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EDUCATION New Tri-C president Michael Baston talks plans for future. PAGE 7

CYBERSECURITY: Internet of Things creates risks for commercial real estate. PAGE 10

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A passenger waits for his bus July 14 at Lakeland Community College’s campus. Lake County’s public transit agency created a program to help workers get to their jobs.

Businesses struggle to fill jobs amid continuing sprawl in Northeast Ohio, where the number of jobs near residents has continued to fall. PAGE 14

JOB SPRAWL

SPILLOVER

Change to property-value ‘I want my work to be meaningful’ Vitamix’s new CEO sees opportunities for growth challenges takes effect

BY MICHELLE JARBOE

Expect more litigation.

That’s one thing attorneys agree on as the real estate industry and public entities adjust to a huge change in Ohio law governing fights over how much buildings and land are worth.

BY RACHEL ABBEY MCCAFFERTY

House Bill 126 took effect Thursday, July 21. Passed in April after a roller coaster ride through the General Assembly, the bill curbs school districts’ ability to seek increases or oppose decreases in property values for tax purposes.

See PROPERTY on Page 24

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Steve Laserson took on the role of CEO at blending equipment maker Vitamix at the beginning of June. | VITAMIX

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Steve Laserson has always enjoyed working for what he calls a “purpose-driven business.”

He spent more than two decades with greeting card company American Greetings, where he said the mission was defined as making “the world a more thoughtful and caring place.” Now, he’s leading Vitamix, a company focused on improving health and wellness.

“I want my work to be meaningful,” Laserson said.

Laserson took on the role of CEO at blending equipment maker Vitamix at the start of June, having joined the company as its first chief commercial officer a little more than two years ago. Laserson succeeds Jodi Berg as CEO, and he’s

the first non-family member of the more than 100-year-old family-owned company to hold the top spot.

“It’s a dream job, so it wasn’t a hard decision,” Laserson said.

As CEO, Laserson said he wants to “unlock” the extra potential of Vitamix’s brand and the creativity of its employees. And he said he wants to make sure his employees have a good place to work, as well.

Olmsted Township-based Vitamix typically employs between 800 and 900, based on the time of year.

Laserson has a background in finance, but early in his career, he realized his passion lay more in sales, marketing and product development. The former “felt like See VITAMIX on Page 23

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SPORTS BUSINESS

‘A PHENOMENALLY GOOD THING’

McLendon Foundation’s Minority Leadership Initiative adds diversity to college athletics

BY JOE SCALZO

playing field, both on the field and in leadership roles. It’s definitely getting better, and this initiative is something that’s going to help.”

In the spring of 2020, University of Kentucky men’s basketball coach John Calipari launched a weekly Facebook Live series called “Coffee With Cal” designed to raise money for COVID-19 relief.

By early June, he had shifted focus.

As the Black Lives Matter protests broke out in the wake of George Floyd’s murder, Calipari started using the platform to talk about the nation’s social unrest.

“We have to do better,” he said at the time. “We have to demand better.

What I will say is this: I want to be a part of the answer in any way I can.

And it may be a small part, but I can’t stand on the sidelines while my players, my staff, their sons and daughters, our fans and so many others live with fear and injustices.”

That promise led Calipari to hold a roundtable discussion with Harvard men’s basketball coach Tommy Amaker. That in turn led to the creation of the McLendon Foundation Minority Leadership Initiative (MLI), which is administered by the Westlake-based National Association of Collegiate Directors of Athletics (NACDA).

The coach-driven program creates employment opportunities for minority candidates, specifically within college athletic departments.

“John Calipari says, ‘Hey, we need to move the needle; we need to get kids in the pipeline — and I’ve got a million dollars to back it up,’” NACDA CEO Bob Vecchione said.

But opening his wallet was just the first step.

Opening other coaches’ wallets was the next.

“Coach Cal, he’s like a pied piper,” Vecchione said. “We got (Gonzaga coach) Mark Few, we got (West Virginia coach) Bob Huggins, we got (Michigan State coach) Tommy Izzo — we got all these big-A coaches from around the country on this call, and they’re all donating money for internships at their respective institutions.”

There are now more than 70 students in the MLI pipeline, which begins its third year this fall. The 202223 class kicks off with the MLI leadership weekend, an in-person event that brings together current and future participants for a professional development experience in early September at the University of Kansas.

More than $3.5 million has been raised for the program so far.

“Nobody knows about this and it’s something people should know about, because it’s a phenomenally good thing,” Vecchione said. “Bad news sells.

It’s hard to get good news out there, and this is a good-news story.”

Here are four things to know about the program:

Basketball League in 1959.

Since 1999, the foundation has granted more than 130 postgraduate scholarships to students who intend to pursue an advanced degree in athletic administration.

The MLI program complements the scholarship program, placing undergraduate or graduate students into internships in college athletic departments.

1. It operates under the umbrella of the McLendon Foundation.

The foundation is named after former Cleveland State coach John McLendon, who is widely recognized as the first Black basketball coach at a predominantly white university when he was hired by the Vikings in 1967. McLendon also became the first Black professional head coach of any sport when he was hired to coach the Cleveland Pipers of the American

2. It’s designed to level the playing field.

The scholarship program was created in 1999 by former NACDA executive director Mike Cleary, a St. Ignatius High School and John Carroll University graduate. Athletic administrators kept telling Cleary the reason there wasn’t enough diversity in their leadership ranks was because there weren’t enough qualified candidates.

“He was like, ‘I’ll fix this,’” said

John McLendon, shown here with former Pepperdine coach Al Duer, was a men’s basketball coach for Cleveland State and the Cleveland Pipers. | NACDA PHOTOS

Above: University of Kentucky men’s basketball coach John Calipari, 11th from right, poses with the 2021-22 class of the McLendon Leadership Initiative at its leadership weekend in August of 2021.

Right: Adrien Harraway is the director of the John McLendon Minority Scholarship Foundation.

Adrien Harraway, a former McLendon scholarship recipient and current NACDA VP who oversees the MLI program. “He wanted to provide a (scholarship) for (minority) students to go to grad school, because that would really propel your career and help you get into positions.

“And it did move the needle, but it’s crazy that we were still talking about the same thing in 2020.”

The problem, Harraway said, is that

the makeup of collegiate rosters — specifically in revenue-generating sports — doesn’t align with the leadership you see in those sports.

“I don’t want to say it’s a good ol’ boys network or just some nepotism that goes along with it, but ... who you relate to is who you hire,” Harraway said. “(Often) you haven’t engaged with others who have had different experiences than you.

“The goal is just to create that equal

3. It involves three organizations.

The McLendon Foundation posts the MLI openings in April. The openings are chosen by athletic directors, coaches and conference officials and include a variety of positions, from marketing to sports information to student development to facility operations. NACDA turns to Cincinnati-based ProLink Staffing to narrow the candidate pool.

“We knew it was going to scale bigger than me just being able to go through all the resumes,” Harraway said.

ProLink, which donates its time, sends the final candidates to the university or organization, which makes the final decision. While those individuals work for the institution, the MLI program provides the stipend and the tax information.

“The most important thing we provide is the education piece,” Harraway said. “It’s a holistic program. I didn’t want a transactional feel, where it’s, ‘Here’s your job; you do what you do.’ I wanted a community feel, a family feel.”

The third organization is Cincinnati-based G3 Marketing, “which nurtures the relationships with coaches and sponsors,” Vecchione said.

4. NACDA wants to grow the program.

The MLI’s first class included 29 individuals, the second year had 42 and the third year projects to have 40-45.

Many interns have since landed fulltime jobs in athletics.

Even better, the interns aren’t just undergraduates in their early 20s. One of the interns got a development job at Columbia University after spending several years playing basketball overseas. Another was a female coach who wanted a career change.

“When you can do things in your career that changes people’s lives, that’s a whole different kettle of fish,” Vecchione said. “It’s really a phenomenal success story and we’re going to continue to grow this thing come hell or high water.”

Harraway would like to see some of these positions endowed, but that (obviously) requires more funding.

Coaches have continued to donate to the program — albeit not quite at 2020 levels — but athletic departments are seeing its value and impact, too, which has led to a more diverse donation base.

Vecchione also expects McLendon graduates to eventually give back to the program.

“Looking in the crystal ball — five, eight, 10 years from now — we want this to be McLendon Fellows,” Vecchione. “There’s going to be a whole cadre of people who have come up through the McLendon Foundation into athletics departments, into corporate America. And when they do come through that channel and they reach a level, they want to be there and give back.

“We want it to be an honor to be called a McLendon Fellow.”

Joe Scalzo: joe.scalzo@crain.com, (216) 771-5256, @JoeScalzo01 JULY 25, 2022 | CRAIN’S CLEVELAND BUSINESS | 3

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Offering benefits in a post-Dobbs world is complex decision While some employers have made public commitments to supporting employees who need to travel out of state for abortion care, many more are still figuring out what to do — if anything — in the wake of Dobbs v. Jackson Women’s Health Organization, the U.S. Supreme Court decision that overturned Roe v. Wade and eliminated federal protections for abortion rights.

The legal landscape is rapidly changing through a patchwork of state laws and subsequent challenges, and experts say organizations need to consider the legal risks, as well as other factors, when offering benefits related to abortion services.

“We’re talking about the difference between a policy being completely lawful in one state and perhaps completely unlawful in another state, and I, as the employer, have employees in both; what do I do?” said James Wilkins, shareholder and president of Kastner Westman & Wilkins, a labor and employment firm in Fairlawn.

“It’s going to be difficult.”

Wilkins The impact of the Dobbs decision on the workforce remains to be seen, but Jessie Hill, professor of law at Case Western Reserve University, said it will be “extraordinarily disruptive.”

Some will need not only financial support for the procedure and travel, but they’ll also be taking time Secrist away from work and may need to get childcare.

“And some people are just not gonna be able to make it work,” said Hill, who has been involved in litigating several lawsuits in Ohio challenging abortion restrictions, including a case pending before the Ohio Supreme Court challenging Sample the state’s “heartbeat bill” that went into effect the same day the Dobbs decision came down. “So I would expect to see far more disruptions for women and people who can get pregnant in their working lives.

And so, I think it’s going to be a really significant impact.”

With nearly 50 years of law overturned in one day, “employers are really scrambling to kind of come up with a path forward,” said Matt Secrist, partner at Taft Stettinius & Hollister. An employee benefits and executive compensation attorney, Secrist said the executives he’s working with who are thinking about responding to the Dobbs decision, from CEOs to HR directors, are in a “tough position.”

“They’re going to upset somebody on one side or the other,” he said.

Through the pandemic, the workforce stepped back a bit to re-evaluate what they want out of the work environment and experience, said George Sample, board president of the Cleveland Society for Human Resource Management. He sees the Dobbs decision as “another inflection point that allows an organization to demonstrate where they want to land on issues that impact a lot of folks.”

Organizations that are making a

commitment to support access to abortion or taking any definitive stance in the wake of the Dobbs decision are likely those that already have a record of being active on larger societal issues, Sample said. Whatever the direction, it serves as “a signal to potential employees and potential customers” as to what kind of an organization they are, he said.

Secrist said that as employers are working through creating any benefits, they need to keep in mind state laws and try to get a grasp of where they might be implicated.

“If you can; it’s really hard,” Secrist said. “It’s really just a matter of how these prosecutors interpret the law and how aggressive they are. It’s really a brand-new world.”

With the space moving so quickly, and with so many factors and state laws, Sample said it’s critical for organizations to keep legal counsel closely tied to the decision process, particularly for multi-state organizations.

“One of the things with this ruling is that each state is kind of left up to their own devices in regards to how they’re going to handle it,” he said.

Once an employer has decided to offer a benefit supporting access to abortion services, Wilkins said employers need to factor in potential legal compliance issues with employment law or tax laws. He sees three potential ways for employers to offer a benefit supporting access to abortion services — each coming with distinct obstacles or advantages.

One option would be for an employer to provide abortion service-related benefits through its group health insurance plan, which may need to be modified to offer, for instance, travel-related expense coverage, he said. One potential downside, Wilkins said, is that it would only support those employees who are enrolled in the employer-sponsored health plan, which often doesn’t cover part-time employees.

On the other hand, there are privacy advantages to housing the benefit within the health plan through a carrier or third-party administrator as opposed to an employer trying to administer the benefit internally and potentially coming into possession of information it then has a duty to protect as confidential, Wilkins said.

Another way for employers to cover abortion-related travel expenses would be through spending accounts often connected to a group health insurance plan, like flexible spending accounts or health savings accounts.

Wilkins said he hears that some employers are contemplating changing the amount they contribute into such funds for employees to take into account the fact that some may use those dollars for expenses related to accessing abortion services.

“I don’t think an employer can target employees who desire this service by giving only them an additional amount of money,” Wilkins said.

A benefits approach increasing contributions to these savings accounts would likely be across employee populations, “which many employers might consider to be a very inefficient way to address the issue,” he said, “and I would tend to agree.”

The last mechanism would be a direct reimbursement method outside of a group health insurance plan or savings accounts, Wilkins said, noting several considerations for this model: Which expenses will be covered and reimbursed and how? Is there a threshold for hotel stays? A fixed per diem? How is it administered?

“Because if it’s administered in house, then you’re back to requiring the employee to disclose to their employer that they need to access these services, which for many employees is going to be a barrier to them doing that,” Wilkins said.

Outsourcing to a third-party administrator is an option, he said, adding that if there’s a demand, the service likely will follow.

Most companies are holding off on public commitments, in part, because many questions remain. Employers that choose to extend a benefit of this sort must have a very strong commitment to doing so “because there is a lot of uncertainty, and a fair amount of risk that goes with it,” Wilkins said.

He expects many will sit on the sidelines until the legal issues shake out.

Secrist said he expects some employers will add provisions but won’t make public announcements about those decisions.

“There’s going to be internal policies, one way or the other,” he said.

Days after the Dobbs decision, the Cleveland Cavaliers organization announced on social media that it would cover costs for employees to travel outside of Ohio for reproductive health care to the fullest extent permitted by law.

“The Cleveland Cavaliers, Monsters, Charge, Cavs Legion, Rocket Mortgage FieldHouse and Rock Entertainment Group stand for equality, and believe having full access to reproductive health care is a fundamental freedom of choice all women should have,” the statement read.

The Cavs declined comment beyond the initial statement but noted the statement sentiment was measured at nearly 70% positive on social media when it was issued in late June.

Separate from any benefit policy, Sample said organizations need to be mindful of the dialogue around what is a sensitive topic with strong, nuanced, complex stances.

“So, this would be a great time for organizations to remind their employees about how it’s important to have respectful conversations in workplaces, and if they have the means to do so, offer training on how do you have constructive conflict within organizations,” he said.

Because it is such a divisive topic, the legal landscape remains uncertain, as in many ways, “this is unplowed ground,” Wilkins said.

“Legal compliance is going to be more challenging and have more uncertainties in this area early on, than is typical, just because it is a polarizing issue,” he said.

Lydia Coutré: lcoutre@crain.com, (216) 771-5479, @LydiaCoutre

4 | CRAIN’S CLEVELAND BUSINESS | JULY 25, 2022

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FINANCE

Customer payment data could be part of abortion investigations

BY JEREMY NOBILE

With the overturning of Roe v.

Wade, banks and financial services companies could one day find themselves in potentially sticky legal and political situations if or when authorities investigate those accused of breaking anti-abortion laws.

Legal experts say that prosecutors potentially could subpoena customer payment data from financial service providers as part of efforts to collect evidence showing that someone may have broken such laws. This evidence might be something like a large payment at a known provider of abortion services, or expenses at pharmacies that predominantly offer abortion pills.

Barring a few narrow exceptions, abortion is now illegal in Ohio after a fetal heartbeat is detected, which typically is five to six weeks after conception.

Under the current state law, only doctors performing abortion services after that time are liable for penalties. The pregnant person — and anyone helping them — could not presently be charged with any crimes.

But a concern is that could one day change in the Republican-controlled state of Ohio, said Jessie Hill, the Judge Ben C. Green professor of law at Case Western Reserve University School of Law. Hill has done extensive work and research in the area of reproductive rights.

One Ohio lawmaker — a Baptist preacher — already has proposed

an outright abortion ban in the state that is widely expected to become law.

It’s not implausible that Ohio could one day add an aiding and abetting component to its abortion-restricting laws similar to what Texas has passed, Hill said, or put criminal penalties in place for those who receive abortion services.

These are, of course, hypothetical situations. Yet, they point to some of the questions that pop up with respect to how state laws restricting abortions could be shaped or enforced in the future.

It’s possible penalties for aiding or abetting abortions could be in play in Ohio already because there are general laws against aiding and abetting crimes, Hill said.

Others agree that’s a bit of a gray area.

“It’s a nebulous thing,” said Michael Gentithes, associate dean of academic affairs at The University of Akron School of Law, who has a background in criminal procedure and constitutional law. “This is a little difficult to define not just because the law in the books is a little amorphous but also because of the discretion by various actors on the ground, like prosecutors, who are making the decisions (of what to prosecute).”

It is an area that is shifting rapidly as members of the Ohio House and Senate think about how they want to approach abortion restrictions.

“Even if you criminalize abortion, there is still a lot of discussion among prosecutors on who to bring

RECRUIT WHERE THEY ARE

charges against,” Gentithes said.

“We already see some prosecutors in Ohio and across the country saying they won’t pursue charges against doctors or mothers because they don’t think it’s a high priority.

But it’s also difficult to predict how this will shake out. We just don’t know.”

Damon Hacker, president and CEO of digital forensics and cybersecurity firm Vestige Digital Investigations, said it makes sense that authorities might go after bank customer information in these kinds of investigations.

“Could I see that kind of thing happening? Absolutely,” he said.

“Do I think banks are going to roll over on that, though? No, I don’t.”

But the jury is out on that.

“I think banks don’t want to be involved in this,” Hacker said. “But that’s not to say that’s not ever going to happen.”

Banks looking to demonstrate their support of clients may try to resist such subpoenas, just as tech companies have when asked to give up their own user data.

“Banks and other institutions are going to be making a bit of a political choice on whether or not to respond to these subpoenas,” Gentithes said. “They’ll want to appear both supportive of investigations, but at the same time, they want to demonstrate to customers that they will put them first and protect their information even in the face of this kind of request.”

Amalgamated Bank, a New Yorkbased bank with about $7.7 billion in assets, recently told the New York

Times that it would try to resist such requests for its customer data with respect to abortion-related investigations, if it can. The company declined to discuss this position further with Crain’s.

“Amalgamated Bank will carefully scrutinize any subpoenas for information related to the prosecution of women for exercising their right to choose and object to the fullest extent possible,” the bank said, as reported by the Times.

Amalgamated said that it also plans to notify customers of such subpoenas absent of a gag order preventing them from doing so.

Those who did respond tend to say they don’t comment on hypothetical scenarios, especially those with possible legal implications.

At the same time, some (but not all) of these companies said they will support employees who may need to seek out abortion services in other states through efforts like covering their travel expenses.

How they would treat otherwise private customer data in these situations, though, is unclear. The Ohio Bankers League also declined to comment about how the industry might react in these scenarios.

The key takeaway, Gentithes

“THERE IS SO MUCH LEGAL UNCERTAINTY RIGHT NOW AND BOTH SIDES ARE TRYING TO STAKE OUT THEIR VIEWS OF THE LEGAL REALITY. THAT BEING SAID, YOU SHOULD KNOW THAT YOUR DATA IS NOT PROTECTED. THERE IS ABSOLUTELY VULNERABILITY THERE.” — Michael Gentithes, associate dean of academic affairs at The University of Akron School of Law

Some banking insiders say that companies in Ohio are considering what they might do in this kind of scenario.

But none of the largest banks in this market would comment for Crain’s on how they might treat such subpoenas. That includes KeyBank, Huntington Bank, PNC Bank, Citizens Bank, JPMorgan Chase Bank, Fifth Third Bank, U.S. Bank and New York Community Bank (doing business here as Ohio Savings Bank).

said, is that data people tend to think is personal and protected often isn’t, and that goes for details on how people spend their money.

“There is so much legal uncertainty right now and both sides are trying to stake out their views of the legal reality,” Gentithes said. “That being said, you should know that your data is not protected. There is absolutely vulnerability there.”

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

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REAL ESTATE

TV station may move to suburbs

BY STAN BULLARD

A new home for TV broadcast and streaming stations WOIO Channel 19, WUAB Channel 43 and WTCL Channel 6.1, which all air 19 News, may be built on a high-profile site in Independence if pieces for what’s certain to be a multimillion-dollar project come together.

Gray Television Inc. (NYSE: GTN), the mammoth multimedia company based in Atlanta, applied Monday, July 18, to the city of Independence for a conditional use certificate to put a proposed two-story “television building” on a site visible on the southeast corner of the I-90 and I-77 interchange.

The parcel has more than 300 feet of highway frontage. It is reached through Rockside Woods Boulevard and sits between the Embassy Suites Hotel and Topgolf .

The 3.2-acre parcel was the proposed home of a Saucy Brew Works headquarters and brewpub that had been in the works since 2019. The plan was dropped in March after the Cleveland-based concern found it was able to fulfill its expansion needs at its Ohio City location.

The site, held through Saucy Brew Works Independence LLC, is being marketed for $3.2 million by Cushman & Wakefield CRESCO. In a marketing brochure, it notes the site is “shovel ready.” Saucy disclosed the

purchase price as $2.1 million in a January 2021 article in Crain’s Cleveland Business.

A drawing of a potential site plan filed with the city of Independence shows a 37,000-square-foot building with TV studios, a newsroom, a patio for employees, 12 satellite dishes and a communications tower. The site plan shows parking for 132 cars, including separate parking lots and entrances for employees and visitors.

Gray is required to obtain a certificate of conditional use from the suburb to build on the site because it is proposing an office and television use on land zoned for hotel, motel and auto-related use. The Independence Planning Commission has set a public hearing on the application at 5:30 p.m. on Tuesday, Aug. 2 The commission and Independence City Council have approved such conditional use certificates in the past. Indeed, Saucy’s plans received the same designation.

If the suburb approves the plan, Gray closes on the land purchase and the building proceeds, it would put in play a move from the downtown Cleveland home of the media properties. The shared news operations of the CBS affiliate WOIO, the CW affiliate WUAB and Telemundo affiliate WTCL and their business offices are in leased space at Reserve Square, 1717 East 12th St. The corner of East 12th and Chester Avenue outside the

TV stations often is used for Channel 19 News live stand-up shots.

The lease for 50,000 square feet of Reserve Square space was renewed for 10 years in 2017 after a public dispute between its management at that time and building owner K&D Group of Willoughby about conditions at the property, though the broadcast stations remained in the structure.

Losing a downtown television presence would be a blow for the central city in terms of an unknown number of possible job losses, as well as prestige. It also would be a break from Fox 8, WEWS Channel 5 and the Ideastream Public Media stations, which all are downtown.

However, cleveland.com’s operations are now based in Brooklyn at the newspaper’s printing plant after the Plain Dealer Publishing Co. sold the downtown newsroom and offices at 1801 Superior Ave. in May to an affiliate of Industrial Commercial Properties of Solon.

Meantime, iHeartMedia has just moved its operations for nine local radio stations, including the WTAM news-talk station, to 668 Euclid Ave. downtown after 20 years of operations in Independence in a multitenant office building. K&D owns the 668 Euclid office, retail and apartment building, as well as Reserve Square.

On the flip side, such a centrally located home would make the sta-

The rectangle marks a site in Independence where Gray Television, operator of WOIO, WUAB and WTCL (Telemundo), wants a zoning change for a new facility. | COSTAR

tions more accessible throughout sprawling Northeast Ohio. That would be especially the case for mobile TV news crews who use the tagline, “First. Fair. Everywhere.”

The potential TV moves surfaced seven months after Gray acquired WOIO, WUAB and WTCL related properties as it bought 17 stations from Meredith Local Group in a transaction valued at $2.7 billion.

Gray subsequently named Matt Moran its Cleveland general manager. He held a similar position at Gray’s offerings serving Charleston-Huntington, West Virginia.

Gray serves 113 television markets, reaching approximately 36% of the U.S. television market by households. Gray also owns Raycom Sports, Tupelo Media Group and PowerNation Studios, as well as two studio production facilities.

Moran, whose name is on the ap-

plication for the Independence conditional use certificate, declined comment.

Independence Mayor Gregory P. Kurtz, through a spokesperson, also declined comment.

Although the application with the suburb is for Gray, it does not specifically identify stations that might be involved in a move.

On the section of the city’s application for the project/building name, it uses a code name. Such a term is typical of corporate realty undertakings that are in the nebulous, changeable planning stage.

Its code name is “Project VOSOT.” VOSOT is a commonly accepted TV journalism term for “voice over/ sound on tape,” a relic of broadcasting days before media became digital.

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

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6 | CRAIN’S CLEVELAND BUSINESS | JULY 25, 2022

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7/22/2022 2:02:02 PM

EDUCATION

New Tri-C president talks future plans Cuyahoga Community College’s new president Michael Baston wants you to know he’s a “perennial partner.”

“What that means is I look for meaningful ways to partner that ultimately allow all of us to win,” he told Crain’s Cleveland Business.

Baston, who succeeded Alex Johnson to become the college’s new leader on July 1, said he’s looking forward to working with the business community to help move Cleveland forward.

Before arriving in Northeast Ohio, Baston was most recently the president of Rockland Community College in New York. Learn more about him in this wide-ranging Q&A below. The conversation has been edited for brevity and clarity.

— Amy Morona ` Welcome to Cleveland! It’s been a few weeks into your new job.

How are things going?

Things couldn’t be better. I have thoroughly enjoyed the warmth of the reception not only at the campuses, but also in the community, so I’m thrilled and overjoyed. ` Let’s talk a little bit about you.

You’ve spent decades in higher education, but you also worked as a lawyer and a pastor. How did — or maybe, how do — those roles shape you as a college leader?

I’m very blessed to have had a career that has allowed me to always believe in the power of the possible for people, to always be in a position to help people understand a path, that they could design their destiny, that they could sort of move forward in their lives.

So whether it was an attorney representing educational corporations, religious institutions and nonprofit organizations, or in the ministry, trying to help people to really connect to a belief in the future and the power of the possible, all of those sorts of experiences have well prepared me for my work in education as a teacher, as a leader, as someone who believes that education can truly transform lives.

Baston ` I remember hearing similar points you made during a Tri-C town hall when you were one of three final presidential candidates. Another thing I remember from that event was when you detailed the so-called “secret shopper” trip you and your wife made to the area. Can you briefly describe that as well as what you learned?

We dressed up as parents who were going to enroll our daughter in the college in the fall. It enabled us to go to every campus to speak to students, to faculty, to staff. I wanted to see how people would treat us. Would they be warm? Would they share what their true feelings were about the college, not knowing me as a candidate?

What I found almost everywhere I went was this true sense of the employees feeling they’re very valued and happy, to the students feeling like they have great professors and great opportunities to build their personal relationships with other students.

We were able to really talk to people in the local restaurants about Tri-C. Almost every person said either they went there, they had a child that went there, a nephew, an auntie, an uncle, a cousin, (or they know) someone that works there.

Everyone all over the county and its four corners said they had a meaningful, positive, tangible connection to the institution. What that did for me and my wife is it made us confident that this was a place that would embrace us, would embrace

our vision, and would ultimately be a place where we can be a part of the community. ` Did you learn anything that the college could or should improve upon from those conversations?

I met a person at the Cracker Barrel who graduated from the college many years ago with a photography degree.

At that time, that was a wonderful thing to have because he wanted to be an entrepreneur, but with the advent of smartphone technology and the fact that you can do portrait mode on your cellphone, it had an impact on his ability to continue to have a viable economic future. He came back to make sure that he could get into cybersecurity, an emerging field.

I want more people who are adult learners, who need to upskill or to reskill, to recognize that we can be the same partner we were with you and your initial steps many years ago right now. That is going to be something that I would like to see enhanced and improved.

Of course, we have those students who have been impacted by disconnected learning during the pandemic. For younger folks, how are we going to think deeply about supporting them as they transition into the next stage of educational development?

So we, as the college, are going to have to think about what does additional support mean for those students who are now going to be coming from K-12 who had a different educational experience than those in 2019. How are we going to make sure that these students are supported? ` Speaking of the pandemic, one of the biggest issues that twoyear public colleges, including Tri-C, have faced during this time is declining enrollments. How do you hope to turn that trend around?

One thing we have to recognize is that some of the competition for students, or where the students are, are not other institutions. The competition now is for opportunity. You have a lot of our students, (or) potential students, who are now gig economy persons. They are doing DoorDash and Uber Eats. They’re doing all of these alternative forms to rise in America. Those are the students that would normally be coming to a community college. Those are the ones that maybe have economic fragility, but academic promise, but are making a decision to pursue more economic means.

So we’ve got to be able to now make a value proposition to those folks who would have come to us but now going that route to know that you can do both. We’ve got to begin to say to that gig worker, “Listen, we know that you want to be entrepreneurial, we know that you want to rise in the ways that

you think will work. We can help you.” ` How do you plan to do that?

Well, think about it. We need to make the relationships with Uber Eats and DoorDash and say, “Hey, if you’re operating in these gig economy opportunities, maybe we have to give you an educational discount so that you can come and we can partner with you.”

Maybe we have to look at the way in which you want to be educated and actually propose to you a schedule or a modality that’s going to work in alignment with your entrepreneurial aims.

Maybe our academic programs have to emphasize the skills that students can get so that they can be more competitive in a changing marketplace.

So, it requires the educational institution to actually go after a population that we normally didn’t see as an opportunity, but now must realize (is) our greatest hope. ` You mentioned potentially connecting with places like Uber Eats or DoorDash. How do you plan to connect with other businesses here in Northeast Ohio?

From my point of view, the business community is essential to our work. As you know, Tri-C’s always been a leader in workforce development. But I’d like us to transition more into workforce innovation.

When I talk about workforce innovation, it is really co-designing curriculum opportunities with business and industry partners so that we can meet and achieve opportunities for the in-demand opportunities that actually exist.

You’re going to see me very, very eager and active in working with businesses and industry to understand how we better strengthen our relationship. I think we do an amazing job with a lot of the workforce work that we have done.

As we move forward, we have to think about how we look at our curriculum, how we actually are able to showcase the skills that students acquire through our curriculum, how we allow our students to have the kind of work-based learning opportunities that give them a competitive advantage.

So, that means in working with business and industry, what are the “earn and learn” opportunities? We do lots of apprenticeships here, but what are going to be meaningful “earn and learn” opportunities that actually give our students a leg up and give our employers the opportunity to get the workforce they need given the talent shortages in Northeast Ohio and around the country? ` As we wind down here, can you share one thing you really want Clevelanders to know about you as the college begins a new chapter with you at the helm?

I’d like them to know that I am the perennial partner. What that means is I look for meaningful ways to partner that ultimately allow all of us to win.

The partnerships that we develop have to show mission alignment, vision alignment and opportunities where everyone can move forward, because we all have a stake in helping Cleveland become even stronger. We all have a stake in making sure all of our citizens rise. We all have a stake in making sure the economic viability of our community is stable.

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

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PERSONAL VIEW

ESG wars will be fought in the courtroom, not the boardroom

BLOOMBERG

BY RICHIK SARKAR

EDITORIAL

Entering the Forum S

howing up in life is half the battle, an old saying goes. (Or at least some variation on that, according to Google. This is a popular saying.)

Many of us take the showing up part for granted. But for a lot of Northeast Ohio workers, getting to the job — literally, showing up — is not easy, and it has major ramifications for employers and the regional economy.

Challenges of transportation — caused by sprawl, COVID, economic disruption, disinvestment in public transit and other factors — and their impact on the workforce are the focus of a new feature that debuts this week: Crain’s Forum.

You’ll find it on pages 14-21 of the print edition, as well as online, featuring eye-catching design in both analog and digital formats. Much of the reporting comes from Jay Miller, a thoughtful veteran of covering this region.

A taste of this kind of material came in June, in a collection of pieces that examined how the water-rich Midwest could provide a refuge for Americans amid climate change — if we take the right steps to prepare. That section was produced primarily

by Crain colleagues at our sister publications in Chicago and Detroit. The July section, on transportation, comes fully from Crain’s Cleveland Business, focused on Northeast Ohio.

The monthly Forum sections, sponsored by the Joyce Foundation and CIBC, will examine the intersection of business and public policy. Through deeply reported articles, as well as opinion pieces from topic experts, we’ll provide information on economic, policy and political matters that are top of mind — or should be top of mind — for Northeast Ohio’s government, business and civic leaders.

Transportation is among the most basic human needs in the modern world and is fully integrated into our prospects for economic growth. Most any employer can tell you how hard it is, still, to find workers. Finding ways to connect workers to the places where jobs are available is critical.

In a recent hearing focused on advancements for public transportation as a result of the bipartisan infrastructure law, U.S. Sen. Sherrod Brown, D-Cleveland, who chairs the Senate Banking Committee, noted that transit systems in Cleveland, Columbus and Cincinnati all are making upgrades to their route networks and technology. Those improvements, he

said, will help “connect more communities. It will mean faster service to more neighborhoods. It will open up new job opportunities, so workers aren’t limited by a bus that doesn’t reach a job site or doesn’t run on Sunday.”

This Forum section looks at a range of transportation issues: infrastructure capacity, electric cars, ride-sharing, innovations arising from The Paradox Prize, and more. Work is well underway for upcoming Forum sections. In August, we’ll examine gun violence and its ripples throughout our communities. September’s topic: regionalism, and why Northeast Ohio has talked a bigger game about regional cooperation than it ever has delivered.

Our goal is to get leaders talking and to prompt discussions about hard problems. It won’t always be comfortable. Northeast Ohio has no shortage of big challenges, but as you’ll see in this Forum and upcoming sections, it has many people working to identify ways to make things better.

Rejected N

ews comes at you fast these days, so you might not have noticed last week that the Ohio Supreme Court, yet again, rejected a Republican-drawn map of U.S. House districts due to excessive gerrymandering.

The process that began with the Ohio Redistricting Commission, and then moved to the state Legislature, has produced one embarrassing failure after another. It’s a black eye for the state.

Proving that there sometimes is no real cost to failure, Ohio’s 2022 congressional primaries went forward on May 3 under an earlier invalidated U.S. House map, and new maps will not be put in place until 2024.

Legislative primaries under a (surprise!) unconstitutional Statehouse map are just around the corner, on Tuesday, Aug. 2. Early voting for those already has begun.

None of this is ideal — you have to be a die-hard to be paying close attention to politics in August — but neither is sitting out a vote because the circumstances aren’t perfect. State legislative elections have taken on greater importance, and we urge all voters to make sure their voices are heard next month.

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

Anyone who thinks that the environmental, social and governance (ESG) movement is just a human resources trend, environmentalist crusade or a do-gooders’ investment plan is blind to ESG’s potential long-term impact on multinational corporations amid the Business Roundtable’s decision to shift the focus of corporate purpose from shareholder interests to stakeholder Sarkar is a (employees, communities, customers, partner at etc.) wellbeing.

Dinsmore & Flush with new power, activist stake- Shohl. He directs holders see ESG as their first opportuni- commercial, ty to influence and transform corporate consumer and operations. Luckily, savvy corporations cybersecurity can avoid ESG hazards by deploying litigation for proactive measures. At its core, ESG is a entities of all stakeholder tool that allows sharehold- sizes and helps ers, consumers and employees to lever- lead the firm’s age environmental and social sentiment ESG practice. to change corporate operations.

Getting ahead of the ESG curve requires corporate leaders to recognize that business movements — especially those led by consumers and shareholders — attract regulatory attention, and heightened regulation triggers company-risking litigation.

ESG’s emergence follows this pattern: massive growth of environmental investments, corporate proclamations exalting commitment to corporate-consciousness. Overall the worldwide trend increasingly includes regulation, CORPORATE LEADERS compliance ratings and acWHO DON’T tivism. For example: ` The U.S. Securities and RECOGNIZE ESG Exchange Commission formed a Climate and ESG “TRUTHS” RISK THEIR Task Force and has begun ROLES AS promulgating proposed FIDUCIARIES AND rules. ` BlackRock has clarified INCREASE THEIR that it will use the power of institutional “votes” LITIGATION RISK. against boards of directors not aligned with its ESG imperatives. ` ESG focused hedge funds have forced board turnover through the proxy process.

ESG-related lawsuits and regulatory actions often attack leadership’s misrepresentations about their commitment to ESG principles, misleading stakeholders and decreasing corporate value. Corporate leaders who don’t recognize ESG “truths” risk their roles as fiduciaries and increase their litigation risk. For example: ` Attorneys general have sued companies for allegedly misleading shareholders by not appropriately disclosing the companies’ understanding of climate change risks. ` The Federal Trade Commission challenged misleading green statements about products being biodegradable or otherwise sustainable.

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.

See ESG, on Page 26

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

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OPINION

PERSONAL VIEW

It’s time for GE to let go of GE

BY BROOKE SUTHERLAND AND BEN SCHOTT BLOOMBERG OPINION

General Electric Co.’s three-way breakup is meant to be a moment of rebirth for the 130-year-old industrial giant.

This is the company that commercialized modern lighting, developed the X-ray machine, invented non-reflective glass and made the silicon rubber for the boots used by Neil Armstrong and Buzz Aldrin during their walk on the moon in 1969. A plane powered by jet engines that GE had a hand in developing takes off every two seconds, and its power equipment helps generate one-third of the world’s electricity.

But this is also the company that allowed its finance arm to grow so opaque and unwieldy that wrong-way bets almost sank the industrial parent during the financial crisis and more recently created a surprise $15 billion reserve shortfall tied to a long-term care insurance business.

Since the start of this century, GE has developed a reputation for making bad acquisitions — from the 2015 purchase of Alstom SA’s energy business, which resulted in a $22 billion writedown, to its ill-fated foray into oil and gas, and expensive bets on a digital reinvention that failed to pan out — and for taking a loose approach to financial reporting.

Former CEO Jack Welch once described GE as “the greatest people factory in the world,” but his management style and business culture are now being blamed for breaking the company, those that its executives parachuted in to run, such as Boeing Co., and perhaps the American capitalist model altogether.

While current CEO Larry Culp has made meaningful progress in cleaning up GE’s act and streamlining its operations, the stock has foundered since November, when he announced plans to split the company in three.

Many investors seem to prefer to wait for the opportunity to own shares of the new companies rather than ride out the messy and long process of unraveling the GE behemoth — particularly amid concerns about a recession. So it’s surprising that given the opportunity to cast its businesses in a new, independent light, GE is choosing instead to anchor them in name to the parent’s legacy.

Fresh start

GE on Monday, July 18, announced the branding for the three companies it plans to create. The health care division is scheduled to be spun off first, in early 2023, and will be called GE HealthCare. The amalgamation of GE’s gas power, renewable energy and digital assets, which is set to be carved out in early 2024, will be called GE Vernova. The remaining aerospace operations will be called GE Aerospace. The last business will retain the rights to the GE trademark, which it will license long term to the other companies.

GE says its brand is valued at almost $20 billion and provides a competitive advantage with customers. But it also comes with a lot of baggage, particularly in the eyes of investors. If the lesson of GE’s past is that it was too bold when it should have been cautious, the lesson of its present may be that the company is too cautious about letting go of its legacy when it should be bolder.

When Culp’s former company, Danaher Corp., announced it was breaking into two in 2015, Steven Winoker — then an analyst at Sanford C. Bernstein & Co. but now GE’s head of investor relations — had this to say: “Two Danahers? What’s not to like about that?” It’s difficult to imagine anyone saying the same about three versions of GE. It’s also worth noting that despite its sterling reputation, Danaher didn’t pass down its name; the spinoff of its industrial business was called Fortive Corp.

The new GE names are boring, and that has its benefits. Keeping all three entities inside the GE master brand will likely have relieved the company’s lawyers, who were saved the tricky commission of securing a trio of novel global trademarks. Notwithstanding the company’s ups and downs, the GE monogram has been evolving elegantly since the 1890s and is not to be dis-

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The most imaginative of the new names is GE Vernova. The explanation for how the company came up with that branding suggests it’s probably for the best that the creative impulses ended there. “Ver” is derived from “verde” and “verdant,” to signal the greens and blues of the Earth, while “nova” comes from the Latin word “novus,” which means new. This is meant to capture “a new and innovative era of lower carbon energy that GE Vernova will help deliver.” Sure.

There is a plausible path for that energy-focused business to eventually become known as just Vernova. This would be akin to how Baker Hughes Co. eventually dropped the name Baker Hughes, a GE Co. — a mouthful of a moniker that was adopted upon the merger of the two companies’ oil field services businesses in 2017 and became significantly less desirable after the GE parent ran into financial difficulties. GE still owns about 4% of Baker Hughes.

It makes sense that the Vernova energy businesses would have the most direct route to a non-GE future as they are the ones with the most checkered past and the most challenged financial outlook. By contrast, it seems unlikely that GE HealthCare will one day simply call itself “HealthCare,” while the aerospace business goes by “Aerospace.” This branding leaves limited room for the resulting companies to carve out their own identity.

Design-wise, GE’s spinoffs follow in the footsteps of Facebook’s recent restrained rebranding as Meta Platforms Inc. — an attempt to reframe the company within the metaverse without provoking undue controversy.

There is also an echo of Volvo’s earnest sensibility, as parodied in the 1990 movie “Crazy People”: “Buy Volvos. They’re boxy but they’re good. We know they’re not sexy. This is not a smart time to be sexy anyway, with so many new diseases around. Be safe instead of sexy. Volvo. Boxy, but good.”

If GE’s color choices are predictable — “compassion purple” for GE HealthCare, “evergreen” for GE Vernova and “atmosphere blue” for GE Aerospace — they at least have pretensions to the poetic. But the variety of sans-serif typefaces is a tad more chaotic. GE HealthCare uses approachable curves and a cute rotation of its a’s and e’s; GE Vernova is set in bland all-caps, with a clunky tag line to explain the name; and GE Aerospace deploys an industrial, almost federal face which feels more New Deal than next century.

There is nothing screamingly wrong with GE HealthCare and GE Aerospace as brand names. For all the negativity surrounding GE in financial circles, investors have short memories. The company’s challenges are also fairly complex, and there is a broader world beyond Wall Street in which the average person doesn’t spend much time dwelling on long-term care insurance foulups and acquisition writedowns.

GE’s reputation has never been tarnished in the same way as, say, Monsanto Co., which is associated with the Agent Orange herbicide used in the Vietnam War and genetically modified crops. Bayer AG dropped the Monsanto name when it acquired the company in 2018. But there is nothing particularly inspiring or exciting about the names GE HealthCare or GE Aerospace, either, and typically companies embarking on a reinvention want at least some inspiration and excitement.

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BOOMING CANNABIS INDUSTRY A PRIME TARGET The rapid growth of a relatively new industry makes it a focus for tech-savvy criminals. PAGE 13

CYBERSECURITY

GETTY IMAGES/ISTOCK

Internet of Things creates new risks for commercial real estate

BY RACHEL ABBEY MCCAFFERTY

Cybersecurity is an “ongoing and developing conundrum,” said John B. Nicholas, professor of computer information systems at the University of Akron. Cyberattacks continue to evolve. As one vulnerability gets resolved, hackers and other actors look for another way to get that data.

And one of the biggest vulnerabilities Nicholas sees in the cybersecurity space today is the Internet of Things (IoT), the term describing the network of physical products, like appliances, being connected to the internet. Consumers can buy inex-

pensive, internet-connected doorbells and security systems, but they need to be properly secured from a software perspective to be safe.

“Meaning that the actual physical security that you’re putting into your buildings or into your homes or whatever is actually, kind of, the weakest link to cybersecurity,” Nicholas said.

One sector where this might be particularly relevant is commercial real estate, where the data being handled isn’t just the commercial real estate company’s. It’s that of their customers, as well.

“Any device that’s connected to your net-

work anywhere on that system is a potential vulnerability, if it’s not secured right,” Nicholas said.

A 2015 report from Deloitte on cyber risk in the commercial real estate industry noted that most in the sector, at that time, considered themselves “relatively less at risk from a potential cyberattack,” because they don’t host much personal customer data on their own systems. But the report highlighted that tenants are exposed to cyber risk at a variety of points within a physical building.

“... THE ACTUAL PHYSICAL SECURITY THAT YOU’RE PUTTING INTO YOUR BUILDINGS OR INTO YOUR HOMES OR WHATEVER IS ACTUALLY, KIND OF, THE WEAKEST LINK TO CYBERSECURITY.” — John B. Nicholas, professor of computer information systems at the University of Akron

See INTERNET on Page 12

10 | CRAIN’S CLEVELAND BUSINESS | JULY 25, 2022

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7/21/2022 3:29:48 PM

FOCUS | CYBERSECURITY OPINION

A rookie mistake shows hackers aren’t all geniuses

BY TIM CULPAN BLOOMBERG OPINION

For more than two decades, ransomware attacks have been the bane of corporate IT managers and their CEOs, and a source of much research for cybersecurity professionals. An underground market for hacking and encryption tools has helped such incursions proliferate, but thankfully a recent case shows what we can learn when attackers don’t know what they’re doing.

Unlike other cyber nuisances, such as viruses, which replicate and cause mayhem, or denial of service attacks, which bring networks to a grinding halt, ransomware is almost impossible to unwind once it’s been deployed successfully. That’s because they use encryption to lock up the files, with a secret decryption key being the only route out.

Rather than try to undo this encryption, most victims just write off the files and restore their systems using backups. This can take days or weeks, assuming the target has good data practices, while still costing millions of dollars. It may be impossible if secure backups don’t exist.

And that’s what ransomware attackers are betting on: the losses from restoring systems are so high

GETTY IMAGES/ISTOCK

that a target is willing to pay to get a copy of the digital key, which can decrypt the files and restore everything to normal.

But what hackers don’t bet on is savvy cybersecurity professionals coming across rookie mistakes in the malware code that lets them reverse the encryption without paying a dime to the assailant.

A group at International Business Machines Corp.’s X-Force team did just that. Taipei-based CyCraft Corp. also managed to find the flaws and

offered decryption tools for free.

In an article on IBM’s Security Intelligence website, and a recent presentation at the RSA Security Conference, the researchers outlined how they spotted an error within the code of the Thanos family of ransomware.

Prometheus, a variant of Thanos, is believed to have struck at least 30 victims in industries including manufacturing, logistics and finance.

It all centers around randomness.

This quality is one of the most important aspects of good encryption

because encryption-decryption keys — they usually come as a mathematically linked pair — rely on being almost impossible to guess. And because these digital passwords are so long, a brute-force attack — scrolling through each possible combination to find the one that works — isn't feasible.

Unfortunately, machines are terrible at randomness, it’s against their nature. (Computers are incredibly predictable: The same inputs put through the same system will always return the same result.) So to create randomly generated keys, computer scientists have developed pseudorandom number generators that mimic true randomness. When used correctly, these software tools can do a very good job of creating passwords and encryption keys that are hard to crack.

But the writers of Thanos didn’t use those tools properly. Instead, they hard-coded one part of the process, and used the very predictable clock time of the victim computer for another.

Researchers uncovered that first part (it was a sequence of numbers counting from one to eight), and merely had to find how long the computer had been running before the malware was deployed. It took a bit

more sleuthing and some hit and miss, but eventually they could make educated guesses.

From there, it was just a matter of plugging the numbers together to see if they could create a cryptographic key that would match. And they did.

As a result, the malware’s super secret key wasn’t as hard to guess as its developers thought.

Beyond just outlining some clever investigative work by the cyber-intelligence community, the case of Thanos’ faulty encryption reveals a lot about modern hacking. First, as researchers well know, a lot of this malicious software is recycled among a vast community of would-be attackers, many of whom don’t really understand the tools they’re using.

In addition, the people who hack into computer systems and those who write the malware tools — often distinct groups — aren’t always experts in their fields. Using a hard-coded initialization vector is a pretty basic mistake. This means that flaws are often repeated, and offer researchers the kind of digital fingerprints they need to track and defend against growing threats.

As ransomware attacks grow in size and scale, it may be at least some consolation to know that not all hackers are geniuses.

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The ever-evolving world of cyber insurance and how to adapt to it

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refuse to offer terms or even walk away from risky coverage.

As the famous saying goes, the only constant in life is change. Nowhere is that truer than the cyber security landscape, which has shifted dramatically over the past several years.

Businesses of all sizes are starting to see these changes affect them in places they never quite expected. Cyber insurance is one of the most significant areas where businesses can find surprises awaiting them.

Implementation of Multi-Factor Authentication (MFA) is, for most carriers, the most important requirement. And it’s no longer sufficient to just add MFA to email. MFA is required for all external network connectivity like VPN’s, Remote Desktop and virtual and application gateways. Internal administrative access to Active Directory, servers, firewalls, routers, and network equipment will also be required to have MFA.

There are many different types of cyber insurance policies available, but the main thrust is the same; to provide protection to businesses against financial losses caused by cyber incidents. These incidents include data breaches and theft, system hacking, ransomware and denial of service. Cyber insurance policies also assist in recovery.

In the beginning, cyber insurance was not very expensive and in some cases was simply add-on coverage attached to other types of insurance.

Most carriers had simple applications that did not inquire into the IT security protocols already in place.

But as ransomware and other threats steadily rose, so too did the claims against cyber insurance policies, as well as the demand for coverage. In fact, they increased so much that carriers needed to change the way they approached underwriting. Carriers are now very selective in the marketplace. They have much higher premiums and, in some cases,

Carriers now demand Endpoint Detection and Response (EDR), which goes far beyond typical antivirus. This is real-time, continuous monitoring and collection of endpoint data that is monitored 24/7. Carriers now require a formal, documented incident response plan paired with EDR. The carrier wants evidence that you will not only detect, but that you also have a plan to respond to an incident.

Employee training is a high priority for carriers.

You may have the best network security, but the reality is that humans are the weak link.

Businesses would do well to put more emphasis and effort on security awareness and training.

Any training that ensures employees can identify threats such as phishing, and respond appropriately, is worth your while.

A strong backup methodology and a tested, functional Disaster Recovery Plan round out the increased requirements. Businesses would

GETTY IMAGES/ISTOCK

be wise to ensure they have multiple backup strategies including an off-site air-gapped copy of their data. “Air-gapped” means that a copy of your data is offline, disconnected and inaccessible from the internet. Making sure that your backups can be restored is critical.

Widespread implementation of MFA and EDR, combined with a formal incident response plan, thorough employee training and a robust backup plan are what businesses can do to best position themselves to obtain or renew cyber

insurance. They are also best practices businesses should follow to not only get the best rates, but to protect themselves from having to use their cyber insurance policy in the first place.

STORY SPONSORED BY:

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

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7/21/2022 3:33:31 PM

FOCUS | CYBERSECURITY

INTERNET

A CUSTOM PUBLISHING SECTION CONTACT Mara Broderick at mara.broderick@crain.com Participation Deadline: September 12

Corporate Training and Professional Development

the bad actor access to all is pretty high.

But it’s impossible to eliminate From Page 10 all risks. The aim, Merriweather “CRE companies are stepping said, is to prioritize what most up their use of new technologies needs protection and find a plan such as cloud, mobile, and social that fits the company’s budget and media to drive tenant engagement goals.

Commercially available security and operational efficiency. In addition, they are implementing in- products increase the “potential creasingly sophisticated technolo- for attacks,” Merriweather said, because people are familiar gy solutions for building with the products. Promanagement,” the report prietary products are stated. more of a deterrent to That might make life hackers. easier in some regards, And there are simple but it also “exposes inforsteps companies and inmation and data through dividuals can take to promultiple channels,” the tect themselves, like usreport noted. Notably, ing VPNs and strong the report mentions the passwords. It’s about cre2013 Target data breach, Nicholas ating barriers, so your which used the system of company isn’t an easy the retailer’s HVAC contarget, Merriweather tractor to steal customer said. information.

Nicholas said if he were The liability of a landleasing a building to cuslord to its tenants varies tomers, he’d want to make by state, but in Ohio, the sure there was a “cyber state has the Ohio Data defense” mechanism in Protection Act, Nicholas place, implementing said. Under the act, parhardware or software inties need to follow certain Merriweather trusion detection and inguidelines if they don’t want to be held accountable for trusion prevention systems. Specifically, Nicholas said he’d set up a breaches.

Curtis Merriweather Jr., a design “subnet” to tightly secure the buildand innovation Ph.D. fellow at ing’s IoT systems, like security sysCase Western Reserve University, tems or automated heating and said the first step in any cybersecu- cooling, away from other internet rity plan needs to be an assess- uses. Cybersecurity is largely about ment to identify vulnerabilities. In “mitigating risk,” he said, keeping real estate, use of IoT technology potential attacks as contained and gives companies more exposures limited as possible.

“Sometimes the big picture here for potential attacks.

Merriweather, whose back- is just finding ways to contain the ground prior to Case Western Re- hackers if they do get in, so they serve was in cybersecurity via gov- can’t get out and go to other placernment contract work, doesn’t es,” he said.

And cybersecurity needs to be think small real estate holders, like small landlords with a few build- an ongoing consideration. These ings, are at much risk for cyberat- are systems that need to be updattacks. The return for the work isn’t ed regularly, as threats — and cushigh. But large real estate holding tomer needs — change frequently, companies and REITs might be. he said.

There are more assets at play, and the chance that hacking into one Rachel Abbey McCafferty: (216) facility at a large company gives 771-5379, rmccafferty@crain.com

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One of the biggest vulnerabilities in the cybersecurity space today is the Internet of Things, the term describing the network of physical products, like appliances, being connected to the internet. | GETTY IMAGES/ISTOCK

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FOCUS | CYBERSECURITY

Cannabis is becoming a flashpoint for investment as the U.S. stands on the brink of legalization. The rapid growth of a relatively new industry also makes it a focus for tech-savvy criminals. | RICHARD T./THE CBD.CO VIA UNSPLASH

Growing cannabis industry a prime target for cyberattacks

BY DOUGLAS J. GUTH

Cannabis is becoming a flashpoint for investment as the U.S. stands on the brink of legalization. Ohio alone is set to open dozens of new medical dispensaries in the coming months, thanks to the release in May of 70 new provisional licenses by state regulators.

The rapid growth of a relatively new industry also makes it a focus for tech-savvy criminals, say Cleveland-area experts interviewed by Crain’s. With a market projected to reach $200 billion by 2028 — per a report from Fortune Business Insights — the bad guys are salivating for a piece of the action.

“When asked why he robbed banks, John Dillinger said, ‘Because that’s where the money is,”’ said James Ickes, a Stow-based attorney whose practice guides medical marijuana startups along the path of company formation, application and licensure. “Cannabis companies are doing very well at the present time, which makes them a target.”

Retail operations like dispensaries face unique threat vectors due to the predominance of protected health information in their systems, noted Ickes. In the criminal’s mind, threatening release of personal identification data that people want kept private could result in an easy payout.

Seeing as the majority of the cannabis industry operates in cash, cyber attackers may attempt to disable a dispensary’s security system or cameras for a quick smash-and-grab robbery, said Nathan Sterrett, a certified information systems security professional (CISSP) based in Kent.

“These businesses have money onsite, and a product that people want to steal,” Sterrett said. “It’s hard for (dispensaries) to report the theft to

the police because of the nature of the business.”

Whereas ransomware attacks and phishing scams make headlines, it’s not difficult for hackers to breach an internet-accessible door control system, Sterrett added. All it may take is copying an employee secu- Ickes rity badge via an RFID (Radio-Frequency Identification)-reading device purchased from Amazon.

“Ransomware won’t impact cannabis the same way as other industries, because those businesses are not taking credit cards,” Sterrett said. “It’s a space where you’re talking about the In- Sterrett ternet of Things (IoT) and other cybersecurity challenges that people may not notice. Like cameras or wireless devices where you don’t have to be on-premise to orchestrate an attack.”

Building a culture of security IoT’s prevalence in cannabis operations extends to HVAC systems controlling the temperature and humidity in a greenhouse. For any such device, going the low-cost route may leave you open to attack.

“Don’t just buy the cheapest thing you find on Amazon,” Sterrett said.

“Look at reviews and buy from a company you trust. Change the default password on devices immediately so people can’t log on to an access point and take over your point-of-sale system.”

Sterrett also suggested using vendor emails for information about potential security issues or software updates. While vendors are better about

acknowledging cybersecurity than they were a decade ago, cannabis entrepreneurs still must demonstrate due diligence around the issue.

Industry-agnostic problems like phishing are not uncommon in cannabis, said Ickes, the attorney.

Troublemakers often use social media to gather information, then social engineer intricately detailed emails that contain faulty links. Companies across industries are smart to send test phishing emails to staff, with anyone failing the test receiving additional training around common online dangers.

Although new cannabis enterprises are busy handling their day-to-day operations, savvy entrepreneurs also have the ability to bake security into their organizations from the ground up. Developing a cyber-aware culture should start with security awareness training.

“If top management takes cybersecurity seriously, everyone will take it seriously,” Ickes said. “Dealing with security in the onboarding process is also very important, because many breaches result from insider threats.

Avoiding potentially problematic employees on the front end can help you avoid breaches.”

Cannabis employees should feel free to voice concerns over security and privacy, even with something as seemingly innocuous as a strangely worded email. Embedding security into organizational culture will become paramount upon potential passage of the American Data Privacy and Protection Act (ADPPA), a bill regulating how organizations collect, process and store personal informa-

tion.

The federal privacy bill, which has bipartisan support in Congress, would put the onus on companies to protect customer information. Failure to do so would open businesses to possible liability and exposure — not to mention a reputational hit that could cost them clients.

Ickes said, “It’s hard to claim you can’t expect getting breached when it’s happening across all industries.

The bad guys are out there and trying to find new targets all the time. It only makes sense that they’d go after cannabis, because it’s well known how

the industry is doing financially.”

Marijuana proprietors layering cybersecurity into their workaday procedures will be ready for the expected market explosion that comes with legalization, Ickes said.

“This is an opportunity to build a culture around security — a mindset you need to protect people’s privacy,” he said. “Building that culture is going to make the organization better, because the legal risk (of cyberattacks) isn’t going anywhere.”

Contact Douglas J. Guth: clbfreelancer@crain.com

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CAR-SHARING: Shaker Heights firm rolls out service to offer affordable way to access transportation. PAGE 18 BUS EXPANSION: Solon sees a big win for job seekers with the expansion of RTA route 41. PAGE 18 ELECTRIC VEHICLES: Only 21,2000 of the state’s more than 10 million registered vehicles are electric. PAGE 19

TRANSPORTATION

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Patricia Harris, an employee at Lakeland Community College, rides the Laketran bus to the Frank J Polivka Transit Center. Harris rides the bus from downtown Willoughby to campus. | PHOTOS BY GUS CHAN FOR CRAIN’S CLEVELAND BUSINESS

JOB SPRAWL SPILLOVER

Demands grow for workforce mobility improvements as the distance between home and work sites continues to expand

Paradox Prize pilot programs aim to attract and retain employees

BY JAY MILLER

BY JAY MILLER

Solon, an affluent suburb in southeast Cuyahoga County, has a problem.

Many of its 900 businesses are struggling to keep their production lines moving and their workstations occupied. Part of the problem, city leaders found, is that it is difficult to attract job candidates looking for work. The reasons for the struggle to fill jobs — in Solon and elsewhere in Northeast Ohio — are varied.

Health issues related to the

COVID-19 outbreak are a factor; so, too, are low wages, difficulty finding and keeping childcare, and workers who have retired early.

Solon is not alone in this problem. Continuing sprawl — and its impact on matching workers with available jobs — is an intractable problem that continues to plague our region. Over the next year, Crain’s Cleveland Business in a monthly Forum series will explore issues like this at the intersection of public policy and business. First up, we look at how employers are

struggling to fill jobs and the impact continuing sprawl has had in Northeast Ohio, where the number of jobs near the average resident has continued to fall.

Generations ago, after the Civil War, the industrial age brought jobs to the Cleveland and Akron business districts and to the steel mills, rubber factories and other industrial businesses on the edges of those downtowns. Then after World War II, came urban sprawl.

See SPRAWL on Page 16

Most employers offer transportation as an employee benefit to make the job more attractive to job candidates. Unfortunately, it’s usually free parking, which is no benefit to employees who don’t have a car to get them to work.

But that’s beginning to change.

In Lake County, for example, Laketran, the county’s public transit agency, in December 2020 created a program called Transit GO, an employee benefit program that

is helping workers get to their jobs, either on a regular Laketran bus route or on Dial-a-Ride, the system’s door-to-door service.

The program is being used by 400 employees at 175 employers.

The monthly cost is $70 for an employee who uses the bus line and $400 a month for Dial-a-Ride service.

The program is one of eight first piloted as part of the Paradox Prize program, which offered See PRIZE on Page 15

SPONSORS

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to

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9

PRIZE

From Page 14

$75,000 to help get the program off the ground. With additional support from an Ohio Department of Transportation grant and the grand prize money Laketran won for creating the best of the eight programs, Laketran has made Transit GO permanent a year after it began.

“A lot of times when companies think of where they want to locate, they look at taxes and finances; they don’t look at things like transportation, and the reality is transportation is very expensive,” said Ben Capelle, Laketran’s CEO. “I would love for business owners to say, ‘Well, I want to locate here, but is there bus service?’”

The program has helped Zoup!, a Mentor fast-food restaurant, which, Zoup! owner Jamie Buzzanca told the prize sponsor, had in the past lost potential new hires who didn’t have cars. Now it has had two employees taking the benefit.

“As I interview people now, I throw it out there that if they don’t have transportation every day, there are a few different avenues that we can explore for that,” Buzzanca said.

The other Paradox Prize pilot programs have found other ways to help employers in their areas attract and keep employees.

The other winning programs were:

Patricia Harris, an employee at Lakeland Community College, gets off the Laketran bus at the Frank J Polivka Transit Center.

` Let’s Get to Work Lorain County! ($100,000 prize winner) — The city of Oberlin, Lorain County Transit (LCT) and other organizations in Lorain County came together to expand LCT’s Oberlin Connector and connect job seekers to a car share program, using a car from Sway Mobility Inc. (see accompanying story), a Shaker Heights electric car-sharing service, to get them to job training and interviews.

` Rural Mobility Solutions ($100,000) — In Wayne County, which did not have any public transportation, Community Action Wayne/Medina (CAW/M) purchased routing software and created a vanpool service to connect residents to jobs and services. In 2021, CAW/M announced a further step in helping county workers get to work with Stark Area Regional Transit Authority (SARTA). It launched Wayne County Transit

(WCT), offering scheduled-in-advance trips for $2.50. ` FlexRide ($75,000) — This is a program of Akron METRO RTA that offers door-to-door service from areas of high unemployment in the city of Akron to businesses that need workers in northern Summit County. ` Stark Career Connect ($100,000) — It identifies “navigators” in area businesses and support organizations who help job seekers overcome the

barriers to getting a job and getting transportation to the workplace. ` Career Access Navigation ($100,000) — RTA, working with the Centers (formerly The Centers for Families and Children) and Sway Mobility, offered free bus passes and Sway’s car share service to its El Barrio Workforce Development Center on Detroit Avenue in Cleveland’s Detroit-Shoreway neighborhood. ` Get2Work Now ($100,000) — The Cleveland Clergy Coalition and Manufacturing Works, two Cleveland organizations that work to expand employment opportunities, joined together to connect Cleveland residents with well-paying manufacturing jobs. Pastor Aaron Phillips, of Sure House Baptist Church, realized the four vans his church used to bring parishioners to services on Sunday sat idle the rest of the week. Volunteers from CCC member churches drive Cleveland residents to interviews, training and jobs. ` Healthy Transportation Choices ($98,000) — The MetroHealth System offered free monthly transit passes to employees at its transit-connected campus and other incentives, including a special daily parking rate, to encourage employees to alter their commuting behavior and as a way to attract future employees.

Jay Miller: jmiller@crain.com, (216) 771-5362, @millerjh

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SPRAWL

From Page 14

Sprawl was a response to economic growth that fattened wallets and allowed the newly affluent to leave cramped neighborhoods for bigger homes in the suburbs. But it also created the loss of green space and wildlife habitats and induced higher car dependency and longer commuting times.

Getting workers to the jobs is a particular concern in Solon, which has a population of 22,858, according to the last census.

A 2020 study by Team NEO, an economic development nonprofit focused on Northeast Ohio, found that of the nearly 27,000 people who work in Solon, 25,000 lived outside the Cleveland suburb. And of those, some traveled from as far away as Vermilion to the west and Farrell, Pennsylvania, to the east, both an hour’s drive in good weather — 90 minutes on a snowy Northeast Ohio day.

And that’s for workers who can commute by car. The Fund for Our Economic Future, in a 2015 report called “The Geography of Jobs,” cites research showing that a job in Northeast Ohio that is 20 minutes away for a car commuter is almost 75 minutes away for a typical transit commuter.

So, in 2020, along with city officials, Solon companies, including its two largest employers, and the Solon Chamber of Commerce, created the Solon Mobility Task Force. The suburban community had been growing as a business center for nearly 50 years — a beneficiary of the urban sprawl created by the development of freeways and a population yearning for more elbow room. But while its population more than doubled in that time, its business community had grown 600% from 1978 when it had only 150 business employers.

The goal was to find ways to attract job candidates to the many open jobs in Solon.

Swagelok Co., its largest employer, makes valves and fittings for fluid systems products and has nearly 3,000 employees in Solon, according to the city’s count. It recently had 209 postings for Solon-based jobs such as tool crib operator and customer service manager on its website. Nestle Prepared Foods, Solon’s second-largest employer, with more than 2,300 workers, had postings for 79 job categories, including ingredient handlers (on three shifts) and procurement specialist.

The Solon task force found that the rising cost of transportation was making job seekers think twice about the time-consuming commute to an outlying suburb, whether it is owning and maintaining a car or the cost of public transit or other forms of alternative transportation.

To attack the problem, the task force is working with the Greater Cleveland Regional Transit Authority (RTA) to find ways to expand or realign public transit. It also is exploring vehicle-for-hire and other micro-transit solutions and is researching funding options for making these workforce mobility improvements.

Problems recruiting, retaining workers Broadly, the availability of skilled personnel is high on the concerns of the business community, wherever

The Regional Transit Authority route 41 bus waits on a traffic light on the corner of SOM Center and Aurora roads. RTA extended the line to the center of the suburb’s business district.

they have operations. Executives surveyed earlier this year by the American Institute of Certified Public Accountants found that only the impact of inflation was considered a greater challenge facing the business executives. That survey found that 82% of respondents said their companies had some difficulty recruiting and retaining employees. Because of unfilled positions, the respondent companies were delaying service expansions, limiting new projects and bids, and restructuring staff.

What qualities an employer is looking for in a potential employee varies from job to job. Past experience in the job can be a plus, but so might things ranging from communication skills and working in a team to the ability to lift 70 pounds. One consistent element, though, is something that is often called dependability, and being able to get to the job every day, on time, is a key factor in dependability.

Before sprawl, the concentration of jobs in a city like Cleveland helped stabilize careers for many workers.

“You could jump between jobs in downtown Cleveland and your entire life wouldn’t change logistically,” said Adie Tomer, a senior fellow at the Washington, D.C.-based Brookings Institution think tank who lives in Shaker Heights.

Similarly, bus lines connected many neighborhoods to factories. Residents of what is now Cleveland’s Tremont neighborhood could walk to the steel mills along the Cuyahoga River. Now, however, Northeast Ohio has dozens of “job hubs” like Solon. Independence, for example, near the intersection of two interstate highways, has a population of about 7,300 but a daily workforce of more than 21,000.

What the dispersal of jobs means is that too often, job seekers can’t get to the job sites, and for employees, getting to work every day, on time is harder.

At a June 16 luncheon meeting, the Fund for Our Economic Future released results of research it called “Where Are the Workers.” The re-

search found that while low pay and health and disabilities issues were key barriers to employment, according to the unemployed surveyed, 27% considered a lack of transportation an important barrier to finding and keeping a job.

These commuting concerns are only now emerging as a problem for business owners, Tomer said.

“Employers may not see the direct transportation costs, but the transportation network for workers is absolutely connected to the business,” he said. “It will touch the bottom line through lack of dependable workers.

Workers unable to show up is not good.”

This problem is especially acute in Northeast Ohio. A 2015 Brookings study found that of the largest metropolitan areas, the Cleveland Metropolitan Area had the largest drop in the number of jobs near the average resident between 2000 and 2012. It ranked in last place, at 96th, with a 26.5% drop. The Akron metro area was in 84th place with a 14.4% drop.

In other words, while employment may be growing in places like Solon, the commute is discouraging people who want to work from making the trek to a work site.

“What we found was, as you go further from central business districts, as the street network gets less dense, the distances people travel grow and grow,” said Tomer, who researches infrastructure policy and urban economics, with a particular focus on transportation. “The challenge with those distances is those distances effectively make it difficult to travel (to work) by any means besides a car.”

Cost of transportation Part of the problem, too, is the need to commute long distances takes its toll on household budgets.

Tomer said that because of the need to travel long distances to work, people tend to pay more for transportation than they do for food or health care — unless they have serious medical issues — making it the

second-highest household expense after a mortgage or rent.

And Northeast Ohio is a relatively low-cost place to be commuting.

A study by Clever Real Estate, a national real estate education resource, estimated the average annual cost to commute in the Cleveland metropolitan area to be $6,745, fifth lowest among cities surveyed. It used federal data, including from the U.S. Census Bureau and the Federal Highway Administration, to compile the commuting costs in the country’s 50 largest metro areas. At the top of the list was Detroit, at $12,801, due in large part to the high cost of insurance. The average cost among the 50 metros was $8,466.

As workplaces have moved outward, reaching jobs has been especially difficult for low-income people and those struggling with unemployment who may not own cars. The “Geography of Jobs” report cites research showing that a job in Northeast Ohio that is 20 minutes away for a car commuter is almost 75 minutes away for a typical transit commuter, putting many jobs out of reach.

“We know from a lot of the business growth and attraction work that’s happened getting the talented people to those locations is critical,” said Marty McGann, executive vice president for advocacy and strategy at the Greater Cleveland Partnership, the regional chamber of commerce.

Not every family can afford the upfront cost of a car, especially one that sits in a company parking lot all day.

They must rely on public transit, or other services such as Uber, Lyft or van pooling services. But alternative transit to a job takes longer and can cost nearly as much as commuting by car.

That makes it hard to hold a job or reliably get to job interviews.

“Having a good operating automobile can be part of maintaining employment,” Tomer said, adding that people who are struggling financially may have a used car that is always at risk of breaking down, jeopardizing their job. “This is real stuff. It’s ex-

tremely stressful to either not be able to afford a car or to barely be able to afford it, or to lose it and potentially lose your job.”

Paradox of ‘No car, no job; no job, no car’ Economic development organizations in Northeast Ohio have begun to think more about the access to jobs, in part because of the Fund’s focus on the subject.

The “Where Are the Workers” research, cited above, is only the latest in a series of reports that began in February 2018, when the Fund released its “The Two Tomorrows” report. That research argued that maintaining and growing the region’s economic vitality depended on the region’s ability to connect people to good jobs. And getting people to the vacancies and keeping those jobs was a key part of that.

“The Two Tomorrows” report contended that economic development, land use and transportation planning at the local and regional levels have been uncoordinated and that the region can no longer afford to spread jobs across the region in a nogrowth or low-growth environment.

Since then, the Fund has kept up its quest to find solutions to the job creation and access problems.

In June 2019, it raised $1 million for a contest to find innovative ways to connect people to jobs and employers to the talent they need. It called that competition “The Paradox Prize” and explained the paradox with the catch phrase “No car, no job; no job, no car.” In other words, if an unemployed person has no car, he or she can’t get and hold a job. The problem, of course, is that if you don’t have a job, you can’t afford a car. Since 2019, the Fund has awarded eight programs financial assistance that created pilot programs to help put worker mobility solutions to work.

“The pilots made a significant impact on real people and businesses and went a long way in improving

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mobility in Northeast Ohio — but the long-term objective of The Paradox Prize was always about solving the ‘no car, no job; no job, no car’ paradox for good,” Fund president Bethia Burke told prize winners at the June 17 awards program. “The work ahead of us is to build on these ideas with employers, transit agencies and policymakers. Transportation is everyone’s business.”

McGann, who was a member of The Paradox Prize advisory committee, said he was intrigued by the concepts behind some of the pilot projects. “You know, ‘How do we, as businesses, find unique relationships with mobility providers,’” said McGann. “I think the real trick here is scaling those.”

With the final awarding of Paradox Prize money, the Future Fund is moving on to the broader “Where Are the Workers” project.

The goal, said Burke in a later telephone interview, “is to tackle the tight labor market in the wake of the pandemic to see how employers can pull sidelined workers back to the job. We have enough of a talent gap that we need a bunch of different strategies to fill it.

“It’s much easier to connect people who already live here to jobs than it is to try to import a bunch of people to the region.”

Transportation, Burke said, will be a component of this developing strategy.

“Maybe you’ve heard the term transportation demand management (TDM). It’s those strategies that companies can pursue that enable people to get to work more effectively,” she said. “It’s understanding who within your organization takes the bus and reflecting on whether shift times match bus schedules and, if not, (does) changing the schedule or changing the shift time work” to attract workers.

Business owners’ concerns Dennis McAndrew, president of Silverlode Consulting, a Cleveland site selection and economic development firm that helps businesses evaluate locations for expansions, said worker commuting concerns are only slowly becoming a factor in site decision making. His clients, he said, “tend to be looking for shovel-ready sites, maybe on an interstate or they’re looking at an existing building that has the modern amenities of high ceilings and adequate parking, things like that.”

Local tax policies also play a major role in site decisions, said Mark Zannoni, director of smart cities strategy for Oracle Corp. and a former research director for the Northeast Ohio Areawide Coordinating Agency (NOACA), the planning agency that maps out planning and federal transportation spending for Cuyahoga, Geauga, Lake, Lorain and Medina

counties.

A business owner thinking about taxes in Ohio might choose to live — and locate his or her business — in a township because in Ohio, “townships can’t levy income taxes; they rely on property taxes,” said Zannoni, a longtime transportation consultant based in Cleveland. “So, if you are going to open up a factory and you want to be 10 minutes from your house, you don’t live in a municipal corporation where you’re taxed; you live in a township where you pay zero tax.”

Zannoni is skeptical that pilot programs like those highlighted by The Paradox Prize can have a significant impact. He called the Paradox pilots Band-Aids.

“If you’re providing transportation with, you know, 20 vans or seven vans, and you’re driving 16 people or 20 people from an inner-city neighborhood like Hough, to Solon, it’s good for those people, yeah, but that’s not really solving the greater issue,” he said. “I think we should get to the root of the problem: Why is the factory being located in Twinsburg when the labor’s in Hough?”

Transit alternatives Grace Gallucci, NOACA’s executive director and CEO, agrees that jobs should be brought close to the existing labor pool, but she also believes that efficient, affordable transportation to job opportunities is im-

portant. It’s a key goal in NOACA’s recently adopted economic development strategy.

“I think what we’re seeing is the recognition that people and jobs need to be closer together,” Gallucci said. “There has to be development of housing near the jobs, or there has to be jobs locating or relocating near where the people are.”

Under its new strategy, NOACA will prioritize funding for access by transit and other alternatives to job hubs and support a more regionalized public transit system to expand inter-county transit routes and parkand-ride systems. It also has joined with other transportation focused organizations in Ohio that have created a service that will link to TDM programs.

Gohio Commute, offered by both NOACA and the Akron Metropolitan Area Transportation Study (AMATS), offers carpool and vanpool services as well as bicycle and pedestrian options. Through Gohio Commute, employees, as a benefit, can set aside up to $260 a month to cover commuting costs, including public transit and vanpool expenses.

Team NEO, which is a key point of contact for businesses looking at Northeast Ohio for expansion, also has begun a program to put these issues before site selectors and their clients when they consider an expansion or a new site in the region.

Called ESGP, it brings the issue of

commuting, as well as other environmental, social and governance issues, into site selection. By entering a site, the program will, for example, identify the size of the labor pool within a 30-minute commute, by car and by public transportation. It also will provide racial and ethnic demographics and the impact of environmental emissions.

For example, the program calculated that there were 894,993 potential workers within a 30-minute drive from the Nestle distribution center in Solon, but only 21,928 within a 30-minute transit commute. By comparison, there were 1,027,893 potential workers within a 30-minute car commute of Public Square in Cleveland and 322,137 in a similar transit commute.

“One of the things that comes up more and more is while most people drive to work, in a very tight labor market, we’re seeing companies ask for public transit connections — ‘so tell us where the nearest bus stop is’,” said Bryce Sylvester, Team NEO’s senior director of site strategies. “If you’re a company CEO and you’re looking to reduce your risk on getting the right labor, then we believe that proximity to public transit and even going to places where you can potentially even want to work, are competitiveness issues.”

Jay Miller: jmiller@crain.com, (216) 771-5362, @millerjh

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imsses ving JULY 25, 2022 | CRAIN’S CLEVELAND BUSINESS | 17

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Shaker Heights firm rolls out car-sharing service

BY JAY MILLER

Getting people to work when a car, or even a bus, isn’t available can mean an expensive Uber or Lyft ride.

Or it can be more affordable if a community or company creates a car-sharing service like the ones operated by Sway Mobility Inc., a 4-year-old Shaker Heights company.

CEO Michael Peters said Sway now has a dozen cars in programs in Northeast Ohio and Detroit.

Among its current clients are the city of Oberlin in Lorain County and The Centers (formerly The Centers for Families and Children) in Cleveland.

The Centers’ program is funded by a Paradox Prize grant, and it helps the El Barrio Workforce Development Center on Cleveland’s West Side get trainees to job interviews and to keep their jobs if other transportation falls through.

Oberlin’s program began in 2021 and was approved by City Council to help residents and Oberlin College students with affordable and flexible transportation and to reduce carbon emissions. The city agreed to pay as much as $223,000 over five years to cover a portion of the service’s cost not recovered from user fees.

“We have two electric cars that are available for anybody to use, but you have to pay by the hour,” said Carrie Porter, Oberlin’s direc-

tor of planning and development.

“They have been well used, more than what (Sway) thought they would be used.”

An Oberlin resident or college student can use the cars for a few hours or a few days, depending on their need. Users pay $8 an hour and may pay additional fees if the car needs extra cleaning or if the battery is drained. Peters said the cars are sometimes used as many as five times a day.

“The cars are completely self-service and keyless, meaning that basically there’s an app that you download and, through that app, you make the reservation for the car, you unlock the car, it authorizes the car to start with the push button,” said Peters. “So we don’t have staff waiting around.”

Its car-sharing, Sway contends on its website, saves drivers who use the service instead of owning cars $5,500 a year and reduces greenhouse gas emissions by 10%.

“The reason that we started Sway was because my co-founder and I were doing other kinds of sustainability things, smart cities and stuff like that,” he said. “And a nonprofit we were working with brought it to our attention that residents of the city of Cleveland, on average, pay a higher percentage of their income on transportation than they do on housing. That seemed messed up, so that was the original problem we were trying to address. And look, Cleveland is not alone.”

The Sway Mobility app allows you to rent an electric Chevy Bolt much in the same way you would rent an electric scooter. Michael Peters, president of Sway Mobility, stands next to one of the rental cars at Church + State apartments.

Passengers wait for the Regional Transit Authority route 41 bus on the corner of SOM Center and Aurora roads.

Solon official: ‘It was very eye opening for all of us’

BY JAY MILLER

Beginning in March, the Greater Cleveland Regional Transit Authority route 41 bus, which begins in East Cleveland at the Stokes-Windemere Rapid Transit station, was extended to the eastern edge of Cuyahoga County. It wasn’t a long extension because the bus already reached parts of Solon, but it brought a bus out to SOM Center Road, the center of the suburb’s business district.

Solon considers extending the bus service, even for a relatively short distance, a big win for the community and for its Solon Mobility Task Force, a group of city officials, employers and RTA officials looking for ways to get job seekers to consider coming out to Solon.

The task force also found that a transit trip involved more than just sitting on a bus.

“If they are utilizing public transit, it’s not only how long it takes them in terms of ride time, but also time waiting for the bus,” said Angee Shaker, Solon’s economic development director. “And then in some cases, not only that, but then you have to factor in the walk time as well, after they’re dropped off at their stop. And it was just very

eye-opening for all of us.”

So RTA has moved some bus stops to make them more convenient and the city now has four bus shelters, up from one.

Maribeth Feke, RTA’s director of programming and planning, said the extension of the route 41 bus and the added shelters “provides employees with more shelter and thus a more pleasant waiting environment before their trip,” she said.

“It also revises bus stop locations on the #41 with more options near the retail area without sacrificing bus connections with other routes in the RTA network.”

These changes are part of a new RTA “micro mobility” program called ConnectWorks. The program was created to help people get to work at job hubs via public transit.

It’s an acknowledgement that the RTA route network, some parts of which were laid out decades ago, now longer reaches Cuyahoga County’s employment centers, even though work is most often the destination for RTA riders.

The next step under consideration for the Solon area is a microtransit solution to connect RTA’s Southgate terminus with job sites in the Bedford and Solon areas.

RTA also is adding a bus loop through the village of Mayfield and the city of Highland Heights at the end of the route 7A bus line to help bring workers to the Progressive Insurance campus and other employers in that job hub.

Until recently, the trip to work was an issue shared most directly by commuting workers and the public agencies that built roads and ran buses. When the task force looked at the issue, it found that only 1,729 of Solon’s workforce of nearly 27,000 lives in Solon. Its analysis found that more people who live in the city of Cleveland work in Solon — 2,364 people — and that Cleveland had many job seekers with the baseline skills needed for many Solon jobs.

But, the task force found, 36% of its public transit commuters spent 60 minutes or more each way.

That analysis, the pandemic and the low unemployment rate have forced employers to get more involved.

“There is a point there where the businesses have as much of an interest as the employees in ensuring that there are transportation choices that get everyone to where they want to be,” said Grace Gallucci, executive director and CEO of the

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Where Ohio stands with electric vehicle adoption

BY JAY MILLER

Northeast Ohio Areawide Coordinating Agency (NOACA), the regional transportation planning organization. “Businesses need to be concerned about where they’re located and how accessible that location is to the workforce they need.”

Wrap-Tite Inc., which makes packaging products and materials such as poly bags and stretch film used for shipping, is getting more concerned.

“It’s going on two years and everybody’s having the same problem — you schedule them and they don’t show up,” said Sherrie Wright, Wrap-Tite’s human resources manager and a member of the task force. “Our HR recruiter is doing her best to get people to come in. She’s scheduling interviews and then they don’t show up,” she said. “We’ve had a few people that have applied for jobs, but they lived on the West Side and it’s like, a two-hour drive and we work 12-hour shifts.”

Shaker credits state Sen. Matt Dolan with getting the ball rolling.

“He reached out to my office and said, ‘Hey, you know, we need to really think about public transit, connecting people in a better way, in a more efficient way, to jobs in the outer ring suburbs,’” Shaker said. “He asked if we could get some business leaders (together) and we absolutely did it.”

A spokesperson in Dolan’s office said the senator was away for home and would not be available for comment.

Earlier this year, the United States crossed what many consider an important threshold — sales of new electric vehicles are now more than 5% of total vehicle sales. The growth is, in part, a response to high gas prices but also an increase in the models available, across a broad price range.

This threshold, according to a report from Bloomberg, signals the start of mass EV adoption, the period when technological preferences rapidly flip, according to the analysis.

Ohio is not a leading EV state — of its more than 10 million registered vehicles, only 21,200 were electric, according to the U.S. Department of Energy’s Alternative Fuels Data Center. Part of the reason for the state’s slow adoption of EVs is that Ohio has instituted a special, high registration fee for electric and hybrid vehicles.

The recently adopted state transportation budget continued registration fees of $200 for all-electric and plug-in hybrids, in part because they cut into the state’s gasoline tax, which pays for road construction and repair.

Other factors include high vehicle cost and concerns about vehicle quality.

One other worry is “range anxiety,” the concern that charging stations are hard to find and, even if found, the cars take too long to charge. That’s changing.

A number of private companies have begun selling charging stations to businesses, retailers and other institutions. But many believe adoption would be faster if the state and local governments had more publicly available charging stations. In May, the state’s Ohio Electric Vehicle Infrastructure Deployment Plan identified only a dozen public charging stations, principally at gas stations, scattered across the Ohio Turnpike and several major freeways.

Now, however, with the passage of the federal bipartisan infrastructure law, Ohio will be participating in an allocation from a $5 billion pool to build out an electric vehicle charging infrastructure along major highway corridors. By 2030, the program expects to have 500,000 publicly accessible charging stations compatible with all vehicles and technologies.

As a result, the Ohio Department of Transportation will receive $20.7 million a year for the next five years to install chargers along what the Federal Highway Administration calls Designated Alternative Fuel Corridors (AFCs) — the state’s interstate highways plus several major federal highways, such as Route 33, connecting Columbus with Athens, the home of Ohio University. The charging stations will typically be placed every 50 miles along 1,800 miles of highway.

In addition, the Northeast Ohio Areawide Coordinating Agency (NOACA), the regional transportation planning organization for Cuyahoga, Geauga, Lake, Lorain and Medina counties, is playing an important role in deploying publicly

Electric vehicles are parked and charging at the Cleveland Clinic employee garage on the corner of E. 105 St. and Cedar Avenue.

The city of Euclid has installed a ChargePoint electric vehicle charging station between the Euclid Public Library and City Hall.

available charging stations.

It already has allocated $3 million to install 120 charging stations at public places across its five-county territory. Its planned sites include Avon City Hall, the Brecksville Community Center, the Geauga County Courthouse in Chardon, Lakeland Community College and the Medina County Jail.

Now, with additional federal money on the way from the Transportation Department’s National Electric Vehicle Infrastructure program, NOACA will have as much as $20 million for additional public charging stations.

Grace Gallucci, NOACA’s executive director and CEO, believes replacing gasoline-engine cars with electric vehicles can play a significant role in cutting air pollution.

“We want to make sure that EV charging is available in as many public places as possible,” she said.

“That includes libraries and parks, but it also includes places where people live in rented or multifamily homes and can’t install their own home chargers.”

The Ohio EPA is also lending a hand. Using funds from the settlement of a lawsuit over violations of the federal Clean Air Act, it has awarded $7 million to support the installation of electric vehicle charging ports at public and private locations statewide. Cleveland Clinic applied to the EPA for chargers at all eligible hospitals and family health centers and, in a press release, said it has begun installation of what may be as many as 124 charging spaces at 22 of its locations.

It currently has 14 spaces at four locations in Northeast Ohio.

“This initiative supports Cleveland Clinic’s commitment to clean air and healthy communities,” a press release said. “Electric vehicle

chargers will be publicly available for patients, caregivers and visitors.

They will be compatible with all current models of electric vehicles.”

The issue of compatibility — which vehicles can use which kind of charger — should not be a problem for most EV owners. The most common chargers are called Level 1 and Level 2 chargers, which use the same standard plug. DC chargers and the Tesla Supercharger are sometimes called Level 3 and are less common and can only be used by certain vehicles — for example, Tesla vehicles.

However you charge, it’s not as fast as pumping gas. Level 1 chargers use a standard 120-volt plug and are typically for home use, since it can take up to 12 hours to get a full charge. Level 2 chargers use a 240volt plug and are the kind in use at public charging stations. Depending on the vehicle and the charger connection, they can deliver 12 to 80 miles of range per hour. Level 3 charges 10 miles or more per minute.

Blink Charging Co., a Miami Beach firm that installs and operates charging stations, is involved in several programs in Ohio, including the installations at the Clinic.

“What we’re doing is Level 2 chargers because a lot of businesses want that, because you have employees who are going to be working all day or shoppers spending a lot of time at shopping malls,” said Jon Myers, Blink Charging’s media director. “DC fast chargers are making a big splash, especially on major highways where people don’t want to spend a lot of time to pull over to charge.”

The cost of a charge varies. On the Ohio Turnpike, which currently offers charging at four service plazas (two in each direction), the charge is 40 cents a minute for DC fast charging and 3 cents a minute for Level 2 charging. The city of Lakewood has several public charging stations including at City Hall and the Serpentini Winterhurst Skating Rink and had been offering the service to residents at no cost until earlier this year. It instituted a fee of 24 cents per kilowatt hour on March 1.

Jay Miller: jmiller@crain.com, (216) 771-5362, @millerjh

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The value of people, the power of place

BY BETHIA BURKE

Bad news: Approximately 20% of your workers are considering quitting their job. Better news: About half say something could be done to get them to stay. And, while a majority of workers unsurprisingly rank competitive wages highest among factors affecting work decisions, newly released insights from a survey of 5,000 adults across Northeast Ohio show better wages are just the table stakes for today’s talent game.

Burke is the “Where Are the Workers?” is the latest public initia- president of the tive of the Fund for Our Economic Future, the organiza- Fund for Our tion I lead. For nearly two decades, we have been work- Economic ing to understand what matters, drive what works and Future. prepare for what’s next in pursuit of a more equitable, prosperous Northeast Ohio economy. “Where Are the Workers?” brings together insights from the referenced survey and input from more than 600 employers and offers actionable ideas for anyone in the business of attracting or retaining talent.

Paying attention to what workers say matters. Even with concerns about a coming recession, talent shortages persist. There are nearly two open jobs for every worker in the U.S., yet finding or keeping a job has been difficult for nearly one in five Northeast Ohioans over the past year. While the region’s employers say their top talent strategy has been increasing wages, barely half of workers say they earn enough to meet their needs. And, as we’ve discovered, the way workers are reacting to today’s economic uncertainty is different than in past economic crises. While the instability of the Great Recession had the effect of scaring many workers into taking jobs they might otherwise not have settled for, today increased stress from the pandemic seems to have prompted many to ask, what makes the trade between work and life “worth it”?

The COVID-19 pandemic acted as an accelerant, exposing and amplifying long-term, systemic issues. Systemic issues, like no-growth sprawl, that have long driven family-sustaining work both literally and figuratively out of reach for many Northeast Ohioans. But “systemic” doesn’t mean “impossible to solve,” and our analysis presents several potential strategies for employers:

ASK CURRENT WORKERS WHAT WOULD MAKE A DIFFERENCE TO THEM. INCORPORATE FLEXIBILITY, THINKING EXPANSIVELY ABOUT WHAT “FLEXIBILITY” MIGHT MEAN. 1. Ask current workers what would make a difference to them.

2. Incorporate flexibility, thinking expansively about what “flexibility” might mean. For some, it’s a fully or partially remote work environment.

Other options? Build in more part-time positions or consider the alignment of shift times with school schedules.

3. Decrease the cost for workers to get to work. This may be the fastest way to give someone a raise, and one of the most effective ways to increase access to talent. Even before gas prices soared, Northeast Ohioans were spending a disproportionate amount of income on transportation. Substantial work over the past three years through The Paradox Prize has produced replicable strategies for both individual employers and systems actors to change this reality. In Lake County, for example, workers using Laketran’s TransitGO option are saving anywhere from $70 to $400 a month in commuting costs. These savings are real, and increasingly important at a time when inflation is putting pressure on employers and workers alike. The solutions emerging from The Paradox Prize (available at paradoxprize.com) can help employers of all sizes improve connections with workers and job seekers.

Additional implications and deeper analysis continue to emerge at wherearetheworkers.com as the Fund and our partners — including ConxusNEO, PolicyBridge, the Summit/Medina Workforce Area Council of Government and Team NEO — explore the data produced through this collaborative effort. All along the way, I’ve been heartened by the many employers who are eager to understand their workers’ and would-be workers’ perspectives and consider how to make workplaces work better for people.

Meanwhile, we and others have also been hard at work on an effort to enable more informed near-term decision making that can more effectively support more economically competitive long-term outcomes. Earlier this year, the Fund and Team NEO launched ESG to the Power of Place (wherematters.teamneo.org), a first-of-its kind mapping tool to help businesses reach more workers, increase the racial diversity of their workforce and reduce commute emissions through the site selection process. That is, to use the power of place to reach environment, social and governance goals.

Understanding, reaching and keeping talent has never felt more important. A better tomorrow for the people and businesses of Northeast Ohio is possible. To reach it, we must recognize the value of the people in our workforce and harness the power of place.

The lack of density has made the use of public transit less attractive as a mode of travel and less viable. | STEPHEN LEONARDI/UNSPLASH

A ren

Working to support people with insufficient transportation options

E h

BY GRACE GALLUCCI

BY B

The Northeast Ohio Areawide Coordinating Agency (NOACA) is the metropolitan planning organization for Cuyahoga, Geauga, Lake, Lorain and Medina counties that form Greater Cleveland.

NOACA plans, funds and oversees the federal transportation system, including highways, arterial roadways Gallucci is CEO and public transit, as well as bicycle and executive and pedestrian facilities. director of the NOACA also addresses air quality Northeast Ohio issues related to mobile emissions.

Areawide Being a regional facilitator is central Coordinating to its role, bringing together multiple Agency. partners to develop and implement plans to ensure safe, cost-effective and environmentally sound travel throughout the region.

A fully developed transportation system is the foundation of a strong economy and must include elements giving people access to resources and opportunities that improve their lives.

An equitable transportation system further ensures such access to all people, whether or not they own a car.

NOACA’s strategy for increasing transportation alternatives is a vital part of our long-range plan, eNEO2050: An Equitable Future for Northeast Ohio, which is a comprehensive plan that guides Northeast Ohio’s major infrastructure investments and vision for the future. The plan focuses on mobility and integrates inclusive options for equity. More specifically, eNEO2050 incorporates an examination of the region’s demographics, economy and land use patterns, including the relationship between housing and jobs, with the goal of identifying and implementing better policy for transportation within the region.

The not-so-surprising conclusion of the research for eNEO2050 is that the region’s population density has been declining for 50 years, with people and jobs expanding outward into previously undeveloped areas.

These trends currently present significant challenges in connecting people to places, particularly for those without an automobile. Over this time period, the NOACA region has been extremely responsive in building a transportation system to serve travel demand by car; now we must focus on serving travel demand by ALL modes. Drivers will continue to be a critical part of the market share, and the infrastructure to support them must be maintained and even enhanced. But it is time to better balance the scales in favor of walkers, bikers and transit riders.

NOACA and its partners are planning accordingly to support those with insufficient transportation options, but the region faces continuous challenges in providing

appropriate levels of public transportation for its residents.

The lack of density, along with increasing costs and imbalanced funding, has made the use of public transit less attractive as a mode of travel and less viable geographically and economically. eNEO2050 takes a broad yet strategic approach to addressing both immediate and future transportation needs with an overall goal of improving the quality of life for all within the region. A more regionalized public transit system is planned to expand accessibility to jobs, health care, education and entertainment, among other destinations to keep people more connected.

Public transit is an important aspect of the transportation network, and mobility choices are vital to the health and vibrancy of a region; moreover, public transit provides a lifeline for lower-income households, the young, the elderly, and people with disabilities.

NOACA works diligently with the individual transit agencies in all five counties to meet service demands while being fiscally prudent; but, due to the established patterns of people and jobs, more regional collaboration will be needed.

Transit corridors that traverse county lines and focus on regional assets are outlined in eNEO2050 and must be realized to have a truly regional transit system. Public private partnerships must be forged to more effectively align transportation with land use, including the planning and implementation of transit oriented development (TOD). These elements of eNEO2050 also advance efforts for cleaner air, which is reliant on less vehicle miles traveled and lower emissions achieved through a mode share shift from single occupancy vehicles to alternative transportation.

Through structured funding sources like Transportation Alternatives, as well as adopted policies such as Complete and Green Streets, eNEO2050 provides support for programs and projects characterized as non-motorized transportation. Examples of these investments are on- and off-road pedestrian and bicycle facilities, infrastructure projects for access to public transportation, transportation for livable communities, environmental mitigation and streetscaping.

Within the past year, NOACA has been privileged to lead comprehensive planning work that emphasizes the connection to inclusive transportation access and mobility. The 4Ps — plans, projects, programs, policies — included in eNEO2050 are real reminders of NOACA’s vision for investing in a transportation system that will achieve NOACA’s vision to stregthen regional cohesion, preserve existing infrastructure, build a sustainable multimodal transportation system to support economic development, and enhance the quality of life in Northeast Ohio.

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Connecting people to jobs requires good transportation — and then some

BY EMILY GARR PACETTI

A rendering shows early plans for two new leading-edge Intel processor factories in Licking County, Ohio. | INTEL CORPORATION

Effective site selection strategy can help solve the no-car-no-job paradox

resi-

BY BILL KOEHLER

and nsit geo-

Economic development is the ultimate team sport.

In the Northeast Ohio region, our team includes multiple economic development organizations, partners and civic leaders all working with JobsOhio and state economic development organizations to en- Koehler is CEO courage more business investment of Team NEO. in the region.

While each member of the team focuses on different geographies, industries and talent populations, they share common goals: attracting new companies, helping current companies grow, creating new jobs, and enhancing prosperity.

Today, they also share common challenges due to historical development patterns that created fragmentation of sites across the region and resulted in racial equity, environmental and financial implications that undermine our region’s competitiveness. As a result, multiple barriers exist to developing a more vibrant, inclusive economy that creates regional economic growth and individual prosperity.

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KEY AMONG THE CHALLENGES WE FACE IS THE LACK OF CONNECTIVITY BETWEEN WHERE POTENTIAL EMPLOYEES LIVE AND WHERE THEY CAN FIND AVAILABLE JOBS. Key among the challenges we face is the lack of connectivity between where potential employees live and where they can find available jobs. Team NEO, working with the Fund For Our Economic Future, developed a job hubs program to help solve this problem. It focuses on facilitating transit-oriented design and development, using targeted incentives, and deploying compelling branding and marketing efforts to encourage job creation within job hubs, which reduce transportation and other connectivity barriers to employment. To do so, however, we need a thorough understanding of what types of sites the market demands and the types of sites we have available.

Site selection drives economic development. Since January, site selection has been at the forefront of conversations in Northeast Ohio following the news that Intel selected New Albany, outside Columbus, as the home of two new chip factories. Several people have questioned why Intel did not choose Northeast Ohio and what Northeast Ohio could do differently to win projects like Intel. The answer lies in the timely avail-

ability of a mega site of more than 1,000 acres that could be prepared with suitable utility infrastructure and other important strategic attributes.

Northeast Ohio as a region can become more competitive and more attractive for mega-projects like Intel, as well as small- and medium-sized companies looking for the best location to grow with a proactive site selection strategy that addresses the key elements of every site selection decision: meeting the project needs and minimizing the amount of time, risk and money for the investment.

Northeast Ohio’s 18 counties have a diversity of urban, suburban and rural settings that offer a variety of resources, sites and opportunities for economic development. With such diversity, we must focus on how the time-risk-money framework applies differently to greenfield sites that have never been developed and urban sites that typically require significant redevelopment. Greenfield sites make it easier for a company to develop a location according to its specific needs with minimal risk of environmental contamination. However, they may also lack industrial-grade utility infrastructure, transportation and transit connections and require cultural surveys and zoning changes. Addressing those issues can take time and money, increasing the perceived risk.

By contrast, urban redevelopment sites often have high-capacity utility infrastructure, good connections to workforce populations, and proximity to transportation infrastructure and supply chains. However, these sites frequently are assembled from multiple smaller parcels, environmental remediation is frequently required, and existing infrastructure may need significant repair. Our region must be prepared to offer both greenfield and urban redevelopment sites to compete for the widest range of opportunities.

These are the realities we face when it comes to assembling and marketing sites to companies and site selectors. If we want to win the site selection game, grow our economy, and ensure workers can attain good jobs with family-sustaining wages, the solution is clear: operate from a shared playbook, one that proactively leverages data, collaboration and site selection best practices.

Team NEO’s Sites Strategies team has developed an effective playbook that leverages data insights to take a proactive approach to site selection, guiding local partners, property owners and developers, and serving as a conduit for JobsOhio resources related to site readiness.

By working together, we can address the time, risk and money concerns for companies looking to invest, and we will ultimately help the region address the until-now intractable challenge of transportation and location as barriers to employment.

Across the U.S., accessible and affordable transportation is key for people to get, and keep, jobs. In Northeast Ohio, with its history of sprawl, population decline, and residential segregation, transportation has become especially important for people to reach their economic potential in the labor market. COVID-induced remote work and elevated gas prices make the landscape even more complicated. Transportation Pacetti is vice challenges also interact with many other barriers to president and employment — all of which affect something the Fed community cares deeply about: maximum employment. affairs officer I’m a fourth-generation Clevelander. When my with the Federal great-grandparents immigrated here in the early 1900s, Reserve Bank of they settled into a neighborhood once labeled “hazard- Cleveland. The ous” on East 105th and moved to the suburbs midcen- views expressed tury, a privilege many non-white families did not have here are hers because of redlining. Their children and their chil- alone and not dren’s children were raised in the suburbs. Though I necessarily those promised myself I would not perpetuate a cycle of sub- of others in the urbanization with my own family, we left Cleveland for Federal Reserve the suburbs last spring, where I benefit from the privi- System. lege of a hybrid work arrangement.

I share this because it’s not the 1940s anymore, but sometimes we still act like it is.

We need to recognize the more complex networks of people and jobs, both physical and virtual, that exist today beyond “breadwinner commuting” (a term recently used by Joyce Huang, Cleveland’s new city planning director). In doing so, we must consider how transportation systems — but also workforce and economic development, education and social service systems — work for and against the goal of connecting people and jobs.

First, we must understand where people live and work today and how these arrangements are evolving. In 2015, the Federal Reserve Bank of Cleveland and the Fund for Our Economic Future each drew attention to job access, or the ability to reach jobs within a typical commute distance or time, particularly for residents in economically distressed neighborhoods in Northeast Ohio. Research demonstrated the benefits of reduced commuting distances, which can make a significant difference in keeping people employed, especially for Black workers, women and older workers.

Since that time, organizations such as the Fund, Team NEO and the Northeast Ohio Areawide Coordinating Agency have prioritized the issue and even created online tools like wherematters.teamneo.org for employers to understand why and how their location decisions can mean the difference between a deep labor pool or a shallow one. The Fund’s recent Paradox Prize initiative helped to fund solutions to the “no-car, no-job” reality that many lower income workers confront, and to surface solutions like pick-ups to satellite job locations and employer-subsidized transit.

This leads to my second point. We know that transportation solutions alone won’t solve the myriad issues faced by lower-income workers. While surveys, including the Fed’s own Community Issues Survey, continue to reveal transportation as a primary challenge to entering or re-entering the workforce, respondents also cite lack of affordable childcare and concerns about loss of government benefits. A recent Fed report “Missed Connections in Cleveland” finds that even neighborhoods with the highest rates of job access don’t have the corresponding high employment rates that one would expect, suggesting a mismatch between jobs available and workers’ skills. Earlier this month, the Cleveland Fed joined with United Way of Greater Cleveland to help sponsor more than 200 community members to learn more about nine “social determinants of work,” of which transportation was only one.

Solutions to job access, therefore, must be sensitive to how today’s transportation needs interact with things like childcare, education, workforce training, affordable housing, hybrid and remote work, and the diversity of work-life situations that people face, particularly those with lower incomes.

How can transportation systems evolve to be both multimodal (ride-sharing, passenger vans, buses, bikes, scooters, trains and so on) and multi-nodal (i.e., with a diversity of origins and destinations in mind)?

The Cleveland Fed focuses on convening community leaders and providing research to help communities understand and explore issues like these. Our community development team will continue to examine barriers to work that prevent too many Northeast Ohioans from being able to help support themselves and their families. Job access is one such issue.

You can find more of our research on clevelandfed.org.

I applaud the efforts of so many of our partners in the public and private sectors who recognize that only by working together and continuing to change and evolve can we keep moving in the right direction: forward.

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CRAIN'S LIST | IT SERVICES FIRMS

1

REGENCY TECHNOLOGIES 4550 Darrow Road, Stow 888-801-3497/regencytechnologies.com

252

281

IT asset disposition and recycling company

2

DELOITTE 127 Public Square, Suite 3300, Cleveland 216-589-1300/deloitte.com

231

584

Professional services firm

✔

3

POMEROY TECHNOLOGIES LLC 6930 Treeline Drive, Brecksville 800-846-8727/pomeroy.com

230 1

265 1

IT managed services and staffing provider

✔

4

ACCENTURE 1400 W. 10th St., Floor 3, Suite 400, Cleveland 216-535-5000/accenture.com

223

243

Professional services company in digital, cloud and security

✔

5

PARK PLACE TECHNOLOGIES 5910 Landerbrook Drive, Mayfield Heights 800-931-3366/parkplacetechnologies.com

147

525

Data center and networking optimization firm

✔

6

VOX MOBILE 6100 Rockside Woods Blvd. N., Suite 108, Independence 800-536-9030/voxmobile.com

122

145

Managed mobility services provider

7

GENESIS10 One Cascade Plaza, Suite 1230, Akron 330-597-4114/genesis10.com

115 1

125 1

Talent, workforce solutions and technology consulting firm

8

US COMMUNICATIONS AND ELECTRIC INC. 4933 NEO Parkway, Garfield Heights 216-478-0810/uscande.com

105

105

Network design and integration services firm

9

MODIS 6150 Oak Tree Blvd., Suite 490, Independence 216-447-1909/modis.com

95 1

110 1

Information technology and engineering staffing and consulting solutions

10

FIT TECHNOLOGIES 1375 Euclid Ave., Suite 310, Cleveland 216-583-5000/fittechnologies.com

94

109

Managed IT services firm

11

RSM US LLP 1001 Lakeside Ave. E., Suite 200, Cleveland 216-523-1900/rsmus.com

79

227

Audit, tax and consulting services firm serving the middle market

12

FORTRESS SECURITY RISK MANAGEMENT 6001 Euclid Ave., Suite 300, Cleveland 440-268-3141/fortresssrm.com

77

84

Incident response, cybersecurity consulting and managed services provider

13

HURRICANE LABS 3401 Enterprise Parkway, Suite 105, Beachwood 216-923-1330/hurricanelabs.com

69

87

Managed services provider – Splunk and cybersecurity services

14

CENTRIC CONSULTING 1951 W. 26th St., Suite T-10, Cleveland 216-533-3028/centricconsulting.com

48

55

Management consulting: business agility and transformation, technology implementation and adoption

15

SIKICH LLP 274 White Pond Drive, Akron 330-864-6661/sikich.com

46

120

Professional services firm specializing in accounting and technology

16

RAZORLEAF CORP. 3732 Fishcreek Road, Suite 291, Stow 330-676-0022/razorleaf.com

46

55

Product lifecycle management, consulting, implementation, integration and managed services

17

QUALITY IP LLC 145 River St., Kent 833-566-9748/qualityip.com

45

60

Managed IT services, co-managed IT help desk and VoIP provider

18

BENNETT ADELSON PROFESSIONAL SERVICES 6050 Oak Tree Blvd., Suite 150, Independence 216-369-0140/bennettadelson.com

44

52

Cloud consulting services firm

✔

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19

PALITTO CONSULTING SERVICES INC. 150 Main St., Wadsworth 330-335-7271/palittoconsulting.com

42

49

Provider of on-site/remote managed IT services, VoIP and custom web/API development

✔

✔

20

PROVATO LLC 8748 Brecksville Road, Suite 125, Brecksville 216-243-7492/theprovatogroup.com

40 1

53 1

Staffing and technology solutions firm

✔

✔

21

KPMG LLP 1375 E. 9th St., Suite 2600, Cleveland 216-696-9100/home.kpmg/us

39

174

Network of professional firms providing audit, tax and advisory services

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22

MERITECH 4577 Hinckley Industrial Parkway, Cleveland 216-459-8333/meritechinc.com

36

108

Office technology solutions provider

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23

PARAGON CONSULTING 5900 Landerbrook Drive, Suite 150, Cleveland 440-684-3101/paragon-inc.com

36

50

Web technology and digital marketing firm

24

TRUSTEDSEC 14780 Pearl Road, Suite 300, Strongsville 877-550-4728/trustedsec.com

35

40

Information security consulting firm

25

ADVIZEX 6480 Rockside Woods Blvd. S., Suite 190, Independence 216-901-1818/advizex.com

31

73

Technology solutions provider

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✔ Paul Wellener, Northeast

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✔ Chad Fangman, vice

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✔ Severine De Wagheneire,

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Nate Gram, managing director

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Patricia Connole, CEO

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✔ Pete Paras, CEO

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Andy Brouse, regional vice president

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Andy Jones, CEO

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Will Dawson, CEO

✔ Adam Tubbs, CEO;

Fred Franks, chief strategy officer; Michelle Tomallo, chief people officer

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✔ David Andrews, Ohio market leader

Joe Smucny, partner, VP

✔ David A. Brockman,

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✔ James Mylen, Cleveland

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✔ Mary Ann Bednar, CEO

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Chris Adams, president, CEO

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partner-in-charge, Akron Eric A. Doubell, CEO

✔ Ryan Markham, CEO;

Greg Girton, president Nilesh F. Bandi, president; Timothy May, vice president

✔ Bryon Palitto, CEO Dan Egleston, technology director; Jeff Zart, managing director managing partner

John Ours, CEO

David Kennedy, CEO

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office managing director, Cleveland

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president, technical staffing services

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Ohio managing principal

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VOIP MANAGEMENT

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WEB DEVELOPMENT

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TOP LOCAL EXECUTIVE(S)

Jim Levine, president

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NETWORKING/ INTEGRATION

MANAGED SERVICES

IT STRATEGY CONSULTING

HELP DESK SUPPORT

HARDWARE LIFECYCLE MGMT

DATA PROCESSING/ HOSTING

TYPE OF ORGANIZATION

CYBERSECURITY

COMPANY NAME

TOTAL LOCAL STAFF 2022

CUSTOM SOFTWARE

RANK

LOCAL IT SERVICES STAFF 2022

IT STAFFING

Ranked by local IT services employees

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✔ Cindy Manley, VP of

operations; Jeremy Wood, chief transformation officer; Matt Gaudio, CMO

Research by Chuck Soder (csoder@crain.com) | Employment figures are full-time equivalent as of June 2022. In case of a tie companies are ranked by total local staff. Information is from the companies. NOTES: 1. This figure includes IT staffing employees who work on behalf of other companies.

Get 80 companies and +230 executives in Excel format. Become a Data Member: CrainsCleveland.com/data 22 | CRAIN’S CLEVELAND BUSINESS | JULY 25, 2022

P022_CL_20220725.indd 22

7/22/2022 11:10:00 AM

LIST ANALYSIS

IT companies cut office space as other industries waffle

BY CHUCK SODER

At least one industry is not waffling on the question of whether to cut office space: the information technology services industry.

Eleven of the 80 companies on the full digital version of the Crain’s IT Services Firms list said they have cut local office space or plan to do so specifically because more employees are working remotely these days.

Those 11 companies account for 20% of the 53 firms that answered the question.

Most of them are in the top 25 on the list, which is ranked by full-time-equivalent IT employees in Northeast Ohio. One of them is Vox Mobile, at No. 6.

Vox occupied about 15,800 square feet at its Independence headquarters in March 2020. But that was a long time ago.

Today, the mobile device management services provider occupies about 2,350 square feet, said chief operating office Ron Pollock. There are about 30 desks, mostly shared work stations, but on a busy day maybe 10 to 15 of the company’s 145 local

VITAMIX

From Page 1

work,” he said, but sales and marketing “most often didn’t.” And he found it satisfying and exciting to see the results of his work on retail shelves.

“It just really spoke to me,” Laserson said.

Early in his career at American Greetings, Laserson had the chance to develop a key partnership with a significant customer. He served as almost a general manager, creating products and solutions specifically for the customer.

“It was an opportunity to get my arms around a true total business, but in a very focused way, because it was focused on one particular retailer,” he said.

And that gave Laserson a taste of what it would feel like to run a business and served as a “jumping off point for the rest of my career,” he said.

Laserson spent more than two decades at American Greetings, but in 2019, he decided it was time for a change. He knew he wanted some things to stay the same: he wanted to stay in Northeast Ohio, if possible, and to work for what he called a “great brand.” And he liked working for a family business, which American Greetings had previously been.

Vitamix met all of those criteria. He joined as chief commercial officer in April 2020.

Vitamix’s prior CFO was retiring at the same time as Laserson joined the company; he’s gotten to work alongside Greg Teed, who had taken on that role and then some, almost from the start. Teed is now president at Vitamix, and the two are “leading the business together,” Laserson said.

Laserson said it wasn’t intentional, but he thinks starting in the beginning of the pandemic actually sped up his transition into the company. Teams “bond through opportunities and challenges,” he said. That’s when they collaborate most and build relationships.

“So coming on when things were so fast-changing and so much needed to be done, in a very positive way, it feels

employees come in.

Pollock is among three employees who come in most days and have assigned seats, but he’s a huge remote-work proponent. He knew there was no turning back after seeing the results of an employee survey in early 2021.

“The No. 1 response in that survey was, ‘Please allow me to continue working from home,’” Pollock said, noting that his attrition level is half of what it was pre-COVID. As Crain’s reported in April, there are prominent examples of local companies across industries cutting office space, but many are still trying to figure out what their office space needs will be in the future. Even on this list, five of the 53 companies answering the question about whether they plan to cut office space said they’re discussing it but haven’t decided.

But companies on our IT Services Firms list have given remote work a particularly strong embrace. We also asked them how many days local employees are required to come into the office. The most popular single response: zero days. It was chosen by

Tech companies go remote 11 companies on the Crain’s IT Services Firms list said they have cut or will cut local office space specifically because more employees are working remotely. That accounts for 20% of the 53 companies who answered the question.

Has this company’s work from home policy driven it to reduce the amount of office space it uses in Northeast Ohio?

We have or will cut square footage 11 We are discussing it but haven’t made a decision 5 We have no plans to change our use of space 37 SOURCE: SURVEY OF COMPANIES ON FULL DIGITAL VERSION OF THE CRAIN’S IT SERVICES FIRMS LIST, WHICH CONTAINS 80 COMPANIES (NOT ALL COMPANIES ANSWERED THESE QUESTIONS).

14 of the 54 companies answering that question, or 26%. And that doesn’t even count the three companies that chose “special occasions only,” such as Simplex-IT, No. 44 on the list.

Simplex-IT CEO Bob Coppedge said the decision hit him in the face like a rock: “You’re literally walking through the corridors and it’s one empty office after another, and we’re getting the job done.”

In June, the managed IT services provider left that 5,000-square-foot office on Darrow Road for a 3,000-square-foot space down the street. Though Coppedge comes in daily, more than 80% of employees are mostly remote. It was the reverse pre-pandemic.

The change will help Simplex-IT hire people who live farther away, perhaps even technicians who can provide evening service from other

time zones. But he noted one specific downside of remote work: The company hasn’t figured out a way to offer internships.

“The people who would be mentoring those people are not coming into the office,” he said.

Genesis10 CEO Harley Lippman echoed that concern.

The IT staffing firm, No. 7 on the list, recently reduced the size of its Akron office, but Lippman does feel like companies may shift back to offices to some degree. “In the office you can do a level of brainstorming and mentoring you just can’t do” remotely, Lippman said.

But employees like the comfort of working from home, and it saves money, he noted.

And there are sometimes better ways to spend that money, said Pollock, of Vox Mobile, which gave out employees raises after cutting office space.

“I’d rather pay people than a building space that sits empty,” he said.

Chuck Soder: csoder@crain.com, (216) 771-5374, @ChuckSoder

like I’ve been here a lot more than two years,” Laserson said.

Laserson was named incoming CEO in February and officially took on the role June 1. A news release noted that, as chief commercial officer, Laserson had “driven profitable growth and boosted market leadership with an approach that embraces creativity, innovation and inclusive collaboration.” He oversaw everything from marketing and sales to product management to engineering in that role.

“The history of Vitamix is a special one,” John Barnard, executive chairman of the Vitamix board of directors, said in the release. “The foundation and focus with which my family has built the company has led to pioneering innovation in whole food health. We are committed to creating the best blending solutions on the market and making whole food eating accessible to more people. The Board and I welcome the passion, expertise and commitment to the Vitamix brand that Steve brings with him as he steps into this role.”

Laserson said it’s an “incredible honor” to serve as the first non-family CEO for Vitamix.

“Our opportunity is to continue to uphold the values of the Barnard family and, at the same time, to lead us to new growth opportunities and lead our way into the next century,” he said.

The company has always been based in the promotion of health and wellness, Laserson said, and the brand is strong. Those things will continue.

Where Laserson sees an opportunity for growth is in expanding them.

The work has just begun, he said, and he couldn’t share what exactly that growth might look like, whether it’s in new products or new price points.

“There’s lots of options, and the hardest part about strategy, they often say, is deciding what not to do,” Laserson said. “So I think we have lots of things we can do, and we’re going to decide which of those are the best for our longterm growth, the best fit for our brand strategy or preserving the equity of our brand.”

Rachel Abbey McCafferty: (216) 771-5379, rmccafferty@crain.com JULY 25, 2022 | CRAIN’S CLEVELAND BUSINESS | 23

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7/22/2022 1:32:19 PM

PROPERTY

From Page 1

Proponents say the new law will provide more certainty to investors and end perpetual battles between school districts and some commercial property owners. Detractors call the law a serious misstep, one that will make it harder for public schools to hang onto existing revenues and replace lost funds.

“In my 30 years of practice, I have never seen a more significant change in the law that affects property-tax disputes,” said Robert “Kip” Danzinger, a Cleveland lawyer who represents property owners.

Local taxing authorities have had the ability to challenge county real estate valuations since 1976, when Ohio legislators passed a bill designed to keep tax collections tied to certain voter-approved levies from climbing with inflation. Cities, library systems and other property-tax beneficiaries, such as park districts, can mount such challenges. But school districts have, by far, the most to gain or lose — and are behind many complaints and countercomplaints.

Skirmishes over values play out before county boards of revision, public bodies that hear evidence and render decisions. Arguments don’t necessarily end at the local level, though. They can escalate to the Ohio Board of Tax Appeals or, in rare cases, a county common pleas court.

The fiercest frays, involving complicated commercial properties, drag on for years.

“It’s just exhausting,” said John Carney, a Cleveland attorney and real estate developer who believes that unpredictability around property taxes hurts the investment climate in Ohio.

‘Who is being protected?’

House Bill 126 sharply curtails school districts’ ability to seek valuation hikes.

They can only file a complaint based on a recent sale — and then, only if the sale price is at least 10% higher and at least $500,000 greater than the county’s current market value. That $500,000 floor will climb annually, based on inflation, but it cannot fall.

School districts still can push back when property owners petition to cut the value of an office building, an apartment complex, a shopping center or a hotel. But districts can no longer appeal an unfavorable decision from a board of revision to the Board of Tax Appeals.

The upshot is that it will be nearly impossible for schools, and other outside parties, to seek higher values for homes. And it will be difficult for districts to pursue value increases, or ward off decreases, for smaller commercial properties.

The law change is likely to shut smaller school districts and boards of education in rural areas out of the valuation debate, said Will Schwartz, deputy director of legislative services for the Ohio School Boards Association. “This has always been pegged as a taxpayer protection measure,” he said. “But my question is, who is being protected?”

County auditors expect the volume of board of revision complaints, filed during the first quarter of each year to challenge the prior year’s valuations, to plunge by more than 50%.

That could equate to millions of dollars in losses for school districts, which strive to balance out the refunds issued to some taxpayers by

A visitor stands on the roof deck of the 75 Public Square apartment tower in Cleveland. Downtown properties have been the subject of fierce battles over tax-related real estate valuations for years. | MICHELLE JARBOE/CRAIN’S CLEVELAND BUSINESS

chasing more dollars from other property owners.

A recent analysis by the Cuyahoga County Board of Revision shows that complaints filed by school districts would have dropped by 64% for the 2021 tax year if House Bill 126 had been in place. Filings would have fallen by 79% for the 2020 tax year and 78% for the 2019 tax year.

Players on all sides of the debate say it will take years to grasp the full impact of the new law. They expect legal challenges from school districts, particularly over the bill’s elimination of appeal rights. And they’ll be watching for changes to how boards of revision conduct hearings and how county auditors adjust their mass-appraisal processes to better capture value shifts.

districts out of the process entirely, according to public records.

One version of the bill, approved by the Senate in December, did just that. But the final wording, shaped by a conference committee and signed

by Gov. Mike DeWine on April 21, was more of a compromise. It preserved a role for schools, while substantially checking their power.

“I don’t think anyone’s coming away from this particularly thrilled,” Kieran Jennings, a Beachwood-based property-tax lawyer, said during a May episode of the Rust Belt Apartment Podcast, a program hosted by apartment brokers at Colliers International’s Cleveland office.

“There’s probably a small slice of folks that had been harassed by the school districts, where they had owned their prop“I DON’T THINK ANYONE’S COMING AWAY erties for a long period of time, imFROM THIS PARTICULARLY THRILLED.” proved their — Kieran Jennings, a Beachwoodproperties, and based property-tax lawyer didn’t feel it was right for the school “Yes, there were abuses out there,” district to just simply single them out said Christopher Galloway, the Lake and file on them. And, quite frankly, I County auditor, who was open to re- agree with them,” he said.

But Jennings believes House Bill forms but believes that House Bill 126 has made Ohio’s valuation sys- 126 isn’t a pure victory for his clients.

During an interview, he described tem worse. “There were school districts out there just going nuts. It’s it as a Band-Aid — a fix that doesn’t like the old adage that they say — solve the bigger problem of a lack of pigs get fed and hogs get slaughtered. uniformity in values, and that does You’ve got certain districts that were nothing to rectify an unconstitutionbeing hogs, and they got slaughtered. al school-funding system that leans And that’s affecting everybody in the heavily on property taxes. food chain.”

The bill also did away with private-pay agreements, deals in which property owners and school districts Not ‘particularly thrilled’ agreed to behind-the-scenes settleHouse Bill 126 won support from ments to avoid a valuation scuffle. real estate trade groups, landlords Those agreements were legal until and developers, the Ohio Chamber last week, but they drew fire from legof Commerce and the Downtown islators on both sides of the aisle.

Cleveland Alliance. Advocates point- County auditors loathed the arrangeed out that Ohio was an outlier, one ments, which suppressed public valof few states to allow third-party in- uations of some properties and cut non-school taxing entities out of the tervention in valuations.

Columbus attorney Thomas Zaino, equation.

Property owners saved roughly a former state tax commissioner representing an opaque group called the 25% to 30% by entering such settleCoalition for Fair Property Tax Valua- ments, lawyers said, while school tions, lobbied for stripping school districts received extra cash.

The K&D Group, a major apartment landlord and commercial property owner based in Willoughby, struck private-pay deals from time to time, said Doug Price, the company’s CEO. A vocal critic of school-district attorneys’ tactics, Price compared those agreements to blackmail, though he acknowledged that private settlements saved money and time.

Property-tax attorneys said they were slammed from April through last week, finalizing private-pay agreements for clients while the mechanism was still legal.

House Bill 126 largely eliminates retroactive tax increases that have been a turnoff for out-of-state investors. That’s a big deal for buyers who, because of the way Ohio’s tax system works, were hit with tax bills for periods before they actually acquired a piece of real estate.

The new law effectively creates a waiting window before school districts and other third parties can file a complaint. “That there is probably the single cleanest and most fair portion of the bill,” Jennings said. “I think that’s very, very clean, and it’s a welcome change.”

‘A difficult job’ The language also includes changes to notification requirements and approval processes for school-district complaints. And it requires boards of revision to dismiss complaints initiated by districts or other third parties if the cases aren’t decided within one year.

County auditors are likely to ask legislators to tweak some of those technical items. The one-year decision timeframe, for example, is manageable for boards of revision in smaller, less busy counties. But it will be a challenge in places like Cuyahoga County, which fields thousands of filings and typically takes up residential cases before diving into complex commercial ones.

“I respect the hell out of county auditors and boards of revision,” Danzinger said. “They have a difficult job.

And now … it becomes more diffi-

cult.”

For years, auditors have relied on savvy school-district attorneys to catch hidden sales — transactions in which buyers purchase a limited liability company that owns real estate, rather than buying the property outright. Lawyers dig through mortgage filings, regulatory documents and news articles for clues about quiet transfers. Then they draw out details through the board of revision and appeals process.

House Bill 126 raised awareness of the so-called LLC loophole, a legal but controversial way that investors can maintain privacy, preserve certain financing and contracts and elude real estate transfer taxes and eventual property-tax hikes. But the bill did nothing to close that gap.

“If we don’t get that fixed, shame on us,” said Jill Thompson, the Athens County auditor, who said that full transparency around sales is necessary to ensure fair real estate valuations — and to reduce the odds of shifting tax burdens from more sophisticated commercial properties to smaller businesses and, over time, homeowners.

“I think the LLC loophole’s a much bigger concern than most people realize,” she said.

School-district lawyers will continue to file complaints based on such entity sales, said David Seed, a Cleveland attorney who represents boards of education in property-tax disputes and other financial matters. But they’ll have a much harder time proving their cases.

He decried House Bill 126 as “a solution in search of a problem,” a policy shift that will hurt students, smaller taxpayers and residents who rely on local government services.

What about lawyers? Seed laughed and declined to comment.

“I know this much,” Jennings said, in response to the same question.

“Whenever there are taxes — and there are always going to be taxes — there’s going to need to be tax lawyers.”

Michelle Jarboe: michelle.jarboe@ crain.com, (216) 771-5437, @mjarboe

24 | CRAIN’S CLEVELAND BUSINESS | JULY 25, 2022

P024_CL_20220725.indd 24

7/22/2022 2:46:39 PM

REAL ESTATE

Trucking company All Pro Freight adds new cross-town location

BY STAN BULLARD

been deterred by what he viewed as soaring prices.

The move-in condition and good As a trucking executive, Chris Haas, president and CEO of All Pro location of the R.L. Lipton building Freight Systems Inc. of Westlake, ap- overcame the negative of the preciates the value of time, distance 90,000-square-foot warehouse’s age. and energy. He also prizes the bene- Part of the structure, which was confit of being close to his customers — structed in two phases, dates from 1965. (The other is from 2009.) Tax and potential ones.

“Proximity absolutely matters,” records show it has a 30-foot-wall Haas said in an interview. “The clos- height, which matters to storage oper you are to your customer, the bet- erations that benefit from more ter you can serve customers. For ex- room to stack shelves and products ample, manufacturers want cartage and hold more inventory in a buildto distribution centers. Then want it ing with a smaller floor size.

“From our original base in Lorain shipped from one facility to another or the end customer. In transporta- County (Avon), we’ve expanded to tion, you take what they offer. By Westlake with our headquarters and comparison, real estate is easy. You now the East Side, so we have presence to cover the market,” Haas said. just have to pull the trigger.”

Adapting to recent conditions also Haas, who has a property portfolio of about 1 million square feet here has prompted Haas to evolve from and in Florida, just pulled the trigger his original entry into real estate by on a deal he expects to benefit his building his own buildings.

Last year, he was preparing to contrucking and warehousing business. struct another “COMPANIES IN SOLON OR TWINSBURG DO building in Lorain County but NOT WANT THEIR PRODUCT SHIPPED TO dropped the idea when he WESTLAKE OR LORAIN ONLY TO HAVE IT shocked by SHIPPED BACK TO THEM LATER. THIS WILL was construction quotes of $80 a DEFINITELY OPEN A CLIENT BASE TO HIM square foot. He THAT HE DIDN’T HAVE BEFORE.” was used to building indus— George Pofok, a principal of the Cushman & Wakefield Cresco realty brokerage trial properties for years at $40 One of his affiliates on July 6 ac- per foot.

“So for the first time last year, we quired the R.L. Lipton Building, 5900 Pennsylvania Ave. in Maple Heights, bought a building,” Haas said, referfor $3.5 million, according to ring to a Baumhart Road property in Cuyahoga County property records. the city of Lorain. “I told the (comAll Pro has immediate use for part of mercial real estate brokers) that if the building and will occupy all of it they can find something that costs after R.L. Lipton, a beverage distrib- $40 a square foot to let me know.”

Buying to cover the region with loutor, exits for a new facility.

The deal also plays a more strate- cations puts Haas in a position simigic role for All Pro. It puts the compa- lar to many industrial property ownny, and Haas, in the southeast indus- ers who have for years bought or trial market, the most vibrant in built around the region to tap different local markets, said George Pofok, Northeast Ohio.

“We have looked for a location in a principal of the Cushman & Wakethe southeast for years, from Solon field Cresco realty brokerage in Indeto Bedford,” Haas said, noting he had pendence. Owners and developers

in the category include Weston Inc. of Warrensville Heights, Ray Fogg Corporate Properties, Premier Development Partners and Industrial Commercial Properties of Solon.

“It’s important to have options for clients on both sides of town,” Pofok said. “Companies in Solon or Twinsburg do not want their product shipped to Westlake or Lorain only to have it shipped back to them later.

This will definitely open a client base to him that he didn’t have before.

Meantime, proximity of warehousing gains value with higher diesel fuel prices, which Haas would know well.”

Although the run-up of building costs has opened Haas to the benefit of buying existing products, it’s not a permanent phenomenon. He’s preparing to build a warehouse in Avon Lake with 100,000 square feet of space.

Haas said the city of Avon Lake has agreed to sell him acreage on Pin Oak Parkway that borders one of his properties, which will allow him to construct the additional structure.

Avon Lake City Council has approved legislation to sell All Pro the acreage for $50,000, according to city records. The city gained control of the property, which Haas said is 10 acres in size, after the prior owner forfeited it at a sheriff’s sale.

Another nearby customer is going to want to expand in the future, Haas said, so this would accommodate that.

Pofok said building in Avon Lake has additional value beyond today’s busy industrial market. He said he believes Haas could construct a building two or more times larger if he has the land for it.

The planned expansion of Ford Motor Co.’s Avon Lake plant to add production of electrical vehicles is likely to bring more, and different, auto suppliers to that area, Pofok said.

CRAIN’S CLEVELAND BUSINESS

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

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PA G E 2 9

Clevelan August 1

Cleveland Plain Dealer July 24, 31; August 7

Real Estate

AUCTION

Real E

2904 State Rd, Ashtabula, OH

Owner Directs Immediate Sale!

Owner Dir

12,800± SF 2,900± SF 2.21± Acre Parcel Building Warehouse Published Reserve

Cashier’s Check

Chris Haas, president and CEO of All Pro Freight Systems Inc., stands in his company’s www.2904stateauction.com $75, $25, headquarters. | CONTRIBUTED On Site: August 25 @ 11am EST Registration Begins @ 10am EST

000

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Inspection: 8/11 @ 10:30am-12pm Advertising Section

8/18 @ 10:30am-12pm | 8/25 @ 9am-10am

OH Broker, Colliers, Colliers.com Mark Abood, OH RE Salesperson

OH Auctioneer, Mark Abood Mark.Abood@Colliers.com

CLASSIFIEDS

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To place your listing in Crain’s Cleveland Classifieds, contact Suzanne Janik at 313-446-0455

REAL ESTATE Crain’s Cleveland Business July 25; August 8

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AUCTION

REAL ESTATE AUCTION Owner Directs Immediate Sale!

2904 State Rd, Ashtabula, OH Inspection Dates:

12,800± SF Building

2,900± SF Warehouse

OH Broker, Colliers, Colliers.com Mark Abood, OH RE Salesperson Colliers.com

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www.2904stateauction.com On Site: August 25 @ 11am EST Registration Begins @ 10am EST

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

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The owner of All-Pro Freight of Westlake has added his first east suburban property to his portfolio, center, at 5900 Pennsylvania Ave., Maple Heights. | COSTAR JULY 25, 2022 | CRAIN’S CLEVELAND BUSINESS | 25

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THE WEEK DEAL’S DONE: The Marcus Thomas headquarters building in Warrensville Heights changed hands in a $13.1 million deal. The sale, which closed Wednesday, July 20, does not appear yet in public records.

But Matthews Real Estate Investment Services, which represented the seller, confirmed the pricing.

The buyer was a private investor from Mexico with a portfolio of retail properties, and the occasional office building, scattered across the United States, said Jonah Yulish, a Matthews senior associate who handled the listing with colleagues Antonio Sibbio and Matt Kovesdy.

Marcus Thomas agreed to a longterm lease extension early this year, records show.

A foreign investor has purchased the Marcus Thomas headquarters building in Warrensville Heights. The independent advertising agency recently extended its lease on the space, despite broad uncertainty about the office market. | COSTAR GROUP INC.

PEOPLE ON THE MOVE

Advertising Section

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

Grant Thornton John Barnes has been named as Grant Thornton LLP’s office managing partner in Cleveland. He has served for 18 years in leadership roles at the firm — and has industry experience with multi-national manufacturers, technology companies, retailers and non-profits. He is a CPA in Ohio and a certified internal auditor, with degrees from Pennsylvania State and the University of Maryland. John embodies Grant Thornton’s commitment to making business more personal and building trust into every result.

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HEADQUARTERS MOVES

NAME CHANGES

Pease Bell, CPAs

Pease Bell, CPAs

Cleveland, OH 216.348.9600 info@peasebell.com

Cleveland, OH 216.348.9600 info@peasebell.com

Pease Bell, CPAs is relocating headquarters to a new office space in downtown Cleveland to accommodate continued business growth. The new office, located at 1111 Superior Ave, offers a view of Lake Erie and FirstEnergy Stadium. The space was recently renovated, and many offices were removed in favor of an open-concept floor plan with plenty of natural light. “We want everyone to enjoy the benefits of the new space,” said Kuno Bell, “every person on our team is important for us to succeed and every person is going to enjoy our new space.” We are looking forward to hosting events for our relationships and people in the accounting community. Pease Bell, CPAs was named by Inside Public Accounting as one of the “Best of the Best CPA Firms.”

We are proud to announce that Pease & Associates, CPAs has become Pease Bell, CPAs. The name change is a recognition of Kuno Bell’s contribution to the success and growth of the firm. Kuno joined the firm in 1990 as an intern, became a CPA in 1992 and then earned his Juris Doctor degree from Case Western Reserve where he graduated cum laude. Joe Pease, founder and chairman of Pease Bell, CPAs said “While there are many others in the firm that also deserve recognition, it was Kuno’s commitment that made this a reality.” “I’d like to thank Joe for giving me this opportunity,” said Kuno, “and I’d like to thank my partners for working together to build such a successful business.” www.peasebell.com

SETTING ITS SIGHTS HIGH: Akron-based Goodyear Tire & Rubber Co. on Wednesday, July 20, announced it’s joining a team led by Lockheed Martin that is developing a new lunar mobility vehicle, or rover. For the space mission under NASA’s Artemis program, the Lockheed-led team of companies, which also includes General Motors, “intends to be the first to establish extended-use commercial vehicle operations on the moon,” Goodyear said. It will develop a tire that can withstand the extreme temperature conditions on the moon. Lockheed, Goodyear, GM and other members of the team expect to have rovers waiting on the surface of the moon when NASA sends astronauts there, which is expected in 2025.

U.K. OK: The U.K. government gave the official go-ahead for Parker Hannifin Corp.’s $7.7 billion acquisition of aerospace and defense company Meggitt plc. Business Secretary Kwasi Kwarteng on Tuesday, July 19, announced approval of the deal following review of advice from the U.K. Ministry of Defence and the Competition and Markets Authority. The deal was scrutinized by the government over competition and national security concerns, as Meggitt’s customers include Britain’s Ministry of Defence, Boeing, Airbus and Rolls-Royce.

Mayfield Heights-based Parker, a maker of motion and control products, supplies components to the mobile, industrial and aerospace markets globally. The boards of Parker and Meggitt in August 2021 approved the all-cash acquisition

by Parker. The company expects the deal to close in the third quarter.

ESG

From Page 8

` Greenwashing claims also have triggered state laws and the federal Lanham Act, which prohibits companies from using advertising that misrepresents “the nature, characteristics, qualities or geographic origin” of goods and services sold. ` At least 10 lawsuits have been filed against public companies across various sectors for failing to maintain diverse boards, despite their proclaimed commitment to diversity.

Once the litigation cycle begins, absent an aggressive defense, governmental protections will not end. Both will take time to emerge.

In the meantime, to limit ESG

REIT STUFF: Boston-based Plymouth Industrial REIT is the new owner of the former Walmart in Bedford that recently was leased to JB Hudco Logistics LLC of Carrollton, Texas, for a warehousing and material services operation. The Plymouth REIT paid $16.5 million for the 200,000-square-foot building at 22209 Rockside Road that a joint venture of Industrial Commercial Properties of Solon and IRG Realty of Los Angeles bought in 2017 for conversion to industrial use. The Bentonville, Arkansas, retailer had shut the supercenter in 2016. The seller, through Bedford Rockside LLC and Holdings Bedford Rockside LLC, had paid $2.3 million for the big, empty store at Meadowbrook Market Square shopping center.

RELAX: VIO Med Spa, an all-inclusive spa chain headquartered in Strongsville, expects to accelerate its expansion plan after receiving what the company characterized as “a significant minority private equity investment” from Tucker’s Farm Corp. The capital “will create a strategic growth partnership between VIO Med Spa and Tucker’s Farm in order to drive nationwide expansion, invest in human infrastructure, expand training and education, explore emerging operational and technology platforms, and further the development of additional corporate-owned locations,” the company said. Specific terms of the investment were not disclosed. VIO Med Spa, founded in 2017 by Joe and Nick Stanoszek, has 13 locations in six states. It plans to open 40 more locations by the end of 2023.

A JUMP ON GROWTH: The Ohio Third Frontier Commission awarded nearly $39 million to Cleveland economic development organization JumpStart Inc. and collaborators as part of an effort to bolster tech entrepreneurship. The two-year award for JumpStart was part of $83.2 million in grants awarded statewide on Tuesday, July 19, by the Third Frontier. Most of that money went to organizations across the state to provide resources to entrepreneurs from Jan. 1, 2023, through June 30, 2025. The state said JumpStart’s Cleveland-based Northeast Ohio operations were awarded $33.8 million, and its Northwest Ohio operations, based in Toledo, received $5.05 million. risk, companies must: ` Monitor ESG disclosures and commitments in filings, reports, communications to employees, social media posts, media interviews and website postings. ` Vet ESG statements for factual accuracy, context and consistency. ` Make sure forward-looking commitments are qualified and subjected to the controls and procedures process for SEC filings.

Because ESG activism often takes the form of legal action, intelligent companies will work with counsel to leverage attorney-client privilege and develop ESG strategies and action plans. Truly effective leaders will shape plans to manage stakeholder expectations and mitigate risk. Those who do not will be the “woke” activists’ next target.

26 | CRAIN’S CLEVELAND BUSINESS | JULY 25, 2022

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