Crain's Cleveland Business

PANDEMIC PERSEVERANCE Physician-owned NOMS has been forced to make difficult choices to survive the crisis.

Nonprofits: Y.O.U. summer jobs program offers long-term benefits. PAGE 6

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CRAINSCLEVELAND.COM I APRIL 13, 2020

COPING WITH COVID-19

‘ALL HANDS ON DECK’ FOR POTENTIAL SURGE Hospitals take every precaution to ensure they have the necessary providers

FINANCE

Paycheck Protection Program sees rocky rollout

BY LYDIA COUTRÉ

As COVID-19 spread to Ohio and cases began to pile up, Marti Bauschka, chief nursing officer at Southwest General, began to see the outreach on social media. Then came the calls and voicemails — all from retired nurses in the region and state asking how they could help during the pandemic.

The hospital’s chief medical officer was fielding similar calls and began looking at how to re-credential retired physicians who were calling to say, “I can come in, I can help.”

MetroHealth, University Hospitals and Cleveland Clinic all have checked in with recently retired staff to determine their availability and licensing in case they are needed.

This is just one piece of the allhands-on-deck strategies hospitals are implementing to ensure sufficient staffing ahead of the anticipated surge in COVID-19 patients.

Though Ohio’s measures have begun flattening the curve so that some of latest the projected surge numbers are looking less drastic, Northeast Ohio hospitals are taking every precaution to ensure they have the providers needed to care for patients.

Reeling businesses are eager to receive funds

BY JEREMY NOBILE

JoLyn Yasaki, director of operations for Cleveland’s Noble Beast Brewing Co., is patiently but eagerly awaiting the funds from a $150,000 Paycheck Protection Program (PPP) loan she requested through Huntington Bank just one day after the U.S. Small Business Administration began accepting applications April 3.

Like all Ohio bars and restaurants that have closed dining rooms and taprooms amid the COVID-19 pandemic, the craft brewery is doing everything it can to maintain some cash flow as sales plummeted following statewide shelter-in-place orders.

It has pivoted to carryout and delivery options, and even to selling some other items, like eggs and toilet paper, in addition to food and beer, through its website.

The loan would help the small business pay its staff of 16 full-time employees their usual wages — something that, with a drop in business and tips and with fewer work hours to be shared, isn’t feasible right now.

As PPP prepared to launch with its initial $349 billion of funds — legislative efforts are already underway to allocate another $250 billion to the program — Treasury Secretary Steven Mnuchin indicated loans could be filed and approved the same day.

However, in reviewing the bulk of applications so far, that has proved to be wishful thinking.

See PROGRAM on Page 17

University Hospitals clinical integration strategists Shannon Tracy, front, Michael Bauman and Nicole Burfield sort masks that volunteers have sewn using UH kits. After the sorting, the masks are laundered. | UNIVERSITY HOSPITALS

SPORTS BUSINESS

Browns following state’s lead in handling of crisis

Team’s longest-tenured exec admires the ‘empathy and compassion’ shown by Gov. DeWine and Dr. Acton

BY KEVIN KLEPS

The Cleveland Browns, like almost everyone else during the COVID-19 crisis, have been working from home the last four weeks.

Doing so has come at a hectic time on the NFL calendar, with the start of the new league year bringing free-agent moves and more urgency to draft preparations, and for the business team, season-ticket renewals, media deals and the unveiling of new uniforms.

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The shift to a remote operation was “crisis management-intense” at the start, said David Jenkins, the Browns’ chief operating officer, as the organization tried to learn as much as it could about the pandemic. It’s since shifted to, in the words of the team’s Jenkins longest-tenured executive, “How do you normalize as much as you can in a situation like this to keep things moving?”

That’s meant more videoconferences — seeing familiar faces helps during a period dominated by isolation, Jenkins said — and an appreciation for the manner in which Gov. Mike DeWine and Ohio Department of Health director Dr. Amy Acton have dealt with the pandemic.

“I think what they did was probably a lesson for everybody: Share information and do it with empathy and

compassion,” said Jenkins, who has been with the organization since 2004 and was elevated to COO in 2018.

The Browns established a task force — a collection of about 10 employees that includes senior executives and representatives from such departments as medical, football, human resources, legal and risk management — that monitors the pandemic and shares information with staffers multiple times each week.

See BROWNS on Page 17

FOCUS | MANUFACTURING  Bringing work home: Some think pandemic will lead to the return of U.S. manufacturing. PAGE 12 Selling smarts: A wide-ranging set of skills and a diverse client base boost South Shore Control’s growth. PAGE 14

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Rocky River deal is one of several significant ventures moving on during uncertain period

BY STAN BULLARD

Even in normal times, real estate developers celebrate making it through the closing process for development loans. Amid the pandemic, even more so.

But Andrew Brickman, the Cleveland builder with a track record for luxurious townhouses with cuttingedge designs, was jubilant Friday, April 3. That was just after final documents for a $30 million construction loan for the 700 Lake project in Rocky River made it through the final execution stage.

“I’m absolutely amazed,” Brickman said in a phone interview. “To get it closed amidst all this craziness as loans and developments are falling through all over the place is unbelievable. And this is a condo deal in Northeast Ohio, not one in New York City or Miami where they are commonplace. After the (lending) market settles down, this could clear the way for more condominium developments here.”

He credited his partners, the Rocky River Carney family, the financial team at financial services firm Brown Gibbons Lang & Co.’s Cleveland office and the waterfront project’s design for the loan approval.

The other element was simply timing. The project for million-dollar waterfront condominiums was far enough through the lending process that it got closed. That is a trend among a handful of projects of scale that secured final loan approvals as the economic collapse resulting from government-mandated business shutdowns and stay-at-home orders sent unemployment claims to record highs from record lows within a period of weeks.

In layman’s terms, the projects were so far along that they made it through.

In financial terms, experts say they were through underwriting and loan committee at the cusp of closing.

That’s the word from Anthony D. Delfre, managing director and a principal of BGL’s real estate finance unit.

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cured a $90 million mortgage on March 25 from First National Bank of Omaha, one of several sources of funds for the 300 apartments and ground-floor storefronts in a timber-constructed building. Chicago developer Harbor Bay Real Estate Advisors LLC has been publicly preparing for this time since 2018, even though the project’s roots go back more than a decade.

The other deal to close is, no surprise, a huge, 130,000-square-foot warehouse that Scannell Properties, an Indianapolis-based real estate developer, has been planning since last year for a Bedford Heights site at 24700 Miles Road.

The national developer, which has been active in Northeast Ohio for more than a decade, secured a $62 million loan March 24 from Birmingham, Ala.based Region Bank, according to Cuyahoga County land records. The project will use the former Mr. Coffee appliance maker’s site, which has been empty for two decades.

The pandemic’s reach in the United States, how the economy fares when it abates and the type of project will determine which projects that were not on the cusp of closing will proceed and which in earlier planning stages get shelved.

Ryan Sommers, managing director of financial services at Project Management Consultants of Cleveland, said the finance world is already dividing underwriting standards due to the pandemic.

“The nuance in financing transactions is that we have pre-COVID-19 transactions and post-COVID-19 transactions,” Sommers said. “You’re taking into account issues with (rent) collections and occupancy that go

Stark Enterprises, the high-profile Cleveland-based real estate developer, has sold a Westlake office complex with ground-floor retail space across the street from its Crocker Park mixed-use megaproject.

Reserve Office Park, at 2035 Crocker Road, was sold April 1 to 2035 Crocker Road LLC of Lakewood by a Stark affiliate that had owned the 25,000-square-foot building since 2017, according to Cuyahoga County online property records.

The deed for the 1999-vintage property does not disclose a sales price for the transaction; nor did documents when 2035 Crocker Road LLC acquired it in 2017 from a partnership led by the original developer, a former West Side suburban builder.

Cuyahoga County assigns the property a market value of $4.5 million this year, up from $2.9 million in

the 2017 tax year.

Asked about the sale, Stark provided a copy of a news release in which Ezra Stark, chief operating officer of the family owned real estate development and ownership firm, said, “Reserve Office Park was a suitable addition to our portfolio back when we purchased it in 2017. We were able to grow and increase the property’s occupancy and convert it into a successful mixed-use project within a perfect focal point in Westlake.”

Nico Bolzan, executive managing director of Stark’s capital group, returned calls placed to the developer.

“We decided to sell before coronavirus (COVID-19) came up, when sale prices were at their height,” Bolzan said.

The company was willing to shed the property because of its small size relative to the rest of the Stark portfolio, where new projects are, on average, more than 10 times the size of Reserve Office Park. Selling also is part of the

shift from founder and chairman Robert Stark’s policy of holding properties, while the next generation, led by Ezra Stark, is willing to sell some assets to maximize returns.

“We gave our investors a better-than-average return by improving occupancy and raising rents as leases turned over,” Bolzan said, and its primarily financial firm occupancy climbed from 90% to 96%.

Bolzan noted that such a sale might provide a bonus if some good commercial properties, here or around the nation, come on the market as the pandemic roils the economy.

However, Bolzan declined to disclose the sale price or identify the buyer by name other than saying that Beachwood real estate broker Michael DiFranco had identified a group of Westlake- and Cleveland-based investors who may focus on it more as a smaller concern.

The new ownership group is led by

2 | CRAIN’S CLEVELAND BUSINESS | APRIL 13, 2020

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Stark sheds Westlake office building

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“It’s a milestone for our region and a bright spot given the COVID-19 conditions we’re in,” Delfre said in a phone interview. “It would have been a hard transaction to complete in a normal situation. Given where we are in the macro market, there was some risk the lender might pull back.”

Northeast Ohio lenders traditionally shy from condo projects because property owners secure air rights to their units and their values are less stable here than in much denser cities such as New York. Townhouse funding, where there is a direct ownership connection to a spot of land, is no problem here.

“We kept in touch even more than we normally would have,” Delfre said.

“The lender was through committee and comfortable with the risk.”

Other factors are typical for which loans get made and which don’t. In the case of 700 Lake — 33 condominiums in a three-story structure overlooking Lake Erie in a tony suburb — one factor was that there are few competing condo projects in the region. Another sign of difficulty was the project’s scope: The $30 million loan technically has three lenders, in addition to lead lender Erie Bank of Erie, Pa., with participation from CF Bank of Columbus and Heartland Bank of Whitehall, Ohio.

Other factors, Delfre added, were Brickman’s experience as a seasoned developer of townhouse projects over the past decade, from Cleveland’s Little Italy to Lakewood and Beachwood, as well as his partnership with the Carney family, a multigenerational force in the region’s property business.

A sign of other projects making it to go is visible on the south side of Lorain Avenue across from the West Side Market in Cleveland. That’s where a demolition crew was at work the week of April 6 razing the 1980s-era Market Square strip center. The wrecking balls are clearing the way for the nine-story Intro apartments.

Cuyahoga County land records show the $140 million project se-

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FINANCE

Mortgage, refi businesses roll on during pandemic With customers capitalizing on rock-bottom interest rates, many firms are as busy as ever

BY JEREMY NOBILE

into underwriting. The post-COVID19 period is the present, since the pandemic swept into the U.S. last month.”

The pre-COVID-19 financial metrics were estimates of what was then the normal market, he said, and the post-COVID-19 ones are under constantly changing conditions with little lender guidance.

Mark Vogel, senior managing director of Berkadia Commercial Mortgage LLC’s Cleveland office, said memories and experiences of the 2008 financial crisis shape this economic meltdown.

“There are three parts to the real estate wheel: rents, landlords and banks. Last time, it was the financial markets shutting down due to the housing collapse,” Vogel said. “This time, it’s rents due to the spike in unemployment. There is still liquidity in financial markets, unlike last time.

This can be a whole lot worse depending on how things go. It feels different this time — a lot creepier.”

Big differences this time are that banks are in better financial shape.

Just one source of financing, the securitized mortgage market, is shut down. Commercial loan markets are also more subject to economic conditions than residential loans, which are generally government-backed.

There is also the nature of the project involved. In the case of 700 Lake, the developers had a third of the units sold, with deposits and signed agreements in place. Brickman also credited the building’s expansive use of stone and plumbing fixtures like those in expensive New York City condo projects.

“The most expensive ones, for $1.2 million to $1.7 million, are selling best,” Brickman said.

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

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Reserve Office Park, a small office-retail building near Crocker Park, was sold by Stark Enterprises of Cleveland. | COSTAR

Sam Khouri, who operates REBEL Development, and county records direct that future tax bills be sent to 18605 Detroit Ave. in Lakewood, a mixeduse Hairy Buffalo and office building where the George Group, the real estate and hospitality concern of Tony George and his son, restaurateur Bobby George, are based.

Khouri did not respond to a Crain’s query about the investment property through LinkedIn by 10:30 a.m. last Thursday, April 9.

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

processing flexibilities” for things like assets or proof of income — the For West Side real estate agent latter something that could be very Chris Bergin, the ongoing COVID- difficult to secure for a borrower 19 pandemic hasn’t slowed down whose employer has shut down. business so much as it’s altered Appraisers are using various tools to quantify home values without how he works.

“There was a little scare early on. stepping inside a property.

Banks and nonbank lenders alike Home inspectors are nervous. Appraisers don’t really want to go into may have their lobbies closed outoccupied homes,” he said. “But we side of appointments as they adapt to modified service structures, but are closing deals.”

Everyone is “more hypersensi- they’re still very much working with tive” and “hyper-aware” of how borrowers. Many, in fact, say they they’re operating, said Bergin, who are busier than ever in their respecis with Berkshire Hathaway Home- tive mortgage and refinance busiServices Lucien Realty. That means nesses.

Todd Donley, the Cleveland marmaking some changes that could have been common protocols in his ket mortgage manager for Fifth field in the first place, from taking Third Bank, said the company has off shoes when entering an occu- added both full-time and tempopied house to regularly disinfecting rary staff in areas like processing doorknobs at properties being and underwriting to meet an onshown to just generally giving peo- slaught of demand for home loans and refinancing. That was happenple more physical space.

In recent weeks, Bergin has start- ing months ago as rock-bottom ed going to showings a little extra- rates not seen since the Great Reearly to clean commonly touched cession played a role in creating a surfaces, open doors and turn on “tsunami of business that, quite the lights so others don’t have to frankly, the industry was not precome in contact with anything. Dis- pared for,” Donley said. On April 6, infecting wipes are left by the front the bank announced it will hire doors. Rubber gloves are regularly 1,000 new employees, including 350 in mortgage sales “THERE WAS A LITTLE and support positions and 100 in operations.

SCARE EARLY ON. ...

Many banks, includBUT WE ARE CLOSING ing Fifth Third, have moved to extending DEALS.” lock-in periods for — Chris Bergin, Berkshire rates in closing deals Hathaway HomeServices from 60 days to 90.

Lucien Realty Donley said the bank worn. Courtesy handshakes are does that in part because of the slightly longer time it might take to now frowned upon.

But some of the greatest con- complete a deal because of capacicerns that might have held up ty challenges on the lending front.

Buyers in the market are motivatmortgage activity in terms of the lending system have been ad- ed by the low rates, just as cashdressed, Bergin said, and business strapped homeowners flock toward had been continuing at a fervent refis to free up some capital.

While it may be a good time to clip through most of March, similar to activity seen heading into this buy a house for those who can afspring before the full impact of the ford to, cash-strapped borrowers outbreak. However, that activity re- facing financial hardships as the economy stalls out are equally concently began to slow.

As companies shut down and tributing to a surge in requests for employees in various fields pivoted forbearance.

According to the Mortgage Bankto remote work, there was concern that county courthouses would ers Association’s Forbearance and close or face staffing issues, stalling Call Volume Survey, “the total necessary elements of finalizing a number of loans in forbearance home purchase or refinance and grew from 0.25% to 2.66% from creating a bottleneck. But Ohio March 2 to April 1, 2020, with mortcourthouses, deemed essential gages backed by Ginnie Mae seeing business entities, have generally the largest growth (from 0.19% to adapted, according to bankers and 4.25%). As of April 1, independent mortgage bank (IMB) servicers real estate agents.

Title companies used to walk in now have the largest share of loans paperwork to have it filed, for ex- in forbearance (3.45%), reflecting ample, then call to let real estate their focus on Federal Housing Adagents know a deal was recorded. ministration (FHA) and Veterans But in Cuyahoga County, there’s Affairs (VA) home loan programs, now a dropbox for those materials and serving low-to moderate in— an option encouraged by the come borrowers.”

Bergin said he recently sold a American Land Title Association.

The downside is that confirmation house to a veteran in Rocky River might come a day later instead of with a 30-year fixed rate of 3%. instantly, but that’s a manageable “Prices are up on sales, but interest rates are down, so it’s keeping afsetback.

Fannie Mae and Freddie Mac fordability pretty reasonable for made changes to underwriting most folks,” he said. standards in response to the pandemic, providing for some “loan See MORTGAGE on Page 19

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NOMS quickly changes gears Physician-owned practice has furloughed staff and closed offices in crisis

BY LYDIA COUTRÉ

Sandusky-based NOMS Healthcare — an independent, physician-owned and -led medical practice — had planned to move administrative functions in March into a new facility in Amherst it purchased at the end of last year to accommodate its rapid growth and anticipated continued expansion.

Instead, the COVID-19 pandemic has forced NOMS (Northern Ohio Medical Specialists) to rapidly shift gears. It has furloughed staff, temporarily closed some offices and stood up telehealth services two months ahead of the planned May launch for that technology.

Though patient volumes have slowed down significantly as patients delay nonessential surgeries and procedures, NOMS CEO Joshua Frederick is confident that the practice is ready to weather the uncertainty in the coming weeks or months. And NOMS providers stand ready to support the health care workers on the front lines of the pandemic.

“We’ve been able to adjust pretty quickly,” Frederick said. “We’ve modeled out scenarios for three months and we’re comfortable where we’re at. Once this thing blows over, we expect to pick up right where we left off.”

In the past few years, NOMS has grown from 60 providers in mid2015 to 250 today. In total, it employs a little more than 1,000 staff members. Leadership plans to continue that growth, hoping to double or triple in size in the next two to three years.

While NOMS has put a hold on adding providers for the moment (opting to only move forward with the providers who have signed contracts), Frederick said he expects that once things return to the post-pandemic normal, the organization will continue its path of growth.

As mandates are lifted and patients can start rescheduling delayed care, the practice plans to ex-

“WE’VE BEEN ABLE TO ADJUST PRETTY QUICKLY. WE’VE MODELED OUT SCENARIOS FOR THREE MONTHS AND WE’RE COMFORTABLE WHERE WE’RE AT. ONCE THIS THING BLOWS OVER, WE EXPECT TO PICK UP RIGHT WHERE WE LEFT OFF.” — Joshua Frederick, NOMS CEO

pand its hours and access to brace for the anticipated high volumes of patients who have been waiting for those nonessential surgeries and procedures. Frederick said NOMS has begun working with surgery centers and hospitals where its doctors are specialists to get privileges at more facilities to meet those needs.

In the meantime, doctors are balancing caring for those patients who are delaying care and are hoping that lower-acuity issues don’t become more complicated or burdensome.

“We don’t want a bunch of currently non-emergent stuff to turn

into bigger issues down the road,” he said.

Within two days of rolling out telehealth in March, 150 of its providers were available on it. By the second week, NOMS providers saw about 1,800 visits and expect that to continue to grow.

Still, NOMS primary care providers are seeing about 50% of their historical volumes through telehealth visits, as well as a handful of in-person office visits when necessary. Its specialty providers, which make up 55% of the practice, are seeing an even greater drop in visits, in large part due to the more hands-on nature of specialty practices. Patients that do need to come in for in-person care are being triaged and sent to certain locations that have remained open for a physical visit.

Many of NOMS’ nearly 100 locations are temporarily shut, Frederick said. The closures are both a logical move as volumes decline and also a cost-saving measure for overhead expenses.

In another effort to cut costs, NOMS furloughed 260 staff members in both clinical and administrative roles. It has scaled back on billing and administrative people not only because of declining patient volumes, but also the challenges of setting up those employees to work from home in a way that remains compliant with regulations and secures patient privacy.

Frederick wants to keep his staff members healthy and ready to care for patients when volumes start to come back or if hospitals need backup in the pandemic surge in the coming weeks. He’s been coordinating with local hospitals to assess such needs.

“We want to make sure that they’re healthy so that when this subsides, the restrictions and such are lifted, that we’re going to come back full speed ahead and continue the momentum that we had prior to this,” Frederick said.

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

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REAL ESTATE

NAI Pleasant Valley adds real estate vet as executive VP Former Ostendorf-Morris co-owner Geoff Coyle joins Medina company in newly created role

BY STAN BULLARD

The Medina-based NAI Pleasant Valley commercial real estate company has named Geoff Coyle, an office leasing and management veteran, as its executive vice president for strategy and operations.

Previously an executive consultant at Cleveland-based Hanna Commercial, Coyle was one of four owners of the former Ostendorf-Morris Co. when it was sold to Hanna in 2010 and has three decades of commercial brokerage experience.

Gino Faciana, who with his wife, Barbara, serve as co-CEOs of the Medina-based Pleasant Valley Corp. real estate facilities management, construction and ownership company, said the family owned company added Coyle to help make a reality of its vision to be a high-profile, integrated real estate company. He said he wants NAI Pleasant Valley to be thought of in the same league as national brokerages he calls “the bigs.”

Faciana said Coyle will help NAI Pleasant Valley create unified strategies to expand beyond the typical deal-by-deal stewardship of brokerages, recruit agents and raise the brokerage’s stature in the region so to help the parent company expand its corporate services business.

Pleasant Valley acquired the for-

“WE WANT TO GROW THIS BUSINESS. TO GET THE (NAI DAUS AND NAI CUMMINS) COMPANIES TO WORK TOGETHER AS A SINGLE BROKERAGE HAS BEEN A TOUGH TRANSITION. COYLE HAS THE PASSION AND EXPERIENCE TO PUT THEM TOGETHER.”

“THEY HAVE RELATIONSHIPS WITH MANY COMPANIES THAT ARE THEIR CLIENTS IN PROPERTY AND FACILITY MANAGEMENT, AS WELL AS CONSTRUCTION. WE JUST HAVE TO ESTABLISH OUR CAPABILITY TO PROVIDE NATIONAL BROKERAGE SERVICES.”

— Barbara Faciana, co-CEO of Medina-based Pleasant Valley Corp.

— Geoff Coyle, NAI Pleasant Valley executive vice president for strategy and operations

mer NAI Daus of Beachwood and NAI Cummins of Akron in 2019, Faciana said, because it needed the affili-

ation the firms brought with the Princeton, N.J.-based NAI Global.

That company provides real estate

services through 375 locally owned offices around the world.

The international brokerage affiliate is key, Faciana added, to broadening Pleasant Valley’s clientele because it needed to provide brokerage along with other services that large public and private companies with multiple locations need, such as construction and property management.

Barbara Faciana said she is excited to add Coyle to their team.

“We want to grow this business,” Barbara Faciana said. “To get the (NAI Daus and NAI Cummins) companies to work together as a single brokerage has been a tough transition. Coyle has the passion and experience to put them together.”

Alec Pacella, president of NAI Pleasant Valley and a principal in the brokerage, said Coyle will be helpful as a new outsider in combining the NAI Daus and NAI Cummins offices as a single firm.

“I was the Daus guy in the combination,” Pacella said. “I like and enjoy working with the Akron agents, but I was the Cleveland guy. Coyle has done this type of integration before and his experience will resonate with all of our staffers.”

Expanding NAI Pleasant Valley’s stable of agents is also one of Coyle’s responsibilities that Pacella said he is glad to shift to Coyle. NAI Pleasant

Valley has 16 producing agents who work in the office, industrial and retail sectors.

“There are only so many hours in the day,” Pacella said. “I’m glad (Coyle) has joined us in this role.”

For his part, Coyle was clearly excited to take on a new challenge and work with a dynamic team like that formed by the Facianas.

“I met Barb as we were showing space in Medina,” Coyle said. “When I met Gino, I was blown away by what they had accomplished here.”

Coyle said NAI Pleasant Valley is ready to undertake the time-consuming task of adding seasoned agents from other firms as well as the costly task of training agents new to the business. Coyle sees new recruits as being experienced sales professionals with a passion for property.

Coyle said that as he discussed joining NAI Pleasant Valley he found himself energized by thinking of steps it could undertake to grow.

“They have a huge platform,” he said. “They have relationships with many companies that are their clients in property and facility management, as well as construction. We just have to establish our capability to provide national brokerage services.”

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

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APRIL 13, 2020 | CRAIN’S CLEVELAND BUSINESS | 5

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NONPROFITS

Y.O.U. summer jobs program offers long-term benefits

BY LYDIA COUTRÉ

The summer jobs program offered

by Youth Opportunities Unlimited (Y.O.U.), a nonprofit workforce development organization, provides its participants long-lasting benefits beyond the direct work experience, according to a new study.

In the two years following completion of the Summer Youth Employment Program, participants are less likely to be charged with delinquency offenses and less likely to be incarcerated in the adult system when compared with other youth who applied to the program but weren’t selected to participate, according to the study by Case Western Reserve University’s Center on Urban Poverty and Community Development.

Those who complete the program also had higher attendance rates the year following their summer job.

Students who completed the pro-

gram and are enrolled in the Cleveland Metropolitan School District were more likely to graduate.

“We’ve been blown away,” said Craig Dorn, president and CEO of Y.O.U. “It had a greater impact than we even thought.”

Y.O.U. helps connect young people to six-week summer job experiences and then pays the bill, offering free labor to businesses and valuable experience to the teens. Some of the opportunities also add an educational component for the workers. The cost of a six-week summer job is about $2,250, more than half of which goes to the young person’s pocket to save and to add back into the economy.

Y.O.U. currently has the capacity to serve 4,000 youth a year, but only enough funding to regularly support 2,000 to 3,000 jobs.

Y.O.U. was founded by the business community to coordinate summer jobs in 1983. It began as a busi-

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ness-supported initiative. Until the mid-1990s, the public-private partnership was a pretty even split, Dorn said. Today, it is completely government-subsidized. Many of the companies that initially supported Y.O.U.’s summer job program no longer exist in the market.

The organization is trying to flip that model to get the corporate community involved in supporting these young workers, who will be the ones filling jobs down the road.

Dorn said he believes it is possible to regain the business community’s financial support, but recognizes the primary challenge in doing so: getting community buy-in to financially support a program that has, in recent years, been providing subsidized labor to companies.

“What Y.O.U. brings to the table is labor and the money to cover labor,” Dorn said. “What you do with that

six weeks, 120-150 hours, the sky’s the limit. So we think that it’s a great opportunity and, again, this is not just young people learning, but depending on what the job is, they also might be helping a company. So until all the workforce issues are solved, we think the time is right.”

The Rainey Institute, a nonprofit community arts center, typically takes between 15 and 20 kids who work as teen counselors to help teach classes and engage with kids to support the institute’s summer camps, which serve 200 to 225 kids. A handful of these teen counselors were once campers themselves.

“They just really mentor kids and they love it,” said Regina Foster, director of operations for the Rainey Institute. “Some of them have decided to go into child care or go into child psychology and different things.”

See Y.O.U. on Page 15

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A teen participating in the Mayor Frank G. Jackson Summer Youth Employment Program (which is run by Y.O.U.) builds a rain barrel at the Department of Water. | CONTRIBUTED

She said the program has been a “blessing,” because it allows Rainey to serve the number of kids it has and maintain its high standards with the summer job participants.

“They are learning responsibility, they are learning work ethic, they are learning how to interact with co-workers, with adult staff and with the children, the campers themselves,” Foster said.

Y.O.U. hired CWRU about a year ago to perform an independent external evaluation of the jobs summer program, which attracts as many as 15,000 applicants each year. Even in its best years, the program is able to connect roughly only 3,000 of those to jobs, Dorn said.

This meant the researchers had a built-in comparison group with similar demographics and poverty challenges that the program was unable to serve. Plus, more than half of the young people served are selected randomly, Dorn noted.

The program keeps students off the streets during their work hours, which can help with safety during that time period, but the study revealed longer-term impacts.

“It also has an effect on do they get involved with the criminal justice program after they participate?

And the answer is at pretty high rates, they don’t,” Dorn said.

Participants who completed the program (defined as those who were present on the job for at least twothirds of the program days) also saw positive educational outcomes in attendance and graduation rates, which Dorn attributed to the experience teaching students the value of school.

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CrainsCleveland.com/CompanyMoves Ca u l e y Fe r ra r i o f D e t ro i t 7 0 7 0 O rc h a rd L a k e R d. �e � t � l o o m � e l d� � � 4 8 3 2 2 Te l e p h o n e : 2 4 8 . 5 3 8 . 9 6 0 0 w w w. Ca u l e y Fe r ra r i . co m 6 | CRAIN’S CLEVELAND BUSINESS | APRIL 13, 2020

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PERSONAL VIEW

In times of crisis, Greater Cleveland’s generosity shines

RICH WILLIAMS FOR CRAIN’S CLEVELAND BUSINESS

BBY RONALD B. RICHARD

EDITORIAL

Stay the course T

here were some encouraging data points last week about the impact social distancing is having in mitigating the COVID-19 pandemic in Ohio. The takeaway?

What we’re doing is working, and we have to keep it up.

The latest model from the Ohio Department of Health projects a peak of 1,600 new cases a day in mid-April — well below earlier projections of 10,000 cases a day. The department estimates that without aggressive mitigation measures, Ohio would have seen 62,000 cases a day at the outbreak’s peak.

The positive trend is critical, ODH director Dr. Amy Acton said, because if it holds, the state may not run out of ventilators, may not need as many extra hospital beds and will be able to shift equipment to hot spots.

New coronavirus modeling from The MetroHealth System, meanwhile, suggests that COVID-19 in Cuyahoga County “may be significantly lower in the number of infections than originally expected,” and that the county “could see sustained impact driven by clusters of infection rather than a single large surge.”

“The public distancing reTHERE’S GOOD EVIDENCE sponse is historic and has the trajectory of the THAT THE GOOD EFFORTS changed infection from being driven by widespread communal OF EVERYONE HAVE transmission to infection in STRETCHED THE clusters of people in close contact,” said MetroHealth CORONAVIRUS CURVE. CEO Dr. Akram Boutros.

There’s good evidence, then, that the good efforts of everyone have stretched the coronavirus curve.

But we’re far from done. People are still contracting COVID-19 and are dying, and health care workers and others remain at significant risk. The weather is starting to turn nicer, and that will tempt more people to venture out.

Fight that temptation. Stay home. Wear a mask when you have to go out. Keep washing your hands. And keep your distance.

We’re all eager to get back to normal and get the economy going again, particularly in light of last Thursday’s U.S. Department of Labor data showing there were 6.6 million fresh unemployment claims across the country, marking a total of

16.8 million over the last three weeks. That’s about one-tenth of the American workforce, a scary figure. For now, though, we have to be patient, and vigilant.

Be prepared “O

hio is voting by mail, and we need your help to educate Ohioans how to get it done!”

That’s the first sentence of the pinned tweet on the Twitter account of Ohio Secretary of State Frank LaRose, a Republican and the state’s top elections official. He encourages voters to “visit VoteOhio.gov and learn how to request your ballot, give our PSA with @GovMikeDeWine a retweet and help spread the word across Ohio!”

The tone couldn’t be more different from that of another Republican, President Donald Trump, who said last week, “Mail ballots, they cheat. Mail ballots are very dangerous for this country because of cheaters. They go collect them. They are fraudulent in many cases.”

We appreciate the responsible message that LaRose and most other state elections officials, lots of Republicans among them, are conveying about voting by mail. Wisconsin’s in-person voting last week was dangerous and a travesty. Ohio’s approach to its primary, which was to have taken place March 17, is far more responsible, and it prioritizes the safety of citizens while protecting the health of our democracy.

The New York Times noted last week that five states “now conduct all elections almost entirely by mail” and they “report very little fraud.” With the right safety procedures, oversight and audit processes, voting by mail is safe. The Secretary of State’s office reminds voters that they can track their ballots at VoteOhio.gov and that ballots “are stored securely in rooms requiring both a Democrat and Republican election official to gain access.”

LaRose’s office has been admirably clear about its efforts to support, refine and improve the security of voting by mail in Ohio.

No one knows exactly what the world is going to look like for the general election on Nov. 3. LaRose and his counterparts nationwide must make sure that voting by mail, at scale, is an option for November. It would be irresponsible not to.

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

Greater Clevelanders take pride in their resilience and solidarity, honed by the collective challenges we have overcome throughout our history. Today, our community faces an unprecedented challenge with the COVID-19 pandemic.

As Cuyahoga County leads the state of Ohio with the largest number of documented COVID-19 cases, our re- Richard, who is gion’s resolve is again being put to the the president test. Individuals and families are and CEO of the struggling with basic needs: food, Cleveland shelter and safety. At the same time, Foundation, the local nonprofit organizations wrote this on working tirelessly to serve our most behalf of the vulnerable residents are struggling to more than 50 stay afloat as they face lost revenue, re- Greater source shortages and reduced staff ca- Cleveland COVID-19 pacity.

This pandemic is threatening lives Rapid Response and livelihoods across our communi- Fund partners. ty. Thankfully, Greater Clevelanders know how to step up for one another in times of crisis, and this latest crisis is no exception.

Here in Northeast Ohio, a group of public and private funders — foundations, corporations, public agencies, families and individuals — wasted no time coming together to launch the Greater Cleveland COVID-19 Rapid Response Fund, an emergency fund designed to complement the work of public officials and expand the capacity of front-line nonprofit organizations in Cuyahoga, Lake and Geauga counties by strategically and efficiently addressing impact from the outbreak.

Since the fund’s launch on March 18, more than $6.7 million has been raised, and that number continues to grow. Rapid Response Fund partners worked together to develop a process for collecting grant requests and distributing dollars to ensure the most pressing needs were addressed quickly, that nonprofit organizations weren’t burdened by a complex application process and resources would be available to address new and emerging needs as the pandemic and its effects unfold in the weeks and months to come.

In times of crisis, coordination of resources and the ability to move nimbly are vital. Philanthropy can do both.

The Greater Cleveland COVID-19 Rapid Response Fund has already announced a total of more than $2 million in grants to nonprofit organizations and groups serving residents of Cuyahoga, Lake and Geauga counties. In the first three weeks of grantmaking, the fund partners have prioritized support that helps organizations slow the rate of infection and flatten the COVID-19 curve now by immediately addressing the basic needs of residents throughout the region.

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.

THE GREATER CLEVELAND COVID-19 RAPID RESPONSE FUND HAS ALREADY ANNOUNCED A TOTAL OF MORE THAN $2 MILLION IN GRANTS.

See RICHARD on Page 9

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8 | CRAIN’S CLEVELAND BUSINESS | April 13, 2020

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OPINION

PERSONAL VIEW

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Students row on the Cuyahoga River after departing from The Foundry. The facility has suspended operations. | CRAIN’S FILE

COVID-19 stalls progress of students, including those already at risk

BY PETER ANAGNOSTOS

This month, on April 1 of all dates — April Fools’ Day — I became, for the first time since I was 13, “non-employed.”

No fooling.

April 1, 2020, marked the first time since the Summer of Love — yes, 1967 — that I have not held a job. That year, I began working every Saturday as the weekend office boy at a newspaper in Rhode Island. I delivered newspapers every Sunday and stocked shelves several afternoons a week, after school, at a neighborhood grocery.

It wasn’t that I needed a job to help my family; I just liked to work. I enjoyed the camaraderie of copy editors and customers and the continual education I gained outside the classroom. And more than the work, I liked hearing the words “good job.”

So when the coronavirus struck, school buildings were closed and after-school programs canceled, The Foundry Community Rowing and Sailing Center followed suit and suspended operations, since our “customers” are students.

Staring furloughs in the face, I counted myself a “nonessential” part of the team and stepped aside as the organization’s president. I was the cheerleader — the person who encouraged the community to root for the great strides The Foundry was making to advance scholastic rowing and sailing in Cleveland.

More important to the team were The Foundry’s coaches who work with student-athletes early mornings and late afternoons, and in between visit schools and rec centers throughout Cleveland as a way of reaching all youth, but especially those in harder-to-reach neighborhoods and communities.

Today, writing as someone unaffiliated with any organization for the first time in a long time, what is especially hitting home for me is not my own future.

What strikes me — and saddens me — is the adverse impact COVID-19 is having on students, particularly the 18 high school students of the Cleveland Metropolitan

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School District’s School of One. Until the coronavirus hit, those students had been using The Foundry as their classroom and the Cuyahoga as their “playground.” On the river, they were gaining the real value of rowing: how to work as a team, communicate effectively, show empathy and respect, and muster the stamina Anagnostos was the sport requires of them, to say nothing of the courage it took for until recently some of them to learn how to swim president and and venture onto the water.

CEO of The The social-emotional lessons Foundry. He rowing also transferred to the classsays he will room and contributed to the draremain matic improvement Foundry a cheerleader School of One students experifor the team. enced in their grades and graduation rates. This, sadly, cannot be replicated in a virtual classroom, because wherever their remote classrooms may be, they will likely lack the safety and serenity The Foundry provided, probably for the first time in many of their lives.

Nor can a virtual classroom provide the after-school jobs many of these same students held at MCPc, the data protection company owned by The Foundry’s visionary founder. There, for the first time in their lives, in addition to a paycheck, they received career direction and a motivation to do well in school — and another place to apply the lessons learned on the water. And it gave them, too, the chance to hear the words “good job.”

It is a credit to MCPc that the work is still there and will be after normalcy resumes. “Good job” too, MCPc. So what I have learned from this coronavirus crisis has been less about my future and more about theirs.

Let’s hope the siege lifts soon, so these bright young men and women, who were already at risk, can resume the remarkable progress they were making before this terrible disaster struck. must support our community through the pandemic and recovery. And while philanthropic dollars are merely a drop in the bucket compared to the state and federal dollars that must be deployed, every bit counts when the needs are this great. For those in a position to give their time, talent or treasure, this is the time to double down.

Greater Cleveland’s philanthropic community has and will continue to spring into action in our most challenging moments. The needs across our region are and will continue to be staggering and heartbreaking. We encourage new organizations, individuals and families to join the ever-expanding coalition of partners in supporting the work of our front-line nonprofits. Gifts of any amount can be made to the Rapid Response Fund online at www.ClevelandFoundation.org/Response.

Thanks to the generous and resilient spirit of Greater Clevelanders, we can be confident we’ll make it through.

APRIL 13, 2020 | CRAIN’S CLEVELAND BUSINESS | 9

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OPINION

PERSONAL VIEW

Avoiding mass extinction: How to mitigate the effects of the CO BBY BRAD WHITEHEAD AND JOSEPH PARILLA

Scientists highlight three criteria for mass species extinction: The event must be worldwide, it must happen quickly and at least onethird of all species must disappear.

For small businesses, the COVID-19 pandemic is potentially an extinction-level event.

Greater Cleveland has about 50,000 small businesses, and according to Brookings Institution and Fund for Our Economic Future research, as many as half of them may not make it in the near term due to the halt in national commerce.

The Brookings research segmented small businesses into immediate, near-term and long-term risk categories, according to their industry. Sectors at immediate risk include restaurants and barbershops, which have been shut down out of public health concerns. Others are less obvious, like rental and leasing services, specialty trades or apparel manufacturing. In total, 52% of small businesses are in industries with immediate or near-term risks.

Many have already closed, especially the smallest businesses (those with fewer than 10 employees), which have the shortest cash buffers.

The pain does not fall equally within our community. Systemic racial exclusion already disadvantages high-quality small businesses in black-majority neighborhoods, according to recent Brookings research. Cleveland’s ThirdSpace Action Lab, among others, has called attention to the subtle and complex ways this pandemic will exacerbate existing structural race issues. Indeed, people of color are disproportionately employed in the most at-risk industries during the COVID-19 crisis.

But we can act to blunt the effects. The equation for addressing the unfolding small business crisis is challenging but simple: Small businesses are not generating revenue, yet they still have costs. We must inject liquidity (cash) into

loans and grants (in the these businesses or help form of loan forgiveness), them reduce expenses until may soon be supplementmarkets return.

In partnership with the ed with an even larger county government and Main Street Lending Promany others, the Fund and gram from the U.S. DepartBrookings have mapped ment of the Treasury and Cuyahoga County’s liquidFederal Reserve Bank. In every community, there ity landscape. (A highly must be extensive outsummarized map can be Whitehead is senior adviser for seen in the accompanying special projects at the Fund for Our reach to make sure all graphic.) What’s clear is Economic Future and a nonresident small businesses are aware there is no silver bullet; in- senior fellow with the Brookings of these opportunities and can receive technical assisstead, businesses must ex- Institution’s Metropolitan Policy plore every pathway, and Program. Parilla is a fellow with the tance to navigate the applithere should be no wrong Brookings Institution’s Metropolitan cation process. Particularly important will be outreach door for small businesses Policy Program. to walk through to receive to minority-owned busiassistance. nesses in economically Over a dozen small business assistance or- distressed neighborhoods where approval ganizations have come together under the rates for SBA loans have traditionally been county executive’s leadership to establish the lower.

Cuyahoga COVID-19 Small Business Resource 2. Fill in the gaps with supplemental assisCenter (www.cuyahogacounty.us/helpfor- tance. As bold and aggressive as the SBA probusiness; 216-452-9714) to direct small busi- grams are, they will not make sense for every nesses to the resources best positioned to help business and some businesses will not qualify. them. The state has established the Office of Fortunately, institutions are stepping up in Small Business Relief to provide support Cuyahoga County with a supplemental fund (www.businesshelp.ohio.gov). Small busi- for businesses that are in vulnerable industries nesses also can go directly to organizations (e.g., hospitality or service) with special attenthey already know and trust, whether that is tion to those in low- to moderate-income COSE, the Urban League, the Hispanic Busi- neighborhoods. While the $3 million fund size ness Center, JumpStart, MAGNET, Cleveland is small relative to the need, it will be welcome help to hundreds of businesses and hopefully Neighborhood Progress or others.

Here are some recommendations for a ro- be the harbinger for further support. Last weekend, JobsOhio announced a $50 million bust mitigation strategy: 1. Fully leverage the federal stimulus. At $350 program to support the most promising venbillion and counting, the Small Business Ad- ture-backed companies statewide. ministration (SBA) programs embedded in the 3. Collaborate with customers and suppliers to CARES Act — especially the Paycheck Protec- reduce/defer costs. Enlightened banks, utilition Program — are imperfect, but perhaps the ties and landlords know that squeezing small biggest levers to staving off a small business businesses now will not be productive. Indisaster. These programs, which include both stead, most have established policies to relax

payments in the near term to protect the long term. Utilities have agreed not to cut off services for nonpayment and many will negotiate payment. One real estate firm will defer rent payments in exchange for a payment plan and a lease extension — which they, in turn, can use to shore up their own financing. Such practices need to be encouraged.

4. Be a safe local consumer. We as citizens also have a role. We can support local restaurants with their innovative (and safe) takeout and delivery plans, support creative supply chain workarounds, such as the Love Local Collective the Central Kitchen is pursuing with farmers, or sign up for an online fitness or yoga class. If possible, we should continue supporting the contractors who care for our children or clean our homes even if they are not presently serving us. And we should “buy forward” with gift certificates and coupons. Revenues now can be a lifeline.

5. Prepare for more. All that is being done is impressive, but it may not be enough. Already we are hearing talk of a future stimulus, and our community must gear up quickly to take full advantage of it. Should the situation deteriorate further, local policy leaders must prepare now for even bolder actions such as tax forbearance or additional relief services.

These policies and actions can avert mass extinction. With businesses shuttered and a massive recession unfolding, it’s hard to imagine an “after.” But another lesson from nature seems to be that, in addition to the pain they cause, severe disruptions can ultimately yield unforeseen positive evolution. These policies and actions can help small businesses adapt to a potentially fundamentally different economy. As Northeast Ohio contemplates its rebuilding, civic leaders should envision a future that not only helps small businesses get back on their feet, but instills greater entrepreneurship, racial equity and quality jobs.

PERSONAL VIEW

What will it take for NEO to rebuild our economy right?

BBY BETHIA BURKE

From the rise of rapid relief funds, the to rebuild our economy right? quick pivots of businesses to meet esIn immediate response to the pancalating health care demands for perFor the past few weeks, I have felt like a tsu- demic, like many others, we at the sonal protective equipment, the fonami is coming. I don’t know when it’s coming Fund have been adjusting our work to cused efforts of economic and or how big it will be, I just know I can’t stop it. align our strengths with the urgency of community development organizaThe advice is to stand still, hold your breath the moment. For instance, we’ve been sourcing ideas and interventions from and hope you weather the storm. tions bringing critical aid to struggling This is impossible advice. There is a need to national partners, like the Brookings businesses, the abundance of research act, to lessen the impact of the public health Practitioner’s Network and the Nationmeasuring the scope and scale of the crisis and save human lives. To take steps to al Fund for Workforce Solutions. We’re Burke is impact to guide how to respond, and mitigate the long-term economic consequenc- providing direct support to Cuyahoga president of the the individual acts of kindness, from donations to meal deliveries. This is rees of businesses closing and nearly 16 million County’s economic development team Fund for Our people filing for unemployment across the na- as it develops strategies for the near Economic markable community building. and long term, particularly targeting Future. tion (with more coming).

Yet, with all the activity to help I assumed the role of president of the Fund small business support. Through The mitigate the immediate economic impacts of the COVID-19 pandemic, for Our Economic Future, an organization fo- Paradox Prize, we’re working to concused for the last 16 years on the long-term, nect nonprofits on the front lines with a surge in what will happen next?

While there are many unknowns, this feels cersystemic transformation of our regional econ- mobility needs to public transportation assets omy, on March 19. Suddenly, amid a rapidly that might be able to support them. We’ve begun tain: The economic reverberations of COVID-19 unfolding crisis, I find myself grappling with to analyze the potential local economic impact will be profound and the burden will fall on al(see a geospatial analysis of the in- ready overburdened individuals, families and dustries most at risk in Northeast businesses. This moment of unprecedented crisis THE CORE FUNDAMENTALS OF WHAT MAKE Ohio here) and are digging in on the is further exposing structural inequities by race AN ECONOMY STRONG DON’T CHANGE. $2 trillion CARES Act to understand and ethnicity and will disproportionately affect effect on businesses and people, low-wage workers. Small businesses are already REBUILDING STRATEGIES NEED TO EMPHASIZE the on nonprofits and economic devel- suffering, and, as in the Great Recession, minoriTHESE FUNDAMENTALS — FACTORS IGNORED opment organizations. And we’re ty- and female-led enterprises are likely to face strategizing with workforce develop- disproportionate impact.

OR UNDERPRIORITIZED FOR TOO LONG. ment partners on shifts in service This crisis will undoubtedly alter the structure philanthropy’s collective response to an un- delivery the sudden change in employment will of our regional and national economy. But the core fundamentals of what make an economy precedented economic blow for residents necessitate.

Even more than what we’re doing through the strong — attention to job creation, job preparaacross our region and nation. Chief on my mind in recent days: After the immediate ef- Fund, I could not be prouder of our members tion and job access with equitable outcomes by fects of the crisis are mitigated, what will it take and partners as they have sprung into action. race and place — don’t change. As the country

moves forward with $2 trillion (or more) of stimulus money and tries to minimize job loss, not to mention human loss, rebuilding strategies need to emphasize these fundamentals — factors ignored or underprioritized for too long.

Following the Great Recession, Northeast Ohio’s economy suffered harder and for longer than our peers. This is another inflection point.

Northeast Ohio can emerge stronger on the other side of this crisis, but it matters what leaders do today. And it matters that Northeast Ohio learns from yesterday.

Unprecedented levels of investment from the federal government are an opportunity to seed growth in innovative industries and push for relevant skill-building. The real societal consequences of an economy reliant on jobs without basic benefits like paid sick leave are increasingly apparent; these consequences emphasize the need for stepwise improvements in job quality for all workers. The allhands-on-deck approach to stabilizing small businesses in communities calls for attention to place and long-term asset building to help us build up and reinforce job hubs.

Strategies like these offer the potential to drive long-term growth with equitable access to opportunity and to close — rather than exacerbate — the economic divide by race and place. Such strategies also must be pursued intentionally. Now is the time to learn from other economies that came out of the Great Recession more quickly than Northeast Ohio.

If we do, this time we can rebuild it right.

10 | CRAIN’S CLEVELAND BUSINESS | April 13, 2020

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CO

Cash

Cost

OPINION

the COVID-19 pandemic on small businesses

ong seriate rent and can uch

also ants and hain lecrmyoga ortdren resard” nues

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COVID-19 small business liquidity options | Cuyahoga County

Cash infusion

Eligibility

Source

Strengths

Constraints

Paycheck protection

Loan — partially forgivable

Up to $10 million per business

Any business < 500 employees

Banks, credit unions, CDFIs

Waives credit checks, guarantees, collateral. Loan becomes forgivable if used for business expenses

Lack of clarity on implementation; may overlook disadvantaged businesses

Economic injury grant

Grant

Up to $10,000 per business

N/A

SBA

Grant comes within three days of applying

$10,000 is not at the scale of need

Economic injury disaster loan

Loan

Up to $2 million

Any business < 500 employees

SBA

Low-interest loans; favorable terms

SBA is the lender, so likely will take weeks to issue loans

JobsOhio Innovation Fund

Convertible loan

Up to $2.5 million

Ohio-based, venture JobsOhio backed

Highly flexible, focus on highly promising companies

Only venture-backed firms eligible

Grants

Grant

Up to $5,000

For-profits < 20 employees

Cuyahoga County

Focus on hard-hit industries; attention to traditionally disadvantaged businesses

Scale: needs will quickly outstrip size of fund

Loans

Loan funds

Up to $50,000

For-profits < 100 employees

Cuyahoga County

Speed; multiple providers; attention to disadvantaged businesses/neighborhoods

Scale: small business needs will outstrip size of fund

SBA loans

Loan relief

6 months of principal/ Business with interest relief existing SBA loans

SBA

Time of relief matches time of economic crisis (six months)

Most small businesses do not have existing SBA loans

Bank loans

Interest and principal deferrals

N/A

Dependent on Lenders private negotiations

Flexible, rapid, market-driven, bottom-up

May simply pass cost from small businesses to banks

Rent

Landlord rent renegotiation

N/A

Dependent on Landlords private negotiations

Flexible, rapid, market-driven, bottom-up

Simply passes costs from small businesses to real estate owners

Utilities

Utility payment deferral

N/A

Any business that cannot pay utilities

Guaranteed, wide coverage, single decision-maker Simply passes costs from small businesses to utilities

State

Local

Debt relief

Cost deferral

First Energy, CPP, Dominion

SOURCE: THE BROOKINGS INSTITUTION

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CLOSE DATE: April 17 | ISSUE DATE: May 18 April 13, 2020 | CRAIN’S CLEVELAND BUSINESS | 11

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MANUFACTURING

VECTORIOS2016

HOW COVID-19 COULD CHANGE MANUFACTURING

Some think pandemic could lead to more U.S. work, but customers need to consider costs and risks when creating a supply chain

BY RACHEL ABBEY MCCAFFERTY

The uncertainty caused by COVID-19 could cause manufacturers to reassess the risk in their supply chains and, maybe, bring more work back to the U.S. The shortage of health care supplies highlights this concern, but it extends to other sectors as well.

Ken Patsey, president and executive director of Manufacturing Works in Cleveland, had already started to see some trends away from Chinese manufacturing prior to the spread of COVID-19. Wages in China have been increasing, he noted, which meant it was getting more expensive to make products there. The tariffs implemented by the Trump administration served as another incentive for some companies to want to look at moving manufacturing out of China.

“I THINK THE SUPPLY BASE IS GOING TO LOOK AT THIS AND SAY, ‘YOU KNOW, THERE’S OTHER UNFORESEEN CIRCUMSTANCES.’ ” — Bill Adler, president and CEO of Stripmatic Products Inc.

On top of costs, COVID-19 also brings the question of reliability into the sourcing conversation. Patsey said he thinks that introduces what could potentially be a “substantial opportunity for local manufacturers,” as Northeast Ohio’s manufacturing base is made up of companies that comprise the supply chain.

Jerry Murphy, partner in charge of the manufacturing and distribution services team at Illinois-based professional services firm Sikich

LLP, said last year’s trade tensions and tariffs were squeezing clients’ margins, causing them to consider moving their manufacturing operations. A recent survey by Sikich, conducted from early to midMarch, found that 56% of respondents were looking to make more products or components in the U.S., compared to 45% last year.

Those conversations have continued during the pandemic, but now those clients have to think about how COVID-19 is affecting the country where they’re looking to move.

“They don’t want to jump out of one possible challenge into another,” Murphy said.

Ultimately, this isn’t a shift that can be made quickly; it takes time to move the manufacturing of a part, though assembly can be moved faster, Murphy said.

Quoting has picked up recently for members of the Independence-

Steve Peplin, right, CEO of Talan Products Inc., has seen sourcing shift back to local markets over the years, with companies getting supplies from the region where end products will be used. | TALAN PRODUCTS INC

12 | CRAIN’S CLEVELAND BUSINESS | APRIL 13, 2020

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base ciati add that brin

ts al s end

SELLING SMARTS

ADVISER

A broad skills set plus a diverse client base spell growth for South Shore Controls. PAGE 14

How 19 Ohio companies teamed up to produce a face shield for health care workers. PAGE 15

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“I REALLY THINK THE TIME’S RIGHT FOR THAT, TO NOT ONLY U.S.-SOURCE BUT START TO CONSIDER LOCAL-SOURCE.” — Ken Patsey, president and executive director of Manufacturing Works

based Precision Metalforming Association, president David Klotz said, adding he thinks a decent amount of that is due to customers looking to bring back work to the U.S. Mem-

bers of the association are metal fabricators and stampers that are part of the supply chain for industries ranging from medical to automotive to appliance.

Klotz compared the effect the pandemic could have on supply chains to what happened after an earthquake and resulting tsunami struck Japan in 2011. Companies started duplicating their tooling in the U.S. as a back-up to their work in Japan, he said.

Bill Adler, president and CEO of Stripmatic Products Inc. in Cuyahoga Heights, also thinks COVID-19 will cause his customers to re-evaluate risks to their supply chains. It’s not just this pandemic; it’s cumulative.

Over the past 20 years, the world has seen SARS, the tsunami in Japan and dock strikes in the U.S. “I think the supply base is going to look at this and say, ‘You know, there’s other unforeseen circumstances,’ ” Adler said.

Customers may start to ask if it’s worth saving “a fraction of a cent per part” for that exposure to interruptions, he added. Having a local supply chain doesn’t protect against all disruptions, but it does lessen the number of variables at play.

Adler hasn’t seen this shift happen just yet. In the past 18 months, metal fabricator Stripmatic Products has been able to get some reshored work, but that hasn’t been a large amount of products. The import tariffs raised the price of raw materials, which actually made it more difficult for the company to compete with overseas factories, Adler said.

Steve Peplin, CEO of Talan Products Inc. in Cleveland, started the metal stamping company in 1986 and remembers the different geographic shifts the industry has taken over the years, from a focus on the southern states to Mexico to China. In recent years, though, Peplin has seen sourcing shift back to local markets, with companies seeking supplies from the region where end products will be used, including the U.S. Talan, which serves building products industries like solar energy and commercial roofing, doesn’t go after labor-intensive jobs, instead focusing on work that relies mainly on automation or machining. That means labor costs aren’t as much of a competitive factor.

Peplin said he thinks the flexibility of a local supply chain is what drives a lot of that shift. Being near a supplier means a customer can order more parts, or fewer, on shorter notice. When times are volatile, it’s more difficult to plan ahead, which is a necessity if a supplier is on the other side of the world.

Locally, Manufacturing Works is creating a resource to help connect Northeast Ohio manufacturers with customers looking to move their supply chain back to the U.S. The organization plans to launch a simple version of the resource in the next 30 to 60 days, Patsey said, with a goal of adding more value-added components in the future. Manufacturing Works had started looking at this idea about six months ago, but the supply-chain issues caused by the pandemic brought the project to the forefront.

“I really think the time’s right for that, to not only U.S.-source but start to consider local-source,” Patsey said.

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APRIL 13, 2020 | CRAIN’S CLEVELAND BUSINESS | 13

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FOCUS | MANUFACTURING

Selling smarts at South Shore Controls

A broad skills set, diverse client base boost Mentor company’s growth

BY DOUGLAS J. GUTH

South Shore Controls is selling its brains, though this isn’t some insidious black-market scheme. Instead, the factory automation company is marketing the robust skill set that helped it expand into a new facility in Mentor last fall.

“We have more engineers here than we do workers on the shop floor,” explained vice president John Ovsek. “It’s a very educated crew coming up with solutions to make a customer’s line more efficient.”

South Shore moved to Mentor in November after outgrowing its previous headquarters in Perry. Its new accommodations at 9395 Pinecone Drive offer 35,000 square feet of manufacturing space, as well as room for continued expansion.

Ovsek said the new facility enables South Shore to increase manufacturing capacity for a thick portfolio of advanced industrial automation services, with a particular focus on design, engineering, manufacturing, installation and process improvements for plant operations. The company also specializes in custom-designed solutions for automation, converting lines and web handling.

Since its founding in 1998, a core competency in developing programs for specialized manufacturing equipment has extended into designing and modifying machinery while providing turnkey engineering services for control panels, programmable logic controller (PLC) programming and more.

Diversification has been a mantra at South Shore since an ownership group led by Ovsek and chief operating officer Chris Weinkamer bought the company in 2017. Weinkamer said South Shore didn’t want to become siloed in the way it presented its services.

“We were writing multiple purchase orders to controls people, mechanical folks and installation people,” Weinkamer said. “We realized the need for a company that did turnkey projects.”

South Shore’s new facility provides 35,000 square feet of manufacturing space, along with room for continued expansion. | CONTRIBUTED PHOTOS

South Shore moved to Mentor in November after outgrowing its previous HQ in Perry.

A high-end company South Shore’s client base is similarly spread among numerous industries and technology platforms.

Ovsek noted that currently, the company doesn’t have a single customer that makes up more than 5% of its business.

“It could be a service call for a company that makes fish food,” he said.

“We want to be wide and varied so we’re not tied to aerospace, auto or food and beverage. Of all those industries, there’s not one we don’t service.”

SQF CERTIFIED

This year, South Shore looks to expand the product line for its Niagara Systems subsidiary, a manufacturer of industrial washing systems for products including engine blocks and hard plastic “sharps containers” used to dispose of hypodermic needles, disposable scalpels and similar hazardous biomedical waste. Thanks to its new facility, the company now has capacity to be a single-source vendor for converting lines, pickand-place automated systems and line control upgrades.

South Shore executives said they believe developing products inhouse can be a customer draw. The company’s DynaPlace pick-andplace machine — similar in operation to devices used to move product along an assembly line — will dovetail nicely with already-established automation services.

“DynaPlace can go along with a larger automation project,” said Ovsek. “We saw a void in the marketplace with pick-and-place.”

Filling market gaps goes back to having a smart staff on hand, added the company VP. South Shore’s 50-person staff includes degreed engineers working alongside highly skilled machinists, fabricators and field installation workers. That talented workforce helped boost company sales by 10%-15% in 2019, aided by management-led investments into processes and systems.

“We also worked on paying down debt,” noted Ovsek. “Some good old-fashioned blocking-and-tackling with our costing system.”

Though economic uncertainty pervades the country right now due to COVID-19, South Shore is working off a deep backlog of customers. Nor has the virus stopped the company brain trust from weighing the poten-

John Ovsek, South Shore Controls vice president

tial impact of changing technology on future operations.

Increasingly blurred lines between advanced industrial computer control systems and the larger network have South Shore exploring how to harness the Internet of Things — a system of physical devices accessed through the internet that identify themselves to other online devices — for clients concerned about security leaks.

“People didn’t want anything to do

“WE WANT TO BE WIDE AND VARIED SO WE’RE NOT TIED TO AEROSPACE, AUTO OR FOOD AND BEVERAGE. OF ALL THOSE INDUSTRIES, THERE’S NOT ONE WE DON’T SERVICE.” — John Ovsek, South Shore Controls vice president

with a manual system interconnected with a network, but that’s changing,” said Weinkamer. “These worlds are overlapping, and we need to gain experience on the IT side to offer customers information about recordkeeping and data logging. Our controls guys aren’t IT folks, and our IT folks aren’t controls guys.”

South Shore may partner with Case Western Reserve University on co-ops to upskill students on mechatronics and controls — two emerging technologies not widely represented in Northeast Ohio. The way the company execs see it, the more the brainpower they have at their disposal, the better.

“This is a high-end company that’s going to be needed for the foreseeable future,” Weinkamer stated. “As long as we’re manufacturing things in the U.S., our customers will need people like us.”

Contact Douglas J. Guth: clbfreelancer@crain.com

14 | CRAIN’S CLEVELAND BUSINESS | APRIL 13, 2020

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FOCUS | MANUFACTURING | ADVISER

Y.O.U.

Saving lives, securing a future for manufacturing

From Page 6

19 Ohio companies came together to produce a new face shield for frontline health care workers BBY ETHAN KARP AND ERIC BURKLAND

Manufacturing has a proud history of retooling to support war efforts: from Goodyear Tire in Akron making fighter planes to General Motors pivoting from cars to guns and tanks for World War II. Now, Ohio manufacturers are doing it again — this time, in the war against COVID-19.

Cleveland Whiskey is now making hand sanitizer for the Cleveland Clinic. A local dental laboratory is 3D-printing nasal swabs for COVID19 testing. Mattress companies are producing face masks.

Many manufacturers were already volunteering to help when Gov. Mike DeWine and Lt. Gov. Jon Husted put out a statewide call for manufacturers to retool their factories to produce desperately needed protective equipment for front-line medical workers. Within just two days, 1,500 manufacturers answered the call.

This manufacturing army will make everything from face shields to masks for a public-private partnership called the Ohio Manufacturing Alliance to Fight COVID-19. What we have achieved already — together — is incredible.

Take the example of our new face shield for hospital workers to wear to prevent COVID-19 infection.

The Manufacturing Alliance built

Karp is president and CEO of MAGNET and Burkland is president of the Ohio Manufacturers’ Association.

IN A DARK TIME, THIS EFFORT REMINDS US OF THE COLLECTIVE POWER OF OUR COMMUNITY TO COME TOGETHER FOR THE COMMON GOOD. an entirely new product and a brandnew regional supply chain. Three local hospitals tested the prototype and clinically approved it. Sourcing the plastic was almost impossible with raw materials disappearing at record speed. Finally, with private-sector and state economic development agencies fast-tracking everything, we secured emergency funding to place a multimillion-dollar order.

The next bottleneck was building a mold to shape the plastic. Such molds

are often made in China and usually take six to 12 weeks to complete. We solved that problem locally with the help of cutting-edge 3D metal printing, even inventing some new techniques along the way. In the end, 19 Ohio companies came together to do the work — companies that normally make products ranging from toys to engine parts were able to drop everything, pivot their production and make this happen.

Because of these manufacturers, and the power of the Alliance behind them, we will make up to one million face shields over the next month. It took less than two weeks from prototype to production. And we’re going to repeat this for other types of protective equipment.

This will save lives. In a dark time, this effort also reminds us of the collective power of our community to come together for the common good. To triumph with innovation. To overcome barriers with technology. To push traditional limits with strategic alliances.

This demonstrates the might and agility of Ohio manufacturing. That’s a lesson we must hold on to as we look ahead to the day when we will rebuild in the aftermath of this crisis. This is a blueprint for the future of manufacturing. It shows us that we can work together to make things that haven't been made here in Ohio for decades.

It’s also a stark reminder of the need to re-establish our local supply chains.

Coming out of this crisis will be the right time to bring more supply chains back home, starting with the medical sector and expanding from there. This will help protect us from future disruptions like the pandemic, which is paralyzing some manufacturers because they can’t get raw materials and parts from overseas. It will also allow us to make more things locally. And the more local products we create, the more jobs we create.

There’s been much talk about the opportunity for Ohio to lead in the rapidly developing field of advanced manufacturing; to become a global leader in cutting-edge technologies like collaborative robots, sensors and artificial intelligence; and to make Ohio a destination for the best companies and the brightest people.

With the job losses, production shutdowns and economic chaos caused by the pandemic, this now sounds like a far-off dream. But the reality is, we will get through this exceptionally tough time. We will win the war against COVID-19.

In this moment of truth, our manufacturing industry is proving that we have the powerful partnerships, innovation know-how, cutting-edge technology and leading talent to rebuild stronger than ever. Most importantly, as we answer the call to help our front-line heroes stay safe, we’re also proving we have the heart.

The summer job either shows them the reality of work that they don’t want to ultimately do and need further education to avoid or it introduces them to a field that interests them and pushes them to step up in school to be able to enter that field.

Last year, after the period of time the study examined, Y.O.U. added case managers to its summer program. Previously, students were connected with a job coach who supported them through the six-week program.

The case managers can stick with the teens for up to a year. Dorn said he believes that if the study were to be repeated in a couple of years, the benefits would be even greater given this added support.

“What’s amazing about this is the summer jobs program isn’t some really deep, expensive intervention,” Dorn said. “And it has all these other benefits, like generating more money back into the economy.”

He hopes the study serves as a call to action and urges the community to consider investing more in summer jobs for youth.

“And not just one summer at a time, but long-term, because these benefits really speak to everything the community’s talking about: You have a path out of poverty, you stay out of jail, you do good in school,” Dorn said. “So who knew that a simple summer job could increase the odds of that happening in a dramatic way?”

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April 13, 2020 | CRAIN’S CLEVELAND BUSINESS | 15

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4/9/2020 4:21:18 PM

AKRON MANUFACTURING

REAL ESTATE

Goodyear CEO hopes to restart sites in May

Akron's shutdown may be at least painful time

BBY DON DETORE

It’s the billion-dollar question: When will tire plants open again, perhaps signaling the return of business as usual?

For Akron-based Goodyear Tire & Rubber Co., the answer centers on its original equipment vehicle customers. All but a handful of vehicle assembly plants in the U.S. and Europe are idled in the wake of the COVID-19 pandemic.

When some of Kramer the major automakers resume production — many of them are targeting the first week of May — Goodyear will begin to ramp up production at its idled factories.

“Ideally in early May, if we’re optimists, we’ll see some production line up, and that will be a good sign,” Goodyear chairman, president and CEO Rich Kramer said in an interview with Tire Business, a sister publication to Crain’s.

“It won’t happen on May 1, but as it ramps up and the supply chain for us and for the auto suppliers come into place, you could see us getting back to some more activity, which ultimately is needed.”

Goodyear announced April 2 all of its tire and retread manufacturing plants in North America, Europe, the Middle East and Africa regions were going to remain idled “until further notice” in the wake of the pandemic.

Goodyear’s commercial tire service business is considered an “essential” business by the federal government and is keeping its truck-care network open to support the trucking industry as it delivers critical goods across North America.

“We’ll follow the demand signal that the OEMs give us and that the markets at large give us,” Kramer said.

However, he cautioned that when manufacturing around the world resumes, society will have to make “tradeoffs” for the betterment of the economy.

“We can’t stay sheltered forever,” Kramer said. “I believe we should be sheltered now, so don’t misunderstand me. But we can’t do it forever.

At some point down the road, we are going to have to make tradeoffs on how we deal with this to get the economy back up and running.”

Supply doesn’t seem to be an issue, at least in the short term, particularly with commercial tires.

“We’re selling tires to keep trucks moving, keep medicine moving, keep food moving, keep America rolling, as we say,” Kramer said. “That is the priority for us, so we’ll see where the inventories are and the demand signals are to see when we open for that as well.”

See GOODYEAR on Page 17

Downtown was already slowed by construction; Bowery project still moving ahead BBY DAN SHINGLER

There’s never a good time for a pandemic, but as far as Akron’s concerned, now is probably the best time in terms of its impact on the city’s redevelopment plans.

As long as things return to normal as planned and attitudes toward urban living survive this historic episode, that is. If so, it may even present the city some opportunities.

The COVID-19 crisis has downtown Akron, like a lot of city centers, virtually shuttered. But at least the shutdown is occurring when the core of the city was already hobbled by a massive construction project on Main Street, said the builder spearheading downtown’s $42 million Bowery Project, which now sits behind orange barrels on Main Street.

“Now would be the time to do it, because there wasn’t a lot happening on Main Street anyway,” said Don Taylor, CEO of Fairlawn-based Welty Building Co., of the current shutdown.

Taylor’s company is building out the six formerly decrepit office and industrial buildings to transform them into a mixed-use development slated to open this summer. His company also is leasing out the 92 apartments that Taylor said make up the project’s residential component, as well as its roughly 40,000 square feet of retail space.

Welty has been leasing apartments throughout the current crisis, Taylor said, speaking over the sound of jackhammers from the site as work continued on the street outside.

“We are now at over 35 leases signed for the residential, out of 92 units. So, our residential leasing has done really well, even with coronavirus,” Taylor said, noting that all of the apartments in the project are now complete.

Many people may not have expected that prospective tenants would be signing leases. After all, the economy is in tatters, especially in downtown areas that rely heavily on now-shuttered bars, restaurants and retail establishments. Those are the amenities places like the Bowery typically use to market themselves, as well as sources of income for some potential tenants.

Leases at the Bowery are not cheap by Akron standards, either.

Apartments at the new complex lease for between $1,000 and $3,100 a month — fairly pricey for Akron, where various apartment-tracking sites list average rents between $600 and $825 a month.

But even as the city and the nation are gripped by what most economists say is likely the beginning of a significant recession, Taylor said interest in leasing at the Bowery has been keen.

He likely can thank Akron’s diverse economy and, in particular, its strong health care component for picking up the slack.

“We have a real cross-section (of new tenants), from young professionals to those newly moved to the area," Taylor said. "And probably the most concentration is with doctors and those that serve health care, mainly because we are a block from

South Main Street in downtown Akron remains under construction in front of the city’s $42 milion mixed-use Bowery Project.

Because of the construction, downtown was already relatively quiet before the pandemic. And even though the crisis has shut the city, the Bowery still is seeing people sign up to rent its apartments. | CONTRIBUTED PHOTO

Akron Children’s Hospital and four blocks from Cleveland Clinic Akron General (Hospital).”

On the retail side, though, pretty much everything is on Taylor hold, he noted, with prospective new bars, restaurants and other establishments taking a wait-and-see approach before committing to space.

Taylor said that’s not necessarily due to the COVID-19 crisis, but to the construction on Main Street, which is taking longer than anticipated.

“Every single commercial space had at least one person looking at it.

And when I say they were looking at it, I mean we were in serious conversations about leasing,” Taylor said.

“But because of the delay in construction on Main Street, as it became apparent it would not be finished (in 2019), our interest in those spaces really dried up. They said, ‘When Main Street is done, call us back. We can’t put time into planning something when we don’t know when we can open the front door.’ ” That means the establishments likely won’t have their space built out and be ready to open when Main Street is completed, Taylor said.

Taylor had planned to have a grand opening for the Bowery in April or May but said he will now push that back to June or July. However, he’s not overly concerned as long as Main Street construction wraps up in July as the city is currently promising.

“Now, the city’s telling us that Main Street will be done in July.

Most of the retail community said, ‘Prove it. When it’s done, we’ll talk again.’ Now, we have the coronavirus and we’re in a serious pause,” Taylor said, stressing the impor-

tance of the city completing Main Street by the new deadline.

That’s on track to happen, said Jason Segedy, Akron director of planning and urban development.

“We’re really full steam ahead on all the city’s construction projects. …

One of the things COVID has done is eliminate a lot of traffic, which has made it easier to work. … I think we’re in good shape in terms of opening a new Main Street on July 1,” Segedy said.

If that happens, and things do return to some semblance of normalcy, Segedy and Taylor both think Akron could even benefit from the effects of the crisis.

For one thing, as big cities such as New York seem to be having the worst time during the pandemic, it may spur folks to seek out smaller cities in which to live, where the pandemic so far appears easier to manage. Or maybe the work-fromhome trend forced on society will stick around, meaning locals who take jobs with companies elsewhere could work from Akron.

“I do wonder if this doesn’t hurt really large cities like New York. But for midsize cities like Akron, I think in the long run we may even benefit from people giving us a second look now,” said Segedy, a staunch urbanist who studies issues that impact cities.

Taylor said the dramatic impact of the crisis on restaurants and bars in the area could benefit downtown, too. He said he thinks that when the shutdown ends, many restaurant operators might see a newly rebuilt downtown as a more desirable place to reopen and relocate their businesses, especially if the Bowery and other projects successfully fill the neighborhood with new residents.

“The predictions that 50% to 60% of restaurants will go out of business, that also means good operators will be looking for new places to run their businesses,” Taylor said.

He added the Bowery will seek to

work with four or five such operators and will offer particularly generous terms in the form of tenant improvement allowances to help make their visions a reality in the Bowery’s new “white-box” spaces. It will cost Welty more up front, but it should also help ensure the project’s ultimate success, Taylor reasoned.

“We’re willing to take some financial bets on some good operators that are out there,” he said.

Of course, all of the city’s plans and Taylor’s bets depend on the crisis passing and on people continuing to seek out cities in which to live and play.

If the past is a gauge, the signs are good, according to economists and historians familiar with past pandemics.

People sometimes fled cities during the outbreaks themselves, but the lure of urban environments didn’t go away. Human behavior changed in many ways — spitting on the sidewalk became taboo, for instance — but people always came back to cities for their social and economic benefits.

“What cities saw during cholera outbreaks and the 1918 flu pandemic is that people just left for the short term. They left while the pandemic was going on, but then they just returned,” said Amanda Weinstein, an assistant professor of economics at the University of Akron.

Matthew Crawford, an associate professor of history at Kent State University who specializes in the history of science and medicine, agreed.

“It’s hard to imagine there would be a big demographic shift back to the countryside or even the suburbs,” Crawford said. “I can’t think of a case where there was a massive shift of people moving to the countryside and giving up on living in the cities. Cities exist for a reason.”

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

16 | CRAIN’S CLEVELAND BUSINESS | April 13, 2020

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From Page 1

Senior executives are also reaching out to 10 to 15 employees who “wouldn’t normally report to them” to make sure the workers “know we care about them, we’re thinking about them, we’re responsive to the questions they have and we’re learning from challenges they may have,” Jenkins said.

Like DeWine’s daily news conferences and frequent Twitter updates, constant communication during a crisis is much better than the alternative.

“This is affecting everybody in our own unique ways,” Jenkins said.

Radio rights staying put The Browns wrapped up one of their big media deals in February, when the team and WEWS agreed to a long-term contract that features preseason rights and shoulder programming. The previous deal with WEWS started in 2015, and the latest contract is similar in length, sources told Crain’s.

Next up are radio rights that have been held by Cleveland’s all-sports competitors — WKNR-AM, 850, and WKRK-FM, 92.3 — since a unique deal was struck in 2013. A source familiar with the process has told Crain’s that the Browns, Entercom Communications (which operates The Fan) and Good Karma Brands (ESPN Cleveland’s parent company) have agreed to extend their partnership.

Details are still being finalized, but the deal will ensure the Browns continue to have about 1,000 hours of annual programming that is split between ESPN Cleveland and The Fan. The previous deal, as is the case with WEWS’ preseason TV rights, is said to be team-friendly, since the Browns get the vast majority of the ad revenue. The tradeoff is the partners are guaranteed content that, despite 21 seasons of mostly terrible results, is certain to generate plenty of interest.

The average rating for the Browns’ four preseason games on WEWS rose 15.2%, to 20.5, and ranked sixth in the league last season. The regular-season norm on WOIO, WKYC, WJW and ESPN was a whopping 34.9, an 11.2% increase during a season marred by drama and unmet expectations.

‘Here to connect’ The Browns’ 6-10 finish in 2019 brought another regime change, one that led to the hiring of the youngest general manager in league

GOODYEAR

From Page 16

Kramer said the pandemic is unlike anything he’s witnessed or that the company has endured in its 122-year history, not even the market downturn after 9/11 or during the Great Recession.

In fact, he called the crisis “not just unprecedented, but unprecedented in the speed and ferocity in which it has spread.”

According to Kramer, analysts predict OE business will fall 20% and the replacement business will decrease 15%, equal to or worse than numbers during the Great Recession.

Goodyear, like all other tire manufacturers, is facing what Kramer called a “cash usage” problem. Tiremakers build inventory in the first half of the

P017_CL_20200413.indd 17

history (Andrew Berry, who celebrated his 33rd birthday on March 30) and a head coach who turns 38 in May (Kevin Stefanski).

The redesigned front office’s early moves have drawn praise and, combined with the talent that sparked the errant predictions last year, has led to something with which Cleveland fans are familiar: offseason hope.

Jenkins said season-ticket renewals, the deadline for which had been March 6, were “very strong.”

The pandemic, though, resulted in the Browns removing the hard deadline, and the club is working with customers who have been hit hard by the crisis. In a letter that was sent to season-ticket holders on March 24, Jenkins said flexible payment options are available.

“We’ve worked hard to make sure that they know if there are any circumstances we need to help them through, we are here to connect,” the club’s COO told Crain’s.

The 2019 Browns reached their cap on season tickets for the first time in five years. Late last August, Jenkins told Crain’s the team’s season-ticket base was in the mid60,000 range, and the Browns had a waiting list — with a required deposit of $100 per seat — that was “several thousand” deep.

The waiting list is now above 5,000, which would make it seem certain that the Browns, after 13 of 31 home games didn’t sell out from 2015-18, would have a second straight season in which every contest was recorded as a sellout. Such an assumption can’t be made now, however, with so much uncertainty and a staggering number of people losing their jobs.

“We still anticipate that we could sell out every game, but we’re not foolish enough to look past everything that’s going on,” Jenkins said.

There’s also the possibility the season could be delayed or played without fans in attendance. The latter is something that the NBA and MLB have considered as leagues try to pick up the pieces as so much has shut down, hospitals have been overwhelmed and the economy has been hammered.

Jenkins said it’s too early for the Browns to start planning for the possibility of playing in an empty stadium, and the club is eager to see how the other leagues proceed in the coming months.

“We know what sports can mean to a community, and if sports can be a respite, a unifier, bring people together, that’s really a role that we all can play,” the team’s chief operating officer said.

Kevin Kleps: kkleps@crain.com, (216) 771-5256, @KevinKleps year to meet peak summer demand.

Now, Goodyear is paying for raw materials it purchased to build that inventory — at a time when sales in the replacement market have stalled significantly.

“So, the direct impact to us is, essentially, (there is) no demand, while we still have bills due for raw materials that we purchased to make tires that we assumed we would sell by now,” he said.

Goodyear has initiated several steps to manage the shortfall, including idling its plants and cutting capital, discretionary and marketing expenses.

In addition, Goodyear has instituted: ``Pay cuts/deferrals for employees who continue to work full time with no furlough, including Kramer, who is taking a 50% pay cut. ``Three weeks of furlough for full-time workers, with pay cut/deferral for the

PROGRAM

From Page 1

Yasaki’s request was not assigned an SBA loan number until five days later.

As of April 10, she was still not clear on when those funds might be disbursed.

She said she trusts her banker, but that financial help can’t come soon enough, so any uncertainties are concerning.

“There is a bit of relief, I suppose, with just having got the application in. But we still haven’t heard any definitive timelines on when the process will be finalized or when the funds will be distributed,” Yasaki said. “It gives me a bit of anxiety waiting and not knowing what we can do with our staff going forward. I’ll feel a lot better when we have that money in our account.”

Yasaki’s experience echoes that of many of the hundreds of thousands of would-be borrowers looking for support from the federal government via the PPP, the rollout for which has been choppy at best for reeling businesses and a headache for most lenders.

Tsunami of requests Companies with no more than 500 employees can borrow 250% of certain payroll costs under the PPP, up to $10 million. Loans can be forgiven if that money is spent on payroll, rent and utilities in the eight weeks after receiving it.

Gil Goldberg, district director for the Cleveland SBA, said his office’s 10 employees are fielding 150 to 200 calls a day and countless emails as they operate remotely. It’s an “allhands-on-deck” situation with staffers working through the weekend, he said. Even so, he acknowledged there are likely some calls that just don’t get immediately answered because of the sheer volume. Some simply need to set a password to log in to the SBA portal, but have struggled to get help several days since PPP’s launch.

Banks are having varying levels of success working through what’s been a complicated system rife with issues in a program often lacking clear, definitive guidance from the federal agencies overseeing it. One issue has been backand-forth messaging on promissory notes. Originally, the SBA wanted lenders to use its template, but some banks used their own when that wasn’t available, while others waited. The SBA has since clarified that lenders can use their own documents. But the confusion has held up some loans. Examples like that are myriad.

Meanwhile, very few firms have managed to disburse funds the same day. One of them is Consumers National Bank, a community bank based in Minerva. CEO Ralph Lober remaining weeks of the quarter. ``Furloughs through the end of the second quarter.

These measures affect 4,100 employees in the U.S. and are all targeted for the second quarter.

“Our goal is to see everyone through the next three months with shared sacrifice,” he said, “and hopefully that is where this ends, and we get directionally back to some normal business and normal production.”

Goodyear was one of the first companies to institute a work-from-home directive, he said, affecting thousands across the globe.

Working remotely has not impacted projects the company considers “vital” or “essential,” such as the intelligent tire concept.

Detore is editor of Tire Business.

CRAIN’S CLEVELAND BUSINESS CRAIN’S CLEVELAND BUSINESS

| |

II said that as of close of business last | Wednesday, April 8, his bank had 80 C Rloans A I N ’ Sapproved CLEVELA D B SBA U S I Nsystem, ESS | inNthe totaling $24.25 million — about $7.1 million of that had already been disbursed on 13 loans.

As of the morning of April 10, a week since the launch of PPP, the SBA had approved 522,283 PPP loans totaling more than $133.9 billion, according to the office of Senate Majority Leader Mitch McConnell, R-Ky. For perspective, total SBA loan volume for the 2019 fiscal year amounted to $28 billion on 63,000 loans. The financial system is now practically processing that much activity almost every day after getting little lead time for training bankers and often-inconsistent guidance. That’s all while lenders adapt their own modified operations — closing a loan gets trickier when a banker and borrower can’t just meet together, as is the case during the COVID-19 pandemic. “(Ohio Bankers League) members worked as quick as they could to get up and running. Lots of banks are waiting for the SBA to process and pass through applications, but that’s just due to the breadth of this,” said OBL spokesman James Thurston.

“Thousands of banks in the country right now are in line to get apps processed, and many are banks that were not already 7(a) lenders.”

In terms of disbursement, the SBA on April 8 clarified that lenders should provide funding to borrowers no more than 10 days after approval. The government wanted to make that five days, but trade groups — including the OBL and the American Bankers Association, its national counterpart — lobbied for 10 because of the various challenges lenders continue to face and the volume of loans they’re attempting to manage.

Huntington Bank, consistently one of the nation’s leading SBA lenders, stopped accepting new PPP applications on April 8 due to “unprecedented volume,” said company spokeswoman Emily Smith. The bank had received more than $4 billion in requests and secured about $2 billion in guarantees by then.

“We will begin accepting applications again as soon as we can work through the enormous demand we have received and confirm that federal funding is available,” Smith said.

CRAIN’S CLEVELAND BUSINESS

Funding concerns?

S E P T E M B E R 3 - 9 , 2 018 S E P T E M B E R 3 - 9 , 2 018

| |

PA G E 17 PA G E 17

smaller banks that previously out| PA G E 17 sourced SBA origination — crank out Sbillions EPTEMB R 3 - 9 ,in2 requests.

018 | PA G E 17 ofE dollars While an additional $250 billion in backup may be deployed, funds for the PPP can’t be replenished indefinitely.

And bankers say a fear of missing out on free money during a time of economic hardship, coupled with promises by the Treasury that loans would be processed fast and funds disbursed almost instantly, contributed to a deluge of loan applications. So many lenders attempting to file loans at the same times in the past week caused the SBA intake system to crash.

Robert Palmer, president and CEO of the Community Bankers Association of Ohio, described the PPP rollout as “frustrating, chaotic and flawed,” adding it’s a “great concept, poorly executed right now, at least for community banks.”

He said the biggest issue a week into the program for some lenders is just getting into the SBA portal, resulting in potentially billions of additional funding requests for small business in rural markets waiting on the sidelines.

“It seems like big banks got in more quickly, and they are basically sucking up all the money,” he said.

There are exceptions, like Consumers National, which seemed to navigate the system quickly, and others that have sent in applications even if loans have not been finalized.

Still, many banks, Palmer said, are facing ongoing glitches and outright delays.

Jon Park, CEO of Westfield Bank, a Northeast Ohio community bank, said that as of the middle of last week, the bank had received $140 million in requests over at least 250 loans, but the firm was “waiting on the SBA to catch up” so it could begin funding borrowers.

Such challenges and delays, whatever their causes, add to worries that much of the PPP funding could evaporate before community banks get to serve their customers, Palmer said. Simply throwing in an additional $250 billion in funds is not easing his concerns.

“We are going to formally ask the federal government, Congress, that a certain amount of this money be set aside for community banks,” Palmer said. “If we want to help these rural communities, there needs to be a carve-out.”

Thurston said the OBL has elevated a list of community banks struggling to access the system to the SBA to expedite solutions to their issues. He added that while it’s currently unknown (as of press time) how much additional funding might back up the PPP, it should be enough to cover community banking customers as well.

S E P T E M B E R 3 - 9 , 2 018

As far as funding, there’s a simmering worry among some borrowers and lenders that the PPP could, indeed, run out of money. That’s creating additional anxieties for some community banks afraid they won’t be able to secure funding for their customers as Nobile: jnobile@crain.com, larger banking systems, which often Jeremy Advertising Section 771-5362, @JeremyNobile have dedicated SBA teamsAdvertising — versus (216) Section

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P “I said teen afte can’ can’ be a

COPING WITH COVID-19

State and local governments are facing ‘the new normal’

Lawmakers are conducting essential business, but must deal with challenges of virtual meetings BBY KIM PALMER

Ohio laws requiring government entities to hold in-person meetings that are open to the public have become more relaxed as the COVID-19 pandemic has created a prolonged public health crisis.

“There is some room for interpretation with the term ‘open’ in regards to open meetings,” said Mark Altier, director of open government in the Ohio Attorney General’s office.

In response to the Ohio Department of Health’s COVID-19 social distancing directives, state lawmakers passed emergency legislation expanding in-person open meeting laws to temporarily permit the use of teleconference and videoconference during public health emergencies. Ohio House Bill 197 waived regulations regarding in-person public meetings so lawmakers could adhere to public health laws while conducting critical hearings.

“A member of the body does not have to be physically present if they are holding a virtual meeting in order to have a quorum and take a vote,” Altier said of the new law.

Before Ohio’s rule changes, city and county councils statewide had to evaluate their charters and codes of regulations — some dating back decades — to determine how to satisfy the open meetings requirements without risking the public’s safety.

Cuyahoga County Council members were set to vote last month on a $14 million financial package for the new downtown Sherwin-Williams Co. headquarters days before the state issued a public health order prohibiting large public gatherings.

HOSPITALS

From Page 1

Some clinical staff who work in nonessential surgeries and procedures, which have been put on hold for the time being, are being trained and reassigned. Others are furloughed or working fewer hours, standing at the ready and staying healthy as workforce needs evolve, which is especially important given health care providers’ heightened risk of contracting COVID-19.

Another way to possibly expand the workforce if needed is activating the Medical Reserve Corps, a group of volunteer licensed providers available for support during emergency preparedness initiatives, said Lisa Anderson, senior vice president at the Center for Health Affairs, the nonprofit advocate for Northeast Ohio hospitals.

Ohio worked with its licensing boards to survey current and retired licensees to identify unaffiliated personnel (those not already being counted by hospitals) who have clinical or behavioral health skills and may be able to help respond to the potential surge. As of last Thursday, April 9, about 53,000 individuals had responded, more than 22,000 of whom had said they were available and willing to respond.

University Hospitals sent out its own internal skills survey of employees with various licenses, which helped the system set up training and redeployment regimens, said Tom Snowberger, UH’s chief human resources officer. The response of people willing to step into whatever role is necessary during the pandemic

Zoom security tips for meeting remotely and safely With millions of Americans working from home, the rate of online videoconferencing usage has surged, and with it, security concerns.

Here are some tips for Zoom security: ``Keep current: Zoom sends software updates and patches to correct privacy issues and create up-to-date policies for users. ``Use passwords: In order to protect a meeting, connect to Zoom via single sign on (SSO), which does not reveal your email address. ``Use waiting rooms: Screen users before they are allowed to enter a a Zoom conference. This allows you to restrict attendees’ ability to collaborate. ``Manage participants: Host the meeting so you can control the camera and mute options. Be the only meeting host. ``Assume what happens in Zoom does not stay in Zoom: Control your own privacy and be wary of sharing sensitive information. And don’t post your meeting link on Facebook or other social media. ``Avoid provided and “click-through” links: Go directly to the Zoom website or app and enter with the meeting ID and password. ``Avoid Zoom online collaboration tools, emails or IMs: Assume they are phishing attempts, as 90% of malware attacks involve phishing.

“We did schedule an emergency meeting on March 16, right before the state order, which bought us some time,” said Joseph Nanni, chief of staff for the Cuyahoga County Council.

Council members then waited for state government guidance that HB 197 eventually provided. “We were hoping that the Legislature would act on the meeting subject,” Nanni said.

The council passed the Sherwin-Williams measure.

County council has been publicly broadcasting, and then archiving, its meetings since 2011. Adding the capability for all 11 council members to conference together from remote locations, while also broadcasting to the public, required more preparation on Nanni’s end.

Since council has a public comments clause in its charter, the public is provided a number to call in with comments, Nanni said.

“If it does not work, we may need to go without verbal public comment and have people email the clerk in order to have comments put in the public record,” he said. “We will see. Right now, we are flying by the seat of our pants.”

Unless specifically stated in an organization’s charter, there is no law requiring all open meetings to provide time for public comment. For organizations like the Greater Cleveland Regional Transit Authority, public comment is a vital means of interacting with the community, and feedback helps shape the agency’s policy, said spokeswoman Linda Krecic.

has been “overwhelming,” he said.

UH has communicated to staff its commitment to not let any staff go to an unpaid status, which Snowberger said he considers another way to protect its workforce and ensure patient continuity. Still, some are seeing decreased hours as patient census dips in the short term. Employees can use PTO and potentially borrow future PTO, but if that’s exhausted, Snowberger said the system will still work to avoid an unpaid status.

“We’re trying to accommodate for the uniqueness of the situation,” he said.

Similarly, Cleveland Clinic is maintaining pay and benefits for caregivers whose roles have been temporarily suspended since they will be reassigned. This includes while they wait for reassignment. The system is supporting its caregivers with training and resources so they can respond to changes in assignments, including moving to another department, work site, shift or remote location.

For staff members who don’t have the necessary license or credentials to join direct patient care, UH is finding other ways for them to supplement the work environment. For instance, 15 to 20 employees have been in one of the system’s cafeterias making masks to distribute to other employees and creating kits for community volunteers who are sewing and donating masks.

Others are stationed at entry points to help screen incoming patients.

Some of MetroHealth’s medical practice assistants (who typically check blood pressure, weight and temperature at appointments) have

been reassigned to help screen people entering buildings in the system.

Others are responsible for contacting patients about telehealth visits or are participating in the system’s Compassionate Care Rounders program, in which they help patients connect to family members by video chat or read them emails and letters.

At Southwest General, volunteers, many of whom are older, are opting to stay home to protect themselves.

Staff members with available time

“WE’RE TRYING TO ACCOMMODATE FOR THE UNIQUENESS OF THE SITUATION.” ——Tom Snowberger, University Hospitals’ chief human resources officer

are taking over some of those duties, such as driving the golf carts that help people get to different locations around the hospital.

“We’ve done our best to keep our staff as whole as we can and to kind of spread that wealth a little bit, so that we’re not assigning one person all the time,” Bauschka said. “Our HR department is doing a great job of making sure that people get opportunities to pick up time.”

Education The state has implemented policies that will help hospitals more quickly access a pool of additional health care

After the ODH order in early March prohibiting mass gatherings, the RTA board meeting, which normally draws more people than are currently allowed in one room, used Facebook Live to hold a virtual meeting. Public comments were accepted via email.

“There have been requests to do this before,” Krecic said about offering the meetings online.

She added she believes the practice might stick around longer than COVID-19.

“I think it was effective. It allows people who cannot come to the offices to see the meetings,” Krecic said.

The COVID-19 health orders mean most, if not all, meetings are virtual.

That has created a surge in the use of online apps, especially Zoom, a free videoconferencing program.

The technology has added a new word to our vernacular: “Zoombombing.” That’s what happens when an unwanted or uninvited participant crashes a private meeting or acts inappropriately during a public meeting.

Ekram Ahmed, spokesman for Check Point, the cybersecurity firm that first discovered significant weaknesses in Zoom security, pointed out that since the early days of the coronavirus outbreak, there has been a spike in Zoom-related domain purchases.

“There have been 17,000 of those domain purchases since the advent of the outbreak, (with) about 25% in the last week of March,” Ahmed said.

“Our research team identified 70% as malicious. As far as we know, there is a lot of hacker interest around Zoom.”

The domains, which resemble the official Zoom URL, but have slight dif-

ferences, are used as traps to extract passwords and personal and financial data from unsuspecting visitors.

Ahmed said Zoom has been diligent about improving security, adding automatic password protection, but users should assume that any information, files or documents are hackable and not private.

“You just have to go in with the mentality that what happens on Zoom does not stay on Zoom,” Ahmed said.

As for preventing Zoombombing, Ahmed suggested using passwords and waiting rooms to screen participants — and be ready to hit the mute button.

“From a liability standpoint, you cannot regulate someone from participating or joining a remote video public meeting, but you can, if someone becomes unruly, remove them just like an in-person meeting,” said Gregory J. O’Brien, partner at the Taft law firm’s Cleveland office.

O’Brien, whose practice includes public law, said the coronavirus disruption has uncovered fundamental problems with state sunshine laws.

“I know when the dust settles, one of the recommendations I will have for clients is that they need to look at all codified regulations and charters and rewrite them to give the executive a more immediate and fluid ability to respond in the case of an emergency,” O’Brien said.

He added, “I think that some of these new things we are doing during the coronavirus crisis will continue on indefinitely. It will be the new normal.”

providers if needed. For instance, allowing, for the time being, nurses who are licensed out of state to work in Ohio without obtaining an Ohio license and temporarily extending roughly 1,400 licenses that would expire during the declared emergency.

The Ohio Board of Nursing also temporarily suspended the requirement that nurses applying for their license must have passed the NCLEX examination. This enables recent and upcoming graduates of nursing programs to more quickly join the front lines rather than waiting to be able to take that exam (though they will ultimately have that examination). The board estimates this could add 4,000 to 5,000 nurses into the workforce.

Timothy Gaspar, dean and professor in Cleveland State University’s School of Nursing, said about 200 bachelor’s and master’s students are poised to graduate in early May, and the school’s goal is to keep that timeline and support them getting a temporary license as soon as possible.

The University of Akron is taking similar steps to expedite the process of clearing their students’ degrees, which can usually take some time. Ahead of finals, officials are looking at the grades of the 130 students poised to graduate in early May so they can forward the necessary documentation to the Ohio Board of Nursing as quickly as possible, said Michele Zelko, assistant director for undergraduate programs in the university’s school of nursing.

Ohio University announced its nursing and medical students will receive their degrees in mid-April, earlier than planned. Ohio State Univer-

sity’s board of trustees on Friday, April 10, was scheduled to consider a request to graduate dozens of senior medical students early. Case Western Reserve University hasn’t adjusted its graduation timeline.

Ultimately, with the help of technology and remote learning, Kent State University is poised to have more than 200 seniors complete all their work by April 28 (ahead of the scheduled May 9 graduation) and send documentation to the Ohio Board of Nursing as much as three weeks earlier than it would typically take, said Tracey Motter, associate dean of Kent State University’s College of Nursing.

She noted that Kent State faculty have been among those who are helping local health care systems train nurses to shift from, for example, operating room care to other more pressing care needs at this time.

The hope, of course, is that the surge will be tempered by all of the mandates put in place by the state and by individuals’ efforts to practice social distancing. But if a wave of patients crashes through the region’s hospitals, Northeast Ohio health systems say they’re ready.

“It’s all hands on deck,” Snowberger said. “You learn a lot about your organization’s culture and you learn a lot about people when times demand courage. ... You can see one organization with one goal in mind working to focus on the solutions and the preparedness for what may or hopefully may not come.”

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

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

18 | CRAIN’S CLEVELAND BUSINESS | April 13, 2020

P018_CL_20200413.indd 18

4/10/2020 2:57:42 PM

CRAIN’S CLEVELAND LOOK BACK | INDIANS OWNERSHIP

Jacobs transforms the Tribe from laughingstock to force The Cleveland Indians, at 71 seasons, have the longest championship drought in Major League Baseball. Still, the Tribe has produced some of the most memorable runs in Northeast Ohio sports in the last three decades, with a few very close calls and two gut-wrenching Game 7 defeats.

The revitalization of a franchise that had been a laughingstock began when Richard Jacobs, who played a huge role in the transformation of Cleveland, purchased the Indians from the estate of Steve O’Neill in 1986. Within eight years, the Indians had a glitzy new home, and the city, via the Gateway project, had a new ballpark, a new arena and a path to a reimagined downtown. — Kevin Kleps

``THE HISTORY

Richard Jacobs purchased the Indians for $35 million in 1986. Thirteen-plus years later, he sold the club for $323 million. | CLEVELAND INDIANS

``IN THEIR OWN WORDS “To him, there was only one way to do things: Either do it first class or you don’t do it all all.”

——Doug Miller, former president of Jacobs Real Estate Services, on Richard Jacobs in 2010

“Look at Indians history from the late ’50s to the ’80s. It was a series of well-meaning but underfinanced owners. There were not enough scouts, not enough farm teams. They had no chance to win.”

——Jack Torry, author of “Endless Summers,” in an interview with Crain’s in 2010

“There’s a time to hold and a time to fold. I don’t think I’ll suffer from seller’s remorse.”

——Richard Jacobs, when his sale of the Indians to the Dolans was announced in November 1999

“I don’t want one World Series for the Indians. I want a string of them. I want to reach the Holy Grail.”

——Larry Dolan, after he and a family trust agreed to buy the Tribe for $323 million

MORTGAGE

From Page 3

Tom Fraser, CEO of First Mutual Holding Co., the parent organization of First Federal of Lakewood, said the bank has shifted staff around to meet an increase in demand. Some of those positions are there to help borrowers facing financial hardships.

“This January and February, rates were unusually low, so we had lots of inquiries surrounding refis,” said First Federal mortgage loan originator Julia Rutkowski, who noted there’s usually a drop-off in activity in those months and that much of the mortgage and refi processes today are being managed through digital means. “We’ve kept very busy going into this pandemic season with refi volume and just never real-

Jacobs, a reluctant public figure who was known for his savvy business deals, and his brother, David, paid $35 million for the Tribe. The deal occurred during a period in which the franchise’s future in Cleveland was believed to be in peril.

The Jacobs brothers needed only a few years to strike a deal with the city, via some help from new mayor Michael R. White, and Cuyahoga County commissioners for a new ballpark. The Gateway financing plan, boosted by a “sin tax” on alcohol and cigarettes, was approved by voters on May 8, 1990, and work began on a project that wound up costing about $425 million and featured an arena (now dubbed Rocket Mortgage FieldHouse) to serve as the home of the Cavaliers.

By 1994, the Indians were playing in a ballpark bearing the owner’s name, and the Tribe, led by a plethora of upand-coming stars, became an American League power that sold out 455 consecutive games and routinely had one of the sport’s largest payrolls.

In 1995, the Indians played in their first World Series in 41 years.

The 1997 club came within an out of the franchise’s first title since 1948.

The Indians played in the postseason in each of the last five years in which Jacobs owned by the club. The Tribe’s attendance soared past 3 million for six consecutive seasons, beginning in 1996, but Jacobs again knew to strike when the iron was hot.

The $323 million he received for the Tribe, via a deal with Chardon attorney Larry Dolan in November 1999, was a record for a baseball team, and was $12 million more than Rupert Murdoch had paid for the Los Angeles Dodgers and Dodger Stadium the year before.

Jacobs passed away in 2009. He was 83. His brother died in 1992.

The Indians had top-10 payrolls in each of the first three years in which the Dolans owned the team. But the allure of the new ballpark eventually waned, the spending tightened and the Tribe embarked on a difficult rebuilding period.

Paul Dolan assumed the reins of controlling owner from his father in 2013. A few months earlier, the Tribe hired Terry Francona as manager, which started a run of seven straight winning seasons, four playoff berths and another Fall Classic that ended with a Game 7 loss (to the Chicago Cubs in 2016).

Under the Dolans, the Indians have been the most stable franchise in town. Still, their ownership is often scrutinized, mostly because of payrolls, with a few exceptions, that have been among the 10 lowest in

ly had that break.”

Around midMarch, just as the pandemic and the associated government response began to accelerate in Ohio, Donley the MBA began forecasting total mortgage originations to come in around $2.6 trillion in 2020, which would be a 20% increase over 2019 volumes. Refinance originations are expected to spike 36.7% on the year, to around $1.2 trillion. Purchase originations are projected to jump 8.3%, to $1.38 trillion.

However, the MBA last week said mortgage origination applications dipped 17.9% from a week earlier for a period ending April 3. In the same

time frame, the MBA Refinance Index decreased 19% from the previous week, though it was still 144% higher than the like week a year ago.

“Mortgage applications fell last week, as economic weakness and the surge in unemployment continues to weigh heavily on the housing market. Purchase activity declined again, with the index dropping to its lowest level since 2015 and now down 33% compared to a year ago,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting, in an April 8 analysis.

“With much less liquidity and tighter credit in the jumbo market, average loan sizes declined and mortgage rates for jumbo loans increased to a high last seen in January.”

The greatest challenge in Northeast Ohio right now is not the various systems providing for mortgages and refis; it’s the inventory, Bergin

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

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

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Since hiring Terry Francona as manager, Paul Dolan’s Indians have posted seven consecutive winning seasons and made four playoff appearances. | FRANK JANSKY/ICON SPORTSWIRE

``WHY IT MATTERS TODAY

MLB since 2003.

And now, the Tribe, with a ballpark lease that runs through the 2023 season and the clock ticking on Francisco Lindor’s time in Cleveland, is at a critical juncture.

For the first time, the Dolans seemed ready to sell, as minority investor John Sherman was given a path to control of the franchise.

Sherman, however, elected to purchase the Kansas City Royals for $1 billion last November — a price that is $150 million lower than the Tribe’s projected value, according to Forbes.

Sources have told Crain’s that the next minority partner won’t be given the same path as Sherman, whose stake in the Tribe had risen to about 30%, but that wouldn’t preclude the Dolans from eventually cashing in on an ownership tenure that is the longest in franchise history.

said. For example, there are just over 50 homes for sale in Lakewood right now, he said. That would have been more like 350 during the foreclosure crisis.

Despite the various challenges brought on by the pandemic, the real estate sector is still busy and seems to have adapted to a new normal amid the pandemic.

“We want people to know we’re open for business and we’re being smart about how we transact that business,” Bergin said, pointing out that multiple buyers are currently bidding on West Side properties he’s working with. “If the pandemic hasn’t stopped multiple offers, I don’t know what will — maybe the collapse of the financial system, but we don’t see that happening.”

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

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April 13, 2020 | CRAIN’S CLEVELAND BUSINESS | 19

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