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Notable Women in Entrepreneurship Pages 18-23

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CLEVELAND BUSINESS

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NEW KID IN TOWN

FINANCE

Equity Trust Co. focuses on growth New CEO says IRA market is trending up By Jeremy Nobile jnobile@crain.com @JeremyNobile

Julian Franzen, general manager of the Menards store in Brooklyn, stands on a mezzanine in its lighting center. (Stan Bullard photos)

Massive Brooklyn store is latest addition to Menards’ regional stable By Stan Bullard sbullard@crain.com @CrainRltywriter

Julian Franzen, general manager of the new Menards Mega Store in Brooklyn — which the company calls its Cleveland store — said he loves giving tours to people who have never before seen a Menards. “People are surprised at what we have, such as food and an automotive section,” Franzen said. Food, indeed. There is a 12-aisle food, health and beauty section, which includes a display of nutrition supplements and vitamins that a

pharmacist might envy. Fresh bread, frozen shrimp and a huge rack loaded with laundry detergent are also there. Menards has been selling food since 2007, so it’s not a late-inning addition to the do-it-yourselfer haven at a time when a variety of retailers are adding food to their offerings in the face of online competition. “We see it as convenience for our customers,” Franzen said. Inside the hulking, 240,000-squarefoot store at 7700 Brookpark Road there’s breadth and depth of supplies for the most hard-callused contractor or do-it-yourselfer. SEE MENARDS, PAGE 8

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A shopping visit at Menards may mean a customer can pick up, from left, soup or frozen shrimp, as well as new faucets or kitchen cabinets.

Before joining Boston’s State Street Corp. through an acquisition, George Sullivan helped grow Investors Financial Services Corp. between 1993 and 2007 from $53 billion in total assets under advisement (AUA) to $2.2 trillion. That asset base, and the firm’s work in accounting for the mutual fund industry, are what Sullivan spurred State Street to purchase it in a $4.5 billion deal 12 years ago. Sullivan stayed at State Street, where he was running its alternative investments solution business for the firm of some $30 trillion in AUA, until March. That’s when he was recruited as CEO for Westlake self-directed IRA provider Equity Trust Co., a firm of $25 billion in AUA, where he wants to make an impact similar to that achieved with Investors Financial years ago. “We were able to take something that was relatively small in the beginning and turned it into a pretty significant medium-sized company when we sold it in 2007,” Sullivan said. “The conclusion I came to is I would really like to do that again and from the CEO seat.” The Desich family, which owns the firm — whose executive vice chairman is Jeff Desich — chose Sullivan to fill the position last held by Matthew Wilson, who served as CEO from October 2015 to April 2018, when he joined E-Trade Financial Corp. Part of the draw for Sullivan was the self-directed IRA space itself, which he said has “huge potential.” SEE EQUITY, PAGE 25

5/3/19 3:25 PM

TURNING PASSION INTO PURPOSE WITH CLEVELAND FOUNDATION ORGANIZATIONAL FUND PARTNERS

Investing in our Community’s Greatest Potential The Cleveland Foundation is proud to partner with the organizations listed here that have established funds to support their long-term mission, enhance our nonprofit landscape and present numerous giving opportunities for caring donors. To learn more about how you can help a nonprofit establish an Organizational Fund, or to contribute to a fund listed here, visit www.ClevelandFoundation.org/OrgFund and follow #CLEFund for updates throughout the year.

ARTS & CULTURE Apollo’s Fire: The Cleveland Baroque Orchestra Art House, Inc. BAYarts Cleveland Arts Prize Cleveland International Film Festival Cleveland Philharmonic Orchestra Cleveland Play House Cleveland Pops Orchestra Cleveland Public Theatre Collective Arts Network (CAN) Credo Music DANCECleveland Dobama Theatre Fine Arts Association Great Lakes Science Center Heights Arts MEFGOX – Mid-Eastern Federation of Greek Orthodox Church Musicians Museum of Contemporary Art Cleveland (moCa) Musical Theater Project Near West Theatre Polish American Cultural Center Rabbit Run Community Arts Association Scottish-American Cultural Society Singing Angels SPACES The City Club of Cleveland The Music Settlement Union Club Foundation Zygote Press

EDUCATION Alpha Omega Foundation America SCORES Cleveland American Orff-Schulwerk Association Andrews Osborne Academy Assad Abood Foundation Bay Village Educational Foundation Bay Village Public Schools Alumni Foundation Black Professionals Association Charitable Foundation Breakthrough Schools – Initiatives in Urban Education Foundation Business Volunteers Unlimited Cadiz Alumni Association Scholarship Fund, Inc. Cleveland Leadership Center Cleveland Metropolitan Bar Foundation College Club of Cleveland Foundation Delta Sigma Theta Sorority, Inc. Early Childhood Enrichment Center, Inc. Esperanza Inc. Euclid Public Library Foundation Family Connections of Northeast Ohio Foundation Center Friendly Inn Settlement, Inc. Friends of Breakthrough Schools Friends of Cleveland HeightsUniversity Heights Library Fund for the Future of Heights Libraries Harvey Alumni Association

Hawken School IPM (International Partners in Mission) Kids’ Book Bank Lake/Geauga Educational Assistance Foundation (LEAF) Leadership Geauga County Mayfield Business Alliance Metro Catholic School National Black MBA Association, Cleveland Chapter Nature Center at Shaker Lakes Polonia Foundation of Ohio, Inc. Reaching Heights, Cleveland Heights-University Heights Public Schools Foundation Saint Edward High School Shaker Heights Public Library Sigma Pi Phi Fraternity Tau Boule South Suburban Montessori Association Spirit of Geneva Scholarship Fund The Adhesion Society The Andy Nowacki Foundation, Inc. The Educational Gift Fund of the Woman’s Club of Chagrin Valley The Literacy Cooperative The Union of Poles Boosters and Sports Committee Inc. United Macedonian Diaspora Zeta Omega Scholarship Fund Inc.

HEALTH & HUMAN SERVICES Adoption Network Cleveland American Society of Andrology Association of Indian Physicians of Northern Ohio Blossom Hill Foundation Circle Health Services Cleveland Eye Bank Foundation Cleveland Rape Crisis Center Cornerstone of Hope Creative Living for Life, Inc. Crossroads Deepwood Foundation Domestic Violence & Child Advocacy Center East End Neighborhood House Easter Seals of Northern Ohio Euclid Hunger Center Family Planning Association of Northeast Ohio, Inc. Front Steps Housing and Services Goodwill Industries of Greater Cleveland & East Central Ohio, Inc. Greater Cleveland Food Bank Hattie Larlham Foundation Healthnetwork Foundation HELP Foundation, Inc. Hopewell Hunger Network of Greater Cleveland Lake County Council on Aging Lake Humane Society Lake-Geauga Habitat for Humanity Lesbian, Gay, Bisexual, and Transgender Community Center of Greater Cleveland Lifebanc Lifeline, Inc.

Linking Employment, Abilities and Potential (LEAP) Long Term Care Ombudsman Lutheran Metropolitan Ministry Magnolia Clubhouse Make-A-Wish Foundation of Ohio, Kentucky and Indiana MedWish International Merrick House Milestones Autism Resources NAMI Greater Cleveland National Accreditation Council for Blind and Low Vision Services (NACBLVS) New Avenues to Independence New Directions North Coast Community Homes Northeast Ohio Neighborhood Health Services PeopleBeatingCancer Phillis Wheatley Association of Cleveland Planned Parenthood of Greater Ohio Prayers From Maria Foundation Ravenwood Mental Health Center Recovery Resources Red Tulip Project of Geauga Ronald McDonald House of Cleveland Scarborough House, Inc. Shoes and Clothes for Kids Stella Maris Stewart’s Caring Place The Center for Community Solutions The Centers for Families and Children The Lakewood Foundation The Ohio Affiliate of Prevent Blindness The Salvation Army – Greater Cleveland Area Services The Up Side of Downs United Way Services of Geauga County Ursuline Piazza Volunteers of America Greater Ohio Womankind, Inc. WomenSafe, Inc. Zonta Club of Cleveland

HISTORY & PRESERVATION Bedford Historical Society Canalway Partners Cleveland Grays Armory Museum East Cleveland Township Cemetery Foundation Geauga County Historical Society Intermuseum Conservation Association Lake County Historical Society Siegel & Shuster Society The Cuyahoga Valley Scenic Railroad The Lakewood Historical Society Western Reserve Historical Society

NEIGHBORHOODS, COMMUNITY & ECONOMIC DEVELOPMENT Bay Village Foundation Bellaire-Puritas Development Corporation Burton-Middlefield Rotary Club Cleveland Metroparks Cuyahoga Metropolitan Housing Authority

Detroit Shoreway Community Development Organization Downtown Cleveland Alliance Fairfax Renaissance Development Corporation Famicos Foundation Foundation for Geauga Parks Greater Cleveland Sports Commission Historic Gateway Neighborhood JumpStart Inc. LakewoodAlive League of Women Voters of Greater Cleveland MidTown Cleveland Painesville Community Improvement Corporation Princeton Alumni Association Northern Ohio Project Hope for the Homeless Tremont West Development Corporation Union Miles Development Corporation University Circle, Inc. Western Reserve Junior Service League Western Reserve Land Conservancy Westlake Porter Public Library Foundation

ENVIRONMENT & RECREATION Cleveland Championship 2000 Conservancy for Cuyahoga Valley National Park Green Ribbon Coalition Ohio Environmental Council The Great Geauga County Fair Foundation

RELIGION Antioch Baptist Church Bethany Baptist Church Building Hope in the City Chaplain Partnership Cleveland Church of Christ Citadel of Hope Ministries East View United Church of Christ Faith Cumberland Presbyterian Church in America Forest Hill Presbyterian Church Lee Memorial Endowment Incorporated Olivet Institutional Baptist Church Saint James A.M.E. Church St. Paul AME Church The Word Church

WORKFORCE DEVELOPMENT Cleveland Sight Center Dress for Success Forum for Volunteer Administrators Geauga Growth Partnership NewBridge Cleveland Center for Arts & Technology United Black Fund of Greater Cleveland, Inc. Vocational Guidance Services

YOUTH Aiki Extensions, Inc. First Tee of Cleveland Ginn Foundation Girl Scouts of North East Ohio Youth Challenge

To learn more about giving through the Cleveland Foundation, please call 216-685-2006.

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Cleveland State’s new AD off to a ‘fast’ start By Kevin Kleps kkleps@crain.com @KevinKleps

It was Scott Garrett’s first week as the director of athletics at Cleveland State University. He had already attended an alumni event, and his to-do list seemed almost as long as the Vikings’ NCAA tournament drought in men’s basketball. One question — how does he prioritize everything he needs to do? — brought a big smile to the 38-yearold’s face, and a telling answer. “I haven’t totally figured that one out yet,” Garrett said. “That, probably to me right now, is going to be one of the biggest challenges. You can’t get everything done as fast as you want to get it done.” Garrett, who had spent the previous nine years in revenue- and fan-focused roles at Kansas State University, was named CSU’s director of athletics on April 8. Two weeks later, he was already in meetings and was developing a plan for season-ticket renewals in basketball. Garrett’s urgent approach begins with a men’s basketball program that is a combined 40-89 the last four seasons. In 2018-19, the Vikings’ average attendance of 1,115 was the lowest in the 28year history of the Wolstein Center and the worst for the program since at least 1977 — the earliest year for which the NCAA has attendance records. “We have a thorough plan of how we’re going to improve that this year,”

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Garrett said. “We can’t have another season where we’ve got however-many folks have been in the building. We’ve gotta show progress. There can’t be any excuses of why we didn’t deliver that.” The plan, the new AD said, includes improvements in marketing, community outreach, fan experience and hospitality. And yes, the oncourt product has to get better, too. “Our staff is going to work our tail off to get as many people as we can in the building, and that path needs to align with the competitiveness path so we can really sustain that type of interest in our program,” Garrett said. Garrett’s primary focuses at Kansas State — revenue generation, marketing and the fan experience — are of critical important to a CSU athletic department that had 86% of its $13.7 million budget paid by student fees and school funds in 2017-18. CSU athletics brought in $426,440 in contributions in 2017-18. That total was down $178,970 from the previous year. The Vikings’ $181,467 in 2017-18 ticket sales marked a decrease of nearly $274,000 since the ’11-12 school year. That’s a sharp contrast from Kansas State, which last July announced that it had received a record $30.9 million in donations. The Wildcats’ $86.9 million budget in 2016-17, according to USA Today, was, with the exception of $450,000 in student fees, funded entirely by revenues and contributions. And while CSU, a midmajor Divi-

Scott Garrett file Age: 38 Base salary: $185,000 From: Channahon, Ill. Alma maters: Illinois State University (bachelor’s degree, 2002) and Indiana University (master’s degree, 2003) Previous stops: JJExecutive associate athletics director for external operations and chief revenue officer, Kansas State University, 2010-19 (promoted in 2017) JJAssistant

athletic director, Wichita State University, 2008-10

JJDirector

of sales and ticket operations, University of Illinois at Chicago, 2003-08 (promoted in 2004)

sion I university that competes in the Indianapolis-based Horizon League, is never going to be on the same financial level of a Power 5 school such as Kansas State, the Vikings should at least go toe-to-toe with their conference foes, Garrett said. “The great thing about this is there’s so much potential,” the Channahon, Ill., native said. “Where we’re at from a revenue perspective is really far behind from a peer standpoint, and being able to come in and with experience have a goal of pushing that, I really do think there’s a roadmap to do that.”

‘A perfect hire’ Garrett has known he wanted to be an AD since he was an undergrad at Illinois State University. Mentors at the time recommended that he pur-

sue a master’s degree, which, once he completed his studies at Indiana University, led to a role in ticket sales at the University of Illinois at Chicago. Almost 16 years after getting his start in the Horizon League, Garrett is in the AD chair. It’s a role for which he is perfectly suited, said Wake Forest University director of athletics John Currie, who was Garrett’s boss for seven of the latter’s nine years at Kansas State. “It’s a perfect hire,” said Currie, who was the AD at Kansas State from 2009-17. “Scott is one of the smartest, hardest-working, most creative people I’ve ever been associated with.” Garrett said he’s heard plenty about the difficulties that await, but his view is quite different. “A number of people have asked or commented that, boy, you’ve got your hands full, you’ve got a lot to

do,” he said. “I’ve looked at it way more optimistically than that. That’s what I’m trying to instill, from a culture standpoint, in the department is how do we look at the opportunities and not the challenges? I think there’s a tremendous opportunity for growth.” Among his more immediate decisions are deciding on head coaches for the men’s soccer and swimming and diving programs (there are interim coaches in both roles), as well as filling two key positions on his staff. One likely will focus on internal duties and student services, Garrett said, and the other will be a role that specializes in fundraising, marketing and ticket sales. CSU’s “somewhat dormant” Viking Club — the athletic department’s annual giving program — will get some extra attention, and there’s “room to grow” in sponsorships, the new AD said. Any large gains in revenue likely will be driven by men’s basketball, which last played in the NCAA tournament in 2009. But Garrett himself will be out promoting the CSU brand — an expectation that university president Harlan Sands made clear was a requirement during the search process. Prioritizing everything he wants to accomplish might be something Garrett hasn’t conquered, but he has no such difficulty deciding on the pace at which he will dive into the job for which he’s long been planning. “We’re going to move fast,” he said. “I don’t like to wait.”

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Steiner + Associates, the Columbus-based real estate development firm of famed real estate developer Yaromir Steiner, is part of a team proposing to redevelop the tree-covered, 65-acre Beech Brook campus in Pepper Pike as a mixed-use project — if they can win city approvals to do so. Beech Brook, a nonprofit which provides behavioral health services for children and their families, has put the property into play by putting it under contract to Axiom Development Group of Beachwood, according to Tom Royer, Beech Brook president and CEO. He said in a Thursday, May 2, phone interview that Beech Brook has about 60 of its 180 staffers at that site, and many of them go to other locations during the day. It hopes to use the sale proceeds to consolidate in a smaller office and shed the overhead of the sprawling site and buildings built from the 1920s to the ’70s. Axiom is a startup real estate development company formed by attorneys Bryan Stone and Stephen Bittence, who have real estate experience between them. The company is starting to excavate at 41-home site in nearby Moreland Hills as its first joint venture. Steiner became involved in the project in a very 21st-century way. Stone said that he did an internship with Steiner before completing his law degree in 2012 at Ohio State University in Columbus and remained in contact with the company and its founder. “Yaromir and his team do towncenter development better than anyone I know,” Stone said, referring to the concept of open-air shopping centers intermixed with residential and office components around a traditional city center. “Ever since, I’ve been looking for opportunities to partner with them. I thought this would pique their interest.” While Steiner + Associates is best known as a co-developer of the massive Easton Town Center in Columbus, Stone said what’s envisioned for Beech Brook is a small neighborhood center that would be part of a larger

A group of developers is pursuing redevelopment of nonprofit Beech Brook’s sprawling Pepper Pike campus. (Contributed photo)

project with apartments, offices and single-family homes. Of late, Steiner + Associates has pursued smaller infill projects in urban areas. Steiner also does leasing for Legacy Village in Lyndhurst, so it knows the eastern suburbs firsthand. However, securing a rezoning for a location such as Beech Brook is no easy undertaking, as the community has referendum zoning. The sprawling Beech Brook campus, a former orphanage, has its entrance on a residential stretch of Lander and is across the street from Beechmont Country Club. Beech Brook is currently zoned institutional, so only another institutional and nonprofit user could develop it without a zoning change. Pepper Pike is also a community used to dealing with big-league developers and playing its cards so it gets what it wants. Bill Sanderson, a residential land and green development expert now based in Covington, Ky., who formerly worked for Forest City, noted Pepper Pike’s motto used to be “Where the city meets the country.” “It’s not as much on the edge of the city as it used to be,” he said, adding that he sees the possibility of making a case for mixed-use development on the site because Pepper Pike, like most of Cleveland’s eastern suburbs, “doesn’t have a real downtowner neighborhood.” “There is a high hurdle here on many levels,” Sanderson said. “You

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have to have a plan that you can communicate that people will like and you have a reasonable confidence that you can execute it. Then, will the city give you conditions that will allow you to execute on your plan in a way that will be economically viable?” The tack that Axiom has so far taken is to discuss the property generally with City Council at its April 24 meeting. Steve Bittence, a partner in Axiom, said in a Thursday, May 2, interview that Axiom did not provide specifics earlier because “our desire is to have a true collaboration. It’s not, ‘We’re a developer. Here are our ideas.’ ” Bittence said Axiom hopes to prepare a plan that helps with the city’s traffic issues and provides additional tax support for the community. The group plans to retain Wiley Creek, which bisects the property, as an amenity for the area, envisioning it as a green space with hiking trails. Axiom also proposes to make the spine of the project a street that would stretch from Lander Road to Chagrin Boulevard near Lander Circle. However, Scott Newell, a Pepper Pike councilman, said he and his colleagues hope to see more detail about the plans to form an opinion. The developers have said they hope to ready a proposal in time for the November ballot, which would require the City Council and Planning Commission to ready the proposed zoning, approve it and get it on the ballot by summer’s end. “We know that is a big ask,” Bittence said. On that proposed schedule, Pepper Pike Mayor Richard Bain, in a Friday, May 3 interview, said, “Time will tell. We want to do what we can to work with (the developers), but a lot needs to be accomplished. The reality is that the property will be transitioned. It’s more important that we do it right rather than do it fast.” Yaromir Steiner did not return three phone calls and an email from Crain’s Cleveland Business by noon on Friday, May 3. However, he personally appeared at the Pepper Pike meeting with Stone and Bittence and can be heard on the audio of the meeting on the city’s website. Steiner said he hopes to make the project suit the scale of the community and the public’s changing tastes.

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CRAIN’S CLEVELAND BUSINESS

McDonald Hopkins creates litigation finance group Litigation finance industry survey

By Jeremy Nobile

357 practicing lawyers from 38 cities were asked what they think will drive future growth of the litigation finance industry.

jnobile@crain.com @JeremyNobile

Claims by underfunded plaintiffs Claims by well-funded corporate plaintiffs seeking off-balance sheet financing Portfolio financing for law firms Portfolio financing for corporations Defense-side funding Other

10%

Source: Lake Whillans 2019 Litigation Finance Survey

20%

30%

40%

Crain’s graphic

Cleveland-based McDonald Hopkins sees so much potential in the business of third-party financing of lawsuits that it's building its latest practice around it. As that sector sees explosive growth, expect other law firms to jump on the trend. Many firms may offer to help clients connect with finance litigation shops to fund them or their cases if asked about it, so that’s not entirely novel. But McDonald appears to be one of the first in this market to advertise that work as a practice. Services could range from helping set

Giszczak

Carmel

the deal terms between an investor and client to due diligence for the investors vetting cases to bankroll. Getting into that space now is how the firm aims to capitalize on a business featuring an area of investing that has potential for outsized returns compared to financial markets, an area that 77% of respondents surveyed for the 2019 Litigation Finance

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Survey Report from Lake Whillans (one of the several dozen litigation finance shops in the U.S.) and Above the Law said will only continue to grow either gradually or significantly in the coming years. “There’s more litigation in the U.S. than anywhere. And there’s more money in the U.S. than anywhere, and more free capital to invest. So you’re basically getting a demand and supply increase at the same time,” said Marc Carmel, co-chair of McDonald’s litigation group, who joined the firm last fall from Longford Capital Management, a litigation finance shop based in Chicago. “In general, the momentum is in favor of more money entering the space and more lawyers becoming more comfortable with it.” Money may equate to comfort in this situation. To gauge the significance of that industry, consider Burford Capital, which bills itself as the global leader in litigation finance with principal offices in New York, Chicago and London. The firm reported record earnings in 2018, with an investment portfolio that rose to an 85% return on invested capital. In a statement on earnings in March, Burford CEO Christopher Bogart reported that the firm had committed $2.6 billion to investments in the last two years: “more than twice its lifetime cumulative commitment level prior to that time.” “I think it’s probably a good bet other firms are going to offer similar services in the future,” said John Sahl, director of The Joseph G. Miller and William C. Becker Center for Professional Responsibility at The University of Akron School of Law. “It is definitely a growing business.” Litigation financing could apply to any scenario where a third party is funding someone’s case. It could enable a person or entity to access the legal system when they otherwise might not be able to afford it, as in the case of a small business taking on a large corporation for patent infringement. But the biggest returns will naturally come with bigger, more complex and more drawn-out lawsuits. Tech billionaire Peter Thiel, who also has a family office in Thiel Capital, became a litigation investor as he bankrolled pro wrestler Hulk Hogan’s high-profile invasion-of-privacy lawsuit against now-defunct Gawker Media, something Thiel’s lawyers eventually said was, in part, financially motivated. Litigation finance shops like Burford, Longford or Lake Whillans will be almost exclusively interested in those larger commercial cases. The fact there are still just a relative handful of those shops in the country, and so many cases to consider, means those investment firms can be quite discriminating in the companies and lawsuits they elect to support. Carmel indicated that shops tend to turn down more than 90% of the cases they review. Most cases that get backed by investment firms tend to fall within a broad range of price tags, between $500,000 to $5 million on average, he said. The cases are almost always done on a nonrecourse basis, so the investors get nothing unless the case is won or settled. There’s no standard for underwriting those investments either, and it’s nearly impossible to generalize what the returns could look like in any given case because each is unique and the terms of repayment could vary. SEE LITIGATION, PAGE 8

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CRAIN’S CLEVELAND BUSINESS

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Retiring Gershen looks back on busy decade By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty

Jay A. Gershen was ready to retire when he was asked to apply for the role of president of what was then called NEOUCOM. He was working as the vice chancellor for external affairs at the University of Colorado Denver and had his retirement letter written. When a search firm called on behalf of NEOUCOM, he politely turned them down — twice. On the third call, he agreed to an interview, thinking he could combine it with a visit to his daughter at Miami University. Turns out, Gershen fell in love with NEOUCOM and its people and took the job. That was a lucky decision for what’s now called the Northeast Ohio Medical University (NEOMED). Gershen officially became president of the Rootstown university in January 2010. He soon began making changes. The foundation for the transformation had started before Gershen took on the role of president, with the state appointing an independent board, instead of one made up of the presidents and boards of the university’s partner schools. But in the years since Gershen arrived, the university has simplified its name, going from the Northeastern Ohio Universities Colleges of Medicine and Pharmacy to the Northeast Ohio Medical University. It greatly added to its campus. It completed a fundraising campaign and estab-

lished the REDIzone to encourage research commercialization. It’s put more of a focus on engaging with the community and increasing diversity. Gershen “We stand on the shoulders of those who come before us,” Gershen said. Now, Gershen plans to retire for real on Sept. 30. Gershen has “elevated” NEOMED’s reputation in the region, the state and beyond, said Robert Klonk, board chair at NEOMED and CEO of the Oswald Cos. Gershen understands the role of a public university, but also the relationship the university needs to have with the private and civic communities, Klonk added. As president, he had a big vision for NEOMED and has been able to bring together the communities the university serves, the institutions it partners with and the staff, faculty and students to make it happen. In his desk, Gershen has a laminated piece of paper outlining 11 challenges he saw facing NEOMED, written the month after he started. The list included: JJThe university’s limited participation in academic health center or public university conversations JJThe state’s unfunded mandate to add Cleveland State University as a partner institution

JJAging

campus facilities

JJLack of a consistent system for staff

merit increases JJLow name recognition Those challenges, as well as the others on Gershen’s list, have since been addressed. Take, for example, the challenge he noted about the university’s status as a commuter school with students’ “mixed loyalties.” Today, the university has its own student housing. “We went from a commuter school to a residential university,” Gershen said. But there are still some challenges, such as what had been comparatively low faculty and staff salaries, where Gershen sees improvement but also more work to do. He also feels that way about institutional diversity at NEOMED. Diversity has been an important topic for Gershen in his time at NEOMED. As a public institution, the university needs to serve all of its constituents. Having a more diverse physician base could create more trust among patients. Gershen said research has shown that individuals “gravitate” to providers who are similar to them in terms of race, religion and background. Working to serve underrepresented communities has long been part of Gershen’s career. At UCLA, where he earned a doctorate in education and worked for more than 20 years, he put in time at the mobile dental clinic that served the children of migrant farm workers; at the University of Colorado Health Sciences Center,

he worked to help fund a telehealth program for Native Americans. Now, in Northeast Ohio, Gershen has brought the region’s metropolitan chambers of commerce together at NEOMED to develop a regional business group focused on diversity and inclusion. That type of community involvement has been emblematic of Gershen’s presidency. For example, when it came time to expand the campus, NEOMED made a concentrated effort to include the community’s needs — not just the needs of its students, faculty and staff — in its facilities. “We thought, what would it be like to bring the community in?” Gershen said. “What if we dismantled the ivory tower, dismantled the silos and let the community participate in the university?” A public-private partnership model helped the university complete the project without state capital dollars, but it also brought more amenities to campus. Today, NEOMED’s campus features a health and wellness center that’s open to the public, a STEM+M high school, a clinical practice and a pharmacy. This approach benefits the community, giving it more tangible ways to make use of the university, but it also benefits the university itself. Gershen said he thinks the “positive inertia” from welcoming the community at NEOMED led to the university’s recent success in completing a $44 million fundraising campaign. Gershen said the previous campaign, before he arrived, was for $4 million.

Gershen isn’t from Northeast Ohio, but he seems to make wherever he is home, embracing the area’s challenges and opportunities, said Team NEO CEO Bill Koehler. “He is a strong advocate for the power of regional thinking and collaboration,” Koehler said. Those who have worked with Gershen spoke of his collaborative nature, his vision for the university and his tendency to give freely of his time. Youngstown State University president Jim Tressel said it was obvious that “collaboration was always first and foremost” for Gershen. It wasn’t just that schools like Youngstown State send students to NEOMED. He was always interested in higher education issues at large and in ways to make the student experience better, Tressel said. As chairman of the Inter-University Council of Ohio’s Presidents’ Council, a statewide role he held this year, Gershen has been an advocate for higher education and a “consensus-builder,” said University of Akron interim president John Green. The state’s institutions have common interests, but they also compete with one another for students and funding. The group was in transition when Gershen took on the leadership role, with presidents preparing to retire, some just getting started and others, like Green, serving in the role on an interim basis. “To get the group to work together and talk through the differences and figure out what our common goals are is a difficult task,” Green said. “And Jay did just an excellent job.”

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CRAIN’S CLEVELAND BUSINESS

MENARDS

LITIGATION

The lighting fixture display alone consists of 2,000 items, with in-stock items on the ground floor and items available by special order on part of a mezzanine circling three-quarters of the store. The mezzanine in the lighting section also contains couches and chairs — also available for sale — where Franzen said customers are welcome to take a break. In other areas, behind large walls that also serve as signs identifying departments, the mezzanine also serves as extra storage for larger items. The drive-in lumber store allows customers to load boards directly into their truck or car after paying for it. There’s also a separate online and heavy-purchase pickup area. There is a department to order millwork and wood trusses — triangular supports for angled roofs — as well as engineered wood beams that can be made to order and shipped in from one of seven production centers throughout the regional Eau Clair, Wis.-based company’s service area. “We’re heavy on displays,” Franzen said, to help customers learn how to build things. Menards also carries its own line of customizable Klearvue Cabinets, which can be put together from standard components in a variety of finishes (think Ikea-style assembly). The store includes a design center that allows it to teach customers how to build them and get help in ordering. The wood trusses, cabinets and even steel roofs are among multiple items that Menards produces itself. Burt P. Flickinger, managing director of retail consultancy Strategy Resource Group of New York City, said Menards is distinguished by its vertical integration, or producing products that it also sells. “Some may say costs are too much to produce these items in the U.S.,” Flickinger said, but there is a cost case to be made for

A riskier case means potentially higher returns, and vice versa. Financing could also work as a loan for covering operating costs for a company while they are in litigation, versus being directly applied to the specific legal costs of a case. That said, Carmel said investors are looking for returns of 100% per year on their investments. Most prefer cases projected to be resolved in approximately three years. Good returns in a successful case tend to fall in the range of doubling to quintupling an investment over three to four years. Realizing those returns are uncorrelated to the market is a driving reason more money is flowing to these litigation finance funds. “Obviously, not everybody is doing better than the market,” said Chris Hagale, a Columbus-based managing director with Lake Whillans. “But people have found in some situations that litigation funding is providing attractive returns relative to other investments. “But I also think people in the U.S., until recently, they didn’t think of it as a tool in their tool belts,” he added. Jim Giszczak, co-chair of the new practice alongside Carmel and chair of McDonald’s litigation department, is largely responding to market demands. “We are good at finding creative solutions to problems, and we found this is an issue we’d identified over the years with various clients,” Giszczak said. “Given Marc’s background, it gave us the opportunity to put a group together to find creative ways to help our clients.” An ethical criticism of litigation funding is whether the apparent proliferation of capital targeting cases could lead to frivolous or unnecessary lawsuits since a client receiving the funding won’t have their own resources tied up in a case. Sahl said while that may be a concern, he emphasized the various rules and ethical guidelines in place to prevent frivolous cases and the ability for a third-party funder to have any actual involvement with lawyers or a case outcome. A funder might want to see a case drawn out instead of settled because of the potential for more money, but abiding by that motivation would be a breach of ethics. Those concerns are in mind, said Carmel, but not really of concern.

CONTINUED FROM PAGE 1

CONTINUED FROM PAGE 6

Menards has a drive-through lumber yard, where customers who have bought wood can select boards and directly load them up, at its store in Brooklyn. (Stan Bullard)

making things locally and shipping them shorter distances. Franzen sees it more simply. “This gives us more control over quality,” he said while demonstrating how the rudiments of a kitchen cabinet may also be adapted to produce an entertainment center or a bedstead. The Brooklyn store joins a Menards location that opened last July in Cuyahoga Falls, an Avon store that opened earlier this spring and a Mentor store that will open in late summer. Menards opened the Brooklyn store because of its central location to serve a densely populated area, Franzen said, and to “serve people who are hungry for what we have to offer.” Menard spokesman Jeff Abbott in Wisconsin would not speculate how many stores the company ultimately may add here, a market that has little population growth and is already home to plenty of places to buy hardware and food. Flickinger said it’s a case of a regional chain known for offering low

prices expanding its footprint. He added that Menards will most likely take market share from the national DIY chains in the market, Home Depot and Lowe’s. There are currently 300 Menards stores. Flickinger added that lumber yards and other local suppliers serving contractors and home builders are so specialized and customer-focused that Menards, even with very competitive pricing, may have little effect on them. Menards continues to invest in sales and service to gain market share as a family-owned company, Flickinger said, while national DIY shops are publicly traded and have had to cut expenses to meet sales and dividend expectations. Asked where Menards could be faulted, Flickinger said he believes it is in its measured growth, while national DIY retailers are at this time adding few new stores. However, Menards clearly picks its sites with a rare patience. For the Brookpark Road store, the company shelled out

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$10.4 million to buy the empty Brooklyn Super Kmart four years ago. Even with finding and readying for development multiple locations in the region, that was a long hold for a retailer before setting up shop. For some, the expansion can’t come soon enough. Sherry Swirynsky, a Brook Park resident who was on her way into Menards on Wednesday, May 1, shook her arms over her head in excitement over being able to go to one of the chain’s stores close to home. “It’s flabbergasting,” she said, “in terms of the selection and the quality. Just look at what’s here. We like going to Menards to see what they have. We discovered the Sandusky store because we keep our boat at Cedar Point. We’ve been going there for five years.” In the past, she’s bought general merchandise, patio furniture and floor coverings in the Sandusky store. Another shopper was overheard in the garden center saying, “What are these doing here? That’s marine store stuff.” The object of his observation was a box of plastic fenders that protect docked boats. Although Menards has an app with a map of the store for smartphones and many of its lines are available for online purchase, it also has a downhome feel to it. That’s epitomized by simple postage-paid orange sheets of paper at the entrance that nondigital natives can use to mail in customer comments the old-fashioned way.

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M AY 6 - 12 , 2 019

PA G E 9

Watch WARN notices for signs of recession By Jay Miller jmiller@crain.com @millerjh

Federally required notices of large layoffs in Northeast Ohio spiked in 2018, a trend that continued into the first quarter of 2019 even though the announcements declined statewide and the number of people employed in the state and the region continued to grow. Since 1988, the federal Worker Adjustment and Retraining Notification, or WARN, Act has required companies that have 100 or more full-time workers at one location to notify a state jobs agency 60 days in advance when 50 or more workers will lose their jobs at a plant or office. Layoffs are a normal part of doing business, so this may be only the slightest of tremors in the labor market. But history tells Vince Adamus, vice president of business and real estate development at the Greater Cleveland Partnership, that it’s a factor to be watched carefully. What worries Adamus, who has worked in economic development for two decades, is what happened to WARN notices at the start of the Great Recession. “That’s when we had the last spike,” he said. “We had a spike early in the (economic) cycle and by 2010 the (WARN notice) numbers were back down.” In a spreadsheet he regularly updates, Adamus recorded the filing of 19 WARN notices by Greater Cleveland companies in 2018, which led to the loss of 1,371 jobs. In the first quarter of 2019, Adamus added 10 notices, affecting 803 jobs to his spreadsheet. Statewide, 68 companies filed WARN notices in 2018, according to an email from Bret Crow, spokesman for the Ohio Department of Jobs and Family Services (ODJFS), the state agency that receives the notices and tracks state employment. The closings cost 14,192 jobs. That is down from 96 closings that cost 11,214 jobs in 2017, according to ODJFS data. The number of WARN notices filed by Greater Cleveland companies peaked in 2008, when 21 notices were filed, reporting the loss of 1,914 jobs, according to Adamus’ records. Two years later the numbers dropped to eight notices filed and 1,115 jobs lost. Unemployment in the Cleveland metro averaged 4.9% in 2006. It hit 9.4% in June 2009 and didn’t settle back below 5% until 2015, according to ODJFS data. Unemployment in the metro in March 2019 was 4.4%. So do the WARN notice numbers mean a recession is on the way? Adamus isn’t in the prognostication business, though talk of an impending recession is gathering steam in the investment community. (GDP numbers released Friday, April 26, showing the economy growing at a 3.2% annual pace might ease those concerns, though.) Adamus tracks the notices because GCP tries to help the companies and their workers find new jobs, sometimes holding company jobs fairs before a closing occurs. The largest Cleveland-area layoff filed with the state of Ohio in 2018 came in May. U.S. Bank said it would lay off 260 people in closing its Bedford mortgage office when its lease expired in the fall and the work was sent to other bank offices. So far in 2019, the largest reported layoff came when Youngstown-based Schwebel Baking Co. reported that 204 jobs would be lost when it closed its Solon

P009_CL_20190506.indd 9

baking and distribution center. The most significant layoff in the region, beyond the Cleveland metro area tracked by Adamus, was the winding down of the General Motors plant in Lordstown that began earlier this year. The GM WARN notice set the jobs lost at 1,607. The most jobs lost in a recent year came in 2013, when the region’s WARN notices tallied 3,000 jobs lost. That year, Bank of America closed a loan office that cost 1,050 people their jobs and the closing of Ben Venue Laboratories Inc., a biomedical company, left 1,150 people without jobs. Adamus said GCP held job fairs for the suddenly jobless workers at both companies. Because there was a demand for loan processors, he said most of the Bank of America workers

Cuyahoga County WARNs Gross WARN jobs notices lost

Gross WARN jobs notices lost

’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10

’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

14 2,560 12 1,649 13 2,390 14 3,993 14 2,133 21 1,914 17 3,817 8 1,115

8 1,521 14 1,923 11 3,000 13 1,518 12 1,519 14 1,316 14 1,374 19 1,371

found work. But the skills of the workers at Ben Venue, which manufactured sterile injectable drugs, were much harder to transfer and GCP’s efforts were much less successful. When a WARN notice is filed by a

company in its service area, GCP responds. “I always call the company directly,” Adamus said, “and I ask, ‘Is there anything we can do to help?’ But the reality is that by the time the company files a notice it’s usually too late. But it doesn’t hurt to try.” Those company decisions are usually kept close to the vest, and there is often little an outsider can do to influence such a decision. But Adamus likes to think that when a large company based in Northeast Ohio has to downsize and has choices about where the cuts can be made, its local connection will make it less likely that local employees will bear the brunt. “We love to have local control,” he said. But that’s not always the case.

Adamus recalled a large layoff at a plant operated by a local company a few years ago. He said the company had purchased a smaller company that had two out-of-state operations that performed the same function as the local operation. With the purchase giving the company three factories doing the same thing, Adamus hoped the one local operation would be saved. But in the end, the two other comparable locations won out because they were closer to customers, which meant reduced shipping costs. To keep up with companies, GCP’s business development staff visits 1,000 companies a year. “The more we get out, the more of a relationship we can build and the more likely a company is to share with us (the state of the business),” Adamus said.

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5/2/19 3:39 PM

PA G E 10

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CRAIN’S CLEVELAND BUSINESS

Opinion Personal View

Bailing out FE’s failed nukes harms Ohio’s economic future By Ned Hill

Editorial

DeWine at 100+ Ohio Gov. Mike DeWine passed the 100-days-in-office milestone late last month. By this well-established marker of a political executive’s progress, the new governor is doing pretty well. He has substantive and stylistic accomplishments already — offset, though, by unwelcome detours into social issues. We did not endorse DeWine last fall, but even in backing Democrat Richard Cordray for governor, we noted that both candidates had the intelligence and temperament to “approach the job with a seriousness of purpose that members of the Legislature would do well to follow.” DeWine, whose experience in Ohio political life includes serving as attorney general, lieutenant governor and a member of the state Legislature and the U.S. House and Senate, so far has lived up to that expectation. Members of both parties have given him high marks for working productively within the legislative process. While it might not be the highest bar to clear, they note he is easier to work with than his predecessor, John Kasich. That’s useful. For instance, in the face of a genuine need, DeWine did something no politician — especially a Republican — likes to do: He proposed a tax hike. In this case, an increase in Ohio’s gas tax to address a deficit in the state transportation budget. A DeWine-appointed commission that studied the issue recommended an 18-cent gas tax increase. The governor and legislative leaders ultimately settled on a lower figure, 10.5 cents, for regular gas, and 20 cents for diesel. It was the type of reasonable compromise we don’t see enough of anymore to address a problem without rancor. On the state budget, too, DeWine has been solid. His two-year, $69 billion budget proposal introduced in March was filled with centrist priorities that address important issues for Ohio’s future, including support for early-childhood education; increased resources to local communities to fight addiction, including greater treatment capacity and a new public health fund; and the protection of Lake Erie and other bodies of water through a new H2-Ohio Fund. The budget process still has a way to go, but DeWine is showing a welcome flexibil-

ity in setting priorities geared to helping all Ohioans. We’re not entirely surprised by, but still are disappointed in, the governor’s steps into hard-right politics. Most prominent: his signing of the Heartbeat Bill, which bans all abortions once a fetal heartbeat is detected and makes Ohio one of the most restrictive states in the nation. DeWine’s support for the anti-abortion bill was expected, as is a potentially expensive legal fight that could reach the U.S. Supreme Court. DeWine also has signaled support for a House bill that would end training and permit requirements for those 21 or older, without disqualifying convictions, who want to legally carry a concealed weapon in Ohio. Those requirements have been in place for 15 years. This isn’t a tough one: Anyone who wants to carry a concealed firearm should have training. Ohio has trouble attracting and retaining talented workers for knowledge industries. An agenda emphasizing abortion and guns doesn’t help.

To the future

“BW is not changing. We are a campus where all people are welcome, all are valued, all are given the same opportunities and all are supported.” That statement, from Baldwin Wallace University president Bob Helmer, is a clear articulation of values for the future as the university breaks with the past. BW’s board on April 26 voted to end the university’s affiliation with the United Methodist Church and operate as an independent university, a move that came in response to the church’s recent decision to strengthen prohibitions on samesex marriage and LGBTQ people in the clergy. It’s not easy, even when the cause is just, for big institutions to make meaningful change. BW sought input from all its constituents and laid down a marker for where it’s going. We wish the university the best in establishing new traditions.

Publisher and Editor: Elizabeth McIntyre (emcintyre@crain.com)

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FirstEnergy is pushing Ohio House Bill 6 to bail out its multibillion-dollar obligations to close and clean up its failing nuclear and coal-fired power plants. In addition to the bailout money, disguised as clean-air tax credits, H.B. 6 will result in higher electricity generating and capacity charges for all Ohioans, deter investment in electricity generation not controlled by Ohio’s investor-owned utilities (IOUs), lower the reliability of the state’s electric system (known as reserve capacity) and hurt economic development prospects. There is so much wrong with the bill that Hill legislative horse-trading on its minor provisions will not remove the harm. And there is so little known about FirstEnergy’s legal obligations on plant closing and cleanup, how the hedge funds that invested in FirstEnergy last year will benefit, and the rewards promised to FirstEnergy’s senior management for bringing home the pork that supporting or voting for H.B. 6 is irresponsible. Ohio’s Consumers Counsel and the Legislative Service Commission put the direct cost of the bill at $300 million a year. RunnerStone, an independent energy-efficiency consulting firm, estimates the direct cost at $310 million. But that is just the start. RunnerStone states that H.B. 6 will trigger additional new capacity charges amounting to $80 million per year or more. Another $88 million per year in profit currently received by the IOUs for energy-efficiency services will not be eliminated, as implied by the bill’s supporters. Instead, it becomes a new unearned revenue stream. H.B. 6 is a bailout without an end date. The charges will go on for as long as the nuclear plants operate. The real increase in electricity charges will be about a half-billion dollars a year (conservatively $468 million, plus the increased cost in electricity generation charges), which will be adjusted to offset the impact of inflation. The cost to electricity users is underestimated. H.B. 6 forces all of Ohio’s electricity users to pay for the bailout, not just those in FirstEnergy’s service territory. The bill orders residential customers to pay $2.50 a month, commercial businesses $20 a month, industrial customers that use fewer than 45 megawatts (MW) of electricity a year $250 a month, and large industrial users $2,500 a month. Most assume that “customer” means a residence or a business at a specific address, but in electricity-world, this is expensively incorrect. A customer is an account, and each account is an electric meter. If your business has multiple meters, multiply the bailout tax by the number of meters. For an eight-person manufacturing business with four electric meters and a $803 monthly bill, or an annual bill of $9,636, the proposed law will increase the total monthly bill to $1,785: (4 meters x $250 from the clean-air rider) + ($803 in existing charges) – (4 x $4.39 from the eliminated energy-efficiency rider). The annual bill nearly doubles to $21,420. The nearly $12,000 increase is a 122% jump. Companies in older buildings that have expanded over time are likely to have multiple meters. Those that metered specific locations or machines to track usage accurately will face much higher bills. SEE FIRSTENERGY, PAGE 11

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

5/2/19 4:33 PM

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Can the accounting be shifted back to a business at a single address instead of an account? No. The $300 million in annual “clean-air credits” was used to back into the promised monthly charges, spreading the cost over the number of meters. If customers were defined by address, rather than meter, then the pool of available credits would drop. Can the promised payment schedule be kept? No. The bill adjusts the $9.25-per-megawatt value of a clean-air credit for inflation. It does not change the amount that customers are forced to pay similarly. Over time, the gap between the payments made to the utility and the amount of money collected from users will grow. The classification of a nonresidential customer is also fuzzy. The bill states the classification depends on the business’s utility classification; however, utility classifications do not align with the bill’s terminology. How are large nonindustrial electricity-using businesses, such as grocery stores and back-office facilities, classified? If H.B. 6 passes, the cost of electricity generation will increase, the cost of reserve capacity will increase and reliability will diminish. This becomes clear once you understand how H.B. 6 will re-regulate and re-monopolize electricity generating markets in Ohio. JJNuclear-generating plants and utility-scale alternative-energy generation will be able to execute longterm, above-market-price power purchase agreements (PPA). They will be the first electrons used in the pool of power consumed. In a flat power market, these government-protected, first-in, high-priced electrons will cause lower-cost power to be kicked out of the pool. The result will be higher average generating charges than would be found in a competitive market. Keeping the most expensive power in the con-

sumption bundle and the cheapest power out is not accidental. It is intentional. JJFederal regulators are trying to protect the multistate generating and capacity markets from predatory behavior from state-subsidized power production. A rule supported by FirstEnergy would allow utilities to opt out of the multistate capacity market and generate or contract for electricity themselves. The result: profit-maximizing utility choice substituted for cost-minimizing customer choice. And higher power bills. JJOhio also will see an increase in special-interest petitions made to the PUCO by connected employers for “reasonable rates.” Electricity rates will decline to some negotiated level for certain businesses through an economic development and retention process run by the PUCO. The negotiated rates will be held as confidential business secrets. The negotiated savings will become expenses passed on to unconnected businesses and residential customers to pay. JJH.B. 6 also will discourage investment in efficient natural gas-fired, combined-cycle power plants. The bill helps ensure that Ohio’s abundant and clean sources of natural gas will be drilled, put into pipes and shipped out of state so the value that could have been added in Ohio will take place elsewhere. Using 5-6-2019 SVN ad.indd political power to affect the competitive organization of the power market increases investment risk for investors in new sources of power production. They are investing in lower-cost technologies to crowd out their expensive competitors. This is how capitalism works. As the Tennessee Valley Authority lowers its electricity rates in our competitor states to the south, Ohio is going in the other direction. If enacted, H.B. 6 will trade the economic future of Ohio to bail out a badly run company that made large campaign donations. It's crony capitalism and lemon socialism. Hill is a professor of economic development at the John Glenn College of Public Affairs at Ohio State University.

Cleveland needs to revamp its development-incentive policies

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Letters to the Editor

Crain’s call for a “Closer look” (April 29 — May 5, 2019) at the city of Cleveland’s development incentives is a timely response to the concerns raised by Ohio City residents about inequitable development (“When worlds collide” — in the same issue of Crain’s). Many Ohio City residents’ concerns about development, mine included, are not about what a private owner does with his or her own capital. They’re about how public dollars — through mechanisms such as property tax abatement, public loans that may or may not get repaid, and tax increment financing, among others — are given away. Who benefits from these public subsidies, and who doesn’t? What happens as a result of these decisions to spend limited public resources in this way, and what is neglected? Who in our neighborhood benefits from these decisions, and who is left out or pushed out as a result? My fondest hope is that Cleveland will consider not only changes to current policies but will introduce some new policies to promote equitable and inclusive development across the city. It’s well past time to reconsider the game of “whack-a-mole” that we’ve been playing around tax abatement. In the 29 years that I’ve lived in Cleveland, when one argument for tax abatement is refuted, another pops up to take its place. But it always comes down to developers wanting, and receiving, public subsidy, which in turn allows them to reach higher and higher price points in places like Ohio City. There are policy tools that create a level playing field for developers and help create neighborhoods that are affordable for all residents. Tools such as “circuit breaker” tax relief and inclusionary housing policies have been used successfully in other cities to help moderate-income folks stay in fast-rising neighborhoods, and to increase opportunities for affordable housing in private developments. Community land trusts, like the one being created in Hough and the existing one that

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protects several houses in Ohio City, can be expanded to assure that current residents across the city have a place in neighborhoods where they have invested their lives, far before those neighborhoods became trendy. These policies can be tailored on a neighborhood basis for cities like Cleveland with varied housing markets. Equitable, inclusive neighborhoods won’t be created by the market or by private developers, and they can’t be won by neighbors expressing their concerns at block clubs. It will take public policy shifts, and Cleveland’s analysis of current policy tools is a good start. I hope that Crain’s will continue to report on the progress of the city’s efforts. Margaret K. Misak President, Equitable Development Solutions LLC Cleveland Bill Merriman is a saint in Ohio City for his work at St. Patrick Church on Bridge Avenue. Real estate developers are neither saints nor sinners. They are for-profit businesses. They are not social service agencies. If Mr. Merriman and his three neighbors want to provide more “affordable housing” in Ohio City, they should take advantage of tax abatements and other incentives and build more “affordable housing.” I have lived in a tax-abated condo in Ohio City since 2004. I can assure you that I would not have bought in Ohio City without tax abatement, considering the condition of the neighborhood then. Tax abatement and other incentives can and do provide a useful benefit to developers, homeowners and the city alike. My tax abatement expires in August. I’m staying in Ohio City. Gregory S. Gacka Cleveland

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Sgt. Clean’s co-founder draws on Corps values Ex-Marine aims to change perceptions of the business by focusing on his team and the customer experience By Allison Carey clbfreelancer@crain.com

After the entrepreneurial spirit and a serious work ethic merged in 12-year-old Brian Krusz, it took fate, grit, eight years in the Marine Corps and a sudden layoff to lead the 38-year-old co-founder of Sgt. Clean’s Car Wash to the present day. When Krusz looks to the past, it’s his grandfather who comes to mind first. The tough-as-nails Elyria firefighter also owned a concession trailer. “It was ethnic, selling potato pancakes and cabbage and noodles. I worked on it in the summers at festivals around the state. It was the 14hour workdays that taught me that hard work was the only option.” Krusz also sold pop and candy on a street corner, fixed things up to sell at flea markets and had paper routes throughout the year with his best friend, Andrew Bendik Jr., who today is his business partner and co-found-

The caricature gracing the Sgt. Clean’s signs depicts co-owner Brian Krusz, who attributes much of his leadership ability to his years in the U.S. Marine Corps.

er of their growing car wash business. A lot happened between those working summers and today. When Krusz graduated from Elyria Catholic High School, his competitive spirit determined the path he took. At 17, he chose to join the U.S. Marine

Corps. “I was a go-getter, I was competitive in hockey and golf. I had the right mentality. I wanted to be the best, to win. I figured, if I’m going to join ... it’s the smallest of all of the branches of service, less than 1% of America’s population can be a Marine, it’s the hardest.” His reasoning made sense except, perhaps, to his mother, who preferred he go to college. “My best friend’s grandfather fought in the Korean War,” he recalled. “He told me stories and suggested that I could go to college at any age but I could only go through boot camp and graduate from the Marine Corps at a young age. I’ll have that title of United States Marine for the rest of my life.” During his eight years in the Marines, Krusz was stationed in San Diego; traveled to Japan, Korea and Guam; and spent time on both of America’s coasts. He was a bombbuilder, an aviation ordnance man. “My dad’s buddy called me and said he didn’t see any bomb-builder jobs

listed in the classifieds. He suggested I become a recruiter even though it was not a well-liked job — to learn sales, public speaking, patience, perseverance and determination. They trained me to run a business. After I transitioned out, I already had some college under my belt. I found work as an executive recruiter in the banking industry. “In 2008, the banking world went

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south and I was laid off,” he added. He sat in his car and decided he was not going home to his wife without a plan. He enrolled in the business school at Kent State University. At the same time, Bendik owned two beverage stores. The two of them partnered up, soon expanding to four stores. Krusz said he believes that knowledge is power, so while they had the beverage stores — which the pair have

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ENTREPRENEURSHIP

It might look as if this car is being washed in red-hot lava, but colorful lighting just adds to the fun of the experience at Sgt. Clean’s.

Brian Krusz is co-owner of Sgt. Clean’s Car Wash, with five locations in Northeast Ohio. (Photographs by Allison Carey for Crain’s)

since sold — he and Bendik went to several National Association of Convenience Stores conventions. “We met a gentleman who had car washes. We learned more and fell in love with the industry.” As for what caught his

attention, Krusz said, “I’m a people person. I love interacting and making people happy, and I saw that this industry did that. It made me happy. “I visited car washes throughout the Midwest. I kept a journal of pros and cons. Year to date, I’ve toured over 200 facilities. I took a lot of notes. I met some great people, including a Strongsville native who helped us acquire our first location in March 2013. It was a

distressed business that we thought we could change.” A customer contest helped them rename the place as Sgt. Clean’s (Krusz was an E6 Staff Sergeant when he left the Marines). Today, Krusz, a Strongsville resident, husband and father of two, says their goal is to change the face of the business. “Car washing has a negative stigma. When you hear car wash, people often think of dirty tunnels, grumpy employees, grunge, bad lighting, the worst. We’re changing that environment. We put our team members in uniform, we give them health benefits, a 401(k) program, have some salaried positions and we create an energetic, fun environment. We put time, energy and effort into our team. “I want our team to be happy to come to work and focus on the customer, not worry about how they’re going to pay bills if it rains and no

one gets a car wash. They get paid when they come to work. They might have to clean walls and bathrooms, but we try to make it fun. Our team member retention rate is about 85%.” Krusz noted that while car washing may appear to be an easy business, he guarantees it’s not. “The weather plays a role. Maintaining the equipment is a big factor. We put a lot of time into training,” he said. “We clean and pressure-wash the facility, do preventive and daily maintenance. We want the things touching your vehicle safe and clean. Some facilities don’t put in that much effort; we’ve seen it in the places we’ve taken over. We also think about the environment. All of our soap is ecofriendly and everything drains into a pit which then gets sucked out by Safety-Kleen, a waste-management company.”

+ +

Krusz also attributes their stability to their unlimited car wash program, which starts at $19.97 per month. “I’ve become a weather report watcher. If it rains, if a bird has its way with your car, you can get a wash. It pays for itself after two washes. Washing is the least expensive form of vehicle maintenance. Getting salt off of your car and keeping your sensors clean is crucial,” he said. “The plan is also good for our team: It brings residual money in on a regular basis so we can provide all of those benefits.” As far as growth and giving back, the company offers a 10% discount on monthly passes to veterans and gives 10% of those monthly pass sales to veterans organizations. “We do what we can, like donating free washes to Meals on Wheels just to say thanks to the volunteers. We encourage community involvement,” Krusz said. Today, Sgt. Clean’s has five locations in Strongsville, Westlake, Parma, Medina and Massillon and about 70 employees, with plans to grow. It was just named a 2019 Smart Culture Honoree through Smart Business Magazine. “It was very prideful to be ranked with companies like the Cleveland Clinic and Hyland Software,” said Krusz. He gets a little emotional when describing his views on being a veteran business owner. “I went to boot camp to achieve something, I went into car washing to change it and to provide for our team,” he said. “My reward isn’t stuff like a fancy car, it’s changing the lives of people. I sometimes wear holey socks to remind me of the struggles from boot camp, to the layoff, to the building of this business when there were times we had no money.”

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Legend Headwear sets its cap for success By Dan Angelo clbfreelancer@crain.com

Jake Miller stamps out leather patches to be sewn onto the front of some of his Legend Headwear caps. (Contributed photo)

Jake Miller started Legend Headwear as a creative extension to the family business. His parents’ 35-year-old Graffiti Caps is already a successful manufacturer of headwear, producing 10,000 caps daily for the commercial uniform market from its Carnegie Avenue plant. Legend makes custom-designed headwear to sell directly to consumers. “I wanted to help in some way, but what I’ve always been interested in was art, design and fashion,” explained the 28-year-old Shaker Heights native. “I

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wanted to create something a little more fashionable, a little more high-end. I wanted something that people could not only wear to work, but could wear out on the town, to the gym or wherever.” Results have been more than encouraging so far. Legend had estimated revenue of $100,000 in 2018 and is on pace to double that in 2019, according to Miller. “Legend doesn’t sell caps that Jake likes, it manufactures and sells caps the public enjoys,” said Miller’s father, Abe, who co-owns Graffiti Caps with his wife, Barb. ‘“What’s so extraordinary about what Jake is doing is he produces what the market wants and he can test it in a very cost-effective way.”

After years of working summers and holidays for his parents, Jake Miller finally signed on full-time at Graffiti Caps in 2016. The following February, he added to his workload by launching Legend Headwear. “It was really kind of an experiment at first,” he said. “We wanted to try retail and we weren’t sure what road to go down, whether it would be outdoor or athletic or casualwear. We started making a bunch of different samples and putting different fabrics together in different shapes to see what works, and then tested them out in various markets around the city.” If a design proves popular, such as the denim cap known as The Original, Miller ramps up production to fill demand. “The Original has the Cleveland area code and the letter ‘C’ below it. I love that hat and it really was our first cap that took off,” he said. “I’ve had Detroiters reach out to request their area code with a ‘D’ in the same color scheme. I’ve also had people from Chicago, Cincinnati and Dayton reach out for the same kind of thing. “What I really want people to realize is that the caps are made in Cleveland,” Miller added. “I want Clevelanders to be proud of wearing a product made in the city.” Legend Headwear has been known to show up as a pop-up shop at locations around the city and at flea markets. One of its first appearances was at a table set up inside TownHall, a health food restaurant on West 25th Street. Legend also is active on social media and sells from its online store at legendheadwear.com. Miller’s latest promotional addition is a former FedEx delivery van refurbished as a mobile showroom to give shoppers a chance to see and buy the hats inside. “I love every opportunity to take our product out and showcase it,” he said. “A big part of trying to start something is you have to put yourself out there, even it it’s a Monday night at a bar and you’re in the corner selling hats. It may not be that profitable, but I think its necessary to learn the market and have people see you.” Jake Miller works nearly 12-hour days attending to his responsibilities with Graffiti and its 70 employees, as well as designing and producing his Legend creations. He said his work ethic comes from his parents. “My father showed me what it takes to run a business,” he said. “He taught me that in order to make things work, you have to put in the time and effort, and if you don’t do that, you’re not going to get what you want.” “Barb contributed more to Jake than anyone else because she gave him the space to come in here and figure things out,” added Abe Miller. “We come from an entrepreneurial family. That was started in me by my grandparents and parents and has been shared with Jake. Even though he came into an existing business, on his own he saw an opportunity to create something new and to go after a market that we never considered and to re-engineer our factory to manufacture from scratch these more fashionable, one-of-a-kind caps.” Jake Miller said Legend’s success will never come at the expense of Graffiti Caps. “I’m still kind of feeling things out, but at the same time we have to do what’s best for the family business,” he said. “If I thought I was hurting that, I would not be doing this. But I really do see a future for the brand.”

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Q&A: Heather Roszczyk Innovation and entrepreneurship advocate, city of Akron

Since 2017, Heather Roszczyk’s role with the city of Akron has been to be the “voice of entrepreneurs within city hall.” She works as a convener and advocate, helping guide entrepreneurs to resources that are available to them. In short, she said, she works to “foster a culture where entrepreneurship is celebrated.” That’s important to Akron, which under Mayor Dan Horrigan has shifted to an economic development policy that has a strong focus on growing local business. The evidence of that shift comes in some of the city’s recent initiatives, including the transformation of its incubator into the Bounce Innovation Hub, organized meet-ups so entrepreneurs can learn from one another and Akron’s participation in eBay’s Retail Revival program, where the internet giant helped startup retailers market their products on its platform and offered support. Others are taking notice of Akron’s focus on entrepreneurship, too: City representatives in March attended the South by Southwest Conference in Austin, Texas, to talk about Retail Revival. Roszczyk shared her thoughts on the program and what communities can do to support entrepreneurship. — Sue Walton How much does entrepreneurship play into Akron’s economic development plan? Encouraging more startup activity is critical to Akron’s success. We already have a strong start: Akron has had 42 companies appear on the Inc. 5000 list in the last year, landing it in the top 40% of midsize metro areas. But we need to ensure those companies with high growth potential receive the targeted support they need, and we need to cultivate more of them. If

you look at job creation in the U.S. over the past 15 years, it has been fueled by companies that have been in business for five years or less. So entrepreneurship is a key component. It is also imperative that we continue to support these startups as they grow into midsize firms and beyond. What’s the most important thing a city/government can provide its entrepreneurs? Well, entrepreneurs would probably

say funding. While that’s certainly helpful, I believe that cultural leadership is most impactful. Akron has a mayor who clearly states that he “will not manage his own decline,” who personally meets with startups who raise significant amounts of capital, sets aside time in his schedule to publicly recognize growing companies and routinely asks them how he can help. That message of growth, when paired with targeted resources for the business community, is tremendously valuable. Earlier this year, eBay wrapped up its Retail Revival pilot program. Would you deem the program a success? Absolutely. Retail Revival participants have reached 15,000 customers in all 50 states and nearly 80 countries, demonstrating how powerful the

program was in enabling the sellers to extend their reach far beyond Akron’s borders. Nearly 10% of total revenue has been generated so far by international sales, which is revenue these businesses may not have seen without Retail Revival. A few of the participating businesses had dabbled on eBay prior to the program, and those businesses saw nearly an 86% year-over-year increase in eBay sales. Additionally, two of the businesses — 7th Floor Clothing and Dippity and Snark (previously Five Blessings) — opened brick-and-mortar locations by the end of the program. Speaking more broadly, the program was also a boon for Akron as a whole. Being chosen by eBay as the first city in the United States to host Retail Revival introduced a refreshing national narrative. What aspects of it were most helpful to local entrepreneurs? The education and assistance around exporting goods was very helpful. According to the Small

Business Administration, only 1% of small and midsize businesses export overseas. By contrast, 48% of Retail Revival participants have sold to at least one country outside the United States. The good news for local firms is that the Small Business Development Center can provide similar guidance to businesses that missed out on the eBay pilot. EBay also created some incredible promotional opportunities and assets for many of the participating sellers. What lessons did the city learn from the program in how to support its entrepreneurs? The program opened my eyes to the benefits of a public-private partnership like this. Historically, I’ve thought of PPPs in the context of planning and funding development. But Retail Revival was a great example of a very different and beneficial type of support. I would really love to explore what a similar partnership with one or more of our larger institutions here in Akron might look like.

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FlexFactor inspires next-gen entrepreneurs By Judy Stringer clbfreelancer@crain.com

Want to get a room full of seventh-graders fired up about entrepreneurship? Talk about what they know, said Matthew Poyle, program coordinator for NEOLaunchNET. “A lot of high school and middle school students want to be influencers or YouTubers or things of that type,” said Poyle, who currently uses the viral video of 12-year-old Mason Ramsey yodeling his way to internet fame — and landing a Nashville record label — to introduce teens and preteens to the idea that entrepre-

neurs are “not just older people.” “The message is: ‘You don’t have to wait. You can start thinking like an entrepreneur at any age,’ ” he said. NEOLaunchNET, funded by the Burton D. Morgan Foundation of Hudson, typically helps Lorain County Community College students, alumni and faculty start or grow businesses. Through the yearold Lorain County FlexFactor program, however, Poyle and his team have got their claws into a whole new generation of enterprising minds. FlexFactor was launched with 13 freshmen at Lorain County Community College’s Early College High School in the spring of 2018, accord-

ing to Deanna Hersko, who oversees the program at LCCC. It quickly expanded this school year to more than 650 students in six districts across the county. The five-week curriculum challenges student teams to work collaboratively to identify a real-world problem, conceptualize an advanced hardware device that addresses the issue and showcase their product by building a business model and pitching it to a panel of business and education representatives “Shark Tank”style. Projects have ranged from early oral cancer detection to athlete safety and performance monitoring, from stopgap medical care for wounded

soldiers to clean water access for inner-city residents. “The students are basically given free range,” Poyle said. “They need to come up with an idea that uses flexible hybrid electronic technology to solve a problem, but that is the only real constraint. “It’s really cool to see the kinds of products and ideas students come up with,” he added. "One of the things that has surprised me is how much they care about other people with the projects. I don’t think in seventh grade or as sophomore or freshman, I would have been as concerned with the well-being of the overall population as a lot of these kids are.”

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Hersko said NextFlex, an electronics innovation institute out of San Jose, created the FlexFactor format as an advanced manufacturing workforce development program. Most of the instruction is delivered to students in their schools, although there are two daylong field trips — one to visit an industry partner in the community and another to the host college. Students from Lorain County FlexFactor have toured Lincoln Electric, the HIMSS Innovation Center in downtown Cleveland, A.J. Rose Manufacturing Co., AgriNomix Inc. and Thogus Products Co., to name a few. In addition to tours, the businesses provide mentors to meet with student teams and give feedback on their projects. During their day at LCCC, students meet with faculty, engage in design thinking and prototyping workshops at the LCCC Campana Center for Ideation and Innovation and learn about career pathways, particularly in the school’s advanced manufacturing and technology programs. They attend Poyle’s entrepreneurship session, where he drills down into the specifics of how to create a business plan, articulate value proposition and make an effective pitch. Student teams are also coached on their project by representatives from NEOLaunchNET and the Ohio Small Business Development Center. “These students are expected to be the most entrepreneurial generation of all time,” Poyle said, “but even for those who don’t ultimately go into business for themselves, the skills are very translatable. How do you make a presentation? How do you grab an audience’s attention? How do you work as part of a team?” Beyond that, Hersko said, the program’s slant toward flexible electronics provides young people a unique glimpse into what a career in advanced manufacturing looks like today, so they can “see themselves in those jobs.” “I think what makes this very interesting is the connection to the industry and connection to the college. Not only can you come up with an idea, but your idea is designable. It can be manufactured. We help students connect those dots,” she said. Hersko credits much of the program’s early growth to that collaborative nature. Along with NEOLaunchNET, the Ohio Small Business Development Center and organizations that host student teams, she said the Lorain County Manufacturing Council has been instrumental in Lorain County FlexFactor’s launch and NASA has supplied professionals to sit on several of the pitch-day panels. Several additional school districts are expected to come on board for the program’s 2019-2020 iteration, including a few from the northwestern edge of Cuyahoga County. Hersko estimates the partnership may get the chance to encourage and inspire as many as 800 students during the coming school year, although it’s too early to predict exact enrollment. “It really is a unique program,” Poyle said, “in the way it combines the need to prepare students and help them to be well-versed in emerging technologies, but also the ability to think like an entrepreneur, give them that entrepreneurial mindset.”

5/2/19 2:01 PM

Content sponsored by

CELEBRATING 20 YEARS Cleveland Foundation Summer Internship Program empowers community leaders By JUDY STRINGER CRAIN’S CONTENT STUDIO-CLEVELAND

leveland Foundation Summer Internship alumni use words like “fantastic,” “extraordinary” and even “life-changing” to describe their experiences in the program. Recent intern Noni Thomas calls it “priceless.” “We’re not getting coffee for people,” said Thomas, a Cuyahoga Community College student and a participant in the 2018 Cleveland Foundation Summer Internship program during which she spent 11 weeks working with Tri-C’s Creative Arts Academy. “We’re actually doing the work, and we’re also being fostered as leaders in our communities.” The program – which is celebrating its 20th anniversary this summer – places undergraduate students and recent college grads into 11-week paid internships at nonprofit and public sector organizations across Cuyahoga, Lake and Geauga counties. Beyond the unique experience of seeing the inner workings of their host agency, interns also participate in and coordinate bi-weekly seminars that highlight the impact of other local social service and civic organizations and provide opportunities for networking and professional development. While many alumni credit their internship experience with lighting a path to their current professions, Pam George-Merrill, who helped establish the summer internship program in 1999, said organizations and businesses in Greater Cleveland are as much the beneficiaries as the students themselves. Past participants have gone on to take leadership positions at area nonprofits, such as the Greater Cleveland Partnership, the Cleveland Foundation and Esperanza Inc., as well as the city of Cleveland and businesses such as Hyland Software and Sherwin-Williams. “Some of the students that were in the program when I was working at the Cleveland Foundation have done really well; they’re out in the community doing great things,” said George-Merrill, director of foundation relations at John Carroll University. “I think this internship program laid the foundation for the work that they’re doing now.” That’s the case for local nonprofit leaders Victor Ruiz and Alesha Washington. Ruiz was a recent graduate of Baldwin Wallace University “with absolutely no professional experience,” he said, when he landed a Cleveland Foundation Summer Internship in the summer of 1999 with the Cleveland Metropolitan School District. “For me to get to understand the educational system in Cleveland and to understand about professional work was truly life-changing,” according to Ruiz. He went on to earn a master’s degree in education from Cleveland State University and he currently leads Esperanza Inc., Ohio’s only nonprofit focused on academic achievement among Hispanic students. Washington, vice president for government advocacy at the Greater Cleveland Partnership, said meeting a variety of area nonprofit executives during her participation in the 2005 internship program made her “the professional I am today, because it was those connections that helped propel my career path.” Similar stories come from more recent participants, like Thomas, who attributes her interest in arts management with her summer at

If you would describe the Cleveland Foundation Summer Internship program in one word, what would it be? “Extraordinary. The internship gives you a great professional network but it also really exposes you to Cleveland and kind of pulls you in, and then you start to see all the community has to offer for when you do go out into the professional world.” – Alison Black

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“Life-changing. I really had absolutely no idea about what I wanted to do. I just knew I wanted to help people and this really introduced me to the world of nonprofits.” – Victor Ruiz

“Priceless. I have a strong dance background, but I didn’t understand how to knit business, which is another passion of mine, and the arts together. When I got accepted into the internship program, and I started working (at Tri-C Creative Arts Academy), I was really able to connect all the missing pieces.” – Noni Thomas

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Tri-C’s Creative Arts Academy, and Alison Black, a Defiance native who decided during her 2012 internship with the Downtown Cleveland Alliance that she would make Cleveland her home. Cleveland Foundation program officer Stephanie Molnar, a former summer intern herself, believes the broad exposure to Greater Cleveland nonprofits and public sector organizations is one of the program’s best assets. “I don’t think many interns realize beforehand that they can fit into many of these positions and that there are a lot more positions available than they probably even knew about,” Molnar said. “By the end of the program, you recognize that regardless of what your major is or what your background or interests are, there is a place for you in these sectors.” Adrienne Fischer said even summer interns like her who have gone on to private sector jobs tend to attribute their professional success – at least in part – to lessons learned over the summer internships or contacts made among the growing network of participants. Fischer was part of the 2011 class and is currently an executive assistant in Ernst & Young’s human resource department. And more often than not, she said, being a part of that world leaves an imprint that compels many private sector alumni to give back through volunteer leadership and/or nonprofit board opportunities. “We still get to care about people and their well-being, just in a different capacity,” Fischer said.

SUMMER INTERNSHIP AT A GLANCE • October: Nonprofit and public sector organizations within Cuyahoga, Lake or Geauga counties are invited to apply to host a summer intern. • November-January: College juniors, college seniors or recent graduates are invited to apply to be an intern. Applicants must reside or attend school in Cuyahoga, Lake or Geauga counties. • February-early April: Interviews with top candidates are conducted. • Mid-April: Hiring decisions are made. • May-August: The 11-week professional experience for interns begins the last week of May and ends the second week of August. Learn more at www.ClevelandFoundation.org/Intern

This advertising-supported feature is produced by Crain’s Content Studio-Cleveland, the marketing storytelling arm of Crain’s Cleveland Business. The Crain’s Cleveland Business newsroom is not involved in creating Crain’s Content Studio content.

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CRAIN’S SPECIAL SECTION

Kristie Beck Title: CEO, Proformex, Cleveland Most recent education: Bachelor of science in supply chain management, Bowling Green State University

Kristie Beck specializes in scaling technology companies with more than $2 million in annual revenue through hypergrowth cycles. In less than a year, she identified product improvements at Proformex, such as enhancing reporting and analytics tools and building return-on-investment calculators for the policy management company, and grew its team from just five to 25 employees. Beck has been integral to the success of several companies. As vice president of operations and customer success at MacroPoint LLC, she implemented new technology systems to boost efficiency, including helping to revamp the customer onboarding process and improving reporting capabilities. She also was integral to the company’s $107 million acquisition by Descartes Systems Group in 2017. “She has a unique background in various executive positions in both privately and publicly held companies and has a demonstrated ability to help companies scale quickly and effectively,” said David Morris, CMO of Proformex. “I consider myself very fortunate to have worked with her at MacroPoint before and to now be working together at Proformex, looking to accomplish the same goal we did at MacroPoint.” Recruiting and mentoring women in tech is also a priority for Beck. She started a peer-to-peer coaching group and belongs to the Network of Executive Women, where she helps build a sense of community among top female executives.

Laura Bennett Title: Principal, Gosling’s Leap, Chagrin Falls Most recent education: Master of Business Administration, Wharton School of Business

NOTABLE WOMEN IN ENTREPRENEURSHIP

he exceptional women featured in these profiles bring to bear a wide range of skills and talent, combined with boundless energy and determination, to lead their growing businesses. Thanks to their leadership, mentoring and example, young women throughout Northeast Ohio and beyond can have the courage to move forward with their own visions for tomorrow’s innovative new companies and services.

Laura Bennett co-founded Embrace Pet Insurance in 2003, helping the industry overcome perceptions of offering a “fly-bynight” product and legitimizing the market. As “the only pet actuary in the United States,” she helped build Embrace into a desirable workplace employing more than 100. “Laura was always the yin to my yang,” said Embrace co-founder Alex Krooglik. “With her background as an actuary, she handled everything related to product management, customer service and external relations — being the face of and ambassador for the brand — while I handled marketing, finance and internal operations. … I do not believe we would have had the success we did if Laura had not been in the CEO role. She truly made Embrace stand out vis-à-vis its competitors by legitimizing the industry and the product.” As a consultant now, Bennett works with a variety of specialty insurers, including infertility insurance, to create new companies. She also is a mentor to local women trying to start their own business, invests in the pre-seed/seed rounds of many local women-founded businesses and created the Burning River Coffee Community mentoring group for female entrepreneurs who lead high-growth-potential companies. “From the moment I started managing the Cleveland office of Aviatra Accelerators (formerly known as Bad Girl Ventures), Laura has been an invaluable supporter,” said Reka Barabas, former director of BGV/Aviatra Accelerators. “She was —and still is — always willing to lend a hand where women and entrepreneurship collide. … Laura was willing to provide our clients advice and counsel and even a bit of ‘You got this’ encouragement.”

Find the profiles on Pages 18-23 Illustration by JDawnInk via Getty Images

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NOTABLE WOMEN IN ENTREPRENEURSHIP

Susan Borison

Darlene Campagna

Jeanne Coughlin

Title: Publisher and editor-in-chief, Your Teen Media, Beachwood; Most recent education: Juris Doctor, Case Western Reserve University

Title: President, Direct Opinions Inc., Independence Most recent education: Bachelor of arts in communication, Bowling Green State University

Title: President, The Coughlin Group Inc., Avon Lake Most recent education: Bachelor of science in business, Bowling Green State University

As a mother of five, Susan Borison felt she benefited from baby and child publications that provided advice on child-rearing, but found there was nothing out there for raising teenagers. That led her to cofound Your Teen Media. A graduate of the Goldman Sachs 10,000 Small Businesses program, Borison leads a team of nine employees and multiple contractors to provide innovative solutions and ideas to clients and readers of Your Teen Magazine. To keep the business going, she raised capital and brought in outside experts to analyze the industry and leverage the company’s experience. “Sue is driven, smart, resourceful and undeterred,” said Stephanie Silverman, co-owner of Your Teen Media. “I love the way she can come at a problem from a completely different lens and force me to think about a different solution. I continue to be impressed with her ability to find new ways to grow our company in this dynamic media environment.” Borison is also a member of the National Association of Women Business Owners and founder of Makon, which addresses the needs of Orthodox Jewish LGBTQ members and their families. “As a long-term member of the Board of Trustees of the Mandel Jewish Community Center of Cleveland and chair of its Jewish Life and Culture Committee, Sue raises the bar for everyone involved through her strong leadership, her inquisitive mind and her ability to see the bigger picture,” said Alan Semel, immediate past board chair, Mandel JCC of Cleveland.

A year after joining market research firm Direct Opinions 18 years ago, Darlene Campagna became a part owner. Nine months later, she became president. In 2018, she bought out the remaining partners. As a young mother of two when she joined the company, Campagna crafted a culture that is supportive of women. She is also membership chair and a board member of the Cleveland Chapter of Entrepreneurs’ Organization and a mentor for EO’s Accelerator Program (EOA). “My business grew 30% the year she mentored me,” said Rachel Downey, owner of Guide Studio. “Darlene gave me tools to grow as a female leader, giving me confidence and clarity in who I was and what I was capable of.” Under Campagna’s leadership, Direct Opinions created a customer-satisfaction measurement tool, called Company Service Aptitude Test (C-SAT), to help companies gauge the level of service they are providing customers and determine areas for improvement. “I lead an organization that trains our military and law enforcement and provides corporate security and training,” said Ron Gasper, founder and chief instructor of Cleveland’s Validus Protection Solutions. “Darlene has been instrumental in mentoring me to create sales opportunities, prepare for public speaking/leadership workshops, enhance customer relationships and develop growth strategies for my business. I don’t think you will find another entrepreneur — male or female — that is more deserving of this award.”

Jeanne Coughlin created her company some 26 years ago to help grow privately held companies and family businesses. She does so by taking complex, multifaceted issues and breaking them down into manageable and understandable steps. Over the years, she has helped hundreds of clients and been recognized as an authority in her industry. Coughlin is co-author of “The Rise of Women Entrepreneurs: People, Processes and Global Trends” by Greenwood Publishing. A founder and the chair of the Cleveland chapter of the Women Presidents Organization (WPO), Coughlin earned Cleveland State University’s Entrepreneurial Leadership Award for her dedication to small business. “Jeanne’s facilitation of our group ensures that we learn something about ourselves at every meeting,” said Sheryl Wilson, president of Bay Pointe Tech Services and a WPO member. “We reflect on new and better ways to do things and gain insight on different ways to approach situations in our businesses.” Coughlin also is vice chair of the board of directors and chair of the Revenue Committee for the business accelerator JumpStart Inc., and volunteers for its Burton D. Morgan Mentoring Program. “Jeanne and I have also worked side by side at entrepreneurial organizations locally and nationally, where she has been a passionate advocate for entrepreneurs,” said JumpStart board member Sharon Toerek of Toerek Law, adding that Coughlin has lobbied legislators in Columbus and Washington, D.C., and has represented the needs of small business at the boardroom tables for the Greater Cleveland Partnership, the Council of Smaller Enterprises, Team NEO and the National Small Business Association.

About this section The women profiled in this Notable Women in Entrepreneurship feature were selected by a team of Crain’s Cleveland Business editors based on their achievements in and contributions to their respective fields, as well as their community service and mentoring of young women for their own futures in entrepreneurship, as outlined in detailed online nomination forms. Notable Women in Entrepreneurship was written by Leslie D. Green. For questions about this special report, contact Michael von Glahn at 216-771-5359 or mvonglahn@crain.com, or Elizabeth McIntyre at 216-771-5358 or emcintyre@crain.com. For more in our Notable Women series or to nominate someone for an upcoming section, visit https://www.crainscleveland. com/nominations-0.

Effecting meaningful change Congratulations, Sue, on being recognized as one of Crain’s 2019 Notable Women in Entrepreneurship. Thank you for your leadership, passion and entrepreneurial spirit. Sue Grabowski President and CEO

desidara.com 330.498.0753

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NOTABLE WOMEN IN ENTREPRENEURSHIP

Melissa Ferchill

Angela Flowers

Sue Grabowski

Title: Owner and president, MCM Co. Inc., Cleveland Most recent education: Bachelor of arts, Boston University

Title: Co-owner, Making a Difference Consulting LLC, Euclid Most recent education: Master of science in social administration, Case Western Reserve University

Title: CEO, Desidara Inc., Uniontown; Most recent education: Bachelor of arts in communications, Malone University

A passionate and forthright leader, Melissa Ferchill established MCM Co. as a construction management firm and grew it into a full-service company that provides such services as strategic planning, historic preservation, owner’s representation and real estate development. In its nearly 30 years, MCM has completed more than $3.5 billion in construction and development. Clients have included PNC Bank, Bedrock Real Estate Services, Alleghany Health Network, Case Western Reserve University, Baldwin Wallace University, Cleveland Clinic, University Hospitals, Butler University, Nottingham Spirk Design Associates and the Cleveland Institute of Art. Preservation has been a major focus. Ferchill helped create a pathway for not-for-profits to use historic tax credits to renovate their buildings. Since then, MCM has restored 10 buildings on six university campuses in two states — generating $44.5 million in federal and state historic and new-market tax credits and creating more than 1,000 jobs — and 79 historic buildings — generating $95.8 million in state historic tax credits and $77.5 million in federal historic tax credits and creating nearly 2,500 jobs. “Melissa has served on the board of Downtown Cleveland Alliance for many years and is a passionate advocate for the role historic preservation plays in the redevelopment of our downtown,” said DCA president and CEO Joe Marinucci. “She works closely with our advocacy committee to directly convey to local, state and federal elected officials the importance of state and federal tax-credit programs in our communities.”

When she recognized while working for a public school system that mental health care for students was insufficient, Angela Flowers decided to tackle the problem herself. She co-founded an in-school counseling service, Making a Difference Consulting, that teaches children valuable coping skills. The idea was to build a network of licensed counselors and supply them with the resources necessary to help troubled kids thrive. In the past two years, Flowers has hired 15 new employees and quadrupled her revenue. She also secured funding to enhance the curriculum and expand nationwide. Flowers is a graduate of JumpStart Inc.’s Core City program and shares her insights and experiences with other entrepreneurs and educators. “Angela is one of the clear standouts from our Core City Cleveland: Impact Program,” said Lamont Mackley, partner at JumpStart’s Core City Services & Outreach. “We knew right away that her business model was strong, but the way she absorbs knowledge and immediately gives it back to others around her is truly impressive. Seeing her business grow and watching her create such a positive impact in the community is very inspiring.” Further expanding her reach to children in need, Flowers wrote a children’s book, “Footprints in the Sky,” about a child dealing with the loss of her father. She also volunteers at youth programs and hosts an annual summer camp in collaboration with the Otis Moss Jr. Medical Center of University Hospitals.

Sue Grabowski thinks big and then executes her vision. At Desidara, she has built a team of designers, web and multimedia developers and writers that help organizations from small businesses to Fortune 500 companies communicate effectively. Clients include Danone North America, Erie Insurance, Property Damage Appraisers, The Timken Co., Morgan Engineering, Employers Health, Akron Children’s Hospital and The Schroer Group. Grabowski recognized the traditional advertising agency model was shifting and that many of the opportunities online and digital communications offered shouldn’t just be add-ons to her business. As a result, she aggressively restructured her agency, changing not only the company name but also its specialties, skills and client models to get ahead of the trends. Desidara recently launched Tactical Outlines, which gives clients an analysis of marketing objectives, requirements and recommended tactics. “Sue’s business has experienced incredible growth and accolades since the inception of Grabowski & Co. in 1997,” said Christa Kozy, former president of the Lake Township Chamber of Commerce. “She remains humble and dedicated to her mission of staying true to helping her clients tell their stories through the power of the written word.” In recent years, Grabowski partnered with a tech expert to open Squawqr Mobile Media, which has a patent-pending technology platform that transforms data into web apps for public companies, small businesses, academia and the NFL. Grabowski serves as Squawqr’s chief marketing officer. In 2018, she took full ownership of the business. She is also part owner of Vector Chemicals, which manufactures industrial detergents and degreasers.

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NOTABLE WOMEN IN ENTREPRENEURSHIP

Stephanie Harrington

Andrea Kimmel

Kris McGuigan

Title: Founder, CEO and principal consultant, Matrix Medical Devices LLC, Mayfield Heights; Most recent education: Master of science in chemical engineering, Stanford University

Title: Founder and CEO, Sweet Kiddles, Strongsville Most recent education: Master in Business Administration, Harvard University

Title: President and founder, Professional Courage, Broadview Heights; Most recent education: Master of Business Administration, Weatherhead School of Management at Case Western Reserve University

Stephanie Harrington has a track record for developing successful startups in the medical-device industry. She established Matrix Medical Devices in 2013 to provide medical-device regulatory, quality and product development expertise to accelerate clients’ product development cycles and streamline postmarket surveillance activities. The company, which has more than 75 clients in the United States and abroad, recently began offering engineering support as well. “I have known Stephanie for over 15 years and we have worked together on a number of biomedical startup companies in northeastern Ohio,” said Trevor Owen Jones, president and CEO of International Development Corp. “The most recent is ICBM Medical Inc., which is a spin-out from Case Western Reserve University to develop and commercialize biomarkers for the rapid detection of prostate cancer and breast cancer. … I appointed Stephanie as the president and CEO of ICBM Medical due to her product and industry knowledge, her outstanding knowledge of the regulatory process and her superior leadership capabilities, particularly in motivating her co-workers and convincing our outside colleagues.” Harrington devotes considerable effort to mentoring members of her teams and is an expert at teasing out employees’ strengths, weaknesses and interests, and working with them to realign their job responsibilities. She is using that expertise to establish the MedTech Professional Development and Talent Resource Center to create an Ohio-based resource pool and pipeline of experienced, capable and confident job candidates.

Andrea Kimmel and her husband, Robert, launched their flexible childcare company Sweet Kiddles in 2011. The business model is unique. Kimmel worked with a software developer to create a customized center management system to offer convenient checkins, check-outs and scheduling options to customers, who use a prepaid account and pay for child-care services only as

Just as she left her career as director of health plan operations for HealthSpan Integrated Care to launch her own business, Kris McGuigan aids other professionals and business owners in a variety of industries in maximizing their own potential. Her ABC methodology involves Assessing your fit, developing a unique value-added Brand and Connecting to the right resources and opportunities. McGuigan, a certified résumé writer, executive coach and national speaker, is a member of the Forbes Coaches Council, Career Thought Leaders Forum and HR Leadership Group of Northeast Ohio. She is a mentor, volunteer at Cuyahoga Heights High School Glass Ceiling Roundtable and member of the Board of Directors for Dress for Success Cleveland. “Kris is definitely worth the price of admission, more than earning her status as Cleveland’s Top Résumé Writer,” said Michael Giuliano, COO of Moto Technologies. “She is on trend, on time and knows how to connect the dots at the highest levels right now. Kris has had a national impact and does so in a warm, direct and incredibly accurate style.”

they use them. She analyzed opportunities and raised money and by August 2018 had four child-care facilities, each with its own director, and about 95 employees in total. Kimmel runs her business using the Entrepreneurial Operating System, which focuses on meeting weekly to discuss key performance indicators and profits and losses. “Andrea is driven, passionate, great to work for and an inspirational leader,” said Strongsville Center director Beth Barabash. Kimmel, who recently won a Life PTA Achievement Award for her work and prior leadership of the Strongsville Early Childhood PTA, also serves the community as an assistant Girl Scouts scoutmaster and is a member of the National Association for the Education of Young Children. “Andrea’s greatest strengths are abundant,” said Jill McCourt, co-leader of Girl Scout Troop 71189. “As a volunteer in our group, she organized the financial needs to ensure we had the necessary funds. She organized meetings and content to provide an educationally enriched program to the girls of our troop. She’s very driven to complete the best job possible, even in areas that do not necessarily expect this type of masterwork.”

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NOTABLE WOMEN IN ENTREPRENEURSHIP

Erica Meyer

Patricia Miller

Nicole Paolozzi

Maureen Patterson

Title: CEO and publisher, October Research LLC, Richfield; Most recent education: Master of Business Administration, National-Louis University

Title: Founder and CEO, SpaceBound Inc., LaGrange; Most recent education: Bachelor of science in international relations, Cleveland State University

Title: Founder and CEO, OndeCare, Chagrin Falls; Most recent education: Bachelor of arts in professional writing and theater, Purdue University

Title: Lead designer and owner, Solus Lighting Ltd., Cleveland; Most recent education: Bachelor of arts in theatre technology and design, Baldwin Wallace

When Erica Meyer purchased October Research in 2011, it had just launched a new publication. Since then, the company has developed a national reputation for providing education to professionals in mortgage lending and title insurance industries. “Under her tutelage, I have grown my department, improved the quality of my webinars and our conference, NS3,” said Tara Quinn, seminars and webinars director for October Research. “Everyone in the company has a voice in the decisions she makes to move the company forward.” After purchasing the company, Meyer spearheaded development of a custom contact management system to alleviate data bottlenecks and create an efficient centralized platform for staff. She also expanded the scope of publications in response to the changing regulatory environment. “She has been a leader in providing resources and information to businesses who serve consumers when they buy and sell real property,” stated Cynthia Blair, president of the American Land Title Association. While the real estate transaction industry is male-dominated, Meyer makes it a point to hire experienced professional women. In 2014, HousingWire Magazine honored her as one of its Women of Influence in Housing. Meyer also looks for ways to serve the broader community. Every year, she closes the company’s office for a community service day. For the Make a Child Smile event at October Research’s annual conference, attendees build bikes or fill summer fun bags to donate to local charitable organizations.

Patricia Miller founded technology products and solutions provider SpaceBound in 1987 and has grown it into an enterprise with 42 distribution centers in the U.S. and Canada that serve 62 countries. SpaceBound boasts a server room with zero downtime, disaster readiness, cloud backup redundancy and the ability to allow for real-time changes and updates to its own and partner websites. Miller has successfully navigated SpaceBound through economic upheavals with no layoffs and yearly growth with no short-term debt. In 2016, Enterprising Women Magazine recognized Miller with its Enterprising Women of the Year Award. and in 2015, Ingram Micro presented her with its Women of Technology Award. Miller’s greatest strength may be her adherence to the belief that leaders should serve their teams first and lead second. Her leadership philosophy promotes an open-door policy, no fear of reprisal and collaboration between all levels and all departments. “One of the greatest things about working with Patti is her desire to elevate those around her,” said Nicci McNulty, customer support manager at SpaceBound. “She has a unique way of seeing people and drawing out strengths they don’t even know they possess. Patti unfailingly believes in her people, and that belief in turn provides a solid foundation for unlimited success with a dedicated team.” Miller also directs SpaceBound staff to help serve the community by adopting military platoons serving in the Middle East and sending them monthly care packages.

Nicole Paolozzi is not only able to see and understand the pile of highly complex jigsaw puzzle pieces lying on the table, she can visualize the final picture with clarity, and direct others to see and pitch in to make it reality. As a single mother, Paolozzi recognized the need for safe, vetted child- and elder-care providers who could be requested as needed. As a result, she built OndeCare, an on-demand organization providing shortterm, part-time and ad hoc child care, elder care and care for those with special needs. Since 2016, Paolozzi has built her one-person business into a patent-pending company with more than 50 caregivers (known as “heroes”) that include certified EMTs, teachers, nurses and other care, safety and education professionals vetted through 100% background checks. Offering care beginning in mid-2017, she quickly grew the company beyond just individual clients to serving companies that provide OndeCare as an employee benefit. Paolozzi personally interviews caregivers and coaches them on various business matters, including advising on rates, helping create attractive online profiles and facilitating communications with clients. She also devotes herself to more than just her own company. “Nicole was … appointed to serve on our local planning and zoning commission. ... She is able to dissect the issues before the board and provide effective cures and feedback, enabling our community to move forward in a positive manner,” said Wendy K. Davis, a member of the Chagrin Falls Planning and Zoning Commission.

Maureen Patterson’s attention to detail and high standards help her create suitable atmospheres for large and small corporate, social and nonprofit events and theatrical shows around the world. She leads a team of four employees along with a crew that can range from two to 100 people depending on the project. Among other venues, Solus Lighting has provided in-house support of the lighting system at Quicken Loans Arena (now Rocket Mortgage FieldHouse). “Maureen hired me as her operations manager knowing I had little to no experience in the lighting industry. She is patient, understanding and forthcoming with information to all my endless questions about techniques and equipment and has never made me feel like asking questions was a bad thing,” said Frankie Teuber. “She helps foster an amazing learning environment while also expertly running her own company. It is inspiring to see a fellow woman as a passionate, respected leader in an industry that is heavily male-dominated.” Patterson is a mentor for participants of WISE Within, a Women in Sports and Events initiative. This year, WISE selected her as one of its Women of Inspiration. “Maureen Patterson has been instrumental in the success of our chapter,” said Melanie O’Donnell, vice president of programming and education for the Cleveland chapter of the International Live Events Association. “She excels at guiding and motivating fellow board members, identifying and proposing solutions to potential problems, and keeping the board on track.”

Radhika Reddy

Leading by example Congratulations to the 2019 Notable Women in Entrepreneurship who are leading Northeast Ohio forward, especially our friend and client, Melissa Ferchill. Missy’s commitment to historic preservation is exemplary. By taking action and getting involved, she makes our community stronger. Missy, for your leadership and dedication to the community, we thank you. ®

Our business begins with you.®

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Title: Co-owner, Ariel Ventures LLC, Cleveland Most recent education: Master of accounting in taxation, Cleveland State University

Radhika Reddy emigrated from India in 1989 with $20 and a scholarship to earn master’s degrees in business administration and information systems from Case Western Reserve University. Since launching Ariel Ventures in 2001, Reddy has grown the company from a single-person shop to a national practice with three partners that provides IT, finance, tax and business advisory services to both small and large businesses in real estate, economic development and renewable energy. The company has provided advisory services for more than $2 billion in public-private finance transactions. Reddy’s knowledge of information systems helped the company pioneer development of comprehensive New Market Tax Credits compliance, reporting and Community Development Entities management software. The Department of Treasury approved integration of the software with its CDFI Fund online community. Ariel’s offerings continue to evolve as Reddy identifies unmet market needs. In addition to advisory services, Ariel provides international business and multicultural events at the Ariel International Center, located in the restored 100-year-old Leff Electric building. Reddy is looking to add a restaurant and gift shop to the mix. The company also created Ariel Event Management, which secured a liquor license and manages liquor operations and bar staffing at the center, and the Ariel Economic Development Fund, which makes equity and loans up to $2 million to small-business owners and entrepreneurs in need of alternate sources of financing. Most recently, in 2016, the company restored the nearly century-old Pearl Street Savings & Trust Bank as an event center.

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NOTABLE WOMEN IN ENTREPRENEURSHIP

Alicia Robinson

Sally Schriner

Lauren Steiner

Kate Volzer

Title: Executive director, Limitless Ambition Inc., Stow; Most recent education: Master of arts in human development and family studies, Kent State University

Title: President, Schriner Growth Partners, Rocky River; Most recent education: Master of Business Administration, Northwestern University, Kellogg School of Management

Title: President, Grants Plus, Cleveland Most recent education: Juris Doctor, Cleveland State University

Title: Co-founder, CEO, Wisr Inc., Cleveland Most recent education: Master of Business Administration, University of Chicago-Booth School of Business

As founder of Limitless Ambition, Alicia Robinson designed a curriculum to help young women develop their visions and overcome boundaries. To help them pursue their dreams, she created a Dream Kit, a bookbag with supplies that empower and encourage, which she distributes to girls in foster care. As assistant director of the Women’s Center at Kent State University, Robinson developed the Student Advisory Committee and the Women Leadership Academy, an initiative to equip women with tools to be successful in their careers, and co-developed the Career Closet, which collects gently worn professional attire for students in need. Robinson also developed and cochaired Kent State’s Women of Color Collective, an employee resource group that fosters the professional development, mental wellness and networking and personal growth of women. And she co-chairs the Kent Cares Initiative that works to decrease the number of students experiencing housing, food and financial insecurity. Women for Economic and Leadership Development (WELD) honored Robinson in 2019 as a Women WELDing the Way honoree, and the Greater Akron Chamber recognized her with a 30 for the Future Award in 2017. Beyond KSU and her own nonprofit, Robinson also serves as a member of the advisory board for Coleman Pregnancy Center and is a member of the Akron Urban League Young Professionals and the Akron Torchbearers Young Professionals.

Sally Schriner’s CMO-for-hire company, Schriner Growth Partners, helps business leaders assess existing marketing plans, sales strategies and strategic plans to develop comprehensive growth and marketing plans. As past president of American Greetings Interactive, Schriner uses her experience with big brands and adapts it to advise startups, small and midsize businesses. Metrics-driven, her projects have provided enormous jumps in leads, audience engagement and sales. “By working with Schriner Growth Partners, we have been able to grow our lead gen exponentially,” said Wendy Jarchow, chief investment officer of River SaaS Capital. “It is her industry expertise, but also her ability to get things done that make me enjoy working with her so much. ... She has that unique blend of emotional and business intelligence that allows her the ability to understand immediately what a situation demands.” In addition to serving clients, Schriner works with entrepreneurs participating in the Youngstown Business Incubator and Bounce Innovation Hub to get their businesses off to a good start. Over the years, she also has served on the Northeast Ohio Advisory Council for Aviatra Accelerators and as a board member of the Cuyahoga County Public Library Foundation, among other organizations. “Her skills in marketing and communications allow her to bring keen, invaluable insight to our effort to assure our church’s relevance to the needs of today’s world,” said Jon Fancher, pastor of Rocky River Presbyterian Church.

Lauren Steiner’s Grants Plus has helped secure more than $120 million in funding for nonprofit organizations since its launch in 2007. She earned Outstanding Fundraising Professional honors in 2017 from the Association of Fundraising Professionals of Greater Cleveland, among other awards. “When Lauren first started, she was a trailblazer who used innovative approaches to match a scientific solution to a relationship-driven business. Not content to build a business providing a new type of service, Lauren also has been driven to create a company that provides others with the same opportunities to reach far beyond the crowd. I’ve been amazed by the way Grants Plus has constantly been at the forefront with new tools and techniques that continue to keep it in the leadership position within the community,” said Frances Post, principal at the OgdenPost Consulting Group LLC. Steiner didn’t create Grants Plus just to help nonprofits. Having witnessed the way women colleagues struggled against gender imbalances, she determined to develop better career options for herself and other women. Most of her staff of more than 20 are women. She also prioritized workplace practices to support staff members and help them reach their potential while maintaining priorities in their personal lives. As a result, Grants Plus, a member of the Giving Institute, earned the Psychologically Healthy Workplace Award from the American Psychological Association in 2016. The company offers work-from-home options, flexible scheduling, wellness initiatives and an ability to give back through the Grants Plus giving fund at the Cleveland Foundation.

Kate Volzer was a first-generation college student who, while working in college admissions, became fascinated by how technology might better support students. In 2016, she launched Wisr to improve educational outcomes for college students nationwide. She and her partner designed the Wisr platform to remove the inadequacies inherent in creating connections between students, alumni and other university community members. The software provides students an opportunity to seek advice and career assistance from a broad base of alumni while at the same time providing alumni relations staff with important engagement data. In 2017, Volzer competed against 250 education tech companies and received a Venture Innovation Award at the ASU+GSV (Arizona State University/Global Silicon Valley) Summit. Wisr’s clients include Case Western Reserve University, Oberlin College and the University of Chicago. It added nearly 20 schools to its client list in 2018 and raised $1.9 million in venture capital from organizations such as North Coast Angel Fund, JumpStart, Impact Angels and InvestHER Ventures. “Kate represents something very important for our region: a smart young female entrepreneur who left to get her education, then came back and was able to receive both help and funding from people in her hometown who believed in her vision. Northeast Ohio needs founders and future leaders like Kate and we are very proud to call her a friend and colleague,” said JumpStart president Cathy Belk.

Alexandra Yonkov Title: Partner and managing director, Brickhaus Partners, Cleveland Most recent education: Master of science in project and enterprise management, The Bartlett School of Construction and Project Management at University College London

Alexandra Yonkov has helped grow Brickhaus Partners into an innovative developer of infill real estate. With Yonkov as managing director and partner, the company has developed more than $40 million in real estate that is drawing new and former residents back to Cleveland and its inner-ring suburbs. Brickhaus anticipates completing more than $100 million in new development in the next year. A 2017 Crain’s Forty under 40 honoree, Yonkov started at Brickhaus as an assistant project manager and worked her way up. She emphasizes restoration and adaptive reuse of historic structures and implements innovations such as geothermal heating and cooling and is making it standard for Brickhaus homes to be prewired for electric vehicles to promote healthy living. “I love working with Alexandra. She is a great collaborator and visionary,” said Andrew Brickman, principal and developer for Brickhaus. “I couldn’t have chosen a better person to take Brickhaus to the next level. She also possesses humility -- a quality in rare supply in many great creators.” Yonkov’s projects have won honors such as Best Community Development of the Year for 95 Lake in 2018 from Best of Ohio Homes and Vibrant City Awards for Urban Developer in 2018 from Cleveland Neighborhood Progress, and SmartHome Community of the Year and GreenHome Community of the Year from the Cleveland Home Builders Association. She leads a team of 15 employees and more than 200 subcontractors. More than half of the Brickhaus team are women thanks to Yonkov’s dedication to hiring diversity. She also provides pro bono project management and design advice to St. Luke’s Church in Chagrin Falls.

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THE LIST

Women-Owned Businesses

Ranked by full-time local employees as of March 1, 2019 THIS YEAR COMPANY

FULL-TIME LOCAL EMPLOYEES 2019/ 2018 (1)

YEAR PRIMARY FOUNDED INDUSTRY

DESCRIPTION

TOP LOCAL EXECUTIVE

1982

Telecommunications

Direct marketing company with inbound/outbound call center services

Craig Taylor, CEO Karen Taylor, board chair

InfoCision Management Corp. 325 Springside Drive, Akron 44333 (330) 668-1400/infocision.com

1,200 1,200

Lakeside Facility Services Group 2122 St. Clair Ave. N.E., Cleveland 44147 (216) 771-2400/lfs-group.com

201 195

1999

Service - general

Commercial facility janitorial and maintenance services provider

Katiya Cassese, president Anthony Cassese, CEO

Joshen Paper & Packaging Co. 5808 Grant Ave., Cuyahoga Heights 44105 (216) 441-5600/joshen.com

175 175

1988

Distribution

Paper and packaging wholesale distributor

Michelle F. Reiner, CEO

Mars Electric 6655 Beta Drive, Suite 200, Mayfield Village 44143 (440) 946-2250/mars-electric.com

170 157

1952

Distribution

Wholesale distributor of lighting, gear and electrical products

Fran Doris, CEO

Millennium Capital and Recovery Corp. 95 Executive Parkway, Hudson 44236 (877) 500-6272/nationwiderecoverymanagers.com

150 140

1999

Financial services

National recovery management firm providing skip tracing, impound services and vendor management for consumer lenders

Jayne R. Bronchetti, president

Frank Novak & Sons Cos. 23940 Miles Road, Bedford Heights 44128 (216) 475-5440/franknovak.com

135 140

1912

Construction

Commercial finish contractor and manufacturer of custom lighting, acoustic panels and OEM parts

Gayle F. Pinchot, president Pamela Pinchot Bozsvai, vice president

NAE/NWAN 8370 Dow Circle, Suite 100, Strongsville 44136 (877) 222-1645/naenwan.com

132 130

1996

Service - general

Administration company servicing automotive, RV and powersports dealerships nationwide

Kelly Price, CEO David Neuenschwander, president

Vocon 3142 Prospect Ave., Cleveland 44115 (216) 588-0800/vocon.com

125 110

1987

Architecture

Global interior design, architecture and strategy firm focused on creating distinctive and productive work environments

Deborah V. Donley, principal

Hanson Services In-Home Assisted Living Providers 17017 Madison Ave., Lakewood 44107 (216) 226-5425/hansonservices.com

100 100

1996

Senior health care

Assisting older adults in their activities of daily living in the privacy of their home

Mary Ann Hanson, founder, CEO

US Communications and Electric Inc. 4933 NEO Parkway, Garfield Heights 44128 (216) 478-0810/uscande.com

98 105

1996

Telecommunications

Specializes in voice, data, video and security structured cabling

Patricia Connole, CEO

The VMI Group Inc. 8854 Valley View Road, Macedonia 44056 (330) 405-4113/thevmigroup.com

87 77

2012

Construction

Commercial and industrial contractor specializing in foundations and structure

Neille Vitale, president

Tylok International Inc. 1061 E. 260th St., Euclid 44132 (216) 261-7310/tylok.com

85 75

1955

Manufacturing

Manufacturer of instrumentation fittings and valves

Scott Hahl, general manager

Onyx Creative 25001 Emery Road, Suite 400, Warrensville Heights 44128 (216) 223-3200/onyxcreative.com

83 83

1974

Architecture

Provides architecture, engineering, interior design and branding services

Mike Crislip, president, partner Carole Sanderson, CFO, partner

Pierre's Ice Cream Co. 6200 Euclid Ave., Cleveland 44103 (216) 432-1144/pierres.com

80 85

1932

Retail - consumer goods

Producer of Pierre's Ice Cream, frozen yogurt, sherbet, sorbet and novelties

Shelley Roth, president

Richter LTPAC Performance Advisors 8948 Canyon Falls Blvd., Suite 400, Twinsburg 44087 (216) 285-0806/richterhc.com

74 50

1999

Accounting

Consulting, accounting and revenue cycle management for long-term and post-acute care providers

Jennifer Richter, president, CEO

Litigation Management Inc. 6000 Parkland Blvd., Mayfield Heights 44124 (440) 484-2000/lmiweb.com

72 56

1984

Law firms - legal services

Provider of medical-legal discovery, litigation, regulatory and settlement support services

Elizabeth B. Juliano, founder, CEO

North Coast Logistics Inc. 18901 Snow Road, Suite A, Brook Park 44142 (216) 362-7159/northcoastlogistics.com

70 65

1992

Transportation

Third-party logistics provider specializing in warehousing, distribution and transportation services

Talour Avdek-Gazey, president, principal Mark Kabat, director, sales and marketing

Avantia Inc. 9655 Sweet Valley Drive, Suite 1, Valley View 44125 (216) 901-9366/avantia-inc.com

67 65

2000

Computers information technology

Custom software, web, mobile and Internet of Things development firm

Jennie Zamberlan, president

Cynergies Consulting Inc. 7603 Light House Court, Mentor 44060 (216) 798-6655/cynergies.net

65 55

1997

Computers information technology

Information technology staffing provider

Debbie A. Holy, president

Fit Technologies 1375 Euclid Ave., Suite 310, Cleveland 44115 (216) 583-5000/fittechnologies.com

60 60

1999

Computers information technology

Managed IT services firm specializing in onsite field support, help desk, network infrastructure, internet, wireless and cloud services

Micki Tubbs, CEO, cofounder Michelle Tomallo, president, cofounder

MidWest Materials Inc. 3687 Shepard Road, Perry 44081 (440) 259-5200/midwestmaterials.com

58 59

1952

Manufacturing

Steel service center specializing in hot rolled, hot rolled pickled and oiled, coated, cold rolled and high strength steel

Brian D. Robbins, CEO Noreen Koppelman-Goldstein, president

Marigold Catering 3901 Lakeside Ave. E., Suite 100, Cleveland 44114 (216) 566-5400/marigoldcatering.com

55 55

1997

Hospitality

Catering and event planning services, design and logistics, event venues

Joan E. Rosenthal, CEO, founder

McSteen & Associates Inc. 1415 E. 286 St., Wickliffe 44092 (800) 250-3451/mcsteen.com

55 46

1970

Real estate

Residential and commercial land surveying

Deborah J. Feller, CEO Molly Woeste, principal

Ullman Oil Company LLC 9812 E. Washington St., Chagrin Falls 44023 (440) 543-5195/ullmanoil.com

54 50

1967

Distribution

Petroleum products distributor

Jennifer W. Berlin, president

Margaret W. Wong & Associates LLC 3150 Chester Ave., Cleveland 44114 (216) 566-9908/imwong.com

53 50

1986

Law firms - legal services

Immigration and criminal law firm

Margaret W. Wong, president, managing partner

AAA Advanced Plumbing & Drain 7277 Bessemer Ave., Cleveland 44127 (440) 331-5555/advancedplumber.com

50 50

1927

Construction

Plumbing and environmental services contractor

Carol Ann Fisco, president, CEO

MurTech Consulting 4700 Rockside Road, Suite 310, Independence 44131 (216) 328-8580/murtechconsulting.com

50 NA

2000

Computers information technology

IT consulting, staffing and placement firm

Ailish Murphy, board chair

Metis Construction Services LLC 175 E. Erie St., Suite 303, Kent 44240 (330) 677-7333/metisconstruction.com

49 42

2009

Construction

Commercial general contractor

Julie Brandle, president, founder Donna Komar, CFO, founder

RESEARCHED BY CHUCK SODER (CSODER@CRAIN.COM)

To see all 401 companies in the full Excel directory, become a Data Member: CrainsCleveland.com/data Neither the list nor the full directory is comprehensive. To submit your company, visit bit.ly/2tcs4Wv. Information is supplied by the companies. Send feedback to Chuck Soder: csoder@crain.com. (1) 2019 employment figures are as of March 1; 2018 figures are as of May 15.

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CRAIN’S CLEVELAND BUSINESS

EQUITY

CONTINUED FROM PAGE 1

“And this company has the brand, the backbone, the history, all the things I think you need to be a leader in this part of the space.” What Equity Trust seems to have working for it is the technological infrastructure to capitalize on growing and evolving customer demands. Those are what led to its platform for investing in cryptocurrencies, which launched last summer. As far as overall demand in the self-directed IRA space, that’s growing as customers see the strong returns in alternative investments, which don’t correlate with the stock market. Sullivan expects to see more business, too, as the firm promotes just that in the context of growing potential for another recession. Even though the economy is strong right now, worries of a downturn in the next 18 to 24 months are generally rising, in part because of the cyclical nature of the markets: The expansion has been running very long, and that can’t last forever. “Anyone who went through 2008 would tell you that you want to be independent of the returns of the public markets,” Sullivan said. That was even a motivator back in 2017, when a report by Investment News found that 83% of clients surveyed expressed “some level” of in-

“Anyone who went through 2008 would tell you that you want to be independent of the returns of the public markets.” — George Sullivan, Equity Trust Co. CEO

terest in alternative investments. That study projected that investments in alternatives would grow by $149 billion in the independent advisory channel in the three years ahead. While a more recent study has not been conducted, the sense is that trend remains alive and well. So continuing to focus on customer service and a user-friendly platform is at the heart of Sullivan’s growth strategy for the company. Equity Trust certainly isn’t the only player in the self-directed IRA space, but it will argue its platforms have the most functionality, including several automated options. “We want to be in position to cross the entire alternative asset base,” he said. “We do some better than others. And my objective would be to do them all very capably and easily for customers so they can do transactions in as real-time a format as they can and make their money or get their payments as they transact.” The company, which has about 400 employees today, declined to disclose its revenue or specific growth goals. Other market factors that bode well for growth at Equity Trust include the steady increase in retirement assets overall, which stood at $27.1 trillion at the end of 2018, according to the Investment Company Institute, and those specifically tied to IRAs, which were at $8.8 trillion at the same time. While the money in IRAs has dipped slightly in recent years, that level is still an increase of 76% since 2010. Alternative assets allocations were roughly 10% in 2017; that’s expected to grow to 14% by 2020, Sullivan pointed out. “That’s a greenfield opportunity,” he said. “And that’s what we’re challenged with: to try and service the growth in the market.”

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LIST ANALYSIS

Women-owned firms employ more women By Chuck Soder csoder@crain.com @ChuckSoder

Companies in the Crain’s Women-Owned Business Directory employ more than their fair share of women. For the second year in a row, this year’s directory includes more than 400 local, women-owned companies in all sorts of industries. The full version is available exclusively to Crain’s Data Members. The 28 largest companies by fulltime local employment appear on Page 24. The vast majority, however, are small businesses. But they do em-

ploy a lot of women. Of the 131 companies with at least five employees, 93, or 72%, told us what percentage of their local workforce is female. Those companies employ about 1,338 women in Northeast Ohio, and those women make up 51% of the 2,625 people they employ full-time in the 15-county area, according to data available in the full Excel directory. That percentage may not sound high, but consider this: The U.S. Census Bureau estimates that women make up fewer than 39.5% of all full-time, private-sector employees in Ohio, according to the bureau’s 2017 American Community Survey, which is based on surveys conduct-

ed from 2013 through 2017. For Cuyahoga County, the bureau’s estimate is 42.5%. So 51% is pretty high by comparison. Granted, there’s always the chance that companies employing fewer women were undercounted: Perhaps they wouldn’t want to disclose that fact in a directory highlighting women-owned businesses. And only half of the companies in two traditionally male-dominated industries — construction and manufacturing — told us what percentage of their workforce was female. The percentage of female employees drops slightly as you look at larger companies in the directory. It was 49% for companies with at least 10 local employees that answered the

question; it was 47% for those with at least 20. On the other hand, the percentage is really high for the smallest companies, which isn’t surprising: We asked owners to count themselves as employees if they worked in the business, and if a woman owns a business with only two employees, we already know that at least 50% of her workforce is female. Of course, not every womenowned business in Northeast Ohio is in the directory, but you can help change that: Visit bit.ly/2tcs4Wv to submit a company. Those who submit could appear in a version of the directory scheduled to appear in our annual Book of Lists.

Advertising Section

PEOPLE ON THE MOVE To place your listing, visit www.crainscleveland.com/people-on-the-move or for more information, please call Debora Stein at (917) 226-5470 or email dstein@crain.com. CONSULTING

HEALTH CARE

LEGAL

Experis

CHAMPS Oncology

Experis is pleased to welcome Laurence Talley as Director of Risk Advisory Services. Laurence will effectively lead Internal Controls, Internal Audit, Regulatory Compliance and Risk Management projects for Ohio clients. Earlier in his career, Laurence worked in EY and BDO’s Advisory Practices and most recently as Accume Partners Foreign Banking and Risk and Regulatory Compliance Practice Leader in New York. Laurence is a Certified Public Accountant and Certified Internal Auditor.

CHAMPS Oncology proudly appoints Karen Schmidt, CTR, as the new vice president. With 17 years of cancer registry experience, Schmidt brings leadership, innovation, and passion to this role. As a cancer survivor herself, Karen and her entire team strive to promote the profession, improve the quality of cancer data, and create actionable information. Their goal is to provide superior service to cancer programs across the country, and provide better data to improve patient care and save lives.

Vorys, Sater, Seymour and Pease LLP

Vorys, Sater, Seymour and Pease LLP is pleased to announce that Amanda McMurray Roe became of counsel of the firm. She focuses her practice on antitrust representations with emphasis on antitrust issues relating to the health care industry. Roe has experience representing clients in both litigation and transactional contexts regarding issues such as mergers and acquisitions, monopolization, price discrimination, and the Nonprofit Institutions Act. For more information, visit www. vorys.com.

Vorys, Sater, Seymour and Pease LLP is pleased to announce that Meg Everett, a member of their litigation group, became partner of the firm. Everett has extensive experience representing Ohio employers in all aspects of workers’ compensation law, including administrative hearings before the Industrial Commission. She also has experience in Ohio state courts representing employers in jury trials involving appeals from Industrial Commission proceedings. For more information, visit www. vorys.com.

EDUCATION

PROFESSIONAL SERVICES

LEGAL

Baldwin Wallace University

Radcom, Inc

Patrick Keebler, M.A., is the new Director of Career Services. In this role, he will continue to align the strategies and goals of Career Services with BW’s commitment to student outcomes. He also will lead an expanded outreach to employers to identify collaborative and mutually beneficial opportunities to support the experiential and career development needs of BW students.

Radcom, Inc., a technical documentation and training development company that has been helping clients solve complex business issues for more than twenty years, has announced the hiring of a new Sales Consultant, Gina Pratt. An experienced business development professional with expertise in sales, project management, customer relationship management (CRM) and event coordination, Pratt will be dedicated to helping clients find the right solutions to their organizational challenges.

Vorys, Sater, Seymour and Pease LLP

Vorys, Sater, Seymour and Pease LLP is pleased to announce that Kari Coniglio, a member of their finance, energy and real estate group, became partner of the firm. Coniglio’s practice primarily focuses on the representation of financial institutions, debtors, and committees in bankruptcy cases and adversary proceedings and in commercial transactions and litigation including collections, creditors rights, receiverships, foreclosures and workouts. For more information, visit www. vorys.com.

Vorys, Sater, Seymour and Pease LLP is pleased to announce that Carrie Brosius, a member of their bankruptcy group, became of counsel of the firm. Brosius represents creditors dealing with claims, avoidance actions, cash collateral matters and seeking stay relief. She also represents financial institutions and other creditors enforcing the creditors’ rights under state law, including receiverships, foreclosures, writs of execution, and garnishments. For more information, visit www.vorys. com.

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AKRON

Look out Copenhagen; here comes Akron Four area entrepreneurs break into the dip business with Fully Loaded Chew and its tobacco-free products By Dan Shingler dshingler@crain.com @DanShingler

Thinking that only a crazy person would try to get into the smokeless tobacco business from a home-based company, some Akron-area entrepreneurs have chosen to dip into a bit different category: tobacco-free chew. The product is racking up millions of dollars in sales for Fully Loaded Chew, which started on a kitchen counter but now ships to all 50 states, Canada and elsewhere from its 10,000-square-foot facility in Akron on Cuyahoga Street between North Howard Street and the Little Cuyahoga River. “We did $2.6 million in sales last year,” said Sean Linton, company president and co-founder, over a slightly bulging bottom lip. Linton said he and friends from Green, Alan Duignan and Mike Crawford, were having beers and a dip — also known as chew, or smokeless tobacco such as Skoal or Copenhagen to the uninitiated — while watching the Browns at a bar in Portage Lakes in 2015. Like most tobacco users, they started as teenagers and the habit stuck. They still enjoyed it, but as they got older they became concerned about potential health consequences. They tried a few of the tobacco-free alternatives on the market

ous flavors and nicotine strengths, Linton said. Nearly all of that was done via direct sales, with 12 employees hand-packing each can in the Akron facility the company moved into last September. Fully Loaded ships 80,000 to 100,000 cans a month. “We’re FDA-approved as a facility,” Linton said, adding that the process was not particularly cumbersome or expensive. The business still wrestles with labeling requirements, often erring on the side of caution, he said, and the company would face far more regulations and expenses if it were dealing with a tobacco product. There have been setbacks. The company’s introduction of a version of its product packed in individual pouches was delayed when its U.S. vendor failed to deliver a machine that could do the packing. Fully Loaded ultimately found a machine from a company in China that works and costs only 10% of the original equipment. Now, though, Fully Loaded has to get some of its money back from the first vendor. But there have been some good surprises, too. For instance, the comFully Loaded Chew president and co-founder Sean Linton and his partners think the company is on the brink of pany discovered it gets great expoa big jump in sales for its tobacco-free products, which pulled in $2.6 millionAdvertising in sales last year. (Dan Shingler) Section sure with nontraditional advertising, but found none that satisfied them variety of leaves other than tobacco and kudzu. They grind the leaves into especially via influencers on social in the mix and at the time using nico- tiny flakes, known as “long cut” in the media such as hunters, fishermen like traditional dip. world of dippers. They then add pro- and other outdoorsmen with a lot of “We just knew what we liked. They tine derived from tobacco. “It was just a long period of trial prietary mixes of flavorings that in- followers, Linton said. were Grizzly guys, and I was a Skoal “We can get a ton of exposure for guy,” Linton said. Soon, they were in and error,” Linton said. clude cayenne pepper and molasses, Linton’s kitchen in Green, trying to They finally settled on a mix that which Linton said also helps hold the $50 with the right influencer,” he said. There might be potential risks mix up their own alternative using a worked for them: leaves of spearmint mixture together. Next comes nicotine — or not, as Fully Loaded also ahead, too. Linton said the partners keep a close eye on the burgeoning offers a nicotine-free version. Ultimately, they also chose to go vaping industry and its regulatory with a tobacco-free nicotine, which is landscape. They don’t want to earn Advertising Section the same molecule made in a lab in- the ire of state governments or regustead of from the leaves of a tobacco lators the way vaping sometimes has plant, so that their product is com- with its popularity with minors. REAL ESTATE BUSINESS FOR SALE FOR SALE pletely tobacco-free, Linton said. To that end, Dawson and Linton said That wasn’t easy, because the tobac- Fully Loaded Chew has hired a third17+ Acres of Land Thinking of Selling? to make sure its co-free version costs 10 times as party 7660authenticator Eagle Rd, Free Market Analysis are of legal much, he said, holding a high-tech- customers Waite Hill, OH 44094 age to buy tobacNo Upfront looking silver Fees container about the co. It’s also careful not to market itself mike@empirebusinesses.com size of a large thermos containing a as a smoking-cessation product or a www.empirebusinesses.com liter of highly concentrated nicotine healthier alternative to any tobacco 440-461-2202 that costs $5,000. product. Customers can decide for Once the partners found a formula themselves if a tobacco-free dip has they liked, they asked other people to any advantages for them, Linton said. try it, and they liked it, too. That in- Contact: It’s 440-479-0204 in “the grayest of gray areas,” cluded Ken Dawson, president of Ak- though, Dawson said. For instance, MISCELLANEOUS should its product be taxed as tobacFOR SALE FOR SALE ron’s Eleventy Marketing Group. He had hired Linton at InfoCision co is or should it escape such taxes? LOOKING TO SLOW DOWN FORslowed SALE down a deal with a 17+ Acres of Land House & Acreage for Sale in Akron, whereOUT Dawson previously That AND TRANSITION OF 7660 Eagle Rd, was chief marketing officer. Linton major distributor that Linton and YOUR BUSINESS? Parcel 953-12-001 House & Acreage for Sale Waite Hill, OH 44094 director oftobusiness Dawson said would help break Fully Approx 9 bucolic acres on NE was Ohio native looking own and services. 953-12-001 grow businesses $5mmLinton to Dawson saidfrom he hired at Info- Parcel Loaded into retail sales. Though, it Richmond Rd, S of Solon Rd. $25mm in sales! bucolic resolved acres onto the distribuwas9recently in Solon,Ohio, w/ farmhouse, Cision after renting student housingApprox Contact: Richmond Rd, S of Solon Rd. pond & outbuilding. nearfleurdelismgt@gmail.com the University of Akron to Lintor’s satisfaction, they added. w/ farmhouse, ton and being impressed with him.in Solon,Ohio, Now, they hope Fully Loaded’s Surrounded by Cleveland & outbuilding. Now he says he’s impressed with Lin- pond products start appearing on store Metroparks with woods, Surrounded by Cleveland shelves this year. If that happens, they ton’s product, enough that he’s joined streams & horse trails at your Contact: 440-479-0204 withtowoods, disposal. 940 ft frontage on expect sales go through the roof. as a fourth partner and investor and is Metroparks & horse trails at yourdo $25 million Richmond Rd. could probably doing the company’s marketing work.streams “We disposal. 940 ft frontage to $30 million underon this roof … and “They came to me and they had $ 630,000 think we Rd. could hit that level this this can. I think it was packed in an- weRichmond Contact Dave Lambros $ 630,000 216-392-5744. Linton said. other dip can, Skoal or something year,” Dave Lambros Dawson is more effusive in his oplike that. So, I tried it and I liked it.Contact 216-392-5744. And I said, ‘Hey, it’s got potential!’ timism. MISCELLANEOUS BUSINESS FOR SALE They said, ‘Do you think we could “We’ll be in several thousand stores Commercial, Executive Property,make Industrial or Retail a product out of it, because by the end of this year,” he said, noting LOOKING TO SLOW DOWN Thinking of Selling? do really seem to like it?’ I that some stores sell 1,000 cans of varAND TRANSITION OUT OF Space Here!people Free Market Analysis said, ‘I think so,’ ” Dawson recalled. ious smokeless tobacco a week. YOUR BUSINESS? No Upfront Fees Dawson had used smokeless tobacWith the U.S. market for the stuff at NE Ohio native looking to own and mike@empirebusinesses.com grow businesses from $5mm to co before but didn’t like the fact that it $4.2 billion in 2017 — up from $3.98 www.empirebusinesses.com $25mm in sales! was a tobacco product and quit, he billion in 2016, according to the Fed440-461-2202 Contact: fleurdelismgt@gmail.com said. Now, he sometimes uses Fully eral Trade Commission — he thinks Loaded, and he’s becoming more sales will explode. convinced it will become big. “You grab a 1% or 2% market share 5/2/19 9:32 AMor Last year, the company sold $2.6 and you’re looking at a $150 million ncleveland.com/classifieds million worth of product with vari- $200 million business,” Dawson said.

CLASSIFIEDS

To place your listing in Crain’s Cleveland Classifieds, contact Suzanne Janik at 313-446-0455 or email sjanik@crain.com

CLASSIFIEDS

To place your listing in Crain’s Cleveland Classifieds, contact Suzanne Janik at 313-446-0455 or email sjanik@crain.com REAL ESTATE

2155 Woodstock Rd, Gate Mills 4 bed, 3 full, 3 half baths 4.5 Acres

$1,089,000

A Gem in NE Ohio. 4.5 acre manicured lot. Impressive kitchen, vaulted great room, formal dining & living rooms. Extrodinary master wing! Luxurious bathroom, private ofﬁce, & patio, & sitting room. Several of the most prestigious private schools in Cleveland are located just minutes awayGilmore, University School and Hawken.

Craig Cantrall Chestnut Hill Realty, Inc. 216-249-2021 Craig@CHR-inc.com www.CHR-inc.com

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LIST YOUR

5/2/19 11:21 AM

5/3/19 1:05 PM

CRAIN’S CLEVELAND BUSINESS

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SOURCE LUNCH

Jack Staph President, Cleveland Marathon Inc.; executive race director, Rite Aid Cleveland Marathon Now in its 42nd year, about 60% of the Rite Aid Cleveland Marathon’s participants are women. That’s quite a change from the days in which the field was 60% men. ¶ Jack Staph, who was the chairman of the first marathon in 1978 and acquired the rights to the race from CVS in 2002, attributes the switch to the addition of a half marathon in 2005. ¶ “Women have a different approach to how something should be – and they’re usually right, by the way,” said the 73-year-old Staph. ¶ Plenty of other things have changed about race weekend in Cleveland, which this year will be held on May 18 and 19, but one constant has been Staph. ¶ He leads a staff of four full-timers who work on the marathon year-round, while maintaining his law practice in Beachwood. Such juggling is nothing new for Staph, who completed law school while working a full-time job and helped the marathon get its start during a time in which he was a top executive for Revco. ¶ “You balance your time and you kinda know what’s important,” Staph said. — Kevin Kleps

The Staph file Extra, extra... Staph reads three newspapers a day: The New York Times, USA Today and The Plain Dealer. “New York Times, cover to cover,” he said.

Family ties Staph and his wife, Bernadette, have three adult children and five grandkids.

Happy wife... “Bernie is the boss of the family,” Jack said of his wife of 52 years.

Lunch spot Giovanni’s Ristorante 25550 Chagrin Blvd., Beachwood 216-831-8625

The meal One had the zucchini pasta and the other had the potato gnocchi. Both had water and coffee.

The vibe Giovanni’s — tucked into the first floor of an office building on a busy road — doesn’t stand out, but the Italian fare at this classic whitetablecloth restaurant sure does.

The bill $41.58, plus tip

How is everything looking from a registration standpoint for the marathon? Today (April 22), we caught up with last year, and we’re looking for around 15,000 for all the events. What was the registration total for last year’s events? Last year, we were under 15 (thousand). We’re projecting over. In fact, it’s very possible the marathon will be sold out. We have to order medals in January, and then we know there’s a 10% drop-off. But even with that 10%, I believe the marathon is sold out. What is the sellout point? We order around 1,800 medals (for the full marathon), and there’s usually around a 10% drop. Here’s how it works: It’s not that they drop out. Well, some do because of injuries, but a lot of them just aren’t comfortable with their training, so they drop down to the half. And those medals are different (for the full marathon) than the medals they get for the half. How does the arrangement work with the elite athletes: You pay for their travel to the marathon? And pay for their room and board when they’re here. That’s a common practice in marathons, right? Yeah, and they come because they can get the prize money. We have an elite coordinator in Boulder, Colo.: John Tope. John has contacts with all of the agents. That’s how I got started. At Revco, I negotiated with all of the elite athletes’ agents.

The marathon is in its fifth decade. How much has the business changed over the years? We’re one of the 50 oldest in the country. The business side of this has changed because your customer has changed. When I ran marathons, all I cared about was that the course was reasonably marked — how about that? — and that there was water and bathrooms on the course. That’s all I cared about. Now, it’s more about the whole experience. You have runners who stop and take pictures in front of certain buildings. The Cleveland signs that are around, they love taking pictures of themselves with those. It’s amazing. It’s about an experience. It’s still athletic, but it’s an entertainment experience. The fan experience aspect is obviously much different. What are some of the other major changes? When it comes to sponsorships, branding is important. But what I think is different than it was in the early days is the sponsor expects you, and we market this, to be part of their communication strategy. In other words, to reach those runners who are your customer, that will be become their customer. Our survey across the board, every year, shows between 80% and 90% of our runners will participate in and be loyal to the services and products of sponsors of the race. There’s a real loyalty factor — for us, anyhow. I was on the board of Running USA and I’ve had this conversation with other directors and people involved in races, and it’s a high percentage of loyalty to the sponsors.

Social media is another crucial aspect for events. How has it changed what you do? It exploded. I rely on Ralph (his son, the race director) and the other people to understand it. Look, I have a Twitter account, I follow people, but I don’t ever put anything up. I have an Instagram account, I follow people, but I never put anything up. I just don’t think anyone cares about where I am and what I’m eating. I’m guessing you know a bit more about it than you’re letting on. Social media is big. And there’s segmentation. I understand more than I probably admit. I might not know how to send an email blast, but I do know the basic strategies of how to get people to be customers. I look at management as getting people to accomplish certain objectives, and I look at leadership as getting them to want to accomplish those things. I go over all the (social media) strategies. (Staffers) know all about social media, but they don’t know business sometimes. Do you take pride in the long-term success of the marathon? I do. But it’s not me. It’s more about the people who have worked with me on it for years, and it’s more about the runners who love it. That’s the satisfaction I get. I don’t want to say it’s a labor of love, because I don’t treat it like that. But it’s not economically (a big moneymaker). … I always thought, and I guess this is the lawyer in me, that we would buy other races, and that’s still in the back of my mind somewhere and somehow. But it takes so much to do that.

CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310 Cleveland, OH 44113-1230 Phone: (216) 522-1383 www.crainscleveland.com Twitter: @CrainsCleveland Publisher/editor Elizabeth McIntyre Group publisher Mary Kramer Managing editor Scott Suttell Sections editor Michael von Glahn Creative director David Kordalski Web editor Damon Sims Associate editor/Akron Sue Walton Assistant editor Kevin Kleps Senior reporter Stan Bullard, Real estate/construction Reporters Jay Miller, Government Dan Shingler, Energy/steel/auto/Akron Rachel McCafferty, Manufacturing/ energy/education Jeremy Nobile, Finance Lydia Coutré, Health care/nonprofits Senior data editor Chuck Soder Cartoonist Rich Williams Events manager Ashley Ramsey Marketing coordinator Megan Lemke Integrated marketing manager Michelle Sustar Managing editor custom/special projects Amy Ann Stoessel Associate publisher/Director of advertising sales Lisa Rudy Senior account executives Dawn Donegan, John Petty Account executives Laura Kulber Mintz, Loren Breen People on the Move manager Debora Stein Office coordinator Denise Donaldson Pre-press and digital production Craig L. Mackey Media services manager Nicole Spell Billing YahNica Crawford Credit Thomas Hanovich Crain’s Cleveland Business is published by Crain Communications Inc.

Chairman Keith E. Crain Vice chairman Mary Kay Crain President KC Crain Senior executive VP Chris Crain Secretary Lexie Crain Armstrong CFO Robert Recchia G.D. Crain Jr., Founder (1885-1973) Mrs. G.D. Crain Jr., Chairman (1911-1996) Reprints: Laura Picariello, 732-723-0569 or lpicariello@crain.com Customer service and subscriptions: 877-824-9373 Volume 40, Number 18 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for the last week of December, at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2019 by Crain Communications Inc. Periodicals postage paid at Cleveland, OH, and at additional mailing offices. Price per copy: $2.00. Postmaster: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. 1-877-824-9373. Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, MI, 48207-9911, or email to customerservice@crainscleveland.com, or call 877824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.

THE WEEK Help for nuCLEus

Material effect

Legislation allowing the city of Cleveland to provide $12 million to the proposed $350 million nuCLEus project downtown was introduced at Cleveland City Council. A city-issued news release stated the $12 million “forgivable loan” would help nuCLEus developers Stark Enterprises of Cleveland and J-Dek Investments of Solon meet the project cost. Terms would require the project’s additional income and parking tax revenue to exceed 110% of the city’s investment. Cleveland Mayor Frank Jackson said the project “is an opportunity to re-utilize the Gateway lots and to bring critical opportunities for employment, housing and economic growth to the city.”

Parker Hannifin Corp. is expanding its engineered materials business in a deal to buy privately held adhesives, coatings and materials company LORD Corp. of Cary, N.C., for $3.7 billion. Mayfield Heights-based Parker said the deal should be completed in four to six months. LORD will be combined with Parker’s Engineered Materials Group. LORD, founded in 1924, makes products that are used in the aerospace, automotive and industrial markets. Its annual sales are about $1.1 billion, and it has 3,100 employees.

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Sealing a deal Mayfield Heights-based Parker Hannifin Corp. is buying LORD Corp. of Cary, N.C., for $3.675 billion in cash. (Wikimedia Commons)

Charlotte, N.C.-based Sealed Air Corp. agreed to buy Streetsborobased Automated Packaging Systems

Inc. for $510 million in a deal expected to close in the third quarter. Automated Packaging provides packaging systems, which includes equipment, sustainable materials and technical services. The company employs more than 1,200 people and has seven manufacturing sites in the U.S. and U.K. It had $290 million in sales in 2018. Sealed Air posted sales of $4.7 billion last year.

Leadership change Kent State University’s next president is someone already familiar to campus: Todd Diacon, who currently serves as the university’s executive vice president and provost. Diacon, 60, will take on his new role July 1. He will succeed Beverly J. Warren, who is stepping down after five years as president.

5/3/19 1:21 PM

A TRIBUTE TO Northeast Ohio’s

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