Crain's Cleveland Business

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CRAINSCLEVELAND.COM I APRIL 12, 2021

REAL ESTATE

MOVING IN? Zillow’s expansion may further disrupt residential realty in Northeast Ohio

Zillow, the home listings portal eponymous with the Seattle-headquartered real estate technology giant, is on the verge of shaking up Northeast Ohio’s residential market.

One gambit is clear. Look for Zillow Offers, its take on online instant home-buying services, to surface soon in the northernmost of the 3C’s. It’s already active in Cincinnati.

See ZILLOW on Page 19

CRAIN’S ILLUSTRATION/GETTY IMAGES

BY STAN BULLARD

REAL ESTATE

Opportunity Corridor site earmarked for nonprofit Cleveland considering lease-purchase deal for project, related development

BY MICHELLE JARBOE

Along East 79th Street, just south of where the Opportunity Corridor is cutting across Cleveland’s East Side, ambitious plans are afoot for a 9-acre site where the only signs of

life today are birds flitting between gnarled trees, abandoned buildings and piles of litter.

The city of Cleveland, which acquired the block during land assembly for the $257 million road project, is considering a lease-pur-

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chase deal to support redevelopment. The would-be buyer is a company tied to Norman Edwards, president of the Black Contractors Group and the American Center for Economic Equality, according to public records.

During recent interviews, Edwards and retired contractor Fred Perkins confirmed that they’re planning a project centered on encouraging and preparing young people, particularly from minority communities, to pursue jobs in the construction industry. The first building to rise on the block would be a roughly 39,000-square-foot space to house their Construction Opportunity Institute of Cleveland, a nascent workforce development program.

Legislation introduced at Cleveland City Council early this month, to authorize the land deal, also mentions the potential for a concrete plant and an asphalt plant on the site. Perkins and Edwards wouldn’t discuss those components of the project in detail, beyond characterizing the plants as potential training hubs and revenue sources to sustain the nonprofit institute.

“We are planning to do some innovative stuff, and if we can get the clearance to have those plants there, we will,” Perkins said. “But that’s not something that is cast in stone right now.”

See EDWARDS on Page 19

The Opportunity Corridor road is making its way through Cleveland’s Kinsman neighborhood, just north of East 79th Street and Rawlings Avenue. | MICHELLE JARBOE/CRAIN’S CLEVELAND BUSINESS

4/9/2021 2:24:05 PM

MANUFACTURING

Biden’s infrastructure plan could have big impact here Proposal features major investments in ‘human capital’

BY RACHEL ABBEY MCCAFFERTY

President Joe Biden’s infrastructure proposal goes far beyond roads and bridges. The American Jobs Plan would include investment in everything from broadband access to industrial and energy site redevelopment to electric vehicle creation.

“The President’s American Jobs Plan is a historic public investment — consisting principally of one-time capital investments in our nation’s productivity and long-term growth,” the White House fact sheet read. “It will invest about 1 percent of GDP per year over eight years to upgrade our nation’s infrastructure, revitalize manufacturing, invest in basic research and science, shore up supply chains, and solidify our care infrastructure.

These are investments that leading economists agree will give Americans good jobs now and will pay off for future generations by leaving the country more competitive and our communities stronger. In total, the plan will invest about $2 trillion this decade.”

These proposals could certainly change — and change drastically — as they move through Congress. But

Correction A story about SprayWorks in the April 5 issue of Crain’s Cleveland Business misspelled company co-founder Debra Davidson’s name.

as it stands, the American Jobs Plan could have big impacts in Northeast Ohio. Here are a few areas experts are watching.

A focus on human capital People usually think physical structures when they talk about infrastructure, said Kathryn Wilson, department chair of economics at Kent State University. But this proposal really includes a focus on “human capital,” she said.

That plays out in a number of ways.

The proposal would include investments in facilities and technology for community colleges, as well as in workforce development training for displaced workers and in growing, high-demand fields. Investments in home health care would take elder care responsibilities from some individuals, who could then participate more fully in the labor market. The same could be said for the proposed investments in child care facilities.

And some of the physical capital improvements could directly impact humans’ abilities to learn and thrive.

For example, Wilson mentioned the administration’s goal of removing lead pipes from the water system as being of particular importance in that regard, as lead levels can have long-lasting effects on learning. The White House’s fact sheet notes that six to 10 million homes still have

drinking water that travels through lead pipes and service lines.

Supporting manufacturers, start-ups and R&D Ethan Karp, CEO of MAGNET in Cleveland, said he was pleased to see the proposal try to put “money behind manufacturing.”

This funding is apparent in a variety of places throughout the proposal.

For example, there are mentions of funding that could be used to retool former factories or to invest in clean energy innovations at large steel or chemical production facilities.

“Manufacturing is a critical node that helps convert research and innovation into sustained economic growth,” the fact sheet said.

Karp highlighted the funding set aside for research and for incubators and startup services, as well as funding to help expand the reach of organizations like MAGNET. Support for incubator spaces could benefit Northeast Ohio, as the region has a strong network of such services, from the Bounce Innovation Hub in Akron to the Youngstown Business Incubator to JumpStart Inc. in Cleveland.

“We’ve got this robust network of tried-and-true organizations that are producing startups or creating jobs that is mostly funded through the state of Ohio,” Karp said, noting that more federal funding would be beneficial.

President Joe Biden promotes his $2.25 trillion infrastructure plan and described its passage as urgent to keep the U.S. competitive against China. | BLOOMBERG

Bettering bridges and public transit

of reliable transportation is far from the only reason for the labor gap, but it’s a difficult, expensive one to solve.

In terms of more traditional infrastructure, Northeast Ohio could benefit from improvements to bridges, said Michael DeDad, assistant professor of economics at the University of Akron. And better bridges could mean lower costs for vehicle repairs, as well as improved domestic trade.

And of course, investment in bridge repair — like the other areas of improvement identified in the proposal — could have a multiplier effect as people get hired and paid to work on those projects, DeDad said.

But that’s just a possibility, as the evidence has been “mixed” in the past on whether that kind of spending trickles down, he noted.

In terms of public transit, an improved public transportation system could have strong benefits for manufacturers, Karp said, as transportation issues are the “biggest, most costly barrier” to connecting people with open manufacturing jobs. A lack

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Increasing corporate taxes Alongside the infrastructure plan, Biden is proposing a corporate tax overhaul to pay for it. And that is something that could have a big impact on Northeast Ohio, DeDad said. Critics say a higher corporate tax rate could encourage companies to relocate and move out of the U.S. He doesn’t agree.

“I don’t think there’s much risk with that,” DeDad said.

He pointed to what happened when the corporate tax rate was lowered in recent years: in short, not much. Companies didn’t move back to the U.S. en masse. And there are efforts to encourage countries across the world to impose a global corporate tax rate, which would minimize the temptation for companies to move out of the U.S. Rachel Abbey McCafferty: (216) 771-5379, rmccafferty@crain.com

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4/9/2021 11:30:42 AM

EDUCATION

Colleges host clinics to vaccinate students before summer Shots are seen as a possible path to pre-pandemic life

BY AMY MORONA

DeWine called it a “strategic move.”

“While fewer of our young people COVID-19 vaccines have long get sick from COVID, the evidence been on the radar of Northeast Ohio’s clearly shows that they are significant colleges and universities. Officials carriers,” he said at an April 1 news just didn’t know if, or when, the time conference. “They’re significant carwould come to shell out the shots. riers because of their interaction with Take Oberlin College. Administra- other people. That age group intertors there worked with a local hospi- acts more.”

Gravens said about 95% of Oberlin’s tal and pharmacy to apply to become a distribution center months ago. students indicated in a recent survey “We planned this whole clinic not that they wanted to be vaccinated. The knowing fully that we would ever re- college’s mass clinic will be using the ceive (the) vaccine,” said Katie Gra- one-shot Johnson & Johnson vaccine. vens, Oberlin College’s COVID-19 Other institutions have received or will be receiving the same, too. campus health coordinator.

That’s ideal, said University of AkHaving the approval and logistics in place made it easier to roll out a ron director of health and safety Eric four-day clinic at its gymnasium after Green. It would be tough to use a difOhio Gov. Mike Dewine recently an- ferent vaccine that required multiple nounced the state’s intention to vac- shots as the semester winds down, cinate every college student who even though he said many students wants one at campus clinics before are commuters who may not leave the area for breaks.

“When we vaccinate, it has a “WHEN WE VACCINATE, IT HAS bigger impact on the local A BIGGER IMPACT ON THE LOCAL community because those students are staying here,” he said.

COMMUNITY BECAUSE THOSE The university partnered with STUDENTS ARE STAYING HERE.” a local pharmacy and is set to distribute about 4,200 shots — Eric Green, director of health over two weeks of mass clinics and safety, University of Akron at its basketball arena. Though “a lot” of students have already gotten the summer begins.

After institutions nationwide saw vaccinated through their job or other enrollment drops last fall amid the means, Green said officials have been pivot to remote or hybrid learning, told the number of doses can be advaccines could offer campus com- justed if demand exceeds the supply. munities a return toward pre-pan- The vaccines are free, though Green demic life. Some already have hosted said the university will use some of its clinics in conjunction with health recent federal relief funding to help pay departments or other groups, but this for any additional costs.

But UA and the other institutions new push is aimed just for students.

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Crain’s spoke with for this piece aren’t requiring the vaccine for the fall at this time. The sentiment is similar throughout the area, with a caveat from officials the situation continues to be monitored.

It’s not a requirement at the region’s four community colleges or Kent State University, the school with Northeast Ohio’s largest enrollment.

In Cleveland, Case Western Reserve University’s website pointed out while it’s not a university requirement, it may be for some of its partner institutions. Cleveland State University said the vaccine will be needed for students living in a residence hall this fall.

A handful of colleges nationwide are requiring the vaccine as of now. A recent recap by the Harvard Law Review said institutions may have the legal ability to implement a requirement, but pushed for more federal guidance on the topic.

Institutions are certainly strongly encouraging campus communities to get vaccinated, though. Scroll through social media and you may see part of a local institution’s campaign, many of which use some variation of a mascot wearing a post-vaccine bandage to raise awareness.

Baldwin Wallace University is asking the campus community to share their vaccination status if interested.

The school will also have a record of students who received the shot on campus during the recent mass vaccination clinic at its recreation center. Assistant vice president and director of university relations Dan Karp said the university received the

Freshman Angelina Minisall lines up for her vaccine at Baldwin Wallace University’s clinic on Wednesday, April 7. | BALDWIN WALLACE UNIVERSITY

full quantity of vaccines it would need in one shipment.

Other local institutions are implementing similar processes. Keeping track can help identify if a campus community is reaching herd immunity status. Plus, it may give the ability to roll back some of the safety protocols colleges have implemented amid the pandemic, especially the ones put in place if a student comes in contact with someone exposed to the virus.

“By sharing with us that you’ve been vaccinated, that allows us to say ‘OK, you don’t have to quarantine right now,’ ” Karp said. “Or ‘all right, we don’t have to include you in the surveillance testing.’ ” And as the spring winds down, administrators are no doubt looking toward the fall. Many of the return to campus plans introduced by local

institutions over the past few weeks were crafted thinking that faculty, students and staff would all be vaccinated by the time classes begin again.

BW’s Karp said the college already has had a few students enrolling next semester who have already reached out. They want to know if they can get the vaccine once they arrive.

He reminds them of Ohio’s rules.

Anyone who is over 16 is eligible now, and BW is encouraging those incoming students to get vaccinated throughout the spring and summer.

The college doesn’t know if it’ll have vaccines on hand in the fall.

For now, though, these clinics and the flurry of vaccinations offer moments of hope after an eventful year.

Amy Morona: amy.morona@crain. com, (216) 771-5229, @AmyMorona

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Acquisition by One80 Intermediaries preps Cannasure for big-time growth Cleveland company has built a ‘marked advantage’ in industry

BY JEREMY NOBILE

Years ago, Cannasure Insurance Services founder and CEO Patrick McManamon routinely was brushed off when he called around looking for companies to help provide insurance coverage to state-legal marijuana businesses.

“They would just say, ‘This sounds illegal. What are you talking about?’

They’d chuckle dismissively and hang up,” McManamon recalls.

The legal industry within state markets, budding despite the overhang of federal prohibition, was less unfamiliar out west. So the firm has focused efforts there for many years. It didn’t write its first policy for a client east of the Mississippi River until 2017.

But much like evolving laws and attitudes surrounding cannabis itself, times are changing.

After about 11 years in business, Cannasure, the Cleveland-based niche wholesale broker and managing general agent (MGA) designed exclusively to serve the cannabis and hemp industries, has gone from a veritable pariah in its early days struggling to be taken seriously to a hot commodity poised for a breakout — at least as far as One80 Intermediaries is concerned.

One80, a national specialty insurance brokerage and risk management adviser operated by Boston-based Risk Strategies, recently purchased Cannasure. Backed by New York private equity Kelso & Co., Risk Strategies is deploying capital to roll up various specialty insurance firms as it positions itself for growth.

Financial terms of the Cannasure deal, effective March 1, were not disclosed.

The acquisition marks a new chapter for Cannasure, which is looking to grow its premium base by 80% to 100% every year.

“We anticipate in 2023 we should

Cannasure founder Patrick McManamon said the company expects to triple in size by 2023. | PEGGY TURBETT

be three times the size we are right now,” McManamon said, noting the firm is to remain and grow in its current Cleveland headquarters and retain its brand name.

Within the last two years, wholesaler One80, which has 33 offices in North America and about 800 employees, has acquired its way into other niche specialization areas including yachting, logistics and cannabis. It has been building up its marijuana business in Canada and liked the opportunity Cannasure presents for it across North America, said One80 president Matthew Power.

“Patrick has been at the forefront of this issue,” Power said. “He has been a leading voice in this emerging industry and the nuances around standing up the U.S.-based insurance market.”

Power lauded McManamon’s experience in the space since 2010, which he said sets it apart from other agencies it might’ve considered rolling up, along with the team he has built, which includes chief financial officer Joe Foley and Jim McErlean, a director of business development stationed in California. The people and their experience, Power said, give Cannasure a “marked advantage” in the marketplace.

These features make the firm stand out from newer outfits looking to break into a sector that is still too small, and perceived as too risky, to

matter much today to large namebrand agencies like a Nationwide or Great American Insurance Group.

Some sources suggest companies like this could start to provide reinsurance to the cannabis industry in the future.

Cannasure has seen more competitors creep up in the past two or three years. But the fact few businesses were where Cannasure wanted to be a decade ago enabled it to begin slowly carving out a niche in the marketplace long ago.

McManamon was working for his father’s firm, McManamon Insurance, when a high school friend opening a medical marijuana dispensary in Southern California reached out about securing a liability policy for his business.

After a lot of legwork, McManamon secured that policy, which was underwritten by Lloyd’s of London.

This was around 2009-10, which marked the beginnings of Cannasure as McManamon looked to separate a more controversial business from his father’s firm.

But the next few years were relatively quiet. The California dispensary eventually closed. And McManamon spent the next few years traveling out west, learning about the industry and eventually raising about $5 million in capital.

See CANNASURE on Page 21

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GOVERNMENT

New report highlights positive impact of biz income deduction Data show tax break stirred big jumps in jobs, economic activity

BY KIM PALMER

A state tax break enacted in 2013 to help small businesses spurred $5.9 billion in economic activity and created 59,700 new jobs in 2018, according to a study conducted by Ernst & Young and commissioned by the Ohio Chamber of Commerce Research Foundation.

The “Economic Impact of the Business Income Deduction in Ohio” study released this month set out to examine the economic effects of the state’s use of a tax provision — enact-

ed in 2013 and updated in 2016 — on small business and employment growth in the state.

Brian K. Hicks, president of the Ohio Chamber of Commerce Research Foundation board of directors, said the analysis proves there is “a positive correlation between the enactment of the BID and a growth in economic activity and production in Ohio.” The law permits business owners to forgo paying tax on the first $250,000 of business income and then apply a 3% tax rate to all business income beyond that.

“This report is important research that will help people understand Ohio’s BID better, maybe alleviate some of the misconceptions. It is the first report that provides hard data, empirical data, to evaluate business income deduction,” said Hicks, who also is president and CEO of Hicks Partners, a business consulting firm in Columbus.

The study, which Hicks said is the first to analyze the effects of the BID, comes at a time when the use of business tax breaks faces pushback in Ohio and scrutiny of federal business

deductions — including those that result in large companies paying essentially no business taxes at all — has grown.

Although there is no pending leg- Hicks islation currently aimed at changing or reducing the BID in Ohio, a version of the budget that sought to decrease the tax threshold from $250,000 to $100,000 passed the House in 2019, only to be rolled back by the Senate before the

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budget was signed into law.

As the House prepares to bring the state’s 2022-23 budget to the floor, Hicks said he wants legislators to have the empirical data to evaluate how the BID has benefited the state’s economy.

“We do not anticipate that there are going to be changes to the law this session, but we also want to make sure that people have a good data to think about it and to evaluate it,” he said.

The 15-page study, which uses the latest pre-pandemic economic data available, found that in 2018 the extra tax benefits not only helped create 59,700 new jobs, but that businesses with fewer than 50 employees were responsible for 14,300 of those new jobs. It also found that 1,200 fewer business shut their doors that year because of the tax savings.

“The goal of the business income deduction is to really allow businesses to keep more of their money, retain more of their capital, reinvest it into their companies for economic growth purposes,” Hicks said.

The report states Ohio tends to be a more attractive place for a small business to grow than neighboring and peer states with the BID, which “offsets the anti-competitive impact of Ohio’s significant municipal tax.”

Ohio, with a top marginal individual rate on business income of 4.8%, ranks below states such as North Carolina at 5.8% and Georgia with a 6% top marginal tax rate on business income. However, with the addition of municipal taxes in some areas, which can range from 0.5% to 3%, that effective rate can be higher.

“To the extent that Ohio is able to keep the tax on business income lower with other states it competes with, that makes Ohio, in the long run, better able to compete,” said Tom Zaino, treasurer of the Ohio Chamber of Commerce Research Foundation.

Lower tax rates correlate to a state’s competitiveness, which clearly supports attracting outside capital investment to Ohio, said Zaino, who also is managing member of Zaino Hall & Farrin and the former state of Ohio tax commissioner.

“We never want the tax system to get in the way of the competitiveness of a state or government,” Zaino said.

“And we want to make sure that it does not impede the ability of Ohio to attract capital investment and to grow jobs in Ohio.”

The BID, like other tax reforms that result in some business owners not paying anything on a set amount of income, has been criticized as merely a tax loophole that benefits the wealthy.

The report claims to counter that assertion, stating that according to 2018 data from the Ohio Department of Taxation, 66% of the business income covered by the deduction went to taxpayers with adjusted gross income of fewer than $400,000.

See TAX BREAK on Page 20

6 | CRAIN’S CLEVELAND BUSINESS | April 12, 2021

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PERSONAL VIEW

Northeast Ohio small biz trends defining 2021 RICH WILLIAMS FOR CRAIN’S CLEVELAND BUSINESS

BY MARK D’AGOSTINO

EDITORIAL

Thinking broadly “I

nfrastructure,” all of a sudden, is in the eye of the beholder.

With his proposed $2 trillion American Jobs Plan, President Joe Biden aims “to preside over the greatest expansion of infrastructure in decades — not only the physical stuff but also the definition of the term itself,” according to a Bloomberg analysis.

We’ll leave it to others to parse the value of the giant plan, which includes not just roads, rails, airports, etc., but also spending on child and elder care, and other elements not usually thought of as infrastructure. We do, though, want to underscore the importance of embracing a new way of thinking about one category included in the plan — broadband — that is getting more attention at the state and local level.

You might have noticed Crain’s Cleveland this year is focused on examining the digital divide — the economic, educational and social inequalities between those who have computers and access to reliable, high-speed internet, and those who do not. We’ve written about the topic extensively so far in 2021 and will continue to do so. We’re also hosting an editoHIGH-SPEED rial forum on the subject on May INTERNET NOW IS 12.

The Biden administration estiA BASIC NECESSITY, mates that “more than 30 million NOT A LUXURY. Americans live in areas where there is no broadband infrastructure that provides minimally acceptable speeds.” People with the worst broadband access tend to be concentrated in rural areas and in poor parts of big cities. High-speed internet now is a basic necessity, not a luxury. Those without it are at a tremendous disadvantage in pursuing educational and career opportunities.

Ohio is fortunate that Gov. Mike DeWine has set improved broadband access as a major goal of his administration. We saw a great example of that focus last week, when the governor came to East Cleveland to announce a state-led pilot program to bring affordable high-speed internet to underserved urban areas.

An impressive public-private partnership — involving the work of the Case Western Reserve University; Connect; Eaton

Corp.; GE Lighting — a Savant company; the Greater Cleveland Partnership; InnovateOhio; Microsoft; OARnet; PCs for People; University Hospitals; and the Urban League of Cleveland — initially will provide $15-a-month internet service to more than 1,000 households in East Cleveland, with service originating from an antenna at a school there. The service and needed infrastructure then will expand to an additional 2,000 residents, offering internet speeds of 50 Mbps for download and 10 Mpbs for upload, which is twice the minimum federal definition of high-speed internet.

We’re encouraged by the all-in approach from a cross-section of some of the most important companies and institutions in Cleveland. It reflects a growing consensus that the city must improve internet access as a key condition in escaping its slow-growth rut.

Additionally, Cleveland recently was tabbed as one of seven communities that will tackle the digital divide through an initiative known as Project OVERCOME. In Cleveland, the project — funded by $2.25 million from the National Science Foundation and $450,000 from philanthropic organization Schmidt Futures — will be run by nonprofit DigitalC. DigitalC chief executive Dorothy Baunach says the organization will use fiber and millimeter wave technologies to provide internet service to a “pocket community” at a multi-dwelling complex in Hough, a historically Black neighborhood. DigitalC also will offer technical support and assistance in purchasing devices.

These are both exciting, but small, efforts in tackling a huge problem. An estimated one-third of Cleveland residences still don’t have broadband service that is either affordable or accessible. The Biden administration estimates that about the same percentage of rural Americans also lack access to minimally acceptable broadband, so if you’re looking for an issue to unite our divided country, this could be it.

This problem has been with us for a while, and it has been exacerbated by the economic strains and changing social conditions resulting from the pandemic. It’s not a quick fix.

There should be broad agreement, though, that everyone should have access to the modern economy — no matter where they call home.

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

The business environment in Northeast Ohio has certainly had to shift over the last year. As a provider of human resources services to local companies across the business spectrum, we’ve had a front-row seat to how companies are adjusting to survive and even thrive.

What do the companies making it have in common? Here are the top seven trends we see impacting small businesses throughout Northeast Ohio. How companies are responding provides insight into what the Northeast Ohio small business landscape will look like as we move further into 2021.

D’Agostino is president and founder of ConnectedHR in Cleveland.

1. Are you fuctional, not optimal?

Recently, a small business client described his company’s current situation as “functional, not optimal.” While the big corporations fairly easily transitioned to remote work, the vast majority of workers in Cleveland work in small businesses for whom remote work is not a good fit. Small business owners are being extremely cautious as they grapple with this “interim model” of functionality. Recognizing this is the first step toward optimization.

2. Flexibility is de rigueur The pandemic has pushed companies into rethinking their stance on flexibility to the point that it is practically a requirement. This does not only mean working from BE CREATIVE. THE home. It might mean staggered work schedules so not OPPORTUNITY TO everyone is in the office or MAKE SOME plant at the same time. Or for manufacturing shifts, it may ATTEMPTS AT mean longer days with Fridays FLEXIBILITY IS NOW. off. Or perhaps flexibility is demonstrated by paid online training days. Be creative. The opportunity to make some attempts at flexibility is now.

3. Lock down your technology With so much of our day-to-day business taking place in the virtual world, right-sizing your technology and locking down cyber connections is essential. Just look at the online unemployment hacks costing millions. Unsecured tech access can be a liability. Bump up IT security to safeguard your operations. It’s an investment worth making.

4. Communicate constantly Companies faring well are communicating more than ever before. You really cannot overcommunicate. As things change, employees need to hear, “This is what we’re going to try now, and here’s why.” Often, it’s not change that causes consternation; it’s ambiguity and lack of clear communication. Remember that communication is a two-way street. Be sure to solicit employee feedback.

See D’AGOSTINO, on Page 10

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

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

8 | CRAIN’S CLEVELAND BUSINESS | April 12, 2021

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OPINION

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reer technical centers, community colleges and fouryear universities, and these institutions’ established reOver the past decade, Ohio’s economy has grown lationships with employers, TechCred has already steadily, generally tracking with national trends. And, like allowed more than 10,000 Ohioans in 1,000 businesses the nation, when the pandemic hit at the start of 2020 our to obtain new industry credentials.

Now, more than ever, the success of TechCred must state saw sudden sharp declines in gross domestic prodbe accelerated. In their recently reuct and employment. The losses in leased budget proposal, DeWine and jobs and suspension of economic Husted proposed $50 million in addiactivity were a big blow as our state tional funding over the next two years and nation sought to navigate the to boost the number of Ohioans and once-in-a-century challenge of Ohio employers benefiting from TechCOVID-19. After the progress Ohio Cred’s new, advanced training. The made since the Great Recession, General Assembly should continue to these blows were worrisome, but embrace this effort and support its over the past year growth has startcritical investments. ed to slowly rebound.

As members of the Complete to While Ohio is beginning to edge Roebuck is an adjunct professor at Compete Ohio Coalition, a public-priback from the lows of the pandem- Cleveland State University and vate coalition committed to helping ic recession, two issues that con- former Ohio Career and Technical more Ohioans attain the training tinue to complicate our state’s re- Education superintendent. Harris needed to earn a living wage, fill covery — and our economic health Bane is director of economic in-demand jobs and close Ohio’s skills in general — are our state’s static development for the City of Aurora gap, we are strong supporters of Techpopulation numbers and our need and a former higher education Cred. The initiative’s benefits are for more skilled workers. senior administrator. clear: It is easy for employers to use, In the absence of leap-ahead produces results via training programs technological advances that would increase per-worker productivity to levels that are cur- of less than a year, focuses on relevant training for in-derently hard to imagine, it’s difficult to achieve strong eco- mand roles and is accountable and transparent, with nomic growth without population growth and, therefore, payments coming only after employees complete proworkforce growth. Like many Midwestern states, howev- grams and the results are carefully tracked. Most imporer, Ohio isn’t seeing population or workforce growth, and tantly, it helps Ohioans in real and lasting ways, at a time when they need it the most. we shouldn’t count on that changing anytime soon.

While no one could have predicted the pandemic, few One important strategy for easing Ohio’s systemic and immediate needs and helping lift Ohio families is invest- states are as well-positioned to emerge from it as Ohio, ing in the skills of Ohioans. Fortunately, our current gover- given our underlying economic fundamentals and nor and lieutenant governor understand the importance strong network of education and training resources. The question is whether we fully leverage them by providing of workforce training and have made it a top priority.

Introduced soon after Gov. Mike DeWine and Lt. Gov. TechCred the resources it needs at this critical juncture Jon Husted took office in 2019, Ohio’s TechCred initia- to provide Ohioans needed support. We believe its retive provides employers up to $2,000 per employee to sults speak for themselves and are hopeful they are fund training in one of thousands of approved industry abundantly clear to the General Assembly as we move credentials. Coupled with Ohio’s strong network of ca- forward together to get Ohio back on track.

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LETTERS TO THE EDITOR

Kudos for COVID vaccine delivery There’s a famous drill instructor’s line: “I know (people) in the ranks, that stay in the ranks. Why? I’ll tell you why: Simply because they haven’t the ability to get things done.” Well, nothing could be further from the Cleveland Department of Public Health grassroots community-care COVID vaccine admiration.

I was fortunate to receive both shots at our local community center, which ran like a fine-tuned clock.

I registered (as someone over 65) via the internet and smartphone apps with several drug stores, the county, the state and my hospital. Using the only in-person telephone call, the Cleveland Department of Public Health took my information and hosted my first appointment the following week. They issued a second appointment

reminder card, called and sent a follow-up email as a courtesy reminder, and confirmed that I did not have a conflict.

I don’t know who led this amazing citywide charge.

Still, this person and their dedicated staff, nurses, parking attendants, police and firefighters all deserve the city’s highest recognition for energizing an amazing, life-giving effort for which I and thousands will be eternally grateful.

Greg Coloian Cleveland See LETTERS on Page 10

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LETTERS

From Page 9

D’AGOSTINO

From Page 8

5. Boost morale Make an effort to inject some fun into the workplace and boost morale.

Remember those office birthday lunches? How do you do that virtually?

Find ways to continue to build relationships and feel authentically connected. Host a virtual cooking class, play games online, start a company book club. Find what works for you.

6. Find a balance For many, working from home

during the pandemic is more like “living at work” and they have a hard timing shutting things down. Talk to employees about setting boundaries and realistic expectations. Help your employees understand what it means to take care of themselves — both when working and not.

7. Address the training gap Many of the workplace issues we see result from a lack of management training. Front-line managers need to be trained on the basics of handling human resources issues as well as new protocols related to the pandemic. The age of your managers can also be a factor. Those who are 50-

plus were likely not trained to execute business like it is being executed today. Properly training your managers is one of the most important things you can do for your employees and your company.

Throughout 2021, we will inch closer to returning to the way things were.

However, the above trends show how much has changed along the way, particularly for small businesses.

Flexibility, communication, technology and morale will continue to be crucial. But the most important thing small businesses can do is to train supervisors and managers so they are in lockstep with top leadership. This is the best way to successfully navigate whatever 2021 has in store.

THE

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10 | CRAIN’S CLEVELAND BUSINESS | APRIL 12, 2021

On behalf of Greater Cleveland Volunteers, I bring attention to National Volunteer Week, April 18-24, and thank all the wonderful volunteers we have in Cuyahoga County.

National Volunteer Week began in 1974 as a way to recognize and celebrate the efforts of volunteers.

It’s about inspiring, recognizing and encouraging people to seek out imaginative ways to engage in their communities. It’s about demonstrating to the nation that by working together, we have the fortitude to meet our challenges and accomplish our goals.

During the pandemic in 2020, volunteers continued to be impera-

Joy Banish Executive director, Greater Cleveland Volunteers

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National Volunteer Week is a chance to honor those who give back

tive for nonprofit agencies to succeed. If you were volunteering and stopped, please reach out to that organization for an update. Maybe they have new ways for you to help or have plans to get services back to more customary activities. If you are not able to offer your time there, consider helping elsewhere.

It is an ever-changing environment. With more and more people getting vaccinated, the volunteer world is likely to return to some normal operations soon.

Remember, whether in person or virtual, volunteering is a way to give back to the community and for you to remain active.

If you have an interest but aren’t sure what volunteer opportunities are available, look at our website: greaterclevelandvolunteers.org or call 216-391-9500, ext. 2116.

CO M

IN

GS OO

N

SPORTS BUSINESS

Akron president stresses 'huge' value of sports to university

Zips await findings of task force studying future of athletics at school

BY KEVIN KLEPS

University of Akron president Gary L. Miller is a member of the NCAA Division I Committee on Infractions and served for three years on the D-I Presidential Forum.

He spent five years in leadership roles at Wichita State University, which two years after Miller’s departure made an unlikely run to the 2013 men’s basketball Final Four.

“It is a huge boost to the interest in a university, and it doesn’t trail off,” Miller said. “The basketball tournament does a really good job of showcasing these universities.”

It’s safe to say Miller is a huge believer in the benefits athletics can provide to an institution. At Akron, which has been plagued by financial problems and reduced its workforce by 15% last July, that viewpoint can at times be in conflict with those who think the university’s heavily subsidized athletic budget is unnecessarily high.

Last summer, as Akron weighed budget cuts that eventually led to the elimination of 178 positions and the total departure of 262 employees, the Akron chapter of the American Association of University Professors suggested a move to NCAA Division II or cutting the football program as possible options.

Miller, who started as president in October 2019, has pushed back against those ideas, saying the Zips compete for students with other Division I institutions and such a classification is a recruiting tool.

The university has had “robust discussions,” he told Crain's, about its D-I status since the pandemic accelerated Akron’s financial woes.

Last May, the Zips cut three sports as part of a $4.4 million reduction to

the school’s athletic budget.

In the year prior, $26 million, or 70% of Akron’s $37.2 million athletic budget, was funded by the school.

Still, Miller thinks “the value proposition for athletic programs is huge.

“We have close to 600 athletes,” the university president said. “Half of them don’t have athletic scholarships.”

‘A better strategy’ In September, Akron formed a 17-person task force that includes school administrators, faculty members, students, business leaders and head women’s basketball coach Melissa Jackson.

The group, Miller said at the time, would help Akron determine “a better strategy with a significantly lower cost profile” for its athletic department.

Matthew Juravich, an associate professor of management and the Zips’ faculty athletics representative, is chairing the group.

The task force has shared plenty of data, analyzed the Zips’ array of athletic scholarships and how the awards compare to Akron’s counterparts in the Mid-American Conference, and examined ways to make the department more efficient.

The bulk of the work, Juravich told Crain’s, has concentrated on a couple of basic questions — the answers to which often elude many mid-major athletic departments.

“How do we increase the amount of revenue generated by athletics?

And directly related to that, how do we reduce the amount of financial support provided by the university in doing so? Those are the two broad areas where the discussions have re-

John Groce, who is 70-49 in four seasons as the men’s basketball coach at the University of Akron, recently agreed to a three-year extension that runs through 2026. | GETTY IMAGES

ally been focused,” he said.

Juravich couldn’t reveal specifics because the findings haven’t been released, but he said the task force has reached “the true working phase, which is to come up with some recommendations.”

The tentative plan is for the group’s suggestions to be announced in late May or early June.

Ideally, the task force will “come up with some novel or unique or innovative solutions to help the university moving forward,” Juravich said.

‘We’ll get there’ An early benefit of the task force, according to Miller, is helping Akron “understand the universe of our revenue potential.”

In 2018-19, ticket sales, rights and licensing revenues accounted for $4.6 million, or 12.4%, of Akron’s athletic budget.

“Private revenue is important,” Miller said. “Tournament revenue is important. Having successful programs is important. Ticket sales, we want to have people there at the game. But we have some other options as well.”

One of the Zips’ marquee pro-

grams, men’s basketball, has been a MAC championship contender for most of the past 17 years. Akron, however, hasn’t advanced to the NCAA tournament since 2013.

On March 30, the Zips announced that men’s hoops coach John Groce had agreed to a three-year extension. Groce, whose clubs are 70-49 in four seasons, is now under contract through 2026.

The 49-year-old didn’t get a raise, but he’s slated to make a combined $3.3 million in salary and supplemental compensation the next five years. At $650,000 annually (a tally that doesn’t include incentives for on-court successes), Groce is the highest-paid men’s basketball coach in the MAC. Ohio’s Jeff Boals, at $581,000, is the only MAC coach within $130,000 of Groce’s annual compensation.

Asked about the extension, Miller lauded Groce for “doing a great job,” sharing the university’s values and being very committed to the student-athletes. It’s also important, the university president said, for big-time coaches to receive extensions that line up with the college timelines of recruits. (The idea being that a recruit who plans to play at Akron for four years will know that

Groce is under contract for the duration of his potential tenure.)

Another signature program, the football team, has struggled under Tom Arth, winning only one of 18 games since the former John Carroll University and University of Tennessee at Chattanooga coach agreed to a five-year, $2.5 million deal.

“You have to have successful programs, and football and basketball lead the way,” Miller said. “I think we’re going in the right direction with both of those. We’ll get there.”

As Akron gets set to receive the task force’s analysis of the athletic department, the U.S. Supreme Court is analyzing whether the NCAA’s eligibility rules regarding student-athlete compensation violate federal antitrust law. Miller, whose background in athletics includes leading the boards of the Horizon League and Colonial Athletic Association, is bracing for changes that go well beyond the Rubber City.

“I think we’re headed for a period of transition in Division I athletics, and it’s probably going to be painful, but ultimately a good thing,” the Akron president said.

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

Groce, Boals top pack in MAC A look at the 2020-21 payouts for the head men’s basketball coaches in the Mid-American Conference, along with the duration of each contract: Coach, school Total compensation (

base salary

Runs through

other compensation)

JOHN GROCE, AKRON

$650,000 2025-26

JEFF BOALS, OHIO

$581,000

TOD KOWALCZYK, TOLEDO

$513,906

KENO DAVIS, CENTRAL MICHIGAN*

2025-26

$419,923

MICHAEL HUGER, BOWLING GREEN

2023-24

2023-24

$415,000

2023-24

JIM WHITESELL, BUFFALO

$400,000

2023-24

ROB SENDEROFF, KENT STATE

$385,000

2021-22

JACK OWENS, MIAMI

$368,924

ROB MURPHY, EASTERN MICHIGAN**

2021-22

$350,000

JAMES WHITFORD, BALL STATE

2020-21

$326,083

MARK MONTGOMERY, NORTHERN ILLINOIS**

2021-22

$318,991

CLAYTON BATES, WESTERN MICHIGAN

2020-21

$220,000 0

$100,000

$200,000

2021-22 $300,000

$400,000

$500,000

$600,000

NOTE: PAY DOESN’T INCLUDE ANNUAL INCENTIVES FOR ON-COURT ACHIEVEMENTS AND ACADEMIC PERFORMANCES. * DAVIS WAS FIRED ON APRIL 5 AND WAS DUE A $400,000 BUYOUT. ** MURPHY WAS FIRED ON MARCH 17, AND MONTGOMERY WAS LET GO ON JAN. 3.

CRAIN’S CLEVELAND BUSINESS GRAPHIC

SOURCES: MID-MAJOR MADNESS, CRAIN’S RESEARCH

April 12, 2021 | CRAIN’S CLEVELAND BUSINESS | 11

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REVITALIZED Akron’s Kenmore neighborhood is investing in small business

SMALL BUSINESS

PAGE 14

SPREADING THE FLAVOR

Cleveland Kitchen’s Luke Visnic and Drew Anderson serve kraut from lined barrels, deli-style, during the early days at the North Union Farmers Market. At right, Cleveland Kitchen’s kraut is paired with steak tacos. | CONTRIBUTED PHOTOS

Cleveland Kitchen takes its fermented products nationwide

BY DOUGLAS J. GUTH

Cleveland has certain food truths most of us on the North Coast know about — pierogi, ballpark mustard and Slyman’s corned beef all stand proudly on the pantheon of popular local eats.

Mac Anderson, co-founder and chief marketing officer of Cleveland Kitchen, has added to the menu with a selection of signature sauerkrauts and fermented dressings.

Both products are slickly packaged and available at nearly 10,000 U.S. retail locations, including Whole Foods, Safeway and Target.

At the start of 2021, Cleveland Kitchen increased its distribution at several key retailers — Albertsons Intermountain, Food City, Harris Teeter and more. The company — introduced in 2014 under the name Cleveland Kraut — also added kim-

chi, developed alongside chef Heejung Gumbs of Korea House Restaurant, to its lineup.

“We’re in all 50 states as the No. 1 premium refrigerated sauerkraut in the nation,” said Anderson, who started the business with brother, Drew, and brother-in-law, Luke Visnic. “Last year, we released our fermented dressings and aligned into a platform brand.”

The 36-employee Cleveland Kitchen team operates out of 30,000 square feet in the Central Kitchen Food Hub on 7501 Carnegie Ave. A burgeoning portfolio of nationwide accounts allowed the company to grow from $100,000 in retail sales in year one to a projected $20 million in sales by the close of 2021.

A year of consumers dining from home had its own impact, considering a mission that centered healthy eating even prior to the pandemic.

“People wanted healthier products to boost their immune system, and we fell into that category,” said Anderson, 29. “There was a big surge with folks stocking up from March to June, and we saw growth after that.”

Premium refrigerated sauerkraut, in which finely chopping cabbage goes through lactic acid fermentation, is enjoying a rapid rise thanks to large-scale consumption of culinary fermented foods that support immune system health. Since 2019, the sauerkraut market has ballooned by 100%, with Data Bridge Market Research projecting an annual growth rate of 6% between the end of this year and 2028.

Starting out young Anderson has a literal lifetime around the organic food space. His mother, Donita Anderson, is

co-founder of the North Union Farmers Market, which opened in 1995. Mac Anderson has distinct memories of carrying produce for his mom and watching farmers promote their products. As he got older, the market became a built-in summer job as well as a kind of classroom for a budding culinary entrepreneur.

“I saw what made for a great product when it came to packaging and engaging with customers,” he said. “And with social media coming on board, I saw how businesses were able to leverage that.”

Anderson studied economics at Miami University (Ohio), conducting fermentation experiments in his campus kitchen and making sauerkraut for barbecue season.

Upon graduation, he worked in finance at Jones Day, perfecting rec-

ipes while his soon-tobe business partners did the same.

In 2014, the Anderson brothers and Visnic started making sauerkraut at Cleveland Culinary Launch and Kitchen (now Central Kitchen Cleveland). North Union Farmers Market served as the trio’s proving ground. There they gave out samples and educated customers on the health benefits of probiotics.

By the following year, Mac Anderson helped get the nascent company’s line of sauerkrauts onto the shelves at Heinen’s and Giant Eagle. More locations followed, along with a $5.6 million venture capital raise and a rebrand into Cleveland Kitchen.

See KRAUT on Page 17

12 | CRAIN’S CLEVELAND BUSINESS | APRIL 12, 2021

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FOCUS | SMALL BUSINESS

Brand X Cleveland lends its collective guidance Local experts offer free marketing, branding advice

BY DOUGLAS J. GUTH

The fruits of a post-pandemic economic recovery are not guaranteed, a reality recognized by a new initiative for small businesses negatively impacted by the virus crisis.

Brand X Cleveland was formed by 10 area branding, marketing, culture and business experts who also happen to be small business owners themselves. Motivated to navigate their entrepreneurial brethren through these challenging times, the group built a content-heavy platform that provides advice and resources to Cleveland proprietors.

Mike Ozan, chief creative officer of branding and design company Twist Creative, launched Brand X Cleveland in early February, likening the effort to a “Dear Abby” column for Mike Ozan restaurants, hair salons, boutique gyms and other businesses struggling to make a comeback even as the pandemic dissipates. All advice through Brand X is free. If users wish, they can go to participating experts for extra, paid services.

“The priority and purchase urgency of the small business customer has changed,” said Ozan, who founded Twist 21 years ago with his wife, Connie. “Brand X is a content platform and ongoing conversation. We have to do what we know how to do.”

Brand X Cleveland’s 500 to 1,000 unique daily visitors come to ask questions while reading valuable how-to’s on advertising mediums or increasing foot traffic. A supplier to the automotive industry seeking new revenue streams is one example of the five to 15 questions submitted weekly.

“Assuming your automotive accounts are still quite pleased with your company, it’s time to get some written and video testimonials from three of them,” answered Scott Moss, founder

of M Sales Growth Advisors. “Write out a full description of your ideal customer — demographics, geographics, psychographics — in the heavy equipment manufacturing industry, and then do the same for two additional industries to which your products have easy-to-understand applications.”

Detailed responses are what all Brand X Cleveland participants can expect when tapping the resource, said Stacey Vaselaney, a subject matter expert and owner of SLV Public Relations.

“We are all Cleveland supporters and advocates — when the coronavirus struck, we asked what our skill sets could do,” Vaselaney said. “We didn’t want to watch all these retail businesses slowly die or scale back.”

Brand awareness Questions from small business owners are answered in three or four days, a time frame that advocates want to cut to 24 hours. A workbook called “My Pandemic Pivot” is available for download, offering step-bystep instructions on how to adjust both during and after the pandemic.

Since March 2020, hundreds of Northeast Ohio storefronts have closed or are teetering on the brink following declines in foot traffic and sales. Liz Ferrante, owner of a Barre3 studio franchise in Legacy Village, pivoted classes almost immediately to Zoom when the first wave of stayhome orders came down last spring.

Ferrante considers herself lucky, as she’s retained most of her students for classes combining elements of ballet, yoga and Pilates. Upon reopening in mid-June, she utilized her 2,800-squarefoot space for socially distanced sessions of a dozen people each.

Ferrante’s ability to bounce back during a crisis hasn’t prevented the loneliness of running the sales, finance and marketing side of the business. But Brand X Cleveland expert Connie Ozan, a student of Ferrante’s, hipped her to the new opportunity.

“Me and my administrative staff

talked for 40 minutes with Connie and Mike (Ozan),” said Ferrante.

“They asked us about our concerns, because we’re always working on new clients and business growth.”

Per the Ozans’ advice, Ferrante leveraged Instagram to build brand awareness, highlighting her energetic instructors and offering recipes for nutrient-packed morning smoothies. “(Brand X Cleveland) gave me confidence to not overthink things and put my authentic self out there,” Ferrante said. “People want to get to know us and our product.”

More than anything, Brand X Cleveland gave Ferrante dialogue with marketing professionals she wouldn’t have access to otherwise.

Such relationships are crucial as Barre3 emerges from the pandemic in competition with well-known home-fitness brands like Peloton.

“Butting against a company like that, we have to determine what makes us unique. ... That in-person connection is where we shine,” said Ferrante.

Bridge to resiliency A survey of U.S. small businesses conducted by Bill.com found that 75% of owners are introducing new products and services as they navigate year two of COVID. Nearly half (47%) predicted their businesses will experience growth in the first half of 2021.

Mike Ozan believes small retailers are a healthy community’s beating heart. This certainty, alongside a perceived lack of connectivity amid industry peers as the pandemic raged,

Brand X Cleveland helped Barre3 in Lyndhurst’s Legacy Village better leverage its social media presence. | CONTRIBUTED

inspired Ozan to launch the initiative. A roster of Cleveland-loving experts — among them Brian Glazen and Mary Hipp from Think Media Studios and Sam Sherwood from Heya LLC — are intimately familiar with the challenges faced by smaller enterprises over the past 12 months.

Mike Ozan said brand positioning is of the utmost importance as cautious consumers test the retail marketplace.

Although a marketing push doesn’t have to be extravagant, owners at least need a platform that tells the public who they are. For instance, a barber shop could champion its sanitation practices, delivering a message that resonates with people concerned about hygiene.

“You are now the cleanest shop in town — it’s so simple,” said Mike Ozan.

“Most owners want to tell everyone everything at once, because they don’t have resources to spread the message out. That can be too much for custom-

ers. You have to give your story in the right doses, positing it while asking the question, ‘What’s my brand?’”

Meantime, Brand X Cleveland is developing new ways of reaching the region’s dream makers. A bimonthly podcast will feature business-related discussions, while virtual panels and even in-person meets may be in the offing. For Mike Ozan, the “X” in Brand X Cleveland represents the unknown, a state of affairs that does not have to be frightening or overwhelming.

“Our greatest hope is to provide businesses resiliency for a time when the pandemic is over,” he said. “They’ll know how people are behaving and interacting with each other. We’re getting them to a new businesses environment and building a bridge to it so they’re not washed away.”

Contact Douglas J. Guth: clbfreelancer@crain.com

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Kenmore investing in small businesses

Akron neighborhood’s revitalization efforts are attracting entrepreneurs

BY KAREN FARKAS

Akron’s Kenmore Boulevard defied COVID-19.

While the pandemic decimated many small businesses, Kenmore has attracted six new ones as entrepreneurs were lured by city and local initiatives that have transformed the multiblock area into an attractive, walkable streetscape.

The new businesses include a preschool, home care business, tea shop, restaurant and barbershop, according to the Kenmore Neighborhood Alliance. And the boom in small businesses continues. A vintage boutique and refinishing supply shop opened April 1. A cancer resource center is scheduled to open May 1.

And a long-awaited cafe and coffee shop is expected to open in June.

“It is a great place for an entrepreneur to start,” said Tina Boyes, executive director of the alliance. “There are more than 18,000 people within walking distance and great highway access.”

Boyes and city officials are excited about the success of the southwest Akron business district, which just four years ago was in jeopardy following the closing of Kenmore High School and a Huntington Bank branch.

“I would say Kenmore has really been a great example of the overall resiliency we have seen (in the past year),” said Mark Greer, coordinator of

the city of Akron’s Great Streets Initiative, which provides grants for building upgrades to business and property owners in Kenmore and 11 other city districts. “Once entrepreneurs and visitors see the investment in the area more of them are attracted to it. That organic revitalization has really happened in a strong way in Kenmore.”

Boyes said she worked to connect people interested in opening small businesses with property owners.

Nearly all the new businesses are minority-owned, she said.

Lori Julien, who opened Marigold Sol on April 1, is a former nurse who turned a part-time passion into a fulltime career.

“I have a deep respect and appreciation for communities that are investing in neighborhood revitalization, and what they’re doing here on Kenmore Boulevard is really inspiring,” she said in a news release announcing the boutique.

Ed Michalec, who opened The Guitar Department in 2009, said the additional businesses have definitely helped the neighborhood.

“I’m pleased and a little surprised as far as the pandemic that so many things are going forward,” he said.

Michalec said he was attracted to Kenmore because of its connections to the music industry, including housing several recording studios. Two years after he opened, he moved to another

Vint the l Kenm

Kenmore Boulevard runs through the heart of the Akron neighborhood, which has attracted six new small businesses during the COVID-19 pandemic. | FILE PHOTO

storefront and bought that building.

“The area was looking a little bit rough when I came in 12 years ago,” he said. “Largely with the Great Streets program, a lot of people are taking advantage of the facade grant, including us.”

Great Streets has awarded 23 facade grants totaling $512,000 in the Kenmore district, Greer said. The program requires property owners to match the grants, so some have delayed improvements. But the new vitality on the street is spurring action.

“Interestingly enough, I was speaking with one of the property owners who has three vacant buildings in the area and he is actually planning on moving forward in his facade improvement,” Greer said.

The alliance, with help from block grant funds provided by the city, pur-

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Ironically, the closing of the high school and bank appears to have been the catalyst to small business and neighborhood growth.

After the closings were announced, the John S. and James L. Knight Foundation provided funds for a study by the Dallas-based Better Block Foundation, which works with residents and activists to revitalize neighborhoods.

Better Block conducted surveys and spearheaded initiatives, including painting bike lanes and holding a street party in September 2017. That led to a commitment by business and building owners to revitalize the target area, from 13th Street to 16th Street, Boyes said.

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chased and began renovating a building at 975 Kenmore, Boyes said.

It also received a $30,000 Great Streets grant, which allowed it to remove the vinyl siding and renovate the facade in 2020.

The former beauty salon was slated to become a long-needed coffee shop, but investors withdrew during the pandemic, she said. But, with the help of the city’s Rubber City Match program, established in February 2020, an entrepreneur will open the coffee shop and cafe in that location this summer.

The Rubber City program provides potential, new and existing businesses in the Great Streets districts with financial aid, training and education.

Boyes hopes that program leads to another new business. An entrepreneur who would like to open a brewery in Kenmore received a Business

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14 | CRAIN’S CLEVELAND BUSINESS | APRIL 12, 2021

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TAX TIPS

The changing landscape of PPP loan forgiveness

BY CARL GRASSI

Vintage boutique Marigold Sol is one of the latest small businesses to open in Kenmore. | CHARLEE HARRIS

pactful changes and kind of show people what a physical place can be with a little bit of love,” she said of Better Block.

The alliance, which initially was a community organization, received a $240,000 grant from the Knight Foundation in fall 2017 to develop and grow the neighborhood. Boyes, who served as the Better Block captain, was hired as executive director.

In 2018, the city announced the Great Streets Initiative to improve the streetscapes of distressed neighborhoods. That year, the alliance submitted an application for the boulevard to be added to the National Register of Historic Places. Most of the buildings were built between 1908 and 1928.

The National Park Service approved the designation in September 2019. That designation made properties in the district, between 12th Street and Florida Avenue, eligible for historic tax credits.

Kenmore in 2019 was named one of 16 Opportunity Zones by Summit County, which is a federal tax incentive that allows investors to defer, reduce or postpone capital gain tax liabilities in return for an investment that spurs economic and job creation.

In addition to seeking and promoting businesses, Boyes has been working on activities that will engage business owners, community residents and people who live outside Kenmore.

Boyes is looking forward to resuming outdoor events this summer, including the monthly First Friday musical and food festival. Great Streets has provided $40,000 for district wayfinding and signage, as well as $30,000 for district events and marketing.

“No one is coming here unless you are giving them a reason to come,” Boyes said.

Boyes also is trying to determine how reach the 1,500 employees at the nearby Amazon fulfillment center, which is on the site of the former Rolling Acres Mall.

“When you have that many employees within a five-minute drive of your business district, you want to draw them,” she said.

Boyes and Michalec also are excited about a connector from the Towpath Trail at Summit Lake to the boulevard bike lanes. More bicyclists have been seen in the area since the link was completed last year.Boyes hopes that leads to new businesses tied to outdoor activities and physical fitness.

“Traditionally, Kenmore is a place where young families start then they aspire to leave and move to the suburbs,” she said. “We want to create an emotional connection so that they don’t want to leave.”

Contact Karen Farkas: clbfreelancer@crain.com

categories:

1. States that conform to As part of the Coronaa pre-CARES Act vervirus Aid, Relief, and Ecosion of the IRC will treat nomic Security (CARES) forgiven PPP loans as Act, the Paycheck Protectaxable income and retion Program (PPP) prolated business expenses vides loans to qualifying as deductible (for exambusinesses impacted by ple, Arizona and New the COVID-19 pandemic. Grassi is senior Hampshire).

Businesses that use PPP counsel at loan funds for certain McDonald 2. States that conform to qualified business ex- Hopkins LLC. a post-CARES Act but penses (for example, paypre-Economic Aid Act roll costs, mortgage interest payments, rent and utilities) version of the IRC are expected to can receive partial or full forgive- exclude forgiven PPP loans from ness of PPP loans if certain re- taxable income but deny the deduction for business expenses (for quirements are met.

Usually, forgiven loan amounts example, Hawaii, Ohio). are taxable for federal income tax purposes, but the CARES Act ex- 3. States with rolling conformity or cludes the forgiveness of PPP loans that otherwise conform to a from gross income on a federal post-Economic Aid Act version of level. The Economic Aid to Hard- the IRC would (i) exclude forgiven Hit Small Businesses, Nonprofits PPP loan amounts from income and Venues Act (Economic Aid and (ii) allow related expenses to Act) further provides that business be deducted (for example, Delaexpenses paid with forgiven loan ware, Illinois, Kansas, Missouri). proceeds are tax-deductible for 4. States that adopt specific provifederal income tax purposes.

Some states, however, may tax sions regarding PPP loan income proceeds from PPP loans by treat- that supplant their general conforing forgiven loans as taxable in- mity approach, thereby decoupling come and/or by denying the de- from one or both of the federal tax duction for expenses paid using provisions (for example, California). the forgiven loans, depending on This framework is just the start whether the state conforms or deof the analysis, however, because couples from federal tax law.

States use the Internal Revenue state laws are continuing to reCode (IRC) as the starting point spond to the changes in federal for their own tax codes, but incor- law. For example, the Ohio Legisporate the federal tax provisions in lature passed and the governor their own codes in varying de- signed House Bill 481, Section 36, grees. The three methods of con- which excludes PPP loan forgiveformity are: rolling conformity, ness from the definition of gross static conformity or selective con- receipts for the purpose of the Ohio Commercial Activity Tax. In formity. addition, Gov. Mike DeWine is ex• Rolling conformity: States with pected to sign recently passed legrolling conformity follow the most islation (Senate Bill 18), which current version of the IRC, auto- would conform Ohio to the federal matically incorporating federal tax treatment of the deductibility of expenses paid with forgiven loan changes as they occur. proceeds. Another complication is • Static conformity: States that use that the CARES Act provides that static conformity link to the IRC as it stood on a SOME STATES CONFORM TO certain date and must adopt legislation to ac- CERTAIN PARTS OF THE cept changes to the IRC FEDERAL TAX CODE BUT since that date.

DECOUPLE FROM OTHERS.

• Selective conformity: States with selective conformity conform to certain IRC provisions and decouple from others.

Some states conform to certain parts of the federal tax code but decouple from others. Even states with rolling conformity may adopt legislation to decouple from certain federal changes after they occur. States that use static conformity may routinely fail to update their conformity dates, resulting in major differences between the state’s tax law and the current IRC. Taxpayers need to carefully examine their own state’s tax laws to understand the impact of the state’s method of conformity on the taxation of their PPP loan forgiveness.

Most states fall into one of four

forgiven PPP loans are excluded from federal gross income but does not actually amend the IRC. Therefore, a state could assert that the provision would have no impact on whether the forgiven amounts would be excluded for state tax purposes. This is another reason why developments in this area must be closely monitored.

Many states have addressed the PPP loan forgiveness issues, while others have not officially commented. For those states that have not provided affirmative guidance, the general approach of the state in terms of conformity to the federal treatment will determine how the issue should be handled.

This is a complex issue, and PPP loan borrowers should speak with their tax advisers.

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Fresh products are flourishing across the country, and Cleveland Kitchen dressings are expected to be available at about 2,500 locations by the end of 2021. The new kimchi brand is on shelves at Sprouts stores nationwide and is available locally at Heinen’s, Giant Eagle and Fresh Thyme Markets.

Anderson learned the national dish of North and South Korea at his Burmese grandmother’s table, he said.

Cleveland Kitchen’s kimchi — created by fermenting cabbage, garlic, carrots and onions with salt and a type of chili powder called gochugaru — will ideally be an entry point into the nutritious gourmet goodness on which the company built its reputation.

“We had kimchi in our fridge all through my childhood,” Anderson said. “Bringing true, authentic kimchi with the spirit of Cleveland is a dream come true.”

Cleveland Kitchen’s sauerkrauts and fermented dressings are available at nearly 10,000 U.S. retail locations. | CONTRIBUTED

Spreading the love J.W. Sales and Marketing works with natural and organic specialty brands throughout the Midwest. The company is assisting Cleveland Kitchen in its expansion plans through store displays and presentation of new items at various merchandisers.

Griffen Weisberg, vice president of sales at the Beachwood-based food broker, said Cleveland Kitchen’s locally sourced products are a perfect fit for the organic side of his business.

From left, Cleveland Kitchen co-founders: Mac Anderson, chief marketing officer; Luke Visnic, chief operating officer; and CEO Drew Anderson. | CONTRIBUTED

“Our company represents functional health products that are beneficial for your body,” Weisberg said.

“We represent big brands, but these guys have grown their team nicely

while keeping it small.”

Cleveland Kitchen’s energetic door-to-door sales acumen has impressed big-ticket food mavens such as Michael Symon, who incorporated

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the company’s sauerkraut into his restaurants.

“It shows you can have these types of trends coming out of the Midwest — you don’t have to scale something

for the coasts and bring it here,” Weisberg said. “Other states are putting this Cleveland brand on the shelf, saying it’s that good, and regionality doesn’t matter. It’s a cool local story.”

Anderson points to area impresarios Doug Katz and Ben Bebenroth as additional influences on how he supports ingredients, flavors and brand building.

Visitors to Cleveland can love bratwurst and pierogi flavored with Cleveland Kitchen sauerkraut, while Anderson and his team continue to spread those tangy delights across the land.

“It’s important for me to show off Cleveland,” Anderson said. “We’re a hardworking, trustworthy, blue collar town, so let’s highlight the flavors of our region.”

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From Page 1

‘A valuable asset’

From Page 1

The other is the question of when the indispensable online real estate portal will directly expand its business into brokerage with its meaty commissions.

Legally speaking, Zillow could be conducting brokerage now in Northeast Ohio but does not choose to do so.

That’s because offering its instant buyer service in the Queen City means that Zillow registered its Zillow Homes, the parent of its instant offers platform, as an Ohio company in February 2020. Licenses for its brokers and agents were filed Sept. 8, 2020. Both are visible through the Ohio Department of Commerce Division of Real Estate website, although Zillow said it uses independent agents in Cincy.

Carl DeMusz, president and CEO of MLS Now of Independence, said in an interview that having such licenses technically makes Zillow a broker up this way, too.

Zillow also joined MLS Now on Oct. 9, DeMusz said. That means it is a member of the International Data Exchange, known as the IDX, which enables members of a multiple listing service (MLS) to integrate real estate listings from the MLS database into their own website.

The MLS was the inner sanctum of

Sharkey

Young

the residential real estate business since the days it was developed with mainframe computers. Members of the dominant realty trade association, the National Association of Realtors, lead it here and most places.

However, DeMusz thinks the only reason Zillow is not in the region now is because of the impact the pandemic had as real estate learned to cope with it.

Overnight, open houses, a mainstay of the industry, went virtual.

Pre-pandemic, virtual searches were more the domain of tech-savvy agents. And wearing masks became as important as having a smartphone.

“COVID-19 threw a monkey wrench into the whole thing,” DeMusz said.

He knows firsthand. He said he met with Zillow representatives in late 2019 and was told they would set up shop in the Buckeye State in 2020.

So, he feels it’s a year later and only a matter of time.

Ryan Young, CEO of the Young

Team of Keller Williams real estate agents and co-founder of FlashHouse of Pepper Pike, doesn’t quibble about the details. FlashHouse is a quick-turnaround buyer that issues rapid offers to buy homes, fixes them and vends them again.

Young said he is excited about Zillow innovations.

“I’ve said from the beginning that big companies would be here for the iBuyer (or quick-offer) market,” Young said. “That’s why we are working on taking FlashHouse to Columbus and growing as fast as we can.”

Getting “roots in the ground,” as Young calls it, is designed to allow FlashHouse to grow in an area before bigger tech companies with their coastal focus set foot in the Midwest.

He said it’s also key to the future of the 24-agent Young Team, which will sell about 600 area homes this year.

“Trust me,” Young said. “They are coming. It is a trillion-dollar industry (in terms of cost of homes sold nationally). They are coming everywhere. We welcome them a little bit.

We think it’s a case of having to build your own business better.”

He said that’s because of a fundamental factor.

“They and other tech companies are investing millions of dollars to identify what is important to the consumer,” Young said. “They are listening to what the consumer wants. It’s similar to the way Rocket Mortgage

An opportunity to build The co-founders of the nascent Construction Opportunity Institute of Cleveland are pursuing this 9-acre site for their educational program and related projects.

The city-owned land sits just south of the future Opportunity Corridor boulevard, in the Kinsman neighborhood.

Grand Ave.

OPPORTUNITY CORRIDOR

Norfolk Southern Main Line

Rawlings Ave.

DEVELOPMENT SITE Holton Ave. E 83rd St.

ZILLOW

Garbage litters vacant stretches of the 9-acre site that Norman Edwards and Fred Perkins envision as the future home of the Construction Opportunity Institute of Cleveland and related facilities. | MICHELLE JARBOE/CRAIN’S CLEVELAND BUSINESS

E 81st St.

Betsy Figgie, a consultant working on the project, said that program could serve 100 to 200 Northeast Ohio residents annually. The institute also could assist 50 to 75 high school students each year, exposing them to and preparing them for career opportunities. Additional education and outreach activities might touch another 500 people, she said.

“We want to make sure that the percentage of construction workers in Northeast Ohio who are people of color will increase, and that the number of unfilled jobs in Northeast Ohio’s construction field will decrease,” said Figgie, who was introduced to Edwards and Perkins by city officials.

She was reluctant to put a price tag or timeline on the project, which will require public funding to tear down the few remaining buildings and clean up the site. The new development will draw on a mix of private, philanthropic and public sources, said Figgie, who mentioned the pos-

sibility of seeking tax credits and using financing tools tied to energy efficiency.

Perkins, whose longer-term vision also includes new housing for students, said he wants to open the institute “yesterday.” He hopes the facility will be complete a year from now.

Cleveland-based City Architecture, which is handling the design work, referred questions to the city.

“They are leading the initiative,” one of the firm’s principals wrote in an email.

Councilwoman Phyllis Cleveland, who represents the area, said she has talked to Edwards and Perkins and has received briefings about the project from Ed Rybka, the city’s chief of regional development. She and Figgie both said they plan to convene public meetings about the project, in cooperation with Burten, Bell, Carr Development Inc., the nonprofit community development corporation that serves the neighborhood.

“I expect that there will be questions, and we will deal with them,” Cleveland said. She added that behind-the-scenes discussions largely have focused on the institute, not the construction of a concrete plant or asphalt plant in Kinsman.

Construction industry leaders said they're aware of Edwards and Perkins’ plans, though they're not wellversed in the details. They said that an institute rooted in the city's East Side, and drawing on connections to the surrounding low-income, majority-Black neighborhoods, could dovetail with other efforts to attract and train a more diverse pool of workers.

“Norm’s group is a valuable asset to us,” said David Wondolowski, executive secretary and business manager for the Cleveland Building and Construction Trades Council, an umbrella group for unions. “He certainly has driven really hundreds of young Black people into the building trades, maybe even more than hundreds.”

In a complicated, relationship-based business, where construction tends to run in families, it can be difficult for newcomers to break in, said Glen Shumate, execu-

E 79th St.

Perkins, 81, has deep ties to the Kinsman neighborhood. He grew up there and attended Rawlings Junior High School, which was demolished decades ago. His family’s core construction business, McTech Corp., maintains its headquarters in a nondescript building immediately north of the potential development site.

Now living in Solon, Perkins is looking to leave a legacy. So is Edwards, 66, an often-fiery activist and tireless advocate for boosting the share of Black workers on job sites.

“We’re putting our hearts into this,” said Edwards, who lives in Shaker Heights. “We’re putting everything we have into this. The Black contractors and tradesmen have been left out for so long. We’re trying to change the game and have them prepared.”

Their plans, years in the making, are coming into focus at a time of heightened national discussions about wealth gaps and systemic racism — and as workers construct the late stages of the Opportunity Corridor, a 3-mile road slicing through a sparsely populated stretch of the city that’s long been labeled as the “forgotten triangle.”

The boulevard, linking University Circle to East 55th Street and the highway system, will open late this year. The city plans to build its new police headquarters along the corridor, at East 75th Street and Grand Avenue, just a short walk west of the property Perkins and Edwards are targeting. The surrounding blocks are a mishmash of overgrown lots, churches and industrial buildings, including Orlando Baking Co.’s headquarters and production facility.

The city’s proposed deal with Norsom Development & Construction LLC, a company affiliated with Edwards, spans land running east from East 79th to Norfolk Southern Corp. railroad tracks, between Rawlings and Holton avenues. Both the lease, which can last up to three years, and the purchase will be for “fair market

value,” according to the legislation, which doesn’t list a price.

Mayor Frank Jackson’s administration didn’t make anyone available for an interview in response to a request from Crain’s. In an email, economic development director David Ebersole said that the city expects site preparations to start this summer as the project moves through the design process.

The institute, he said, “will serve as a key entry point for residents in and around the Opportunity Corridor to access jobs in the construction industry. This project will help deliver the Opportunity Corridor’s promise as a location that will create jobs and develop the workforce of these neighborhoods, rather than serve as a simple road connection.”

Perkins and Edwards described the institute as a pre-apprenticeship program, focused on giving students the building blocks they need — from soft skills and remedial help to technical education — to pursue construction careers. They’re still developing the curriculum with a circle of advisers.

CRAIN’S CLEVELAND BUSINESS GRAPHIC

tive vice president for the Construction Employers Association, a Brooklyn Heights-based organization that represents construction companies and other industry players.

“Norm’s message is to really have

inclusion and to deal with some of the societal needs and issues of Greater Cleveland,” Shumate said.

“That’s a fair expectation or ask or desire. … I think many people would say we want an inclusive workforce.”

has changed home lending. If Realtors don’t adapt, we are going to be the Blockbuster of the real estate industry.”

David Sharkey, president of Progressive Urban Real Estate in Cleveland, said he thinks constantly about what Zillow means to residential brokerage.

“I remember sitting at a table with buyers and looking through a book of MLS listings,” Sharkey said. “Zillow (the cyber portal) is a huge positive change. I can see they are lightly stepping around the brokerage world. At the same time, agents are important to Zillow. We buy their leads because of the dominance of the site. Most of my business is by referral. But I still want to advertise on Zillow.”

At the same time, for all the technological changes Zillow and others are making, nothing so far has changed what Sharkey considers the essence of residential brokerage.

That’s the relationship between an agent and a buyer or seller.

The Zillow role is of apiece with other things roiling realty. The company owns Dotloop, a popular Cincinnati electronic property transaction closing service.

Zillow also is pursuing plans to buy or invest in ShowingTime. The Chicago online company helps agents schedule home showings, among other services. Escrow services in the title

area and mortgage loans are also offered. It’s easy to see how such a onestop-service approach could make brokerage inevitable.

For its part, Zillow media contacts, who asked not to be identified by name, said the company does not expect to enter brokerage broadly.

Zillow, they say, has only launched Zillow Homes in three markets: Atlanta, Tucson and Phoenix. It has staff brokers there to service its instant-buyer operations, where it takes title to houses. They are not allowed to do third-party brokerage outside Zillow Homes. In Cincinnati, they said it uses a local broker as its agent.

As for bringing the instant-offer business to Cleveland, Zillow media people confirm it is on its way, someday. The program is national in scope, growing market by market.

Zillow Offers is now in 23 metropolitan areas.

Selling leads generated by Zillow’s website and assisting agents with the “Premier Agent” program are the company’s major sources of revenue, a spokeswoman said. Agents are crucial — now.

But corporate directions and business models change. Those who preach technological disruption should know that best.

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

April 12, 2021 | CRAIN’S CLEVELAND BUSINESS | 19

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4/9/2021 2:25:06 PM

AKRON REAL ESTATE

Proposal would add Theiss Road site to parks Conservancy revises its bid to buy land in Merriman Valley

BY DAN SHINGLER

Nearly 45 acres that the city of Akron owns and has up for bid on Theiss Road in the Merriman Valley could become part of nearby Hampton Hills Metro Park if the Western Reserve Land Conservancy’s (WRLC) new bid to purchase the site wins the day.

The conservancy, which submitted a revised bid of $410,000 for the land on March 30, told the city that if the group allowed to purchase the property it intends to turn the site over to Summit Metro Parks.

“After acquisition and further exploration of the property with Summit Metro Parks, the Land Conservancy plans to ultimately transfer ownership and maintenance of the property to Summit Metro Parks through a donation,” WRLC’s new bid package states.

Summit Metro Parks would make the land part of the adjacent Hampton Hills Metro Park, which includes hiking and mountain bike trails, an archery range and a stand of 100-yearold trees on its 665 acres nearby, said Mike Johnson, Summit Metro Parks’ chief of conservation.

But Johnson was adamant that the park system is not taking sides on the issue, which has been contentious. Akron asked for conservation bids on the site only after it put the site out for bid by residential developers, prompting an outcry from many residents. Some of those residents formed a group called Preserve the Valley to protect the site and others from what they say will be more urban sprawl that Akron and the region do not need and would destroy an irreplaceable green space.

“Metro Parks does not have a position one way or the other in terms of should the site be preserved or should the site be developed,” Johnson said.

“It’s up to the city of Akron to decide that, and if they decide it should be protected, then Metro Parks could take possession of the property and it would become part of our Hampton Hills Metro Park. We respect the process that’s going on right now. We think the city’s doing a great job and listening to the public.”

WRLC might be at a disadvantage.

Its bid is below the minimum bid of $550,000 that the city has set for bids by conservationists. Late last year, the city raised the bar for bidders seeking to

TAX BREAK

From Page 6

Another highlight of the study is the lack of existence of the so-called “LLC Loophole,” Hicks said, adding that the suggestion business owners multiply their deductions and claim more than the $250,000 cap by creating several business entities was unfounded.

A study of the loophole stated that “the deduction is applied just once to an individual tax return, regardless of the number of businesses claimed by a taxpayer on their returns.”

“We think that the idea of an LLC loophole and maybe some other elements of the bill have just been misunderstood,” Hicks said.

Hampton Hills Park, which includes hiking and mountain biking trails and a section of 100-year-old forest, could absorb the Theiss Road site if it is preserved rather than developed. | SUMMIT METRO PARKS

preserve the site, increasing the minimum bid from conservationists while potential residential developers were asked for a minimum bid of $361,520.

That’s because conserving the site would not provide the city with increased tax revenues the way a residential development would, and Akron wants to recoup what it has paid and invested in the property, said James Hardy, Akron’s deputy mayor for integrated development.

“Our minimum bid on the conservation matched what we, the city, have invested in the land,” Hardy said in email correspondence.

At least some of those involved in the Preserve the Valley group — which

now reports it has garnered more than 16,000 signatures for its “Save Theiss Road Petition” seeking to stave off development — say they support WRLC’s plans for the site but are concerned its bid might not be considered.

“There is a possible scenario where this conservation proposal gets rejected by the city and no one ever sees it,” said Preserve the Valley organizer Shelley Pearsall.

Akron City Council has spent hours listening to testimony from citizens who largely oppose developing sites in the valley, including the Theiss Road site.

Mayor Dan Horrigan’s administration will not dismiss the bid out of hand because it came in low, Hardy said.

But for the critics of the BID, the question is less about what the deductions have done for those who have taken advantage of the tax break and more about what the state could have done with the approximately $1.1 billion in tax revenue not collected since it was enacted.

Zach Schiller, research director at Policy Matters Ohio, a progressive nonprofit policy research institute, argues that those lost taxes could have been used to make the state more attractive to outside companies and investors through much need improvements.

“Ohio has a lower-than-average education attainment, and what I would ask is what if that $1.1 billion that was deducted over the years was used to

help make college more affordable?”

Schiller said.

Ohio has cut business taxes by onethird, Schiller said, and the study, while analyzing how many jobs were created and businesses were saved, does not explain why the state has not experienced more growth.

“By any major economic measure, Ohio continues to underperform,” Schiller said.

The state has lagged national rates of new business starts and job creation from 2012 to 2019, he said.

“So where is the proof these business tax cuts work if we just continue to lose ground?” Schiller said.

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

“In the interest of good faith, the city will absolutely consider the proposal,” Hardy wrote in response to a question on the matter.

Isaac Robb, WRLC’s vice president of planning and urban projects and the signatory to its bid for the property, said his organization is open to negotiations if the price becomes a sticking point. WRLC configured its current bid after talking to various stakeholders and doing a cost analysis of the project before the city revised its minimum bid amount, Robb said.

WRLC’s bid purposely focused on the costs and benefits to the city, including an analysis of what it would cost the city to run water and sewer lines to the site.

WRLC says that it would be more cost effective for the city to preserve the land.

“The Land Conservancy believes the Theiss Road property offers too much natural resource value and too great an infrastructure cost for the City of Akron to proceed with development. …

Though the Land Conservancy’s offer price is less than the minimum bid price for conservation, it would take the City only between 2 and 3.5 years to recoup the difference through expenditures saved for service to a new development’s water and sewer accounts alone,” WRLC’s bid states.

But the city also has offers to consider from six developers who have said they’ll spend tens of millions developing the site with new homes if they buy the property.

The city has not said when it will decide the matter. City Councilman Shammas Malik, whose Ward 8 in-

cludes the Theiss Road site, said he favors holding off until a master plan for Merriman Valley, in which the property sits, is completed by Akron and Cuyahoga Falls this year.

“I think the best approach would be to wait for that master plan,” Malik said.

“I probably think the conservancy has the better of the arguments so far, but I think we need citizen input, and I think we should do a real cost-benefit analysis. It’s 45 acres of wooded space that’s city owned, and there’s no rush on the city making a decision.”

That was the argument that Preserve the Valley and others made before the city agreed Feb. 1 to approve a zoning amendment that will allow Petros Homes to develop the former Riverwoods Golf Course in Merriman Valley.

At least some Preserve the Valley members would like the city to approve conserving the Theiss Road site before the master plan is completed as well.

“If they are going to accept a plan for conservation, I think that’s congruent with the majority of our constituents,” said Preserve the Valley organizer Andrew Holland. “With regards to the master plan, we would like to see development halted until a master plan is completed, but if it’s for conservation we would applaud it.”

Hardy confirmed that WRLC is the only conservation group bidding on the site and said Malik is correct in that the city does not have a deadline to accept any bids for the property.

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

Economic performance measures of the BID An analysis by Ernst & Young into the state’s business income deduction (known as the BID) and 3% flat rate on business income examined four economic improvements: gross state product, total employment, small business employment growth and establishment exit rate (business closures).

Estimated economic effects of the Ohio business income deduction, 2018

$5.9 billion added to the state’s gross state product.

59,700 growth in total employment.

14,300 more small business employees.

1,200 fewer business closures.

SOURCE: EY ANALYSIS

CRAIN’S CLEVELAND BUSINESS GRAPHIC

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THE WEEK NEW IN TOWN: The Cleveland Landmarks Commission signed off April 8 on two significant projects on the city’s near West Side, where developers are planning a 16-floor tower at the western end of the Detroit-Superior Bridge and a 126-unit apartment building in the Gordon Square Arts District. The first project, Bridgeworks, will blend new construction and historic preservation on a 2-acre site that’s currently a parking lot and underused Cuyahoga County buildings. Developers Graham Veysey, Marika Shioiri-Clark and Michael Panzica plan to build a 120-room hotel there, atop roughly 160 apartments and ground-floor commercial space. The second project, a midrise building called Waverly & Oak, appeared to be on rocky ground early this year when activists protested the development team’s plans to raze the former home of Club Azteca, a Mexican-American social club. But developer Bond Street Group recently reached an agreement with a handful of community organizations, paving the way for demolition of the building and preservation of cultural assets. Bond Street aims to start construction in late summer on the north side of Detroit Avenue, near West 58th Street. Along with apartments — mostly studios and one-bedrooms — the project will include street-level retail, a co-working space, underground parking and a central public courtyard.

OUT OF THE BOX: Signet Jewelers Ltd. is making a bet on future of the jewelry rental business. The Akron-based parent of Kay Jewelers, Zales, Jared and other traditional, mall-based retail chains on April 6 announced it has acquired Rocksbox Inc., which runs a jewelry rental subscription platform. Signet did not disclose what it paid for the San Francisco company. Signet said the acquisition of Rocksbox gives it “a significant foothold in a growing online service that speaks to next-generation jewelry customers.” The acquisition aims “to accelerate growth in the services category” at Signet, the company said.

CANNASURE

From Page 4

Big carriers didn’t want to play in the space due to perceived legal and reputational risks. McManamon was ambivalent to both.

“When you examine the rules and the facts, insurance is regulated on a state basis, and these businesses and operations are regulated on a state basis,” he said. “It just didn’t make sense to me.”

McManamon acknowledges federal illegality was a primary factor, which also fostered surrounding stigmas in the business world. He would hear about board members at large insurance companies worried what their friends at the country club would think about them being connected to the marijuana industry.

Such sentiments led to Lloyd’s backing away from cannabis.

By 2015, Cannasure was working as an MGA and wholesale broker, and had a couple million in premiums. It was working for several months with Lloyd’s to launch its own comprehensive coverage program. The partnership, he said, lasted about three days

CRAIN’S CLEVELAND BUSINESS

“Immersive Van Gogh” will open in Cleveland on Sept. 9. | IMMERSIVE VAN GOGH

WHAT’S IN STORE?: A Mentor mystery has been solved. The widely reported “unidentified national specialty retailer” that won approvals from the suburb for a store at 9470 Mentor Ave. is Trader Joe’s, based in Monrovia, Calif. Construction crews are fencing the site and preparing to demolish the Sawyer House, a stone Western Reserve-style farmhouse. It has stood at that location since 1843.

Over the years, it also served as offices and, more recently, a succession of restaurants. For more than a year, city officials have reviewed plans and then last fall approved them, for a nearly 14,000-square-foot specialty grocer to build on the site without spilling the name, at the company’s request. The Mentor store will be the third Trader Joe’s in Northeast Ohio.

BUILDING MOMENTUM: The Plymouth Industrial REIT took another bite out of the Northeast Ohio industrial real estate market, this time costing $7.7 million. Plymouth referred to the purchase of the 100,000-square-foot building in its leasing and acquisition activity report for the first quarter of 2021, issued April 5. An online Cuyahoga County deed shows the property, 31000 Viking, was sold to

before Lloyd’s backed out.

“We spent a good chunk of capital we had to get the deal done, and it got pulled out from under us,” McManamon said. “We realized you can either pack up and go home or double down and push forward.”

It was a pivotal moment for the firm.

“We thought we were on our way and we had our lottery ticket, so to speak,” McManamon said. “Then we had to start all over again.”

It was around the end of 2016 that McManamon connected with Topa Insurance Group of California. The firm eventually helped Cannasure launch its comprehensive program offering coverage lines in property, general liability, products liability, crop and excess liability.

Worried the firm might get skittish and pull out, McManamon had Topa reinforce its commitment by acquiring a minority stake, less than 30%, in the business. This followed lessons learned from the Lloyd’s debacle.

Cannasure’s comprehensive program, propped up by Topa, launched in early 2018, marking a chapter closed with the acquisition by One80.

Some of the firm’s biggest markets today by total premiums are Massa-

Plymouth REIT by Capstone Westlake LLC, a Cleveland-based investor group.

POINT THE WAY: Cedar Point will have a new general manager for its new season. The Sandusky amusement park named Carrie Boldman as vice president and GM. Boldman succeeds Jason McClure, who has been promoted to senior vice president of park operations at Cedar Point’s parent company, Cedar Fair Entertainment Co. of Sandusky. She is the first female GM of Cedar Point in the amusement park’s 150-year history.

Boldman previously served as Cedar Point’s vice president of merchandise and games. She previously worked for Disney Parks and Resorts as well as The Chef’s Garden, a family-owned sustainable farm in Huron, Ohio.

SETTING THE STAGE: The wait for fans of the KeyBank Broadway Series to see live shows, in person, is almost over.

And the five shows they’ll see — four musicals and a drama — are among the biggest recent hits in the theater world. Playhouse Square in a virtual broadcast revealed that when the KeyBank Broadway Series returns this fall, the lineup is stacked: “The

chusetts, Nevada and Maryland, which is due to multi-state operators with operations across those markets. Some of its biggest policies are with companies in Washington and Colorado. The firm covers about 90% of the applicable marketplace.

McManamon said he has been approached by other suitors in recent years but ultimately preferred to partner with One80, which provided a “good deal that made investors happy” and “gives us a long runway to capitalize on the future of the industry.”

There are now 35 states (plus Washington, D.C.) with medical marijuana programs, 16 of which also permit recreational use. The U.S. legal marijuana industry was estimated at $13.6 billion in 2019, with about 340,000 plant-touching jobs, according to New Frontier Data.

“We sold to an organization that lets us continue to add and grow both from a tech standpoint and people perspective,” McManamon said. “It’s what we need to do to service the growing cannabis industry.”

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

|

“The Prom” will kick off the new KeyBank Broadway Series at Playhouse Square in November. | CONTRIBUTED

Prom,” “Pretty Woman: The Musical,” “To Kill a Mockingbird,” “Ain’t Too Proud: The Life and Times of the Temptations” and “Disney’s Frozen.”

First out of the gate is “The Prom,” with a Nov. 2-21 run. The four other shows will take place in 2022.

STARRY NIGHTS: “Immersive Van Gogh,” a digital art experience that has been a hot ticket across North America, is on its way to Cleveland this fall. The show’s producer, Lighthouse Immersive USA, announced that “Immersive

Van Gogh” will open here on Thursday, Sept. 9. Tickets are available at vangoghcleveland.com; prices are $39.99 in off-peak times and $49.99 at peak times. It’s an hourlong, timed-entry, walk-through experience. Capacity will be limited in accordance with the city of Cleveland’s safety protocols. Additional safety precautions will include touchless ticket-taking, temperature checks on arrival, hand sanitizer stations, social distancing markers and digitally projected social distancing circles on the gallery floors to ensure appropriate spacing. All guests must wear a face atBall for the location, Smask EPTEM E R times.

3 - 9 , As 2 018 | PA G E 21 the vangoghcleveland.com website says only that the show “is taking over a historic venue in the heart of Cleveland.” The venue will be announced “before the exhibit opens,” the producers said, and ticket-holders “will receive an email with the venue name and location once it is made public.”

SHOWTIME: Cleveland is about to be the center of the football world as host of the NFL draft, and a new exhibition at the Rock & Roll Hall of Fame will look at the intersection of music and the league’s biggest event, the Super Bowl. “The Biggest Show on Turf: 55 Years of Halftime Shows,” an exhibition presented by Pepsi, will open Friday, April 23, less than a week before the draft begins on Thursday, April 29. The Rock Hall’s new show will be on display through September, when the next NFL season starts.

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PEOPLE ON THE MOVE

Advertising Section To place your listing, visit www.crainscleveland.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

ACCOUNTING

BANKING

FINANCIAL SERVICES

LAW

PROFESSIONAL SERVICES

Sikich LLP

Premier Bank

Ancora

Benesch Law

CBIZ, Inc.

Sikich LLP, a global professional services firm specializing in accounting, advisory, technology and managed services, is pleased to announce the promotion of Ray Lampner to Partner-in-Charge, CPA Consulting Services. Ray oversees the operations and client service initiatives for Sikich’s Transaction Advisory Services, Forensic & Valuation Services and Business Succession Planning practices, and has more than 25 years of experience in consulting, taxation and advisory solutions.

Premier Bank is pleased to announce the recent promotion of Elizabeth Lynch to Senior Vice President, Commercial Relationship Manager in the Cleveland market. Lynch has more than 40 years of industry experience working to develop new and expand existing client relationships with tailored borrowing solutions to meet their needs and in so doing becoming a trusted business advisor to clients, COI’s and other members of the business community.

Ancora is happy to announce that Mr. Conor Sweeney has been promoted to a Vice President and Senior Alternatives Analyst. Conor joined the firm in 2018 to support the Alternatives group as an analyst. Prior to joining Ancora, Conor served as an equity analyst for KeyBanc Capital Markets and Longbow Research after earning a Bachelor of Science in Business Administration, majoring in both finance and economics, from John Carroll University. Our congratulations to Conor on this exciting promotion.

Christopher C. Razek has joined Benesch as an Associate in the firm’s Litigation and Transportation & Logistics Practice Groups. Chris represents manufacturers, distributors, retailers, carriers, brokers, and forwarders in connection with general business consultation, regulatory compliance counseling, drafting and negotiation of contracts, litigation and dispute resolution, and enforcement defense including during investigations and audits.

Arianna Ehmer has been named Director of Operations for Financial Services at CBIZ, Inc. In this role, Arianna will work Ehmer directly with the President and Chief Operating Officer of the Financial Services division on strategic projects to improve operations and drive growth across the business. She holds a Master of Business Administration from the University of Akron and currently serves on the Advisory Board for Project NICU. Michael Mangan has been named Senior Director of Field Mangan Accounting for CBIZ, Inc. and in this role will drive improvement and growth within the field accounting processes and teams. Prior to joining CBIZ, Michael worked as a Senior Director of Financial Reporting at Nordson Corporation in Cleveland.

FINANCIAL SERVICES BANKING

CNB Bank ERIEBANK, a division of CNB Bank, congratulates Michael Obi, President of UBIZ Venture Capital and CEO of Spectrum Global Solutions, on his appointment to the CNB Bank Board of Directors. Mr. Obi has extensive experience and expertise in all areas of banking and, combined with his innovative perspective on business, will enhance the bank’s initiatives to be an industry leader. CNB Bank’s divisions include ERIEBANK, based in Erie, Pa., with offices in Northwest Pa. and Northeast Ohio.

Ancora BANKING

Premier Bank Premier Bank is pleased to announce the recent promotion of Kiley Smith to SVP, Senior Commercial Relationship Manager in the Cleveland market. Smith has 25 years of industry experience in Commercial Banking with a niche focus working with entrepreneurs looking to buy or acquire businesses. She earned her undergraduate degree in Business Administration with a concentration in Japanese from Bentley College and her Master of Business Administration from Case Western Reserve University.

We are happy to announce that Mr. Patrick Sweeney has been promoted to a Vice President and Senior Alternatives Analyst. Patrick joined Ancora in 2013 as an institutional marketing associate before transitioning to the Alternatives group in 2015. Prior to joining the firm, Patrick worked as a corporate banking analyst at PNC Financial Services after receiving a Bachelor of Science in Business Administration, majoring in finance, from John Carroll University. We offer Patrick our congratulations.

LAW

Gallagher Sharp LLP Gallagher Sharp is please to announce the addition of Associate Samuel N. Dodoo, Esq. Sam represents businesses, insurance companies, and individuals throughout Ohio in matters involving personal injury, wrongful death, and property damage. He has a range of experience, including emergency response investigation and litigation involving the trucking industry, municipal liability, employment litigation, and product liability. Sam received his law degree from Case Western University School of Law.

MANUFACTURING

Recognize them in Crain’s

Barbco, Inc.

BANKING

Premier Bank

FINANCIAL SERVICES

Premier Bank is pleased to announce that John Cunningham has joined the bank as Senior Vice President, Managing Director of Real Estate Industries. He brings more than 20 years of industry experience and will be responsible for the bank’s Commercial Real Estate business throughout all markets served.

Cunningham earned his undergraduate degree in Economics from Miami University and his Master of Business Administration in Banking and Finance from Case Western Reserve University.

Ancora

22 | CRAIN’S CLEVELAND BUSINESS | APRIL 12, 2021

INDUSTRY ACHIEVERS ADVANCING THEIR CAREERS

We are happy to announce that Mr. Peter Hyland has joined Ancora as an Assistant Vice President in Trade Operations. Peter will provide operational support to the firm’s trading department. Prior to joining Ancora, Peter served as an investment banking analyst with KeyBank in Seattle where he conducted research and performed due diligence to support client M&A and debt financing transactions. Peter earned a Bachelor of Business Administration degree with a major in Finance from Ohio University.

FINANCIAL SERVICES

Andover Bank Andover Bank is pleased to announce that Sean Dockery has joined the bank as Senior Vice President of Commercial Banking. Dockery brings over 20 years of experience to Andover at a time when the bank is strategically focusing on business banking and building out its long-range strategy for growth.

Sean’s extensive experience as an effective leader and skill set will better position Andover Bank as a relationship-driven, customer-centric leader in business banking.

Barbco, Inc. has recently promoted Thomas W. Schmidt to Vice President, Business Development.

Mr. Schmidt will lead the company’s stated mission of world domination of the capital equipment market for the trenchless excavation and underground manufacturing industries. Previously, he served as the Operations Manager for the firm. This seasoned manufacturing veteran also serves on the Manufacturing Innovation Council, the SCMWDP, and the OMA Manufacturing Extension Partnership.

For listing opportunities, contact Debora Stein at dstein@crain.com or submit directly to CRAINSCLEVELAND.COM/PEOPLEMOVES

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