Crain's Cleveland Business

VOL. 40, NO. 27

JULY 8 - 14, 2019

Source Lunch

Akron Neighborhood Watch: University Park finds its identity. Page 16

Page 19

MANUFACTURING

BROKEN PIPELINE NEO building boom highlights a shortage of plumbers

By Jay Miller jmiller@crain.com @millerjh

By Rachel Abbey McCafferty

C

an’t get a plumber when you need one?

Apparently, you’re not the only one.

With a construction boom underway in Northeast Ohio, as developers and general contractors start putting together a construction schedule, they are being

rmccafferty@crain.com @ramccafferty

SEE GROWTH, PAGE 18

Photo illustration

by Allkindza/iStock

advised that the first thing they should to do is nail down a plumbing contractor.

“Just all of the sudden, about a year-and-a-half ago, work went through the roof,” said Thomas Wanner, executive director of the Mechanical and Plumbing Industry Council, which includes the Cleveland Plumbing Contractors’ Association. Wanner said the association has about 50 commercial and industrial members.

While plumbing work may be the hardest to schedule, more broadly the industry is struggling with the otherwise-happy problem of a building boom.

SEE PLUMBERS, PAGE 18

GOVERNMENT

County microgrid would keep the power on

By Kim Palmer kpalmer@crain.com

The most widespread blackout in U.S. history may simply have been the result of some overloaded electrical

Entire contents © 2019 by Crain Communications Inc.

lines and a tree branch or a squirrel on a utility pole. Regardless, for a few days in 2003, more than 50 million people experienced what it was like to live without electricity as one local outage caused a chain reaction throughout the northeastern U.S. and Canada.

Significant changes in the national grid since that historical event have prevented a similar outage, but experts warn that aging infrastructure, weather events and cyberthreats pose real dangers to the consistency of the nation’s utilities.

Enter the proposed Cleveland microgrid project: a redundant power grid that would be available to a specific four-square-mile area in and around downtown Cleveland.

SEE MICROGRID, PAGE 18

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Largest law firms by local attorneys Page 15

CONSTRUCTION

Growth continues — but it’s sluggish Economists and others watching the manufacturing industry predict growth will continue in the second half of 2019, but they expect that growth to be sluggish.

Manufacturers are facing a tough trade environment and a tight labor market, though consumer demand is still expected to be strong.

Expectations for manufacturing for the second half of 2019 are “uninspiring,” said Sarah House, a senior economist at Wells Fargo Securities. Global trade tensions are a big factor, which House doesn’t expect to see resolved or escalated any time soon. Overall uncertainty, weak foreign demand and the strong dollar are also contributing to slower rates of growth for manufacturers.

In addition, manufacturers will have to watch import prices, which have been down this year, in part because of the stronger dollar, said Kurt Rankin, an economist for PNC Financial Services Group.

Tariffs could make imports more expensive for consumers, but the stronger dollar can offset those gains for domestic manufacturers.

Ultimately, financial conditions and business owner or CEO confidence has been slowing, said Tom Jalics, director of asset allocation for Fifth Third Private Bank.

“Certainly, we believe the trade-war rhetoric has put global manufacturing, global business owners on alert,” Jalics said.

Instead of investing in their businesses, decision-makers are taking a “wait-and-see approach” to the U.S.-China trade disputes, Jalics said. He expects growth in the second half of 2019, but on a slower scale.

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Blackout protection A proposed microgrid, bounded by E. 55th St., Carnegie Avenue, the Cuyahoga River and Lake Erie, would offer redundant power in the event of a failure of the traditional power grid.

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More than 60 apartments are bound for Cleveland’s Near West Side in two projects, including one that will raze the building that’s home to Old Fashion Hot Dogs at 4008 Lorain Ave. Most West Siders, however, know the diner that’s been operating since 1928 as the Hot Dog Inn. Its hot dog roller in the front window and the blade sign above it are as much a landmark in Ohio City as the West Side Market.

Real estate developer Chad Kertesz is preparing to launch the formal city planning process next month for an as-yet-unnamed four-story building holding 40 suites on the corner. He said in a phone interview on Tuesday, July 2, that he has a contract to buy the building housing the diner and has owned the tiny, empty building at 4004 Lorain since last year.

Kertesz said he plans on providing a new home for the hot dog shop in first-floor retail space of the new building, although the two don’t have a formal lease in place.

“We’re excited to keep them on the corner and have them in the neighborhood,” Kertesz said. “People just love it.”

At Old Fashion Hot Dogs, Tom Sorma, whose family has owned the place for 30 years, was noncommittal about what’s next during an interview July 2. He said he and Kertesz have not gotten to the particulars, such as how much rent would be.

Pointing to the well-worn counter and kitchen area, he said it would all likely go to the junk heap, as it wouldn’t suit a new space.

“I’m 66, and if it takes them two years to build, I may just retire,” Sorma said. “Business here is not what it used to be. And the people moving in tend to want a place where they can sit at a table, eat and drink a beer.”

For the developer, it’s a case of seeing the new building as a better gateway to a neighborhood where he’s heavily invested. The project also grew on Kertesz. He bought a threestory building at 3928 Lorain two years ago, which he plans to retain and install six apartments in it as the

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Construction is expected to start soon on a 21-suite apartment building in Tremont. Developers created a $1.8 million Opportunity Zone fund to help finance the project, to be called Grosvenor Place.

new building goes up.

“After I got the first building, I wondered how to make it work and realized there was an opportunity to do something to fix up the corner,” Kertesz said.

The new building will also incorporate some empty space behind the 3928 Lorain building to make the project work. Originally, he planned to raze a house next door to the 4008 Lorain building, facing Randall Road, for the project. However, he now plans to renovate it after discussing his plans with the Randall/Whitman/ John/Woodbine Block Club.

“The block club felt it was important to keep the house to retain the residential character of Randall,” Kertesz said. “I agreed because it is important to the neighbors.”

Kertesz added he has several lenders interested in the project. He hopes to break ground by year’s end.

In Tremont, the developers of Grosvenor Place, 2430 W. Seventh St., hope to start construction this month because they secured city planning approvals in 2018 for the four-floor building with 21 apartments.

The development group, called Wigwam Partners, is ready to build as it closed its financing for the project on Friday, June 28, according to Chris Smythe, a principal of Smythe Property Advisors of Cleveland. Smythe is a development partner in the project with developer J. Brian McCreary,

who owned a vacant lot and small apartment house that are providing the site for the project.

The team had planned to use conventional financing for Grosvenor Place, Smythe said, but realized it was located in an federally mandated Opportunity Zone under the most recent round of federal tax reform.

They formed TREOZ Opportunity Fund LLC last April under the new federal regulations and raised $1.8 million for the project. The deal also has conventional financing in a $5.6 million loan from First National Bank.

“It was considerably easier to raise funds for the project with the Opportunity Zone,” Smythe said. “It’s a strong incentive for the investors and a great way to promote economic development in economically distressed areas.”

Under the Opportunity Zone program, investors with capital gains may shelter them from federal taxes by investing in a property or business in a designated Opportunity Zone area.

Smythe said Grosvenor Place should be completed in about a year.

While Smythe declined to disclose total development costs on Grosvenor, Kertesz estimated his latest project will cost more than $8 million to complete.

Dimit Architects is designing the Kertesz project and Beegan Architecural Design is designing Grosvenor.

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CRAIN’S CLEVELAND BUSINESS

Frantz Ward acquires local firm Kadish, Hinkel & Weibel

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Frantz Ward marks its first true law firm acquisition since forming in 2000 as fellow Cleveland firm Kadish, Hinkel & Weibel joins its ranks.

Terms of the deal, effective July 1, were not disclosed.

For Frantz Ward, the combination doubles down on work in business and real estate in particular.

For KHW, whose legacy firm was founded in 1975 by Stephen Kadish, the combination offers a long-term succession plan. Concurrent with the deal, former KHW managing partner Kevin Hinkel has been named head of Frantz Ward’s business law practice group, where he’s expecting to be for at least the next decade — an indicator no one from KHW is immediately looking at retirement.

Frantz Ward and KHW have long worked together on legal matters.

The former was often brought in to assist KHW with its real estate work, specifically construction cases.

What pushed Frantz Ward to pursue a deal was a consultant the firm met with last fall.

Frantz Ward managing partner Christopher Keim said the firm has a strategic plan to “pursue smart growth and do laterals, particularly

Keim

Hinkel

in business law.� It became clear that KHW offered the most perfect fit as it worked with the consultant to identify the best areas to increase breadth and depth of services.

Similarly, Hinkel said KHW had been approached about acquisitions numerous times through the years but didn’t entertain an offer until Frantz Ward came knocking, which the firm felt offered the best cultural fit. “We never went to first base with anyone (else),� Hinkel said. “When I look at the opportunity here from a real estate standpoint, we have a strong real estate transaction presence, as well as Frantz Ward. But with Frantz, we get the construction law to back that up,� Hinkel said. “A real synergy here is as we go to market with a bigger team of real estate transaction people.�

Hinkel pointed to areas like West 25th Street and Lorain Avenue as a sign of the renewed interest in Cleveland projects by national players and

an indicator of more work to come.

That neighborhood is where Chicago-based Harbor Bay Real Estate Advisors is working on developing a mixed-use project that includes a 12-story office building with adjoining apartments and ground-floor retail space. “I think there is some great opportunity with national money coming into town,� he said.

With the deal, KHW has moved into Frantz Ward’s offices at 200 Public Square. That adds 11 attorneys to Frantz Ward, bringing the firm to a bench just shy of 70 lawyers, which would bump it up Crain’s ranking of largest law firms (by number of in-market lawyers) to the No. 14 spot. “This is one aspect of that smart growth. These are the areas we wanted to attack first,� Keim said. “But we will continue to explore all possible acquisitions, be it individuals or other firms.�

Keim added the firm is in discussions with other potential acquisitions but that nothing is imminent.

The deal appears to be just the second M&A transaction this year among law firms in Ohio, according to the Altman Weil MergerLine. The only other combination involving an Ohio firm so far involved Columbus-based Porter Wright Morris & Arthur acquiring Butler Rubin Saltarelli & Boyd, a 19-lawyer firm in Chicago.

Masonic Temple to get a new start

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When Kevin Wojton, a Lyndhurst native, moved back to Cleveland a year ago from New York City, where he worked for several technology-oriented companies, he was ready to launch his own venture by closing on the purchase of the empty West Side Masonic Temple at 2831 Franklin Blvd.

Through Cleveland Rocks Holding LLC, Wojton and his girlfriend, Karen Thang, are starting to convert the 1930-vintage, faux-column-studded building’s two auditoriums into

Astrup

Wojton

a rock climbing gym, yoga studio and a home for a tech-oriented nonprofit called Flux Makerspace, which will house low-cost coding and software training and aid business startups.

Part of the rehab plan calls for popping off the roof over the larger

of the two auditoriums to raise it 25 feet, which will allow climbers to clamber up 60 feet. “At the top it will be glass-walled so that as climbers reach the top they will be able to see downtown and Lake Erie,� Wojton said in an interview and tour of the building on Friday, June 28.

Wojton and Thang are undertaking as much of the work as possible themselves, so the marble walls are covered with plastic dropcloths while they paint.

Brass handrails were stolen while the building was empty, Wojton said, but luckily the interior was not vandalized.

SEE TEMPLE, PAGE 18

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CRAIN’S CLEVELAND BUSINESS

Fitz Frames envisions a future in Youngstown

By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty

The Youngstown Business Incubator has a new tenant. It’s Fitz Frames, a California-based startup that found Youngstown had the additive manufacturing expertise it needed to get its business up and running.

Fitz Frames makes customized, 3D-printed glasses for children. The idea was inspired by founder and coCEO Heidi Hertel’s own life.

Hertel has three children, two of whom have worn glasses since they were toddlers. She said she always found herself “disappointed” with the process of shopping for their glasses.

The choices are limited at retailers,

Hertel Fitz Frames produces 3D-printed glasses that are customized for children.

(Contributed photo)

®

P006_CL_20190708.indd 6

so it can be difficult to find a frame in the style and color a child likes. And glasses for children tend to be designed for wide age ranges, even though there can be significant size differences between a 3-year-old and a 7-year-old.

“It’s really hard to check all of those boxes off in one single pair of glasses,” Hertel said.

And fit is particularly important for children’s glasses, she added, because if glasses don’t feel good, children aren’t likely to wear them. And if they don’t wear them and they can’t see properly, performance in school and sports is likely to suffer.

“It makes it hard to be a kid,” Hertel said.

Fitz Frames aims to make glasses that fit well and that children like.

And it wants to make the process

easy for parents.

To that end, part of Fitz Frames’ business model includes an app for selecting and ordering glasses. Parents will take a photo of their child, which is used for measurements for the glasses, and help them with a virtual try-on process. Fitz Frames offers prescription glasses, as well as sunglasses and blue-light glasses.

There’s an option to buy a single pair or a subscription plan for a full year.

Where Youngstown comes into play is the manufacturing process.

After the glasses are ordered, Fitz Frames will 3D-print the frames at its new space in the Youngstown Business Incubator. The lenses are being supplied by a Youngstown company and once everything is assembled, the glasses will be delivered directly to customers.

When Hertel, who has a background in political consulting and fundraising, was starting Fitz Frames, she wanted to make the glasses in the U.S. However, she was told that it would be “too hard, too expensive and just not possible,” especially if she wanted to offer a variety of sizes and styles.

“3D printing just became the optimal solution, so we’re really, really excited about it,” Hertel said.

Now, the frames, lenses and even the packaging are made in the U.S. Fitz Frames has been running beta tests from the floor of its printer manufacturer and is still in the prelaunch phase, though that will change soon.

The app is scheduled to launch in the Apple Store in mid-July, Hertel said. An Android version is expected to launch soon, as well, said co-CEO Gabriel Schlumberger. Schlumberger has a background in startups, particularly those at the “intersection of physical products and digital,” he said. He’s also the parent of a glasses-wearer.

The company has so far raised a seed round from friends, family and institutional funders, although Schlumberger declined to share specifics on the amount.

Fitz Frames will remain based in L.A., but its manufacturing operations will be in Youngstown. Hertel got to know Youngstown through its lens manufacturer, and soon learned the city had become a hub for additive manufacturing.

The Youngstown Business Incubator, where Fitz Frames is located, has been a “great resource,” Schlumberger said, helping to bring the company up to speed on the 3D printing industry and make connections in that space. The Youngstown operations were up and running by early July.

Currently, Fitz Frames has about seven employees, having brought on two people in Youngstown, one of them an intern, and it plans to hire more as it grows. Schlumberger said the need is most acute for children’s glasses, but the company could expand into adult glasses in the future.

“There’s huge advantages to being in our facility in Ohio with a really qualified and excited and dedicated workforce who know a lot about manufacturing,” Schlumberger said.

It’s not every day that the Youngstown Business Incubator attracts companies like Fitz Frames that have gotten national press in publications such as Fast Company, said Barb Ewing, CEO of the incubator.

As the company builds out and becomes more successful, she said that could raise awareness of Youngstown and the greater Northeast Ohio region as a center for additive manufacturing. That could attract more 3D printing companies to the region.

“This is a differentiator for us,” Ewing said.

7/2/19 10:27 AM

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CRAIN’S CLEVELAND BUSINESS

Opinion Personal View

NOACA plans transportation improvements

By Grace Gallucci

Editorial

Moneyball For the last few days, and extending for a few more, Cleveland is the center of the baseball world.

The MLB All-Star Game on Tuesday, July 9, will fill Progressive Field, but related events leading up to it have helped fill hotels, restaurants and other venues, and have given more life to the streets of downtown. It’s also giving Cleveland another chance to shine in the national spotlight and burnish its brand as a place to hold not just giant gatherings like an All-Star Game or the Republican National Convention, but also trade shows and other events that create a sustainable tourism/visitor business.

David Gilbert, president and CEO of the Greater Cleveland Sports Commission, told Crain’s assistant editor Kevin Kleps that the All-Star Game should produce 40,000 to 50,000 room nights at local hotels, at rates considerably higher than during a typical July. Due to the sports commission’s good work, we’ll see more of this kind of thing in upcoming years, with the NFL draft heading to Cleveland in 2021, followed by the NBA AllStar Game and NCAA Women’s Final Four, in 2022 and 2024, respectively, at Rocket Mortgage FieldHouse.

“For a city like Cleveland that needs to work really hard to shore up its national narrative, these are the rare opportunities to break through the noise and clutter,” Gilbert said.

The people promoting Cleveland are on quite a streak. We look forward to them crafting an even stronger lineup in the future.

Quick thoughts

JJThe U.S. House of Representatives passed an appropriations bill that includes $5 million for the proposed Cleveland-to-Chicago Great Lakes Hyperloop System, a high-tech, high-speed transportation project. The bill now moves to the Senate. The Hyperloop uses magnets and vacuum technology to propel podlike vehicles through tubes at speeds up to 700 mph. We’re

not opposed to the government taking a flier on experimenting with this type of thing, especially when the amount of money is relatively small. We just wish the country were better at funding the basics — reliable bus service, or convenient Amtrak to Chicago — that we know can work.

JJAn experiment we like a lot is taking place in Ohio City, where Market Avenue has been closed to vehicles this summer for a pop-up park installation. The pilot project “is intended to test the street as a public space and to see how the community responds,” says Ohio City Inc., which hopes to emulate the success of other cities in creating more dynamic public spaces. Instead of cars, pedestrians will see tables, seats and lighting fixtures in the middle of the street. Cleveland needs a more vibrant street culture, and this is a good place to test the concept.

JJThe pending departure of the Healthcare Information and Management Systems Society from the Global Center for Health Innovation presents yet another big challenge for the 6-year-old downtown Cleveland building. Aram Nerpouni, president and CEO of BioEnterprise, the nonprofit that runs the Global Center, said the departure of HIMSS “in no way, shape or form hinders the promising direction of the Global Center or the strategy we are implementing.” That’s ... an optimistic take.

We like what BioEnterprise has done in working to rejuvenate the center, which remains a work in progress. The building’s history is an illustration of the problems that arise when there’s not a clear vision from the start.

JJWe hope the backers of the proposed “City Block” are mindful of articulating and sticking to the concept for a planned home for startup and other entrepreneurial businesses at Tower City. Auto dealer and tech entrepreneur Bernie Moreno’s Blockland Cleveland group and Bedrock Detroit, the Dan Gilbert company that owns The Avenue at Tower City, have agreed to pursue a plan to create City Block. Many details remain to be worked out, but the central idea — launching an entrepreneurial/tech epicenter, while revitalizing much of an underused property — is a good one.

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

CLEVELAND BUSINESS

CLEVELAND BUSINESS P008_CL_20190708.indd 8

Managing Editor:

Scott Suttell (ssuttell@crain.com)

Contact Crain’s:

216-522-1383

Read Crain’s online: crainscleveland.com

When I read the Crain’s Cleveland Business article on June 20, 2019, “A baker’s dozen of suggestions on improving transportation in U.S. cities includes one from Northeast Ohio,” I was thrilled to see that Northeast Ohio is viewed as one of the leaders.

In fact, the Crain’s article highlighted a piece from Politico Magazine’s issue on “13 big ideas to improve transportation in your city,” where the major question was, “If you Gallucci could do anything to improve transportation in your city, what would it be?”

Suggestions from readers proudly got my attention, as the Northeast Ohio Areawide Coordinating Agency (NOACA) has already advanced two of these ideas successfully. This is a major compliment to Northeast Ohio and NOACA. We pride ourselves as leaders with bold and innovative ideas when it comes to transportation improvements, and we not only have big ideas, but we also implement them.

As Northeast Ohio’s metropolitan planning organization, we plan, fund and advocate for solutions to improve mobility, environmental preservation and building sustainable multimodal transportation systems.

The two suggestions referenced in the Politico article were using smart technology with traffic-light signals and building a hyperloop system. Relative to the first one, the article states, “The system would allow for traffic lights to be coordinated to keep traffic flows moving, reduce idling and eliminate car pollution.” This is exactly what NOACA’s Signal Timing Optimization Program (STOP) does.

STOP is a regional collaboration between local governments, sponsored and led by NOACA, to improve corridors by optimizing traffic signals. The program is funded through our federal Congestion Mitigation and Air Quality program (CMAQ). STOP has targeted approaches to signal timing, which results in improved air quality; reduced fuel consumption and vehicle emissions; minimized travel time and delays; maximized traffic flow; and improved safety for motorists, bicyclists and pedestrians.

NOACA’s data have shown a reduction in emissions, fuel and delay savings, along with benefit-cost ratios. We studied various roadways and found that outdated and inefficient signal timing had caused unnecessary delays and congestion in several major corridors situated in our busiest workforce areas.

With the STOP, NOACA has had great success.

Having started from a pilot program, traffic-light replacements were installed in the following areas: JJPearl Road: Parma, Parma Heights, Middleburgh Heights JJCedar Road: Mayfield Heights, Pepper Pike, Lyndhurst, University Heights, South Euclid, Beachwood JJWest 150th/Warren Road: Cleveland, Lakewood, Brook Park JJSOM Center Road: Willoughby, Willoughby Hills, Eastlake A total of 75 new signals in these districts were upgraded with traffic lights. To date, our traffic operations analysis has shown reductions in the following area: more than 907,500 of delay hours; more than 6,600 metric tons of emissions; and 742,300 gallons of fuel. The benefit-cost ratio is showing at 26:1 and is boasting better results every day. More areas have been identified under the STOP, with Chester Avenue as the next corridor for upgrades. This particular corridor was also mentioned at the 2019 State of the County address in April and word of the improvements was met with great enthusiasm from the audience.

SEE GALLUCCI, PAGE 9

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.

7/2/19 4:04 PM

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FOR PRESTIGE AND ELEGANCE,​

THINK FIRESTONE COUNTRY CLUB. Personal View

Exhaustive studies of Project Icebreaker are already done

By Will Friedman

The June 16 opinion piece in Crain’s regarding Project Icebreaker, the proposed Lake Erie wind energy demonstration project, begs a response. In full disclosure, I serve on the board of the Lake Erie Energy Development Corp.(LEEDCo), the wind energy project’s nonprofit sponsor.

The author calls for additional environmental review of the project despite exhaustive reviews already conducted by numerous public agencies at the federal, state and local level. In truth, this project has been studied nearly to death. The findings contained in the voluminous reports and analyses, which regulators relied on to issue their permits, speak for themselves: The project poses very minimal environmental risk.

Thanks to years of hard work by project proponents, we are finally poised to build it, propelling Cleveland to the forefront of a burgeoning energy sector.

At the federal level alone, the U.S. Department of Energy (DOE) completed a two-year environmental impact assessment of the project. DOE’s massive review, conducted with input from other federal agencies including the U.S. Fish and Wildlife Service, concluded last year with the issuance of a “Finding of No Significant Impact.” The DOE report reads, “The proposed project will not significantly adversely affect any endangered or threatened species or any critical habitat,” and it further concludes there would be no potential for population-level impacts to any species of birds. Furthermore, any future offshore wind project would have to undergo the same rigorous regulatory reviews.

As the first freshwater wind energy installation in North America, Project Icebreaker represents a once-in-a-generation (perhaps a lifetime) opportunity to vault Cleveland to the forefront of an industry

poised for explosive growth. The first U.S. offshore wind project, a pilot like ours, went into operation in December 2016 off the coast of Block Island, R.I. In just two-anda-half years, a wave of projects are now in the development pipeline along the Eastern Seaboard, representing at least $70 billion in new investment. European countries Friedman have installed more than 4,500 turbines in the North Atlantic and the Baltic Sea that generate enough energy to power 14 million homes. Asian countries are now moving very quickly to harness their offshore wind resource. When built at scale, offshore wind energy projects are now competitive, with zero subsidy, with all other energy sources.

Establishing Cleveland as a leader in offshore wind energy is not only good for the environment and smart energy policy, it holds significant economic development potential — meaning new jobs and investments in Ohio. Ohio already has a formidable wind energy component-part manufacturing presence. Picture Ohio-made wind turbine components shipped around the world from the Port of Cleveland and skilled Ohio workers meeting the demands of a growing industry here and abroad. With Mother Nature providing a world-class wind resource and good old Ohio ingenuity powering the supply chain, we have very real and substantial comparative advantages in this sector that we’d be foolish to squander.

Resistance to change is an all-too-familiar drag on progress. Let’s not look back with regret because others seized the day.

Friedman is the president and CEO of the Port of Cleveland.

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Moreover, nationally, STOP has already received attention, as NOACA just recently accepted an Achievement and Leadership Award for the program by the National Association of Regional Councils. This project is described as the “Best of Best” in the major, metropolitan category and is now recognized across the United States as a replicable traffic congestion solution. STOP works; and now, it won’t be just Northeast Ohio that benefits from the results, it will be the entire country.

The second suggestion was the construction of a hyperloop system. NOACA signed an official public-private partnership with Hyperloop Transportation Technologies (HTT, HyperloopTT) with a feasibility study for America’s first multistate hyperloop in the Great Lakes mega-region. That mega-region represents a $15 billion transportation market with tens of millions of tons of cargo and millions of passengers connecting to the cities within the region every year.

Technologies like hyperloop can take our outdated infrastructure through the 21st century and beyond. The hyperloop corridor feasibility study starts with a route from Cleveland to Chicago as the foundation for the network.

At NOACA, we plan. We listen to our stakeholders.

We respond to our communities’ concerns. We are the resource for this region to create tools for accessible transportation and improving economic opportunities for everyone. This is why we are committed to expending over $56 million annually to this region to make our planning efforts a reality.

This is the era of transit innovations and mobility.

We are poised to take this challenge and advocate a movement for transportation improvements.

P009_CL_20190708.indd 9

NOACA is partnering with HyperloopTT to study the feasibility of bringing transformative technology that would connect the cities of Cleveland and Chicago via a 30-minute commute. (Crain’s file)

Our upcoming events define these efforts. Find out more about NOACA’s transportation improvement projects at www.noaca.org.

Most importantly, our programs and services are designed with bold ambition and impactful results to help our communities to thrive. NOACA’s goals for this region include: 1) strengthen regional cohesion; 2) preserve existing infrastructure; 3) build a sustainable multitransportation system; 4) support economic development; and 5) enhance the quality of life in Northeast Ohio.

Gallucci is executive director of the Northeast Ohio Areawide Coordinating Agency.

7/2/19 12:03 PM

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Focus LEGAL AFFAIRS

A LIFELINE FOR LOW-INCOME RESIDENTS

Illustration by RetroRocket via iStock

Housing Justice Alliance may even eviction odds in court

By Jeremy Nobile jnobile@crain.com @JeremyNobile

A

nyone who’s ever watched a TV cop drama knows about Miranda warnings and a citizen’s constitutionally protected right to an attorney when accused of a crime.

But what you may not learn on television is that when it comes to civil cases, including housing and eviction disputes, there is no right to counsel in a system that favors landlords.

The Housing Justice Alliance, an initiative led by the Legal Aid Society of Cleveland, aims to restore balance for low-income residents who could never afford an attorney on their own.

If successfully established, it could make Cleveland just the fourth city in the country — behind New York City, San Francisco and Newark, N.J. — with a guaranteed right to counsel,

P010_CL_20190708.indd 10

ing to legal aid attorneys, while something that stands to benefit “What a right landlords almost always have lawnot just the individuals and their families facing eviction, but the to counsel does yers in tow.

The hearings typically last all of wider community and, perhaps is change the counterintuitively, even the real five minutes, said Hazel Remesch, landscape. It estate market itself. supervising attorney in the housStatistics from the Ohio Su- disrupts the ing group for Cleveland Legal Aid. The nonprofit regularly assists preme Court indicate there are system and low-income residents facing evicroughly 9,000 evictions filed each year in Cleveland — where generally tion, although because of already about 58% of all homes are rent- makes the stretched resources that’s still only a fraction of those who might als — and about 20,000 countyprocess more qualify for help. wide.

As Remesch explained, the According to an analysis by The fair.” courts are designed to move evicEviction Lab, an average of 12 — Hazel Remesch, people were evicted each day in tion cases through the system Cleveland Legal Aid Cleveland in 2016, where the quickly, tipping the scales in favor eviction rate of 4.53% is nearly double the na- of lawyer-backed landlords versus tenants who often don’t show up to their hearings at all. tional average.

Traditionally, just 1% to 2% of those cases in- Those who do appear often don’t know their volve an attorney on the tenants’ side, accord- rights or how to plead a case when they might

have recourse against their landlord for something like unsuitable living conditions. Without a lawyer, those concerns are almost never raised.

“At the end of those five minutes, the usual outcome is the tenant loses their housing. But they’ve been put in that situation without having the information on what their rights are, what defenses the could have raised, or told of what negotiations representation could bring,” Remesch said. “I think the system has been created in a way that it’s really landlord-friendly.”

Critics say housing courts have become machines designed to process evictions, not necessarily to administer justice.

“So what a right to counsel does is change the landscape,” Remesch pointed out. “It disrupts the system and generally makes the process more fair.”

Securing funding for the program is legal aid’s current challenge.

SEE HOUSING, PAGE 14

7/2/19 3:14 PM

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LEGAL AFFAIRS LIST ANALYSIS

NEO law firms still trail in gender and racial diversity

By Jeremy Nobile jnobile@crain.com @JeremyNobile

Gender and racial diversity continue to lag in Northeast Ohio’s legal community, according to data submitted for our annual Law Firms list, with the most glaring lack of diversity present in partner-level roles.

But there are signs of improvement.

The number of female partners in Northeast Ohio is up nearly 7% year over year, while the number of local minority partners is essentially flat, according to data from the full digital list, which includes 76 firms.

A 7% increase in female partners is relatively big compared to most years over the past decade, judging by data from the 40 largest firms that submitted in both 2008 and 2019, a group that includes all but four of the top 45 firms on the list.

But that number is growing from a small base.

The number of local minority partners, however, has barely budged since 2008, and the percentage remains well below the national average.

Of the 1,362 partners at those 40 firms, 283 are women and just 55 identified as minorities. Those equate to just 20% and 4%, respectively, of that group’s partner class.

The partner demograhics are effectively the same when extrapolated across all firms in the list.

In other words, in a region as culturally diverse as Cleveland, some 75% of those local law firm partners are white men.

The makeup looked only marginally different in 2008. The total number of local partners at the top 40 firms was relatively similar then (1,355 then to 1,362 today). Since then, the number of female partners has grown 26.9%, while minority partners grew 5.7%.

Law firm diversity has been an ongoing issue throughout the entire legal field for as long as the profession has existed, with change occurring at a snail’s pace. But when it comes to national averages for diversity, the Cleveland market is still far behind.

According to a report from the American Bar Association last year, women made up 35% of all lawyers in the United States and filled just 20% of partner-level roles (only 18% are equity partners). Meanwhile, about 12% were minorities. Only 5% of all active lawyers identified as African-American. Another 5% identified as Hispanic or Latino, just 2% were Asian and 1% were Native American.

There are a total of 3,053 local attorneys working among 76 law firms on the list. Of those, 881 are women (28.8%) and 176 are minorities (5.7%).

Addressing the lack of diversity continues to be a lead focus for the Cleveland Metropolitan Bar Association.

The top 10 law firms in the market compose 40% of all Cleveland attorneys (working at firms).

In terms of which firms are grow-

P011_CL_20190708.indd 11

ing or shrinking locally, of the top 10 on the list, all but two have fewer attorneys in Cleveland today than 10 years ago. Benesch (No. 3) and Tucker Ellis (No. 4) both have more local attorneys than a decade ago, growing that number since 2009 by 35% and 44%, respectively. Meanwhile, Jones Day, BakerHostetler, Thompson Hine, Calfee, Squire Patton Boggs, Roetzel & Andress, Ulmer & Berne and McDonald Hopkins all have fewer lawyers in Cleveland today.

The List: Northeast Ohio’s largest law firms, ranked by number of local attorneys. Page 15

Become a Crain’s Data Member Only Crain’s Data Members have access to the full downloadable list — in Excel or PDF format.

To get year-round access to the full version of this list and all 60-plus lists and directories we publish, become a Data Member.

Number of local law partners Here’s a 2008 vs. 2018 vs. 2019 comparison of the number of local partners at the top 40 firms that responded to the Crain’s survey all three years.

2008 1,355 total local partners 223 women (16.46%) 52 minority (3.84%) 2018 1,350 total local partners 266 women (19.7%) 56 minority (4.15%) 2019 1,362 total local partners 283 women (20.78%) 55 minority (4.03%) Source: Crain’s survey respondents

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7/2/19 2:45 PM

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LEGAL AFFAIRS

Lawsuits highlight legal field’s gender issues

By Jeremy Nobile jnobile@crain.com @JeremyNobile

If a light were already shining on gender discrimination issues in the legal profession, a recent lawsuit alleging just those kinds of problems at legacy Cleveland BigLaw firm Jones Day should turn that spotlight to burning white.

The $200 million class-action suit, first filed against the 2,500-lawyer firm April 3 in U.S. District Court for the District of Columbia by six former associates, alleges rampant sexism and misconduct at the expense of female lawyers, the result of a “fraternity culture” and a “brotherhood ruled by one man,” namely managing partner Stephen Brogan.

The amended complaint, now 133 pages deep, details alleged systemic discrimination based on gender, pregnancy and maternity, and accuses the firm of a “black box” compensation system, which refers to a small group of high-ranking, influential partners setting compensation without proper transparency or oversight, as opposed to making those decisions through a diverse compensation committee.

The case lists a number of anecdotes about possibly inappropriate events that allegedly took place, seemingly illustrating a culture that belittled women and prevented them from advancing in the firm, if not making them feel outright unwelcome. The stories include a practice group leader allegedly asking lawyers to report pregnancy plans for “budgetary reasons,” a female associate dressed in white being shoved into a pool at a party (and male counterparts high-fiving afterward) and a game called “(Sleep with). Marry. Kill” al-

Andrea Mazingo, left, and Nilab Rahyar Tolton are two of the former Jones Day lawyers suing the law firm for gender, pregnancy and maternity discrimination. (Contributed photo)

legedly played by male associates during a limo ride, with the individuals choosing which of those actions to perform on or with their co-workers.

It’s the latest in a string of lawsuits brought by Sanford Heisler Sharp, which has been positioning itself as a suer of powerful law firms. Since April 2018, the firm has filed separate $100 million suits against Morrison & Foerster and Ogletree, Deakins, Nash, Smoak & Stewart on similar grounds of gender discrimination.

The Jones Day case, however, stands out for the damages sought and for its targeting what is regularly ranked as one of the “most-feared” litigators in law (as ranked by BTI Consulting Group).

Emphasizing that those discrimination cases are ongoing, Elizabeth Anne “Betiayn” Tursi, global chair and co-founder of the Women in Law

By the numbers Results from a survey on bullying and sexual harassment in the legal profession, conducted by the International Bar Association, says ...

1 in 3 female respondents feel sexual harassment is common in legal workplaces, compared to 1 in 14 male respondents who feel that way.

1 in 2 female respondents feel bullying is rife in legal workplaces.

1 in 3 male respondents agree.

Empowerment Forum, cautioned that it “might not be as bad as people think it is” at those specific firms — which is fair because no one in those cases has been found guilty of anything yet.

“But yes, these issues do exist,” she said. “The burning question is, to what extent does this exist?”

It certainly has law firms thinking — equity, I think almost everyone would perhaps more concertedly than ever — agree, is coming too slowly,” said about their culture and their treatment Ann-Marie Ahern, a labor and employof women in a post-#MeToo world. ment law attorney with McCarthy, Leb“In light of these lawsuits, are law it, Crystal & Liffman. “If progress is befirms taking a deep dive to look at ing made, it isn’t anywhere near these issues? My guess is yes,” Tursi adequate, and we are not closing the said. “That’s three lawsuits from gap in any kind of meaningful way.” prominent firms in a little over a year.

In terms of gender equity, there’s So what is all that about?” still a lot of room for improvement, Many firms nowadays, including and the same could be said for alJones Day, have seemingly begun to most any larger organization, acshape their businesses with women in cording to Betsy Rader, who serves mind. Firms are collectively promoting on the board of the Ohio Employwomen to leadership roles, such as ment Lawyers Association and is a partner-in-charge — more often, put- member of the National Employting them on high-ranking committees ment Lawyers Association.

“Really, a takeaway here — and in and launching women’s initiatives.

Jones Day even notes it has a 26% a lot of contexts, not just law firms — female partner rate (though how is the importance of people feeling many of those are equity partners they have someone they go to, they isn’t clear) and 40% women on its ad- can bring concerns to, so those get addressed before someone just quits visory committee.

Yet, gender issues seemingly persist. or feels like they were pushed out the According to a recent survey by the door,” Rader said. “That’s challenging International Bar Association that in any environment.”

It’s worth noting that neither law firm examined bullying and sexual discrimination in the legal field, one in in the Sanford/Jones Day case is talking three female respondents said they about the suit publicly right now.

Sanford has toned down its media had faced sexual harassment at one outreach since first filing the case. time, compared to one in 14 men.

And that doesn’t even get into pay Sources say that’s probably in part a disparities. According to the fifth bi- cautionary measure because of a ennial Partner Compensation Survey court hearing in May in which it was

by Major, Lindsey & Africa and Acri- suggested that talking to the media tas, male partners, on average, make was at odds with keeping pseudonym $959,000 in compensation, com- status for four of the attorneys who pared to an average of $627,000 for filed as Jane Does, three of whom have since been named in addition female partners.

In the legal field, when it comes to to two previously identified women.

Jones Day directs any inquiries gender equity, reality and stated inabout the case to a statement posted tentions simply don’t square up.

“We are at a crossroads now, where on its website denouncing the suit, the you have had the #MeToo and ‘Time’s end of which maintains: “The distorted Up’ movements. You have growing rec- picture of the firm portrayed in the ognition amongst firms that the diversi- complaint is not Jones Day. We will litity03-07John efforts have Sbeen largely unsuccessgate 10:43 this caseAMin court, Grimm.qxp 2/23/2016 Page not 1 in the meful. And the pay equity and promotion dia, and are confident we will prevail.”

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LEGAL AFFAIRS

HOUSING

CONTINUED FROM PAGE 10

Why a right to counsel?

The idea is to address systemic issues created by eviction, which can have a compounding impact on displaced tenants, who, without their home, may end up on the streets or in prison, or may lose their job or kids, or worse.

Affected children may end up bouncing between school districts, or missing school altogether, creating instability that begets other problems and straining social services.

So addressing eviction means ad-

dressing the factors that lead to homelessness, and the other issues that leads to, said John Pollock, coordinator for the National Coalition for a Civil Right to Counsel.

“Say someone becomes homeless or ends up in a shelter. Those are taxpayer-funded services. Say they went to prison or there’s court time spent on prosecuting them for whatever vagrancy crime. The cost of shelter services (in New York City) alone was something like $36,000 a year for one family,” Pollock noted. “When you look at the cost of counsel, it’s a pittance compared to that.”

Businesses don’t tend to like homeless people and often lobby for ordinances criminalizing homelessness,

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Pollock added. Economically speaking, “the better answer is not to make people homeless in the first place.”

That can often be as simple as helping someone bridge the gap of one rent or utility payment or helping them negotiate a way to stave off eviction.

“We consider a right to counsel as preventive legal medicine,” Pollock said.

“It’s intervening in a system at the point where you can treat the underlying problem instead of just the symptom.”

There’s also the ideological sense of justice that comes with it and is absent otherwise.

Yet half the people who face eviction don’t even show up to court at all, let alone with a lawyer.

“And why would that be? Because the system is horribly broken and they know it,” Pollock said.

Ohio, Cleveland eviction statistics The Eviction Lab figures for Cleveland are striking, showing a rate of 12 evictions a day in 2016. And even that may be a conservative number, as the data may not capture every 7.77% (2007) eviction. Many 8% Cleveland judgments don’t 7% end in official court orders 6% because, for 5% example, some tenants may Ohio 4% move before proceedings 3% conclude, possibly U.S. 2% because of pending eviction.

2000 2005 2010 2015

57,980 evictions in 2016 Cleveland’s 4,453 evictions comprised 7.73% of the state total

Ohio had

The impact New York City legislated a right to counsel in summer 2017, following a three-year tenants’ rights campaign, becoming the first city in the U.S. to do so. It took backing by city council, which established the right through legislation and a mandate to fund it.

The related funds largely pay for legal aid attorneys, who assist those facing eviction living at 200% or below of the federal poverty line. The program is being phased in through various ZIP codes until fully implemented in 2022.

It’s a little over $150 million for five years, said Susanna Blankley, coalition coordinator for the Right to Counsel NYC Coalition.

“Evictions are about power, not individual facts of a case,” Blankley said. “They’re used en masse because landlords have had control over the court system for so long. It’s a tool to scare, gentrify and displace. It won’t shift the balance of power unless all tenants know they have a right to fight with the same tools landlords have in housing court.”

According to New York City’s Office of Civil Justice, the program had a transformative effect in just one year. In that time, 84% of tenants provided a lawyer stayed in their homes (22,000 households), with total evictions dropping 14%. And landlords began suing people less often, with eviction filings dropping 5% by the next summer.

Other cities followed with different programs backing the right to counsel with variations between them.

Pollock said similar initiatives are gaining ground in other markets, including Philadelphia, Detroit and Los Angeles.

A study commissioned in Philly (one is in the works in Cleveland involving Case Western Reserve University, but hasn’t been completed yet) showed that 30% of tenants facing eviction would not be able to afford legal representation. While serving them could cost about $3.5 million annually, the costs associated with things like social services that would be avoided if those tenants weren’t evicted would be more than $45 million.

That creates an estimated ROI of $12.74 for every dollar spent supporting low-income tenants facing eviction, said Neil Steinkamp, a managing director with Stout Risius Ross, a Chicago advisory firm that completed the Philly study and others like it.

He suggested that results of a study in Cleveland might look similar to Philly’s.

While Cleveland Legal Aid said the dollar figure for funding a program annually in Cleveland has not been determined yet, it’s likely in the neighborhood of low to mid-seven figures.

In 2016, there were

12.25

evictions per day in Cleveland.

4.53%

For the year, Cleveland had an eviction rate of .

That’s 2.19% higher than the U.S. average for that same year.

Ohio’s eviction rate in the same time period was besting the national average by 1.15%.

3.49%,

Source: evictionlab.org

Praise and criticism Critics of a right to counsel might include landlords. A May Cleveland.com story about city council preparing to introduce legislation related to Cleveland’s Housing Justice Alliance drew commenters who criticized council for “working against landlords who only wish to receive rent on time.” Some suggested it would be a deterrent from owning rental properties in the city.

But criticism is more of a “knee-jerk” reaction by some in the landlord community, said Christian Patno, an immediate past president of the Cleveland Academy of Trial Attorneys and HJA advisory committee member.

“With this, we think we will be able to help landlords by facilitating tenants who are consistent and able to stay and help those tenants who have complicated issues or just aren’t understood to help facilitate a discussion and resolve a dispute so eviction can be avoided,” Patno said. “In that way, it’s a win-win.”

Land7lords sought out by Crain’s generally praised the HJA. “Anyone working in the multifamily business, regardless of area of specialty, deals with evictions. It’s an inevitable part of the business. We believe regulations like the HJA will have a negative impact on property managers who do not follow the rules, and we believe that this outcome is precisely the point of the legislation,” said David Heller, CEO of NRP Enterprises, which has more than 50 communities across Northeast Ohio. “We can imagine that the legislation may create some additional work for the management companies who play by the rules, but as a whole, we believe that this is a small price to pay if it has a beneficial impact on the unfortunate individuals who find themselves on the receiving end of unfair treatment.

“We think the greatest application of the HJA will be in circumstances where residents are battling cases of wrongful eviction, such as discrimination and other unlawful practices,” he added. “In those instances, we see this as a great benefit for those seeking representation.”

After learning of legal aid’s work, Garfield Heights Municipal Court Judge Deborah Nicastro was inspired to look at a smaller right-to-counsel program in that city, independent of

the one sought in Cleveland that could serve as a pilot program.

Nicastro’s court handled 900 evictions last year, much fewer than Cleveland. Still, most people “have no clue what their rights and responsibilities are,” she said, adding that most of the time spent with tenants in housing court is educating them.

Legal support would likely result in different outcomes beyond eviction.

“I thought this would be a good way for them to have individual representation to explain all that before we get into the trial process,” she said. “A judge has to be impartial during hearings. I’m not supposed to help a landlord or tenant. But when the understanding is deficient on one side, then the system just doesn’t work.”

What comes next In Cleveland, legal aid is ironing out the details of its inaugural program as it works with city council.

That includes finalizing the parameters for support and priorities for anyone receiving help, such as having a young family, said legal aid managing attorney Abigail Staudt.

There also needs to be a framework for the rollout of the entitlement, which could take several years to hit full implementation, similar to what New York City is doing.

Ultimately, legal aid would like to see the right to counsel expand for all of Cuyahoga County.

Other details involve how the attached funding mechanism could work. For example, the related funds might be used to outright cover a single month of rent or a utility payment for a needy tenant, avoiding the need for an eviction hearing at all.

That all comes down to funding, the need for which could vary depending on the look of the program.

Securing funding likely means striking a number of community and philanthropic partnerships.

Like many grass-roots initiatives, the challenge in moving from concept to practice, whether with donor groups or city council, will be getting that first group to step up with money.

“We already know it’s the morally right thing to do,” Remesch said. “We are trying to solve really major issues our community has faced and in that process, it will make the bottom line look better for our entire community.”

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PA G E 15

THE LIST

Largest Law Firms

Ranked by number of local attorneys LOCAL LOCAL PARTNERS ATTORNEYS/ FEMALE/ LOCAL WORLDWIDE PARTNERS MINORITY STAFF ATTORNEYS

THIS YEAR FIRM

PRIMARY PRACTICE AREAS

TOP LOCAL EXECUTIVE

1

Jones Day, Cleveland (216) 586-3939/jonesday.com

184 63

14 0

621

2,500

Full range of litigation and corporate practice areas

Heather Lennox, Cleveland partner-incharge

2

Baker & Hostetler LLP, Cleveland (216) 621-0200/bakerlaw.com

161 89

21 2

372

970

Corporate, litigation, employment, tax, private equity, health care, class actions

Hewitt Shaw, Cleveland office managing partner

3

Benesch, Cleveland (216) 363-4500/beneschlaw.com

144 81

15 3

273

239

Corporate and securities, litigation, real estate, intellectual property, health care, labor and employment

Gregg Eisenberg, managing partner

4

Tucker Ellis LLP, Cleveland (216) 592-5000/tuckerellis.com

131 67

11 6

274

216

All types of trial, transactional or IP matters

Joe Morford, firm managing partner

Thompson Hine LLP, Cleveland (216) 566-5500/thompsonhine.com

129 67

13 3

307

377

Litigation, corporate, real estate, construction, product liability, finance, environmental, cybersecurity, immigration, bankruptcy/restructuring, benefits, IP

Deborah Read, managing partner Kip Bollin, Cleveland office partner-incharge

Calfee, Halter & Griswold LLP, Cleveland (216) 622-8200/calfee.com

124 63

10 1

239

154

Corporate, M&A, securities, litigation, IP, government relations, labor, benefits, commercial, real estate, tax, estate planning

Brent Ballard, managing partner

Squire Patton Boggs, Cleveland (216) 479-8500/squirepb.com

102 45

9 3

296

1,600

Full suite of corporate, disputes and public policy services

Frederick Nance, global managing partner; Michele Connell, managing partner, Cleveland

8

Roetzel & Andress LPA, Cleveland (216) 623-0150/ralaw.com

88 53

13 2

184

172

Banking/finance, employment, energy/environmental, estates, health care, transportation, franchise, government, education, real estate, IP

Douglas Spiker, partner-in-charge, Cleveland

9

Ulmer & Berne LLP, Cleveland (216) 583-7000/ulmer.com

84 42

11 1

167

160

Litigation, financial services, business law, real estate, IP, benefits/ERISA, immigration, product liability, employment, cybersecurity

Patricia Shlonsky, partner-in-charge, Cleveland office

10

McDonald Hopkins LLC, Cleveland (216) 348-5400/mcdonaldhopkins.com

77 45

6 1

155

145

Corporate, litigation, IP, restructuring, estate planning, real estate, M&A, health, banking, benefits

Shawn Riley, president

11

Walter | Haverfield, Cleveland (216) 781-1212/walterhav.com

75 42

12 0

135

77

Business, education, IP, labor and employment, liquor control, litigation, public entities, real estate, tax and wealth management

Ralph Cascarilla, managing partner

Brouse McDowell LPA, Akron

74 48

17 0

132

80

Corporate, business restructuring, environmental, estate planning, health care, insurance recovery, labor/employment, litigation, real estate, tax

Marc Merklin, managing partner Christopher Carney, partner-in-charge, Cleveland

5 6 7

12 (330) 535-5711/brouse.com THE LIST

Largest Law Firms

Ranked by number of local attorneys THIS YEAR FIRM

mcdonaldhopkins.com

It takes a team!

Strengthening youth in Cleveland LOCAL as a Cleveland Indians Community Partner LOCAL PARTNERS ATTORNEYS/ FEMALE/ PARTNERS MINORITY

LOCAL WORLDWIDE STAFF ATTORNEYS

PRIMARY PRACTICE AREAS

TOP LOCAL EXECUTIVE

13

Reminger Co. LPA, Cleveland (216) 687-1311/reminger.com

70 55

9 5

183

152

Medical malpractice, workers' compensation, estate planning, D&O and employment practices, professional liability, oil, natural gas and utilities

Stephen Walters, president, managing partner

14

Hahn Loeser & Parks LLP, Cleveland (216) 621-0150/hahnlaw.com

66 40

6 3

134

124

Commercial litigation, business, IP, estate planning, labor and employment, construction, creditors' rights, reorganization, bankruptcy

Stanley Gorom III, CEO, managing partner

15

Buckingham, Doolittle & Burroughs LLC, Cleveland (216) 621-5300/bdblaw.com

65 45

6 2

125

65

Business, litigation, employment and labor, real estate and construction, health and medicine, trusts and estates

Steven Dimengo, managing partner

16

Taft Stettinius & Hollister LLP, Cleveland (216) 241-2838/taftlaw.com

64 34

9 3

105

480

Finance, litigation, real estate, tax, intellectual property, labor and employment, domestic relations, municipal, health care

Jill Helfman, Adrian Thompson, copartners-in-charge, Cleveland

Frantz Ward LLP, Cleveland (216) 515-1660/frantzward.com

55 33

7 1

84

55

Bankruptcy/creditors' rights, construction, corporate, education, estate planning, health care, insurance, employment, litigation, real estate

Christopher Keim, managing partner Michael Frantz, Joel Hlavaty, management committee members

17

Krugliak, Wilkins, Griffiths & Dougherty Co., Canton (330) 497-0700/kwgd.com

55 38

8 0

105

55

Corporate, real estate/construction, labor/employment, employee benefits, workers' compensation, tax, health care, environmental, OSHA

John Tucker, managing partner

19

Vorys, Sater, Seymour and Pease LLP, Cleveland (216) 479-6100/vorys.com

54 24

4 2

81

357

Corporate, litigation, labor and employment, bankruptcy, health care, real estate, financial institutions

Anthony O'Malley, managing partner, Cleveland

20

Day Ketterer Ltd., Canton (330) 455-0173/dayketterer.com

47 25

4 0

73

47

Business, banking, education, litigation, employment, health care, real estate, family, estate planning, workers' compensation, taxation

Robert Roland, managing partner

21

Kohrman Jackson & Krantz LLP, Cleveland (216) 696-8700/kjk.com

45 26

11 1

77

45

Brand enforcement, commercial, corporate, domestic relations, estates, employment, incentives, IP, litigation, health care, real estate, startups

Jon Pinney, managing partner

22

Gallagher Sharp LLP, Cleveland (216) 241-5310/gallaghersharp.com

43 29

4 0

87

57

Litigation, insurance, legal malpractice, professional liability, railroad, trucking, aviation, maritime, product/employer liability, mass/toxic torts

Timothy Brick, managing partner

23

Brennan, Manna & Diamond, Akron (330) 253-5060/bmdllc.com

39 27

6 1

74

65

Health care, litigation, business, labor and employment, real estate, M&A, tax, estate planning

Anthony Manna, chairman Jack Diamond, president

24

McCarthy, Lebit, Crystal & Liffman Co. LPA, Cleveland (216) 696-1422/mccarthylebit.com

38 23

3 0

66

39

Transactional, estate planning, tax, litigation, domestic relations, banking, property, personal injury, employment, alternative dispute resolution

Robert Glickman, managing principal

25

Meyers, Roman, Friedberg and Lewis, Woodmere (216) 831-0042/meyersroman.com

38 22

5 0

65

38

Corporate, finance, employment, real estate, tax, litigation, construction, family law, estate planning, blockchain, M&A

Seth Briskin, managing partner

26

Weston Hurd LLP, Cleveland (216) 241-6602/westonhurd.com

37 29

4 0

59

44

Business advice, litigation, estate/probate, insurance, construction, employment, white collar crime, professional liability, real estate

Carolyn Cappel, managing partner

Fay Sharpe LLP, Cleveland (216) 363-9000/faysharpe.com

35 21

5 1

75

35

Intellectual property

Joseph Dreher, Timothy Nauman, James Scarbrough, management committee members

28

Tarolli, Sundheim, Covell & Tummino LLP, Cleveland (216) 621-2234/tarolli.com

34 15

1 0

75

35

Intellectual property

Management committee

29

Cavitch Familo & Durkin Co. LPA, Cleveland (216) 621-7860/cavitch.com

34 22

2 2

52

34

Business law, capital and finance, estate planning, family law, litigation, real estate

Michael Cohan, president

30

Dworken & Bernstein Co. LPA, Painesville (440) 352-3391/dworkenlaw.com

32 15

5 0

65

32

Business, commercial litigation, commercial real estate, estate planning, oil and gas, family, personal injury, workers' compensation

Howard Rabb, Erik Walter, Richard Selby Jr., administrative partners

30

Wickens Herzer Panza, Avon (440) 695-8000/wickenslaw.com

32 12

2 0

69

32

Business transactions, litigation, probate/estate/elder law, real estate, construction, M&A, bankruptcy, health care

Matthew Nakon, president, CEO

17

27

RESEARCHED BY CHUCK SODER (CSODER@CRAIN.COM)

Get 76 firms, more names and more contact info in Excel. Become a Data Member: CrainsCleveland.com/data

Data is as of May 1, 2019. Firms with equal numbers of local attorneys are then ranked by worldwide attorneys. Information is supplied by the companies. The city next to each firm's name indicates the location of the firm's main local office. Send feedback to Chuck Soder: csoder@crain.com.

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AKRON

Neighborhood Watch

University Park is finding its identity With UA, Stark State campuses drawing young people, area looks to new development and to complement downtown

By Dan Shingler dshingler@crain.com @DanShingler

YOUR STORY. YOUR STAGE. SPONSOR AN EVENT TODAY: Megan Lemke • mlemke@crain.com

Growth by Design

Northeast Ohio’s economic development engine at work

Some folks who live in Akron’s University Park neighborhood hardly even know it exists, despite the fact that it’s one of the most important sections of the city culturally, economically and in its ability to attract young people.

“I haven’t heard it called that in a while,” said John Najeway, co-owner of the Thirsty Dog Brewery Co. on Grant Avenue in the neighborhood.

Indeed, until about the beginning of this century, it wasn’t called University Park, according to Jason Segedy, Akron’s director of planning and development, on a recent drive around the neighborhood. Much of it used to be known as Spicertown or Goosetown, which no longer officially exist, he said. And some University Park residents likely think they live in nearby Middlebury.

But folks in the neighborhood that surrounds the University of Akron began calling it University Park about 20 years ago, and the city made it an official neighborhood in 2016.

Aptly named, it’s dominated by UA and, since 2018, Stark State College’s Akron campus.

The neighborhood in central Akron is bordered on the east by Middlebury and on the west by downtown. It butts up against south Akron and Cascade Valley to the north and most of the UA campus, except for a couple of buildings downtown.

For decades, students who wanted

The vac

Don Drumm Studio & Gallery, which highlights the artist’s work and that of about 500 others, is probably one of the best-known businesses in Akron’s University Park neighborhood. (Photos by Shane Wynn for Crain’s)

to live near campus but not in UA’s limited dorm space had little choice but to rent houses in University Park, one of the first parts of Akron outside of downtown to be developed, from the 1880s through the 1920s, Segedy said.

The houses weren’t, generally, very stylish digs — more “Animal House” than Bauhaus. By the 1990s, most of the flair the neighborhood once boasted had been replaced by a reputation for run-down rentals and rowdy parties highlighted by the burning of student furniture.

That changed in recent years with the development of student housing downtown and, most notably in 2014, when The Depot and the University Edge student housing com-

plexes came online in University Park. Suddenly, about 1,200 new student apartments were competing with old houses that didn’t seem good enough for some students.

“A lot of the students are leaving these old rental properties, like an old house from the 1890s with 12 kids in it,” Segedy said. “That’s led to a big question mark in the area with regard to what’s going to happen to this neighborhood.”

So far, the better older housing is holding up, while some of the more run-down stuff has gone vacant and been razed, Segedy said. Many of those resulting vacant lots were acquired by UA for redevelopment or by the city, which used land to attract

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P016_P17_CL_20190708.indd 16

The University of Akron’s campus, along with InfoCision Stadium, seen here, is at the heart of the city’s University Park neighborhood. Stark State College’s recently opened Akron campus adds another academic element to the neighborhood.

7/2/19 3:00 PM

The dev

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EV AU NSDI NBEUSSSI N E| S S UBLY C R A I NC’RSACI N L E’ SV C ELA N EDLB S E P| T EJM E R8 3- -14 9 , 2 019 018 | PA G E 17

AKRON

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ea Thirsty Dog Brewing Co.’s Sour Haus is one of the sites that the company runs in University Park.

The Martin University Center, a 40,000-square-foot former private club that opened in 1918 and has been vacant since 2013, is being redeveloped into a 73-room boutique hotel.

About this series We thought we knew a fair amount about Akron, which is the hometown of some of us at Crain’s. That is, until we started driving around with Akron planning director Jason Segedy, who agreed to take part in an ongoing series to show us his knowledge and passion for the city, one neighborhood at a time. This month, we look at University Park, which includes the University of Akron and Stark State College Akron campus. While student housing makes up much of the neighborhood, officials are hopeful the area can play an important role in feeding downtown’s revitalization.

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The University Edge student housing complex is one of the newer developments to come online in University Park.

Stark State. Multifamily properties, including some of the newer student housing projects, are doing very well, said Anthony DeMarco, who works the area for Colliers International in Cleveland’s Cooper Multifamily Capital Markets Team.

“The occupancy across the board is right around 94%,” DeMarco said of the area.

But that’s being watched closely by landlords whose tenants often don’t sign 12-month leases in a market that’s been in turmoil because of its main source of business.

“Back in 2015, there were around 25,000 students enrolled in Akron, and over the next five years they thought that would jump to 28,000 or so. Instead, it’s down to 22,000,” DeMarco noted. (It's actually below 21,000, according to university statistics.)

It’s not a big neighborhood in terms of people: only about 9,000 after it suffered a greater rate of population loss than any other part of Akron during the 1990s, according to the city’s website. Most of that population is linked to the university, Segedy said, and it fluctuates with both enrollment and the cycles of the academic year. It’s more or less Akron’s college-town neighborhood, he added.

Still, Segedy said he sees opportunities for further development as a result of changes in the neighbor-

P016_P17_CL_20190708.indd P017_CL_20190708.indd 17 17

hood. One thing he’d like to encourage is the building of some nicer homes near UA and Stark State that might attract academic professionals, who often live in Highland Square or other neighborhoods, according to Segedy.

Development underway That may be wishful thinking, for now, but there is some development taking place near campus. The Martin University Center, a 40,000-squarefoot former private club that opened in 1918 and has been vacant since 2013, is being redeveloped into a 73room boutique hotel by an investor group led by Tom Chema, who is probably best known for spearheading the development of sports venues in downtown Cleveland.

Chema said now that the project recently was awarded $1.6 million in historic tax credits from the state, his group is moving ahead with what will be a nearly $20 million development.

“We expect to spend something north of $14 million in hard dollars on the project. That does not include the acquisition, so we’ll invest a total of about $19 million,” he said.

Chema added he expects to complete financing and begin construction in October, with hopes of opening by the end of 2020.

The hotel is in the perfect location to provide out-of-town academics with a toney setting, Chema noted. That’s because it’s in the part of University Park that was once one of Akron’s wealthiest neighborhoods. There were no tire-factory barons here, because cars hadn’t been invented yet.

That’s why the Martin Center was built there. It’s also why across the street sits the Hower House, a 28room Victorian mansion — in the Second Empire Italianate style, to be specific — built in 1871 by Akron industrialist John Henry Hower and his wife, Susan Youngker Hower, according to its museum’s website.

A block away is the Andrew Jackson House (the Akron lumber magnate, not the president), which was renovated in 2010 and houses GAR Foundation. Chema said Cleveland’s Dimit Architects, which did the Jackson House project, will be the architects for the hotel renovation.

The cluster of historic homes helped attract him and his investors to the site. “I think this will be a spot for architectural tourism,” Chema said.

New life Farther from the UA campus, other parts of University Park already have gotten new life into old bones. That includes Thirsty Dog Brewing Co. on Grant Avenue, where it occupies the site of Akron’s former Burkhardt Brewing Co. Thirsty Dog has been in the 50,000square-foot, Civil War-era facility since

2006. Co-founder Najeway said it’s been the perfect neighborhood for his business. The fact that he’s in the city’s old brewery district from the 1800s is just a happy coincidence, he said, but he loves the local history.

“This neighborhood I’m in was known as Goosetown. It was the German part of Akron,” Najeway explained. “They used to block ice over at Summit Lake in the winter and then bring it over here.”

Business in the neighborhood is mostly a varied mix of small enterprises on and around Exchange Street, with Don Drumm Studios & Gallery perhaps the best known. The main business drag is dominated by UA and its students and has been host to a long list of cheap food outlets, small retailers and service shops for students and faculty. There, as with residential landlords, they often struggle with a population that’s big for nine months of the year and much smaller during the summer, DeMarco said.

More distant from the schools is a mix of small industrial companies and others in the construction trade — enough that Najeway said he didn’t have to venture from the neighborhood for much when he built his brewery.

It took some doing to turn an old brewery into a modern one. But Najeway said he’s glad he did. Thirsty Dog now employs 38 people at its main brewery and its TapHouse just down the street.

“When we moved here in December of ’06,” he said, “we came into a building that hadn’t been occupied

for 30 years, with no windows in most of it. … It was rough, but it’s been a great neighborhood.”

Burkhardt’s first floor actually had four levels, so it could use gravity to drive its processes, Najeway noted.

Unlike Burkhardt, which used the site as an industrial manufacturer whose product happened to be beer, Thirsty Dog is an entertainment destination as well. The TapHouse is also a restaurant and gathering place.

It’s exactly the sort of thing real estate watchers in University Park want to see more of, because they think the ability to attract and keep new young residents will be key to the neighborhood’s success. They view it as closely linked to downtown by more than proximity: Both areas are part of the same plan to rebuild the city’s population, with the university drawing students to town and downtown developments hopefully keeping them as residents.

“You get downtown residents through the university, the amenities and the idea of not having to get in your car and having to drive out of the city,” DeMarco said. “The more people, the more foot traffic and the more footprint, the better.”

Segedy said he thinks that’s one reason University Park has more advantages than some other parts of the city. In addition to two schools to help support it, it should also benefit from extensive development going on downtown, he said. And there are plenty of opportunities for further development.

“I think this neighborhood will probably come back,” Segedy said.

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PA G E 18

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CRAIN’S CLEVELAND BUSINESS

PLUMBERS

GROWTH

The Dodge Data & Analytics 2019 construction forecast reported that most segments of commercial, industrial and institutional construction would grow by about 3% in 2019.

That follows several years of even faster growth after shaking off the effect of the Great Recession.

Just a quick look around downtown Cleveland attests to the need for plumbers. The $185 million makeover that began two years ago of what now is called Rocket Mortgage FieldHouse involves new sinks and toilets. A few blocks north, the 187-unit Beacon apartments project also is wrapping up, and the 318-unit Lumen at Playhouse Square continues to rise. The region also has seen the addition of several hotels and construction continues apace at area hospitals.

Wanner pointed out that all of the oxygen and other gases in hospital rooms are piped in by plumbers.

As the industry is structured, a general contractor has to find a plumbing subcontractor and the subcontractor has to find the workers. Since water pipes can’t be run through a building even a day after the drywall is up, all of this has to happen on a tight schedule. So plumbing contractors would rather not bid on a project than risk the reputation of not being able to bring in a workforce on time.

“We haven’t seen as many bids from contractors on our projects,” said Jason Jones, vice president and general manager of the Cleveland office of Turner Construction Co. “But when we award a subcontract, there has been the labor to support it more than finding ourselves in a situation where we need six plumbers on a project and they can only supply five.”

Jones said plumbing contractors usually keep a core staff of managers and foremen and, assuming there is always a modest level of work, a small

The uncertainty caused by tariffs and other geopolitical factors are creating caution among companies, said T.J. Monico, managing director for KeyBanc Capital Markets’ industrial investment banking. But KeyBanc’s manufacturing clients are optimistic about demand for the second half of 2019. The biggest challenge they still face is access to talent and labor.

“That’s really been the biggest bottleneck in terms of further expansion in manufacturing activity,” Monico said.

Monico added he’s expecting “mid-single-digits” in terms of organic growth in the second half of the year.

House anticipates industrial production growth below 2%, while she expects GDP to be about 2.25% on an annualized basis for the second half of the year.

Monico said he’s seen more companies turn to mergers and acquisitions to enhance their growth in recent years. A lot of KeyBanc’s clients have been looking to expand into new, higher-growth markets, such as medical.

He’s also seeing growth among companies that work in replacement parts instead of original equipment.

“Part of that is trying to position a business to be more resilient during a future recession,” Monico said.

Recessionary activity in some end markets, like in heavy-duty truck manufacturing, could begin as early as next year, he added.

A recent report from professional services firm Sikich LLP found that 63% of respondents were taking steps to prepare for a possible recession, increasing efficiency in production and business operations and increasing their ability to swiftly scale operations up or down.

The report reflects “hesitation in the market,” said Tracy Burkhart, a partner in Sikich’s Akron office. In addition to recent trade issues, companies realize the economy is in its longest expansion on record and that a recession will occur at some point, even if it’s not for 12 to 18 months.

Burkhart said companies are looking to reduce nonproduction expenses and protect cash flow.

Just 27% of respondents in Sikich’s report thought it was “extremely or very likely” that the U.S. would enter a recession in the next 12 months. That percentage increases to 49% when looking at respondents with more than $500 million in annual revenue.

Burkhart said the disparity in responses between larger companies and smaller ones could be due to bigger companies having more “visibility into the demand for their product” and more international exposure.

Also, smaller companies may have more niche products, which could be more recession-proof, she said.

Matthew Nipper, senior vice president and KeyBank’s commercial team lead for Northeast Ohio, said locally, clients aren’t necessarily preparing for a future recession, but they are looking for ways to raise revenue and grow. He does see clients who hesitate to invest in M&A and over-leverage their existing company.

Despite the headwinds, there are factors that support manufacturing in the months to come. Fifth Third has been “bullish” on U.S. manufacturing in 2018 and 2019, Jalics said. The industry has been adding jobs and the country’s share of global manufacturing has grown in recent years. Long term, he said, the segment looks strong.

Currently, House said, the consumer sector is still strong and there are expectations that the Federal Reserve will cut rates.

“It’s not all doom and gloom, but it’s tough to get too excited about things right now,” House said.

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TEMPLE

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They have lined up conventional financing for the project from Chemical Bank, a $200,000 loan from the City of Cleveland and an $80,000 loan from Cuyahoga County. It’s a project of more than $2 million. However, Wojton said it would have cost much more if the pair wasn’t doing most of the work themselves, with Thang serving as the project’s general contractor.

The do-it-yourself aspect extends to financing as well. Wojton and business partner Nathan Astrup have also launched an Opportunity Zone

MICROGRID CONTINUED FROM PAGE 1

Billed as a more resilient power source with less downtime and fewer brownouts, the grid would pair with existing utilities, Cleveland Public Power (CPP) and Cleveland Thermal, with the addition of an ultra-efficient “smart grid” technology.

The project proposed by Cuyahoga County’s Sustainability office would address growing concern around business productivity downtime.

“There is customer willingness to pay more for reliable power,” said Andrew Thomas, energy policy director at Cleveland State University and co-author of a multiyear feasibility study into the microgrid.

On average, companies experience

P018_CL_20190708.indd 18

CONTINUED FROM PAGE 1

Northeast Ohio’s construction boom, which includes the Church + State development in Ohio City, has heightened the need for plumbers. (Dan Shingler)

squad of preferred plumbers. When business picks up, the plumbing company goes to the union hiring hall and hopes that plumbers are available, looking especially for plumbers on whom it has successfully relied in the past.

Plumbers Local 55, the union that covers Northeast Ohio, has 1,014 journeyman and apprentice members, down from 1,233 in 2013 and 1,301 in 2000, according to its latest filing with the federal Office of Labor-Management Standards. In part, the decline in the number of plumbers is the result of the slowdown in construction during and coming out of the Great Recession.

In addition, the industry knows it must respond to the aging and retire-

ment of the trade workforce.

The Ohio Department of Jobs and Family Services (ODJFS) reported the seven-county region of Northeast Ohio, served by several plumbers’ unions, had 2,130 plumbers in 2014.

It projects that number will grow to 2,330 by 2024. That’s a modest increase of 20 jobs a year, but because of retirements ODJFS expects to need 48 new plumbers to meet the demand it is projecting. That anticipated growth hasn’t been matched by a growth in apprenticeship classes, but David Wondolowski, executive secretary of the Cleveland Building and Construction Trades Council, said the member unions of his council, including plumbers, are gearing up apprenticeships to meet the demand.

According to the ZipRecruiter website, a journeyman plumber in Ohio can expect to make about $25 an hour and $51,988 a year after a three- to five-year apprenticeship at a reduced rate.

Wanner said the current demand for plumbers (and the pay) is making it easy to attract high schoolers looking for a secure career.

“For a while, when we were in a career day (at high schools), the mothers would push their kids right by the construction booth and go to the computer booth or something like that,” he said. “Now, when I do career days, I say, ‘You know they haven’t figured out how to build a skyscraper or school or a factory in China and ship it over here.’ ”

fund, called the Cleveland OZ Fund, with advice from Novogradac & Co.’s Cleveland office, to raise money to provide follow-on funding for Cleveland Rocks and other ventures they see emanating from the makerspace or their other activities.

Astrup said the two envision the Cleveland OZ Fund as a small, locally focused fund that can nimbly invest in local projects and businesses.

“We see a chance to be vertically integrated,” Astrup said, as Flux is designed to spawn companies.

There’s a more holistic aspect to all the efforts of Wojton and Astrup, both 30.

“When I returned to Cleveland, I

felt it needed a stronger technology startup community,” Wojton said. “I also recognize an extreme lack of support for early-stage resources for people in Cleveland.”

As part of that, Flux offers low-cost coding training and works with alumni to launch tech-related ventures.

Wojton said he has 75 graduates who have already launched six companies, including the Cleveland OZ Fund site, which Astrup launched after taking Wojton’s class and becoming a business partner in the fund.

Wojton said he expects to open the Cleveland Rocks location late this year. He added that he formed Flux as a nonprofit to directly and quickly

provide services, rather than try a more traditional approach with grants and other mechanisms.

He has already had to hew to his course to keep his dream of turning his rock-climbing avocation into an occupation.

Asked how many offers he got after landing the old building for just $65,000 last year, according to Cuyahoga land records, Wojton refused to say but did confirm they were primarily would-be apartment developers.

However, the rock-climbing gym and associated ventures will be more responsive to the building’s makeup and the community than a profit-driven effort, Wojton said.

99.9% electrical reliability, resulting in about eight hours of downtime a year.

With the proposed microgrid and its 99.999% reliability (referred to as “59s”), average downtime is reduced to only four minutes a year.

Last week, the Cleveland Foundation board of directors approved a $200,000 grant to fund the management of the RFQ/RFP process by the Cleveland engineering firm Middough Inc. The project also awaits a decision on a $115,000 grant from Cuyahoga County.

Mike Foley, director of the county’s sustainability office, said he believes that because the project will be the first of its kind, the estimated $100 million infrastructure buildout will be paid entirely with private funding in exchange for future fee collection.

“There’s capital out there for this,”

Foley said, adding, “If we build it, they will come.”

Another enticement for developers is the approximately 1 million square feet of vacant land and unoccupied office space in downtown Cleveland. According to the study co-authored by Thomas, by 2026, companies moving into the microgrid area could generate more than 1,000 new jobs in the county, resulting in nearly $100 million in income, with additional tax revenue of around $2.8 million a year.

Despite the rosy economic predictions, the microgrid project may face a tough time getting the initial RFP funding. A “no” vote in June from Cheryl Stephens, a member of Cuyahoga County Council’s Environment & Sustainability Committee, may indicate a level of resistance

when the funding vote comes up for a full council vote later this month.

Stephens, who has a background in economic development, said she wants a guarantee that all RFP funds will be repaid before approving the funds.

Add to that a healthy skepticism regarding the project’s return on investment.

“I think those numbers are very optimistic,” she said. “I voted no because I saw CPP and Cleveland Thermal, but I did not see a return on the principal of the county’s initial investment.”

If the RFP is funded, Foley estimated a decision on the developer will be made by the first quarter of 2020. Construction then would take place in 2021, he said, with the first customers connected to the new grid by 2023.

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CRAIN’S CLEVELAND BUSINESS

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Kevin Clayton Vice president of diversity, inclusion and community engagement, Cleveland Cavaliers Kevin Clayton’s career has come full circle. ¶ A former basketball player at Shaker Heights High School, Clayton has lived in California, New York, Georgia, Michigan and Florida. He started his career with Procter & Gamble in Cincinnati, and has had prominent roles with the likes of Bon Secours Mercy Health, the United States Tennis Association and Russell Corp. He also had a successful consulting firm. ¶ Clayton wasn’t planning on returning to Northeast Ohio, but when the Cavs offered him a newly created position that called for someone to lead diversity and inclusion initiatives for all of the organization’s properties, the former Wilmington College hoops standout found the opportunity too intriguing to bypass. ¶ “This, for me, is my dream job at kind of the latter stages of my career,” said Clayton, whose hiring was announced in early April. “I’m as happy as I could be to be back in Cleveland to leverage all the assets that our organization has to help a community that I grew up in.” ¶ Our conversation was edited for length and clarity. — Kevin Kleps

The Clayton file Hall of Fame lineage His uncle is Sam Jones, who was a five-time All-Star during a 12-year career with the Boston Celtics.

First job Clayton was an intern for the Browns for two summers of training camps at Kent State University.

Enjoying the ride Clayton, a self-proclaimed “thrill-seeker,” has a 13-year-old horse, Dakota, who lives in California.

Lunch spot Bar Louie 1352 West Sixth St., Cleveland 216-452-5500

The meal One had a Caesar salad with chicken; the other had the barbecue pulled pork sandwich. Both had water.

The vibe Bar Louie, which was founded in downtown Chicago in 1990, is what it says: a comfortable place to hang out and enjoy a meal. We highly recommend the pork sandwich.

The bill $26.46, plus tip

You’ve had a successful, wide-ranging career in diversity and inclusion. How did this all come about?

I saw how if you created an environment, no matter who you are — short, tall, black, white, male, female — that you could actually bring your whole self to that workplace. It just creates a totally different synergy. The problem is when you don’t create that inclusive environment, then things come into play such as, “Oh, it must be because of my race. Oh, it must be because of my gender. It must be because of my dialect.” And those are all distractions, when really it could be just an individual leader did not figure out how to create an environment where everyone felt that they could be themselves.

Why the Cavs?

Going back to the beginning, I’m from Cleveland, I grew up cheering for the Cleveland Cavaliers, I played basketball, my sports career started here. I think about all the things I have learned, whether it be on the health care side to getting a seat at the table when we’re creating the strategies and the plans for the U.S. Open. ... So I’m learning all of these different components, and to be able to come back home and do this work, it spiritually felt right, and as I think about what the final step in my journey might be, it was here.

This is a big job — there are only a few of them in the NBA. How do you approach something like this?

I look at this really as what is the business plan around this? I look at it from that perspective because this

isn’t just a process of saying, “Hey, we have 10 different seats at the table. We have to have 10 different types of people to fill those seats.

Let’s go out and hire people that look different or think different,” and that’s your diversity plan. No, this is putting in definitions of what diversity and inclusion is and is not.

It’s aligning the strategies that we’re developing to the values and business strategies of the Cavaliers, and when I say Cavaliers, I’m talking about all of our properties. What I did for the first 30 days was I tried to learn. I wanted to understand what our product was and see what our fan engagement was. That was external. We’ve also gathered information internally. That was focus groups and interviews just to understand what our team members’ perspectives were. What are some opportunities? What are some challenges? What are the types of things that they would hope for?

Hearing you talk about the revenue aspect of diversity and inclusion is interesting because that’s not something that immediately comes to mind when I hear of a role such as yours. Is that a common mistake that people make?

I won’t say it’s a mistake. It’s just a common understanding and definition of what diversity is. It is generally defined like that. I would say that in our interview process, there was a lot of conversation about going beyond basic components of diversity to this next level and really being a leader in professional sports about doing this work.

You’ve talked about focusing on similarities instead of differences.

Why does that work, and why is that important?

That’s one of the things that I’m introducing to our organization: that we have similarities and differences.

If we focus on the differences, that’s going to create problems; whereas the similarities are what connect us.

You and I, before we ever met, we connected on the similarities of our name. That gave us a common bond.

Otherwise, we would have been going through that awkward stage of, I’m Kevin, you’re Bob, or whatever.

It’s just human nature. That’s what we do. But when it comes to diversity, it’s, “Oh, I gotta be careful about what I say.” No, just understand that we have similarities and differences.

Have you also been involved with the Cavs’ esports team — the Cavs Legion Gaming Club?

When I heard about it, I was immediately fascinated by it. I went out to our facility. I’d gone on record in our organization as saying that if you think about diversity in all of our properties, this is one that we need to pay some attention to. The demographics… Let me just go back to the whole concept of leveraging diversity to drive revenue. That demographic group is a demographic group that a majority of sponsors are trying to get to. Therefore, knowing how much the NBA is investing in this, it made sense. I’m a big fan of NBA 2K and think it plays a huge role in my diversity strategy because it allows me to leverage that particular property to connect with my community strategy.

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 Rachel McCafferty, Manufacturing/ energy/education Jeremy Nobile, Finance Kim Palmer, Government Dan Shingler, Energy/steel/auto/Akron Lydia Coutré, Health care/nonprofits Senior data editor Chuck Soder Cartoonist Rich Williams Local sales manager 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 27 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.

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THE WEEK Around the block Auto dealer and tech entrepreneur Bernie Moreno announced that his home for startup and other entrepreneurial businesses will land at Tower City.

Moreno’s Blockland group and Bedrock Detroit, the Dan Gilbert company that owns The Avenue at Tower City, agreed to pursue a plan to jointly create a home for emerging businesses, called “City Block.”

In his announcement, Moreno said City Block “will be a buzzing cross-section of entrepreneurs and services for all types and businesses.”

At a meeting of the Cuyahoga County Finance and Budgeting Committee, Moreno laid out his plan for what he described as something more than a home for developing blockchain technology, the original focus of

P019_CL_20190708.indd 19

his Blockland Cleveland organization.

Rather, he told the committee, it will be for “all entrepreneurship.”

Compounding interest Hexpol Group, the world’s largest rubber compounder, bought Copley-based Preferred Compounding Corp. from private equity firm Audax Group in a deal worth $232 million.

Preferred was the No. 2 compounder in North America, posting 2018 sales of about $240 million. It employs about 540 people and has six factories — five in the United States and one in Mexico.

Clinical precision Blockland envisions Prospect Avenue as a gathering space.

(Contributed rendering)

Cleveland Clinic named health care entrepreneur Semih Sen to its newly created position of chief busi-

ness development officer.

Sen, a native of Turkey now living in Moreland Hills, has more than two decades of international health care investment and development experience.

He’ll also oversee Cleveland Clinic Innovations. Sen will report directly to Cleveland Clinic CEO Dr. Tom Mihaljevic.

Becoming a factor Independence cybersecurity firm Keyfactor is going international.

Keyfactor bought Spain-based Redtrust, which is described as a “digital identity solutions company providing centralized certificate and digital signature management.” The deal follows Keyfactor raising $77 million in January in a round led by New York’s Insight Venture Partners.

7/3/19 11:49 AM

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