cus net aperibus fugiaec tibus, sumqui temposa dicta nem ligenda nditis sumqui temposa ndianti endantiaesed quos doluptur doles ndianti onserrumende se et doles doles doles et se sitatur eproviduste volende ende onserrum cus, quaeceres erro quia riatum verumdam expel moloratem cus, quaeceres erro quia autipicatenis volorehen m doluptatiunt voluptadicta quam, nem volorehendam aut molorate cus net aperibus nem ommolup tatur? Quiaeperi auda cus net aperibus dicta endantiaesed ligenda nditis sed pa cus in ligenda nditis endantiae sitatur quos doluptur repudionem quos doluptur sitatur volende te eprovidus quamus etriatum eproviduste volende riatum ipicatenisaut verum expel velluptam videlic verum expel ipicatenis volupta quam, doluptatiunt quam, ieniet hariam vero volupta i auda unt Quiaeper doluptati ommolup tatur? i auda cus, audit quamus et ommolup tatur? Quiaeper pa cus in repudionem quamus et pa cus in repudionem aut velluptam videlic ieniet aut velluptam videlic ieniet hariam vero cus, audit audit ACCOUNTING r cus, vero doluptatu hariam optatquatem expla r optatquatem expla doluptatu autatqui dolori ut facepro Jon & Jon Co. autatqui dolori ut facepro
CONSTRUCTION
BEST BUILD
INSURANCE
Salma Starlgn hasIte volo officte Agency Russel mpossitatint volut m Thompso Paula fugiaec tibus, sumqui officte volo ndianti hasIte temposa tint volutse et mpossita onserrumende tibus, cus, quaeceres erro fugiaec doles doles temposa sumqui quia volorehendam aut ndianti moloratem cus net aperibus doles doles se etnditis ende onserrum dicta nem ligenda erro quia quaeceres quos cus, endantiaesed doluptur m dam aut molorate volorehen sitatur eproviduste volende nem dicta aperibus net verum cus riatum expel ipicatenis sed endantiae nditisvolupta ligenda doluptatiunt quam, sitatur doluptur quos ommolup tatur? Quiaeperi auda te volende riatum eprovidus pa cus in repudionem quamus et expel ipicatenis verum aut velluptam videlic ieniet quam, volupta untcus, doluptati hariam vero audit i auda Quiaeper ommolup tatur? optatquatem expla doluptatur em quamus et repudion pa cus indolori autatqui ut facepro aut velluptam videlic ieniet hariam vero cus, audit r doluptatu expla tem optatqua autatqui dolori ut facepro INSURANCE
INSURANCE
LEGAL Russel Agency
Paula Thompsom N LLP JOHNSO hasIte volo officte mpossitatint volut Smith hasIte John fugiaec tibus, officte volo volut sumqui tint temposa mpossita ndiantitibus, sumqui fugiaec onserrumende ndiantise et doles doles temposa et quia seerro cus, quaeceres ende onserrum s erro quaecere volorehendam moloratem doles cus,aut doles autnem dam cus net aperibus dicta volorehen quia net aperibus ligenda nditis m cusendantiaesed molorate nditis quos doluptur sitatur ligenda nem dicta quos doluptur eproviduste riatum sedvolende endantiae te volende verum eprovidus expel ipicatenis sitatur expel ipicatenis doluptatiunt quam, verumvolupta riatum quam,auda ommolup tatur? Quiaeperi volupta doluptatiunt i auda pa cus in repudionem quamus et tatur? Quiaeper ommolup quamus et emieniet aut velluptam videlic in repudion pa cus hariam vero cus, auditieniet videlic aut velluptam audit optatquatem expla doluptatur cus, vero hariam doluptatur autatqui dolori ut facepro tem expla optatqua autatqui dolori ut facepro
LEGAL
JOHNSON LLP John Smith hasIte volo officte mpossitatint volut fugiaec tibus, sumqui temposa ndianti onserrumende se et doles doles cus, quaeceres erro quia volorehendam aut moloratem cus net aperibus dicta nem ligenda nditis endantiaesed quos doluptur sitatur eproviduste volende riatum verum expel ipicatenis doluptatiunt volupta quam, ommolup tatur? Quiaeperi auda pa cus in repudionem quamus et aut velluptam videlic ieniet hariam vero cus, audit optatquatem expla doluptatur autatqui dolori ut facepro
LAW
LEGAL
SMITH GROUP
Moris Law LEGAL
George Group
Don James hasIte volo officte Moris Law mpossitatint volut Time hasIte fugiaec Shela tibus, sumqui temposa volo officte tint volut se et ndianti onserrumende mpossita tibus, doles doles cus, sumqui quaeceres erro fugiaec ndianti aut quia volorehendam temposa et ende moloratem netseaperibus onserrumcus quaeceres erro cus,nditis dicta nemdoles ligenda doles aut dam endantiaesed quos doluptur quia volorehen aperibus m cus net sitatur eproviduste volende molorate nditis ligenda riatum verum ipicatenis nem expel dicta doluptur sed quos doluptatiunt quam, endantiaevolupta volende te ommolup Quiaeperi auda eprovidus sitatur tatur? ipicatenis pa cus in repudionem et verum expelquamus riatum quam, volupta aut velluptam videlic ieniet doluptatiunt Quiaeperi auda tatur? hariam vero cus, audit ommolup quamus et em optatquatem expla doluptatur pa cus in repudion videlic ieniet autatqui dolori ut facepro aut velluptam hariam vero cus, audit r optatquatem expla doluptatu autatqui dolori ut facepro
Shela Time hasIte George volo officteGroup
Peter Yan hasIte volo officte mpossitatint
LAW
INSURAN Paul JonesCEhasIte volo officte mpossitatint volut SMITH GROUP fugiaec tibus, hasIte Don James sumqui temposa volo officte ndianti mpossitatint volut onserrumende se et doles doles tibus,erro quia fugiaec cus, quaeceres sumqui temposa volorehendam aut moloratem ende se et onserrum cusndianti net aperibus dicta nem cus, quaeceres erro dolesendantiaesed doles nditis ligenda dam aut volorehen quia quos doluptur sitatur aperibus cus netriatum moloratem eproviduste volende ligenda nditis nemipicatenis dictaexpel verum doluptur sed quos endantiaevolupta doluptatiunt quam, te volende sitatur eprovidus ommolup tatur? Quiaeperi auda ipicatenis verum expelquamus riatum pa cus in repudionem et quam, volupta aut doluptati velluptamunt videlic ieniet Quiaeperi auda tatur? ommolup hariam vero cus, audit em quamus et pa cus in repudion optatquatem expla doluptatur videlic ieniet aut velluptam autatqui dolori ut facepro audit hariam vero cus, r optatquatem expla doluptatu autatqui dolori ut facepro
CONSTRUCTION
INSURANCE
LEGAL
LEGAL
Ground Up
Marble Agency
CallaLEGAL LLP
Singletree LLP
LEGAL
mpossitatint volut fugiaec tibus, hasIte volo Peter Yan volut fugiaec sumqui sumqui temposa tint mpossita offictetibus, temposa ndiantitibus, ndianti onserrumende volut fugiaec onserrumende se et se et doles doles cus, sumqui temposa doles doles cus, quaeceres quaeceres erro quia ende erro onserrum ndianti quia volorehendam aut volorehendam aut moloratem cus, se et doles doles moloratem netquia aperibus cus net aperibus dicta nem s erro quaecerecus dicta nem ligenda nditis ligenda nditis endantiaesed moloratem dam aut volorehen nem endantiaesed quos doluptur quos doluptur sitatur cus net aperibus dicta sed sitatur eproviduste volende eproviduste volende riatum endantiae ligenda nditis riatum verum expel ipicatenis verum expel ipicatenis quos doluptur sitatur doluptatiunt volupta quam, doluptatiunt volupta quam, eproviduste volende riatum ommolup tatur? Quiaeperi auda ommolup tatur? Quiaeperi auda verum expel ipicatenis pa cus in repudionem quamus et pa cus in repudionem quamus et quam, volupta doluptatiunt i auda aut velluptam videlic ieniet aut velluptam videlic ieniet ommolup tatur? Quiaeper hariam quamus et hariam vero cus, audit in repudionem pa cusMORIS vero cus, optatquatem expla doluptatur ieniet videlic aut velluptam LAW audit autatqui dolori ut facepro audit cus, hariam vero r optatquatem expla doluptatu autatqui dolori ut facepro
Carol Strong hasIte CE JennINSURAN Stone hasIte Tina Bond hasIte Bella Jones hasIte Michael Banks hasIte voloCONSTRU officte CTION Singletree LLP volo officte volo officte volo officte volo officte ACCOUNTING Calla LLP mpossitatint volut mpossitatint volut mpossitatint volut mpossitatint volut mpossitatint volut Marble Agency Michael Banks hasIte fugiaec tibus, Up fugiaec tibus, sumqui fugiaec tibus, fugiaec tibus, sumqui fugiaec tibus, sumqui Ground Jones hasIte Bella volo officte Jon & Jon Co. Bond hasIte sumqui temposa Tinandianti temposa sumqui temposa temposa ndiantitint volut temposa ndianti officte volo hasIte mpossita Stone Jenn ndianti onserrumende se et onserrumende se et ndiantimpossitatint volut onserrumende se et sumqui onserrumende se et volo officte Carol Strong hasIte tibus, fugiaec officte volo volut tint doles doles cus, quaeceres erro doles mpossita doles cus, quaeceres erro onserrumende se et sumqui doles doles doles doles cus, ndianti quaeceres erro doles doles cus, quaeceres erro fugiaec tibus, volo officte temposa mpossitatint volut tibus, quia volorehendam aut quia volorehendam aut cus, quaeceres erro quia quia volorehendam aut quia volorehendam aut fugiaec ndianti volut temposa ende se et mpossitatint sumqui tibus, onserrum fugiaec moloratem cus net aperibus moloratem custemposa net aperibus volorehendam aut moloratem moloratem cus net cus, aperibus sumqui se et s erromoloratem cus net aperibus ende quaecere onserrum fugiaec tibus, doles ndianti doles temposa dicta nem ligenda nditis dicta nem ligenda nditis cus netdoles aperibus dicta ligenda nditis dicta nem ligenda nditis quaeceres errodicta nem ndianti cus,nem doles sumqui temposa se et volorehendam aut doles ende quia doles et onserrum se ende endantiaesed quos doluptur endantiaesed quos doluptur ligendaquia nditis endantiaesed endantiaesed quoscus doluptur se et onserrum dam aut volorehen net aperibus endantiaesed quos doluptur quaeceres erro ndianti onserrumende moloratem volende doles cus, doles s erro quia erro quaecere aperibus s sitatur eproviduste volende sitatur eproviduste volende quos doluptur sitatur sitatur eproviduste sitatur eproviduste volende net cus, cus quaecere m cus, molorate ligenda nditis doles doles dam aut dicta nem volorehen aut moloratem eproviduste volende dam riatumquia verum expel ipicatenis nditis riatum volorehen verum expel ipicatenis riatum riatum verum expel ipicatenis dicta nem ligenda quos doluptur riatum verum expel ipicatenis quia volorehendam aut net aperibus m cusquam, endantiaesedquam, dicta nem molorate aperibus doluptatiunt volupta doluptatiunt volupta quam, verum expel ipicatenis doluptatiunt volupta quam, cus net sed quos doluptur doluptatiunt volupta endantiae nditis moloratem cus net aperibus eproviduste volende ligenda sed sitatur nem dicta endantiae nditis ommolup tatur? Quiaeperi auda ommolup tatur? Quiaeperi auda doluptatiunt quam, auda ommolup tatur? Quiaeperi auda te volende ommolup tatur? Quiaeperi ligenda eprovidus sitaturvolupta doluptur dicta nem ligenda nditis verum expel ipicatenis sed quos riatum endantiae sitatur doluptur ipicatenis pa cus in repudionem quamus et pa cus in repudionem quamus et ommolup tatur? Quiaeperi auda pa cus in repudionem quamus et pa cus in repudionem quamus et quos expel doluptur quos verum quam, riatum unt volupta te volende endantiaesed doluptati sitatur eprovidus te volende quam, aut velluptam videlic ieniet aut velluptam videlic ieniet riatum pa cus indoluptati repudionem quamus et aut velluptam videlic ieniet aut velluptam videlic ieniet eprovidus unt volupta tatur? Quiaeperi auda sitatur eproviduste volende expel ipicatenis ommolup verum ipicatenis expel hariamriatum vero cus, audit hariam vero cus, audit aut velluptam videlic ieniet hariam vero cus, audit hariam vero cus, audit Quiaeperi auda et verum tatur? ommolup riatum verum expel ipicatenis in repudionem quamus volupta quam, cus unt pa quam, et doluptati volupta unt quamus optatquatem expla doluptatur i auda optatquatem expla doluptatur hariam vero cus,inaudit optatquatem expla doluptatur doluptati repudionem pa cus videlic ieniet optatquatem expla doluptatur Quiaeper doluptatiunt volupta quam, velluptam aut tatur? Quiaeperi auda autatquiommolup dolori ut tatur? facepro ieniet autatqui dolori ut facepro optatquatem expla doluptatur autatqui dolori ut facepro autatqui dolori ut facepro i auda ommolup videlic Quiaeper et velluptam tatur? aut quamus ommolup et hariam vero cus, audit quamusautatqui pa cus in repudionem dolori ut facepro quamus et pa cus in repudionem r cus, audit vero doluptatu hariam expla ieniet tem pa cus in repudionem videlic optatqua aut velluptam r aut velluptam videlic ieniet optatquatem expla doluptatu dolori ut facepro aut velluptam videlic ieniet autatqui vero cus, audit audit hariam cus, vero hariam r autatqui dolori ut facepro hariam vero cus, audit r optatquatem expla doluptatu r optatquatem expla doluptatu optatquatem expla doluptatu autatqui dolori ut facepro autatqui dolori ut facepro autatqui dolori ut facepro
Advertising Section
PEOPLE ON THE MOVE For more information, contact Debora Stein at dstein@crain.com
CrainsCleveland.com/People-On-The-Move
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PA G E 18
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CRAIN’S CLEVELAND BUSINESS
THE LIST
Minority-Owned Businesses Ranked by local full-time employees THIS YEAR COMPANY
FULL-TIME LOCAL STAFF JAN. 1, 2019
YEAR FOUNDED
MINORITY OWNERSHIP %
BUSINESS DESCRIPTION
TOP EXECUTIVE
1
Janitorial Services Inc. (JSI) 4830 E. 49th St., lower level, Cuyahoga Heights (216) 341-8601/jsijanitorial.com
509 (1)
1969
100% Hispanic/Latino
Janitorial services company serving businesses throughout Northeast Ohio
Ronald Martinez Jr., president
2
MyCity Transportation 16781 Chagrin Blvd., Shaker Heights (216) 662-2430/mycitytransportation.com
281
2004
100% African American/ black
Passenger transportation and shuttle bus services
James Crosby, CEO
3
New Horizons Baking Co. 211 Woodlawn Ave., Norwalk (419) 663-6432/newhorizonsbaking.com
265
1967
100% African American/ black
Commercial bakers
Trina J. Bediako, president Tilmon (Tim) F. Brown, CEO
4
The Anderson-DuBose Co. 5300 Tod Ave. S.W., Lordstown (440) 248-8800/anderson-dubose.com
214
1991
100% African American/ black
Distributor of food, paper and cleaning products to McDonald's and Chipotle food chains
Warren E. Anderson, chairman, CEO
5
Evergreen Cooperative Laundry Inc. 540 E. 105 St., Cleveland (216) 268-3548/evgoh.com
157
2009
79% African American/ black; 1% Hispanic/Latino
Commercial laundry primarily serving the health care industry
Allen Grasa, president
6
ASW Global LLC 3375 Gilchrist Road, Mogadore (888) 363-8492/aswglobal.com
124
1983
100% African American/ black
Third-party logistics, distribution management, fulfillment, branded merchandise and apparel, transportation management, value-added warehousing, packaging
Andre Thornton, president, CEO
7
Apex Dermatology and Skin Surgery Center 5800 Landerbrook Drive, Suite 200, Mayfield Heights (833) 279-7546/apexskin.com
90
2011
100% Hispanic/Latino
Medical practice specializing in medical, surgical and aesthetic dermatology for patients of all ages and ethnic skin types
Jorge Garcia-Zuazaga, president, CEO
8
Safe Choice LLC 11811 Shaker Blvd., Suite 415, Cleveland (216) 231-7233/safechoicellc.com
80
2010
100% African American/ black
Provider of armed and unarmed security guards
Anita L. Spencer, president, owner Anthony Spencer, vice president, co-owner
9
Cook Paving and Construction Co. Inc. 4545 Spring Road, Suite 1, Brooklyn Heights (216) 267-7705/cookpaving.com
75
1950
100% African American/ black
Construction firm providing asphalt paving and underground utilities construction, concrete installation/repair, conduit installation/repair, cable placing
Linda A. Fletcher, president, CEO
9
MVP Plastics 15005 Enterprise Way, Middlefield (440) 834-1790/mvpplastics.com
75
2009
100% African American/ black
Provider of custom injection molding, manufacturing engineering and foam distribution
Darrell L. McNair, president, CEO
9
Rittman Inc. (dba Mull Iron) 10 Mull Drive, Rittman (330) 927-6855/mulliron.net
75
1983
100% American Indian/ Alaskan Native
Erectors of miscellaneous structural, ornamental and architectural metals and steel
Chester M. Mull Jr., president
12
Marigold Catering 3901 Lakeside Ave. E., Suite 100, Cleveland (216) 566-5400/marigoldcatering.com
65
1997
100% LGBT
Catering and event planning services, design and logistics, event venues
Joan E. Rosenthal, CEO, founder
13
Fit Technologies 1375 Euclid Ave., Suite 310, Cleveland (216) 583-5000/fittechnologies.com
60
1999
82% LGBT
Managed IT services firm specializing in onsite field support, help desk, network infrastructure, internet, wireless and cloud services
Micki Tubbs, CEO, cofounder Michelle Tomallo, president, cofounder
14
DLZ 614 W. Superior Ave., Suite 1000, Cleveland (216) 771-1090/dlz.com
56
1916
100% Asian
Architecture, engineering and construction services firm
Vickie Wildeman, vice president
15
Margaret W. Wong & Associates LLC 3150 Chester Ave., Cleveland (216) 566-9908/imwong.com
52
1986
67% Asian
Immigration and criminal law firm
Margaret W. Wong, president, managing partner
16
Accurate Staffing Inc. 1650 S. Arlington St., Suite 4, Akron (330) 630-0700/accuratestaffinginc.com
45
2008
100% LGBT
Staffing firm specializing in filling light industrial, clerical, distribution, warehouse, medical, technical and professional positions
Paul T. Kennedy, president, CEO
16
Fox Enterprise Services 7630 Freedom Ave. N.W., North Canton (330) 497-5200/foxenterpriseservices.com
45
1999
51% Hispanic/Latino
Aluminum composite metal fabricator
Delilah J. Volpe, CEO Anthony M. Volpe, vice president
18
THORS LLC 5054 Paramount Blvd., Medina (330) 576-4448/thors.com
42
2010
100% Asian
Provider of online education, apps and productivity tools for manufacturing industries
Senthil Kumar, founder
19
Green City Growers Cooperative 5800 Diamond Ave., Cleveland (216) 268-0200/evgoh.com
40
2011
71% African American/ black; 12% Asian; 12% Hispanic/Latino
Year-round 3.25-acre, pesticide-free hydroponic greenhouse growing lettuce, herbs and microgreens
John McMicken, interim president
19
RAR Contracting Inc. 4545 Spring Road, Suite 2, Brooklyn Heights (440) 735-1946/None
40
2004
100% African American/ black
Ready-mix concrete and aggregate materials supplier; hauler of construction materials and equipment
Keith L. Rogers, president, owner
21
Spectrum Global Holdings LLC 468 Richmond Road, Richmond Heights (216) 206-6743/spectrum-global.com
38
2003
100% African American/ black
Consulting firm providing expertise in business growth strategy and economic development/entrepreneurship; manager of loan funds
Nnamdi Michael Obi, CEO
22
RW Delivery Inc. 12487 Plaza Drive, Cleveland (216) 267-2000/rwdelivery.com
37
1994
51% African American/black
Local and long-haul trucking- and transportation-related services provider
Richard Wall, CEO
23
Mac Productions Inc. 13115 Puritas Ave., Suite 3, Cleveland (888) 415-8882/macproductions.net
32
1999
100% African American/ black
Technology solutions provider
John A. Stubbs, chairman, CEO, chief marketing officer
24
Jordan and Tristen Investments LLC 3740 Euclid Ave., Suite 100, Cleveland (216) 881-5643/jitserv.com
31
2002
100% African American/ black
Provider of outsourced operations management and staffing services
Brian E. Hall, owner, CEO
25
Ozanne Construction Co. 1635 E. 25th St., Cleveland (216) 696-2876/ozanne.com
30
1956
100% African American/ black
Construction management, design build, general contracting
Dominic L. Ozanne, president, CEO
RESEARCHED BY CHUCK SODER (CSODER@CRAIN.COM)
Get all 192 minority-owned companies in Excel format. Become a Data Member: CrainsCleveland.com/data Neither this list nor the full digital directory is comprehensive. To submit your company, visit this URL: bit.ly/2WbZ5Oi Information is provided by the companies. Send feedback to Chuck Soder: csoder@crain.com. (1) Full-time equivalent; most JSI employees are part time
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PA G E 19
LIST ANALYSIS
Minority-owned businesses say they’re at disadvantage By Chuck Soder csoder@crain.com @ChuckSoder
Many of the companies in our Minority-Owned Business Directory believe they are operating at a disadvantage, according to a survey conducted by Crain’s. And that’s especially true of businesses owned by black people. Of the 192 companies in this year’s directory, 154 answered this multiple-choice question: Do you feel like your company is at an advantage or a disadvantage because it is minority-owned? Most respondents, 55%, chose either “slight disadvantage” (by far the most common answer) or “disadvantage” (the second most common answer, just ahead of “no difference”). That number rises to 65% for African-American/black-owned businesses. By contrast, Crain’s asked a similar question while putting together its Women-Owned Business
CREDITS
CONTINUED FROM PAGE 1
Another is the $511.7 million in tax dollars uncollected because of the exclusion from the Commercial Activity Tax (CAT) of the first $1 million of a business’ otherwise taxable gross receipts. Similar exemptions in sales taxes are made for sales to churches and other nonprofits, the sale of prescription drugs and the sale or purchase of food for human consumption off the premises where it’s sold. However, both Policy Matters Ohio and the conservative Buckeye Institute have railed against some of the breaks, even some of the same breaks that shield millions of dollars of spending or earning from sales or income taxes. “Loopholes make the tax system more complex, less transparent and less equitable — all hallmarks of an unsound tax policy,” Greg R. Lawson, a research fellow at the Buckeye Institute, told the Tax Expenditure Review Committee last year. “By contrast, lower, fairer income taxes and consumption taxes will improve Ohio’s tax climate without creating unfair economic advantages for some at the expense of others.” The committee was created in 2017 and first met in 2018, to review whether each tax expenditure should be continued, modified, repealed or
The largest industry category in this year’s Minority-Owned Business
scheduled. So far, it has not recommended any changes to the legislature, nor, PMO noted in a recent analysis, did the DeWine administration seek to limit or repeal any of the DeWine tax breaks. Both PMO and the Buckeye Institute have directed their indignation at a sales tax break for private jet users that would cost the state $27.4 million in lost revenue over the next two years, according to the tax expenditure report, which is compiled by the state’s taxation department. Since 2003, when the exemption was included in the state budget bill, the sales tax paid by people who buy a fractional ownership of a private jet is capped at $800. According to the Sherpa Report Guide to Private Aviation, a private jet website, the smallest share available on the lightest jets, a 1/16th share, would cost about $275,000. With state sales tax running between 5.75% and 8%, depending on the county, that comes to a savings of at least $15,000. Ohio is home to two companies — Flight Options LLC of Richmond Heights and Net Jets Inc. of Columbus — that are among the largest fractional jet management companies in the United States.
Policy Matters Ohio also questions the $420.5 million in sales taxes that are not paid on building materials used for structures erected for horticultural purposes; captive deer, horse and fish farming; private schools; and hospitals. No other When it comes to commercial loans, Geauga Savings Bank is your no-hassle neighboring state, PMO said in its report, has a similar tax break. YES bank. We pride ourselves on providing local loan decisions from The Buckeye Institute also quesexperienced bankers who can develop creative solutions to loan requests. tions the motion picture tax credit that could save companies filming in Ohio $80 million over the next two Get the service you deserve with your business banking needs. years. The state uses the credits to attract the production of films. Talk to us today and get your business moving ahead! “Motion picture tax credits are a form of corporate welfare that freDell Duncan, EVP, 216-464-5180, Dduncan@geaugasavings.com quently do not pay for themselves long-term,” Lawson argued in testiGreg Yurco, VP Lead Lending Officer, 330-727-8394, Gyurco@geaugasavings.com mony before the Tax Expenditure ReRick Ritley, Sr. Commercial Banker, 216-645-8386, Rritley@geaugasavings.com view Committee last year. Chris McManis, AVP Commercial Banker, 440-321-2010, Cmcmanis@geaugasavingsbank.com The motion picture tax credit is one Jim Kleinfelter, President, 440-564-9441 x112, Jkleinfelter@geaugasavings.com of several tax credits designed to attract new businesses and encourage existing businesses to expand. The others 24755 Chagrin Blvd., Ste. 100 • Beachwood, OH include credits for creating new jobs 10800 Kinsman Rd. • Newbury, OH and retaining existing jobs, tax credits for historic-structure rehabilitation, inwww.geaugasavings.com vestments in small businesses and for BizLoans@GeaugaSavings.com investments in low-income areas. Not included as a tax expenditure by the state law is the $186.5 million spent by JobsOhio, the nonprofit that uses the state’s liquor profits to support ecoGSB_LoanAd_Craines_4x6_1902.indd 1 2/20/19 nomic development. @Foundry216 Including the motion picture credit, those programs will cost the state of Ohio $718.7 million over the next 1831 Columbus Road, Cleveland, OH. 44113 440.596.7069 two years.
LEADERSHIP CONTINUED FROM PAGE 13
“Manufacturers fall into a trap where marketing is an afterthought,” noted COO Bret Joslyn. “We were printing up brochures and throwing them into envelopes. We saw ourselves as manufacturers, not marketers.” Changing the company's philosophy meant rebooting a decade-old website to make it mobile-friendly. New content teaches visitors about the thermoforming process, complete with diagrams and links to products and services. Future posts may explain why certain parts need UV protectant, or what the correct thickness is for a particular plastic truck component. After two years working with SyncShow on brand messaging, Joslyn is just beginning to roll out new content.
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Directory in 2017. Nearly 44% of the 233 women who answered the question at the time chose “no difference.” Another 31% picked either “advantage” or “slight advantage.” Though 21% picked “slight disadvantage,” only 3.4% (eight people) picked “disadvantage.” Minority-owned businesses were also more negative when we asked them this question: Do you feel as though clients/coworkers/business partners treat you differently because you are a minority? Out of 157 respondents, 45% picked “sometimes” and 14% chose “frequently.” Once again, the numbers were higher among African-American/ black-owned businesses: Exactly half picked “sometimes” and 18% picked “frequently.” “Sometimes” also was the most popular answer when we asked women-owned businesses a similar question in 2017. But only 6.5% of the 232 women who answered that ques-
Joslyn
Addressing industry trends before they go mainstream is an overarching goal, and the company is in the planning phase of an online design guide packed with infographics and oth-
er helpful material. “We’re branding and getting our services out there,” Joslyn said. “Being proactive is critical in thought leadership. I see a lot of people in my position just going with the flow.” Craig Kemmerling, vice president of sales for Deist Industries Inc. of Haldey, Pa., said consistently producing fresh information related to the company’s AmeriDeck and Switch-NGo work-truck equipment systems
The percent of African-American business owners who, in a Crain’s survey, said they feel their company is at a “disadvantage” or “slight disadvantage.”
tion picked “frequently.” We should note, however, that the women-owned business survey was conducted just a few months before the #MeToo movement gained momentum, so there’s no telling whether the results would look different now as a result. And neither survey is a random sampling of minority-owned or women-owned businesses throughout Northeast Ohio — though the directories do include companies in all sorts of industries.
Directory is construction, with 22 companies. That category also includes some of the largest employers in the directory. Four of them appear on Page 18, in our list ranking the top 15 largest companies in the directory. The largest company in that category is Cook Paving and Construction, which is tied with MVP Plastics for No. 9 on the list. MVP is one of nine companies in the manufacturing category, another category including somewhat larger employers. The largest, New Horizons Baking at No. 2 on the list, has
265 full-time employees. Evergreen Cooperative Laundry posted the biggest employment increase of any company in the directory by far: The company — which is owned by its employees, most of whom are black — added about 100 employees in 2018 after it began managing the Cleveland Clinic’s laundry facility at 15300 S. Waterloo Road in Cleveland’s Collinwood neighborhood. The directory also includes a lot of sole proprietorships and mom-andpop shops. Most of the companies have fewer than five full-time employees.
As for the directory ...
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can be daunting for his in-house marketing team. Participating in trade association events helps the team recognize new trends and technologies, with assistance from outside marketing firms further boosting their efforts. “Being as focused as we are with our products helps,” said Kemmerling. “We’ve adopted a rifle-over-shotgun approach to end-user markets.” Thought leadership may not pay immediate dividends, but once companies determine how to fit the practice into their plans, the potential benefits are undeniable, said thunder::tech's Therrien. “There are steps to this, but manufacturers have more respect for data than you see in other industries,” he said. “It’s about delivering ‘x’ leads with ‘x’ costs at ‘x’ efficiency. So let’s turn up the dial and test that ceiling.”
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CRAIN’S CLEVELAND BUSINESS
AKRON
Neighborhood Watch
A wave of optimism at Summit Lake Clean water and new improvements
are buoying the distressed area By Dan Shingler dshingler@crain.com @DanShingler
Summit Lake is one of Akron’s most blighted neighborhoods. It’s where the city owns more lots than in any other part of town and where break-ins are too common at the homes that remain. It’s also one of the prettiest neighborhoods, with Akron’s largest lake — more than 100 acres, full of waterfowl, fish and other wildlife and surrounded by unobstructed shoreline. It’s a discordance that doesn’t make sense to city officials, parks and recreation organizations, nonprofits and, more and more lately, to the residents of the neighborhood. That’s why Akron Civic Commons, the John S. and James L. Knight Foundation, Summit Metro Parks and others are funding and driving developments they hope will make Summit Lake a vibrant place for both residents and visitors. They’ve announced several new projects meant to both improve the neighborhood and to reconnect it with downtown since unveiling a vision plan for the lake last year. It was once, after all, a major city beach and amusement park, even if its heyday was in an era when grown men swam in onesies. Admittedly, there’s a long way to go. “One of the first things residents asked us was if we would put a fence around the lake!” said Summit Metro Parks chief of planning Nick Moskos. He and others at the Metro Parks, the Ohio & Erie Canalway Coalition (OECC) and other organizations working to improve the lake were stunned. Residents didn’t want a fence to keep the lake private and to themselves. They wanted to be protected from a lake they saw as a dirty and dangerous environment. It hasn’t yet been a year since the environmental results for the lake came back last June and developments started being announced, but attitudes are changing. “Our lake is just as clean or cleaner than Portage Lakes,” boasts Audley McGill, director of the Summit Lake Community Center, which overlooks the northeast corner of the lake. He’s basically correct, too, says Metro Parks biologist Mike Johnson, chief of conservation management. Summit Lake, it turns out, is in decent shape and as clean as most other urban lakes, he said. That was a surprise to almost everyone. As recently as the 1980s, the lake was still an industrial water supply. It had long been a source of water for local manufacturers, beginning with Firestone’s Tire & Rubber Co.’s first plant on Main Street. Tiremakers and others pumped from the body of water for their processes and simply
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Imp Cen
An environmental report that was released last summer showed that Summit Lake, at more than 100 acres, is much cleaner than previously thought. (Dan Shingler)
About this series We thought we knew a fair amount about Akron, which is the hometown of some of us at Crain’s. That is, until we started driving around with Akron planning director Jason Segedy, who agreed to take part in an ongoing series to show us his knowledge of and passion for the city — one neighborhood at a time. This month, we look at Summit Lake, which is one of the city’s most distressed areas but is on the upswing with new improvements and a clean bill of health for the body of water.
A group of organizers for Summit Lake Build Corps meets recently. The group works with area kids to teach them construction skills. (Shane Wynn for Crain’s)
The pump house at Summit Lake is being rehabbed into a place to learn about the natural aspects of the lake. (Shane Wynn)
returned the water, full of pollutants, back into the lake. That went on until the lake was dead — or so folks thought.
A rebirth “There’s a bald eagle and three ospreys there right now,” said a grinning Demetrius Lambert-Falconer, the Metro Parks’ chief of community engagement. OECC president Dan Rice said Summit Lake is a jewel for his organization and a beautiful spot. It’s not only close to the historic canal, but it’s actually part of it: The canal comes in one end of the lake and exits the other, he said. “Ohio & Erie Canal goes right across Summit Lake. That’s historically where the route of the canal went. So the lake is obviously a big part of the canal’s heritage … and we’ve also been very involved with the Towpath Trail there,” Rice said. The Towpath Trail is critical to
Summit Lake’s future and for future plans involving the neighborhood, according to Rice and Jason Segedy, Akron’s director of planning and urban development. The same trail is a key to the city’s downtown development efforts and other regional initiatives. Its advocates hope to see it link Lake Erie with the Cuyahoga Valley National Park and downtown Akron and then south to New Philadelphia. “It’s about a 10-minute ride from here to downtown … and it’s one of my favorite rides,” said Segedy, an advocate for creating more places to ride and walk in and around Akron. To better integrate the lake and Towpath Trail, the Metro Parks plans to build a trail around the lake, which has a rare, unencumbered shoreline, much of it owned by the city. “It’s a rare opportunity,” Segedy said. “And, coincidentally, it’s almost exactly 5 kilometers around the lake.” That means it’s an ideal spot for 5K races. Moskos said the Metro Parks plans to start with a temporary path this year and fine-tune it before building a permanent path. Along its route, Metro Parks plans another attraction as well. The park system is working on a $1.2 million nature center at the old pump house that used to push water from the lake to local factories. The site is in the process of being rehabbed into a gathering spot, fishing pier and a place to learn about the natural aspects of the lake. “It will be a nature center as good as any in the county,” said Kyle Kutuchief, Akron program director for
4/5/19 2:27 PM
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Stephanie Leonardi, a Summit Lake resident, founded Summit Lake Build Corps in 2017. The group works with youth in the neighborhood to teach them construction skills. (Shane Wynn for Crain’s)
Improvements, including benches, barbecue grills and tables, are going in at the Summit Lake Community Center. (Shane Wynn)
While many houses in Summit Lake are kept up well, signs of distress are still evident in the neighborhood. (Shane Wynn)
the Knight Foundation, which is paying for half of the costs of the center.
Residents first But it will all be for naught if the neighborhood of Summit Lake doesn’t share in any success at the lake itself, backers said. “We’ve really been trying to take a residents-first approach,” Kutuchief said. The Knight Foundation, Akron Civic Commons, OECC and the Metro Parks met with residents before making plans. After they got past the idea of fencing off the lake, organizers started to hear what residents wanted and why they weren’t using the lake. “They said what anyone would say: ‘We want a place to sit, cook out, and I want to be able to see my child if they’re near the edge of the lake,’” Kutuchief recalled. Before some cleanup and improvements, the lake wasn’t very welcoming, he contended. “There was one bench, and it faced away from the lake. Imagine that,” Kutuchief said. “That’s what happens when a place is neglected and forgotten about.” Since then, the Metro Parks and neighborhood volunteers have stepped up their game. There are not only benches, barbecue grills and a
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shelter with unobstructed lake views near the Summit Lake Community Center and adjoining Reach Opportunity Center, more are going in near the pump house and around the neighborhood itself. Some of that is from the work of Stephanie Leonardi, a Summit Lake resident who works with youth in the neighborhood to teach them construction skills. There are now benches around the neighborhood that kids have built from pallets and other recycled lumber. Known to everyone in the neighborhood as “Leo,” she’s lived in the neighborhood for five years and in 2017 founded Summit Lake Build Corps to work with area kids. They show up weekly to learn construction skills in an old garage with help from other volunteers. It’s not a nice classroom, but that’s OK, she said, at least for now. “If they show up for that, we know they’re interested,” Leonardi said. She’s had three break-ins since she moved in. But she said she just installed cameras and is sticking it out. “There’s a shadowy side to every positive story,” said Leonardi, who hopes to soon be putting kids to work rehabbing houses in the neighborhood. Summit Lake is not a big neighborhood — it only runs about a block to the west of the lake and about six
blocks to the east, making it one of the smallest neighborhoods in the city, Segedy said. It only has a few less than 4,000 residents, according to the city’s website. Nor does it have a large business community; there are mostly just a few local manufacturers and other small businesses along Kenmore Boulevard. It’s changing, but slowly, though. In addition to efforts of folks like Leonardi, there’s a new filling and charging station for natural gas-powered and electric vehicles to fill up. But no new homes have been built in the neighborhood since 2004, according to the city’s website. Residents who have been in the neighborhood for decades were slower to come aboard with new plans, but many have been convinced. Sandy Saulsberry moved there in 1982. Back then, she said, it was a mostly white neighborhood and in pretty decent shape. In the decades since, residents aged, many moved out or passed away. They were replaced largely by vacant lots and rundown houses that became rentals, she said. The neighborhood became mostly African-American and low-income as well. She was skeptical when outsiders first started proposing improvements
at the lake, but said she’s warmed up to the ideas, in part, because organizers included residents in their planning. “We have a community meeting monthly, and they bring information and provide a platform for us to say how we feel about things,” Saulsberry said. Her actions may speak louder than her words. Though she’s long lived just a couple of blocks away from the lake, she said she never went to the shore until recently. “I go down there quite a bit now. It’s a pretty lake, but it was just hidden until Civic Commons got some of the clutter and trees taken care of,” she said. That, backers of recent improvements said, is exactly what they hope to hear from residents. The real test, though, they say, will be whether the neighborhood itself can rebound the way the lake has done. There’s no promise of that, just the hope that the improvements, along with things like the city’s tax abatement for new residential con-
struction, will help. Saulsberry is beginning to become optimistic. “When people start seeing what’s down at the lake, I think they’ll want to live near it. I wouldn’t have a problem with that. I know some folks talk about gentrification … but I’m not worried about nothing like that,” Saulsberry said. More and better homes mean higher property values, less crime and a better overall neighborhood. “If people are willing to come in and invest in a neighborhood and buy a home, if you attract that kind of people, you’re going to get some halfway decent people in your community,” Saulsberry said. In the meantime, outreach continues to get more residents from the neighborhood to appreciate the lake and to work with others to improve it. Saulsberry is all for that. “You can have a beautiful lake in a neighborhood, but until you have the neighborhood embrace that beauty, what do you have? I think we’re in the process of getting there,” she said.
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CRAIN’S CLEVELAND BUSINESS
ATHLON
CONTINUED FROM PAGE 1
“It had 10 years to deteriorate. We took hundreds of truckloads of debris out of this building,” DiGeronimo said. He also noted during a Tuesday, April 2, tour that the structure has one of the few pools downtown, which, in this case, cost $1 million to make it usable once more. Such a measure is part of the drill on this project, however. The top 10 floors of the structure were added atop an existing five-floor office building in 1911 in order to accommodate the already well-established CAC’s varied offerings. The pool, where Olympic swimmer Johnny Weissmuller set a world record for the 150-yard backstroke in 1922, according to “The Encyclopedia of Cleveland History,” had to be lowered to 4 feet from 9 as it was renovated and the arched ceiling above it dropped enough to allow water sprinklers to be installed as part of the project. The running track also is coming back for another round. Kevin Konczos, project manager for Welty Building Co. of Fairlawn on the project, said the original plaster ceiling over the running track and pool had fallen to the ground. Everything had to be reconstructed, including designs in the plaster. The pipe banister that forms the edge of the running track will also be back, but augmented with an additional two feet of glass banisters to meet current building code and retain the historic look of the place. However, some things had to go. Basketball courts on the top three floors of the structure were beyond repair. Part of that area is being converted to a fitness center and the remainder to four penthouses of three stories apiece that still are taking shape. The building’s exterior presented other tests. Large sections of the terracotta front had broken free due to years of winter freezes and thaws, and the terracotta on the northeast
At left, Kevin Konczos, a Welty Building Co. project manager who is overseeing The Athlon project, gestures as he recalls how the original plaster had fallen from the ceiling over the old club’s indoor running track and pool. Above, the second- through sixth-floor windows on the Euclid side of The Athlon are about 6 feet wide. (Photos by Stan Bullard)
corner is largely being rebuilt. Konczos estimates almost 40% of the building’s exterior has required repair and almost $7 million of the renovation cost went into repairing the facade and windows. Inside, Sandvick Architects of Cleveland had to design 82 different floor plans to make the structure a viable mixed-use building. Some suites have 6-foot-wide windows facing Euclid, while those on the building’s east side offer views of the terracotta on the Halle Building next door. One-bedroom suites on the structure’s northwest corner have windows lining two sides of the units. Rents range from as much as $3,000 monthly for the three-story penthouses to about $2,000 for two-bedroom suites and $1,300 to $1,700 for one-bedroom suites of 700 to 800 square feet. The small units, according to Tina Vespucci, vice president of J&S Management Co., which handles leasing and operations, are designed for young professionals who don’t want roommates. Those units predominate on the eighth, ninth and 10th floors. The suites have stainless steel appliances, in-suite washers and dryers, and some have dedicated walkin showers. When master bedrooms
in the structure don’t have an outside window, a large interior window allows light in from the adjacent combined kitchen and living room. Vespucci said about one-quarter of the first 30 suites to be available have been leased, and noted the spring rush for apartment rentals is well underway. “As of March 1, the phones started ringing constantly,” she said. Meeting federal standards for historic preservation — a requirement for received state and federal historic tax credits crucial to the project’s financing package — necessitated some interesting changes in the property. The building’s grand ballroom had to be retained as an open space, so the developers are marketing it as 7,000 square feet of office space. Part of the sixth floor, connected by a stairway, will provide a conference center for tenants. Konczos said office tenants will be able to divide up their space but will have to use glass to retain sightlines of the old ballroom. A stairway in the center of the building, which once let crowds enter and leave the structure’s sporting events, is being restored but will be enclosed with fire-rated glass to meet current building codes, he said. Jonathan Sandvick, whose Cleve-
land-based Sandvick Architects specializes in adaptive reuse, said the stairway served as the heart of CAC’s space from the seventh to the top floor. “As part of a building devoted to fitness, part of the idea was that people would exercise using the stairs. It was also part of allowing clients to transfer from one part of the club seamlessly to another, so it was an ornate space, unlike stairways used for emergencies,” he said. Old plaques and trophies in the building were too damaged or moldcovered to be kept, but Vespucci said she is fielding calls from people whose grandparents and great-grandparents were club members. “We’re getting boxes of artifacts that we’ll display,” she said. Those will recall the history of the structure, well remembered for parties, pool, track events, card games and bowling. (The bowling alley was scrapped as beyond repair.) Tom Yablonsky, executive director of the Historic Gateway and Historic Warehouse District development corporations and executive vice president of the Downtown Cleveland Alliance nonprofit, said restoring the building to active use will keep intact the Euclid Avenue Historic District.
“It’s been a long time coming,” Yablonsky said of the project. “For certain generations, that building meant a lot. It’s a part of the great period of American clubs when people sought to share a sense of belonging.” Moreover, Yablonsky said the building is architecturally important because it was designed by J. Milton Dyer, a famous architect in Cleveland who went on to design Cleveland City Hall. The structure has windows of three sizes that grow smaller near the top of the building, which the “Guide to Cleveland Architecture” said is intended to make the tower look taller. However, a big change greets visitors in the dedicated lobby to CAC on the building’s northwest corner. The old entrance was lined with wood, creating a quiet, stately entrance. Now, the lobby is bright and airy, lined by marble walls. It will also serve as the location for the building’s concierge. Konczos said the wood was not original to the building, but the marble, which survived decades behind the paneling, was. Workers also found that what they thought was the lobby’s ceiling was actually a dropped ceiling, he added, and the original plaster ceiling was even higher than designers had at first thought.
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PEOPLE ON THE MOVE
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Vantage Financial Group is pleased to welcome our newest Financial Advisor, Traci Schmotzer. Traci specializes in financial planning and retirement planning. Prior to joining Vantage, Traci spent over 20 years at a large regional bank broker-dealer. She takes a holistic approach to helping her clients define and pursue their financial goals, including wealth accumulation and retirement income. Traci holds Series 7 and 66 securities registrations along with an Ohio Life and Health insurance license.
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Christopher J. Geiss has joined Western Reserve Trust Company as its Chief Fiduciary Officer. Prior to joining Western Reserve, for the past 25 years, Chris was a Vice President and Senior Relationship Strategist with PNC Bank, and its predecessor, National City Bank in its wealth management division. In his new role, Chris will be responsible for Western Reserve’s trust administration and compliance as well as serve as the Senior Relationship Manager for several of the firm’s clients.
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Scott Wolstein CEO, The Wolstein Group Scott Wolstein has a rare perspective on Cleveland-area real estate. The second-generation developer has spent the latter part of his career among the elite of national real estate, working with everything from global investment funds to publicly traded real estate investment trusts. He won that status as he transformed the family real estate company to a Beachwood-based, publicly traded powerhouse with, at the end of his tenure, 500 shopping centers. The one-time associate at Thompson Hine also has been in the trenches of downtown development since the early 1980s. He played a direct role in land assembly in the Flats, where the Wolstein family’s $750 million Flats East Bank Neighborhood stands today. He oversaw leasing at the family’s US Bank Centre at Playhouse Square as the city weathered the early 1990s office-building glut. Last year, he joined forces with a big institutional firm, DRA Advisors, to buy 200 Public Square, a trophy skyscraper. Polished but aggressive, analytical yet incisive, every conversation with him is rich in insight. He is used to being interviewed: Sitting down, he says, “Fire away.” — Stan Bullard
The Wolstein file Favorite movie “Life is Beautiful”
What he drives In the winter, a Range Rover. In the summer, a Bentley convertible.
Drive-time listen WKNR sports talk radio
Vacation place “I’m a sun worshiper. I love the Bahamas. My favorite is a home I have in Colorado.”
Lunch spot Lago East Bank 1091 West 10th St., Cleveland 216-862-8065
The meal One had a pasta bowl, the other a Caesar salad and chicken bruschetta wrap. Beverages: Cabernet and diet soda. Wolstein takes his water with no ice.
The vibe Straightforward modern design keeps the focus of this traditional Italian restaurant on the food.
The bill $79.32 including tip
What does Cleveland need to do differently to improve its economy? We need to devote fewer resources to funding the cost of public buildings that don’t have to pass the market test and focus on attracting private capital investment to Cleveland. If we attract new private capital, it can sustain itself and trigger a multiplier effect. Imagine if the money that went into renovating the Cleveland Convention Center and building the Hilton had gone into attracting private capital investment in new construction — instead of a couple public buildings for $1 billion which require additional capital to sustain. We likely could have attracted $6 billion in capital investment. With incentives, we should not think of it as giving money to a developer. We need to view that as simply reducing the tax burden on the new investment in order that it can be economically viable. You are about to start the third phase of the Flats East Bank Neighborhood. What is your favorite part of the real estate development process? It’s creating the plan and having the vision. Each site is different. There is only one east bank at the mouth of the Cuyahoga River. After that, it’s all execution. At DDR Corp. (now SITE Centers), you created a training program for recent graduates. Many later became leaders of the company at young ages. How does that fit into your business philosophy? I believe in hiring young, energetic
people without a lot of experience. I can train people in a hurry. You can train people in your own image. It’s better than hiring a middle manager who has his or her own way of doing things. Look, people love working with young, energetic people. They want to see young people succeed. That is one of the most important things in business. People have to like you and want to help you succeed. What advice would you give a young person who wants to pursue a career in real estate? Learn how to analyze interesting opportunities. There is always a place for that. Few older people really have the ability to do that, such as running financial targets and using software such as Excel and Argus. My advice is also to be on the revenue side of the business. That’s where the money is made. Go into leasing and sales. I’ve always felt that if you give me a good leasing person, that is the key to building something. Besides Flats East Bank, what are you trying to accomplish at this stage in your life? I’m creating some interesting businesses. We’re working on a few ways to use the large empty spaces at enclosed malls, such as creating food halls and entertainment venues. Another one is to develop apartments on the empty parking fields of enclosed malls. I’m also looking at other sites downtown for apartments. I’m intrigued by multifamily as an asset class. You have a generation of trapped renters because of the mountain of college
student debt that is out there. A person can’t get out of student debt by declaring bankruptcy. It’s a huge problem. They have to make choices that older generations did not face. Few can qualify for loans under the Dodd-Frank banking rules. So there is this shift to multifamily from single-family housing. The priorities of millennials are travel, entertainment, food and beverage, and health and beauty. Last is fashion. That explains what’s happened to malls and the rise of fast-fashion and off-price retailers. What’s your perspective on downtown retail? I think a lot of people don’t understand much about retail. It’s easy to add it to your proforma and throw it on your first floor at a new downtown apartment or office building. It’s more difficult to lease it. I’ve seen it in downtowns all around the U.S. There is often a lack of recognition that people shop where they live, not where they work. Other than service retail, food and beverage, downtown retail is not going to happen until you bring far more people to the market to live.
CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310 Cleveland, OH 44113-1230 Phone: (216) 522-1383 www.crainscleveland.com Twitter: @CrainsCleveland Publisher/editor Elizabeth McIntyre Group publisher Mary Kramer Managing editor Scott Suttell Sections editor Michael von Glahn Creative director David Kordalski Web editor Damon Sims Associate editor/Akron Sue Walton Assistant editor Kevin Kleps Senior reporter Stan Bullard, Real estate/construction Reporters Jay Miller, Government Dan Shingler, Energy/steel/auto/Akron Rachel McCafferty, Manufacturing/ energy/education Jeremy Nobile, Finance Lydia Coutré, Health care/nonprofits Senior data editor Chuck Soder Cartoonist Rich Williams Events manager Ashley Ramsey Marketing coordinator Megan Lemke Integrated marketing manager Michelle Sustar Managing editor custom/special projects Amy Ann Stoessel Associate publisher/Director of advertising sales Lisa Rudy Senior account executives Dawn Donegan, John Petty Account executives Laura Kulber Mintz, Loren Breen People on the Move manager Debora Stein Office coordinator Denise Donaldson Pre-press and digital production Craig L. Mackey Media services manager Nicole Spell Billing YahNica Crawford Credit Thomas Hanovich Crain’s Cleveland Business is published by Crain Communications Inc.
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There has been some churning of tenants at Flats East Bank during the past few years. How do you look at that side of things there? It’s Darwinian. It’s a competitive world. If someone doesn’t make it there, someone else will. It’s not the result of the project. Coastal Taco is being repositioned. Crop failed there. We replaced it with Dante’s Inferno and the Thirsty Dog. They are more productive.
Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for the last week of December, at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2019 by Crain Communications Inc. Periodicals postage paid at Cleveland, OH, and at additional mailing offices. Price per copy: $2.00. Postmaster: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. 1-877-824-9373. Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, MI, 48207-9911, or email to customerservice@crainscleveland.com, or call 877824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.
THE WEEK ‘Fraternity culture’ Cleveland law firm Jones Day is being sued for gender, pregnancy and maternity discrimination. The plaintiffs seek more than $200 million. According to the discrimination suit, filed in U.S. District Court for the District of Columbia, six female plaintiffs — Nilab Rahyar Tolton, Andrea Mazingo and “Jane Does” one through four — describe Jones Day’s “fraternity culture” as a “brotherhood ruled by one man,” managing partner Stephen Brogan. From the suit: “Senior male partners mentor young male associates, give them preferential assignments, facilitate their access to clients, introduce them to the firm’s powerbrokers and groom them for membership in the firm’s partnership, even when
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their legal skills are notably deficient. Female associates, by contrast, have fewer opportunities for mentorship, are promoted in smaller numbers and earn less for equal work.”
Game on
Terry Francona, who has led the Cleveland Indians to four postseason trips in six years as manager, is now signed through the 2022 season. (Getty Images)
MGM Northfield Park is officially the new name of the property that had been known as the Hard Rock Rocksino Northfield Park. MGM Resorts International on April 1 completed a previously announced deal to buy the operating assets of the Rocksino from MGM Growth Properties LLC and to lease the property from MGM Growth. MGM Growth acquired the property last July for a little more than $1 billion. With the deal, the Rocksino has been rebranded MGM Northfield Park. The property has 950 employees.
Sticking around The Cleveland Indians agreed to a two-year extension with manager Terry Francona that runs through the 2022 season. If Francona manages the Tribe through the 2021 season, he will tie Lou Boudreau for the longest tenure in franchise history at nine seasons. If he’s still on the job in 2022, he’ll break the former player-manager’s mark. Francona has posted the third-best winning percentage by a skipper in club history.
What’s in store Meijer said it plans to open its first three Northeast Ohio supercenters on May 14. The retailer is opening stores in Avon, Mentor and Stow. A Meijer Express gas station at the Avon location will open on April 18.
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