Crain's Cleveland Business

VOL. 40, NO. 38

SEPTEMBER 23 - 29, 2019

Akron

Source Lunch

Segmint founder steps aside, makes room for new president. Page 24

Brian Lane, president and CEO, The Center for Health Affairs

The List

Page 27

The region’s wealthiest suburbs Page 22 SPORTS BUSINESS

GOING FOR THE GREEN

Despite a soggy spring, 2019 has been surprisingly good for Northeast Ohio courses

By Kevin Kleps kkleps@crain.com @KevinKleps

The Northeast Ohio golf industry hasn’t had a lot of reasons to celebrate this decade.

Many of the facilities that have survived have consistently operated in the red, as declining participation and brutal weather have proven to be a more formidable duo than Jack

Nicklaus and Arnold Palmer.

But the summer of 2019, after one of the wettest springs on record, has been especially good — so much so that quite a few golf courses are reporting year-over-year increases in rounds played and revenue that are in double figures.

Operators aren’t exactly taking victory laps around their plush layouts, but they are more hopeful than they’ve been in years.

The number of rounds played at

StoneWater Golf Club in Highland Heights has increased 15%. More significantly, revenue per round has jumped 40%.

“It’s crazy, because we lost like two months,” said Lindsey Neidus, StoneWater’s operations and marketing manager.

At Valleaire Golf Club in Hinckley, rounds played are up 6%, and revenue has soared 14%.

The year-to-date increases at Briardale Greens Golf Course in Euclid

are 3.8% for rounds and 6.1% for revenue.

Little Mountain Country Club in Painesville has seen a 26% bump in rounds and a 21% increase in revenue.

“It’s the first exciting year I’ve felt at Little Mountain in maybe a decade,” said Jimmy Hanlin, one of the club’s operators and best known as an ubiquitous golf personality on Fox Sports Ohio and SportsTime Ohio.

SEE GOLF, PAGE 12

StoneWater Golf Club’s rounds played and revenue per round are up 15% and 40%, respectively, this year.

(Contributed photo)

INSIDE

REAL ESTATE

Focus: Real Estate For-profit developers rediscover Cleveland’s East Side. Page 14 Richardson Design finds a home working for the hospitality industry. Page 18 Brownfields as investments Page 19 Entire contents © 2019 by Crain Communications Inc.

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Stark, J-Dek ‘still working’ on plans for $350 million nuCLEus project

By Stan Bullard sbullard@crain.com @CrainRltyWriter

Another construction season is starting to wane without building — or demolition — activity on the site of nuCLEus, the $350 million mixeduse project proposed by Stark Enterprises of Cleveland and J-Dek Investments of Solon on a site between the East 4th Street Neighborhood and Rocket Mortgage FieldHouse.

Asked where the plan for the two 24-floor towers stands, Ezra Stark, chief operating officer of fami-

ly-owned Stark Enterprises, said, “We’re still working on it.”

Last April, Stark had said to look for demolition of a two-story building and a parking garage Ezra Stark on the eastern edge of the proposed project site to begin in August.

In a phone interview on Friday, Sept. 13, Stark declined to say how much of a gap the company has left to close to finance the project. The

plan now incorporates a 24-story office building with 400,000 square feet of office space and a 24-story residential building with 250 suites.

Both are integrated into a parking garage with 1,300 parking spots. The garage also sports 80,000 square feet of commercial space at street level.

The long-term plan by Stark founder Robert L. Stark to create a skyline-changing project in downtown Cleveland suffered some big setbacks since a dramatically revised and downsized design was proposed last spring and approved by the Cleveland City Planning Commission.

SEE NUCLEUS, PAGE 21

9/20/2019 11:24:51 AM

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Downtown Hilton comes in way under budget Total cost for hotel project is $30M below ‘final’ estimate and almost $70M lower than initial projection

By Kim Palmer kpalmer@crain.com

Three years after the inaugural wave of visitors passed through the front doors of the first new hotel to be built in downtown Cleveland in decades, the real costs are being finalized for Cuyahoga County Council to sign off on.

In a short presentation to the Public Works, Procurement & Contracting Committee this week, Jeffery Applebaum, managing director at Project Management Consultants and project manager for the construction of the county-owned Hilton Cleveland Downtown hotel, was able

to confirm that the project came in early and under budget.

“When I made this presentation a month before opening (in 2016), I presented a subtotal of actual costs expended that was $281 million,” Applebaum told the committee. “That was newsworthy then that we were giving back $21 million.”

The initial estimated price tag for the county-funded hotel, which many people thought the city didn’t need and others thought it couldn’t afford, was $310 million. The 600-room hotel attached to the Huntington Convention Center of Cleveland would be funded by 1/4% of a sales tax and eventually run by an outside group.

The somewhat controversial proj-

ect hit its first snag right away when, instead of having three years to get the hotel up and running, a whole year was shaved off the timeline to accommodate the 2016 Republican National Convention.

“We had no option but to be on time. We could not have an extension,” Applebaum said.

Then, there was a tunnel. The hotel-convention center connection, which was sold as a convenience, was threatened by a dearth of adjacent parking. At an estimated cost of $10 million, a tunnel from the Huntington garage to the Hilton was going to halve the $21 million savings.

But in the final reconciling, the actual costs to design, build and outfit

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the hotel, including construction of the unexpected tunnel, came to $240,610,443, or $30,253,859 less than an earlier “final” estimate and well below the projected $310 million.

Why did Cuyahoga County get so much money back?

First, Applebaum explained, two things were new at the beginning of the hotel project. One, there was a new county government and two, before the project began, new legislation passed that changed the way the county was able to bid and pay for development projects.

“Prior to this, with a county-owned project you had to use something known as multiple prime contracting. The county had to go out and

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separately bid and manage contracts,” Applebaum said.

With the new law in place, the project employed what is called a design-build approach, an industry best practice the county hadn’t used for large local public development projects in the past.

“It is a process where everything is done on an open book,” Applebaum said. “Every contractor, every nickel, every dollar was accounted for and the only thing we actually paid out was an actual cost.”

Before the design-build approach, the county and contractors would agree on a static dollar amount for a set design decided upon before any construction began. With a designbuild, extra funds or contingencies were budgeted at each stage of planning and construction. Every time those contingency funds weren’t needed in one part of the project, the funds could be used to pay for overruns or adds to another part.

“That is the sort of financial flexibility in contracts that can be very attractive for obvious reasons,” said Matthew Salerno, a faculty member at Case Western Reserve University School of Law. “Financial flexibility in the form of a contract is a great thing to have because that can let you do things later in the process that maybe you did not intend to do.”

Nichole English, director of public works for the county, said that since the success of the hotel, other county projects have used the design-build approach.

“It is good for big projects, when you do not totally know what you need upfront,” she said. “You need a builder on board to help figure it out, and we are all at the table together working through it.”

English admitted it took some time to get comfortable with the designbuild concept, which required County Council members to authorize large sums of funding before seeing the final product.

“When we did it the traditional way, whatever you designed. that is what you got,” English said. “Now, we can put things back into the plan that might have been cut because they cost too much.”

Some of the other savings on the hotel were just a matter of good fortune.

For example, interest rates remained low throughout the undertaking, as did basic material costs. Relatively good weather in the two years of construction and averting a strike by crane operators also helped keep costs down.

Applebaum noted that none of the funds had to be used for contractor claims or lawsuits, and because of the project’s open-book accounting, contractors were paid promptly — some on a 15-day cycle, a rarity on big projects, where contractors are more accustomed to 30, 60 or even 90 days.

“The small contractors are so cashdependent. We could evaluate invoices in real time,” Applebaum said.

Since the doors opened in 2016, the Hilton has seen better-than-expected revenues: 2017 reached $9.4 million, exceeding predictions by $1.4 million.

The hotel has become a fixture downtown and sparked more hotel buildouts over the last couple of years.

Told to keep his presentation to about five minutes, Applebaum told committee members he could elaborate if he had more time.

“You don’t have to explain on time and under budget that much,” said committee chair Scott Tuma.

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Say Yes Cleveland is running according to plan Program expects to be ‘very, very close’ to goal of awarding 800 college scholarships in first year

By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty

It’s early, but so far, the rollout of Say Yes to Education Cleveland has been going as planned.

Hundreds of students qualified for scholarship funding and were matched with mentors after graduation in the spring, and wraparound services launched in 16 schools this fall.

Cleveland was officially named a Say Yes to Education community in January. Communities and cohorts in the Say Yes network provide students with comprehensive wraparound support services and scholarships toward postsecondary education. The national Say Yes to Education organization, based in New York, provides support and some initial funding, but the programs are locally run.

Diane Downing, executive director of Say Yes Cleveland, said there are “a lot of moving pieces and parts,” but those parts are all moving forward.

Take the scholarship component. To qualify for a Say Yes scholarship, Cleveland Metropolitan School District students have to meet basic eligibility requirements and complete a number of steps, such as finishing the Free Application for Federal Student Aid (FAFSA) and being accepted to a school.

Downing said that, as of Sept. 13, almost 800 class of 2019 graduates had completed all the steps for a Say Yes scholarship; another 170 had

Say Yes Cleveland staff member Georgina Galindo talks to Cleveland Metropolitan School District students at a back-to-school event. (Contributed)

completed all but one of the steps.

Final numbers won’t be available until after college drop/add periods, but Downing said those figures were “very, very close” to the 800 students the program expected to award scholarships to in its first year.

As for the support services, those are being rolled out over time. This year, there are 16 schools in the district receiving additional supports.

Within four years, Cleveland plans to implement those supports in all its schools, faster than the six-year timeline required by Say Yes. The 16 schools already have family support specialists on staff to help connect students and their families with resources in and out of the

schools. That could range from mental health services to housing resources to GED programs, explained Lisa Baskin-Naylor, director of community engagement and wraparound strategy for the district. Part of the specialists’ role will be to build relationships with the families at each building.

In addition to the family support specialists, the Legal Aid Society of Cleveland and the Cleveland Metropolitan Bar Association will work together to provide legal services to students and their families in the 16 schools, Downing said. And Say Yes Cleveland is finalizing plans for afterschool programming and mental health services in the schools.

The support services are important because a lot of Cleveland students and their families deal with nonacademic barriers, Baskin-Naylor said.

That has to be addressed if the district wants students to graduate and go on to postsecondary options.

“In order to do that, we have to remove all of those barriers to help them walk across the stage,” she said.

Baskin-Naylor has overseen the district’s wraparound strategy for almost nine years, so Say Yes to Education is an extension of that work. Say Yes Cleveland will make the district’s approach to support services more widespread and equitable, putting all schools on an “even playing field,” she said. But the services will look different in every school, as the needs at each building vary.

Volunteers have been working on the planning and implementation of the different components of the Say Yes Cleveland program. Downing said more than 100 have been involved in that work so far — and that doesn’t include the mentors who signed up to work with graduates receiving the scholarships. Cleveland was the first Say Yes community to launch with a plan to match every scholarship recipient with a mentor.

This year, College Now Greater Cleveland is working with about 1,700 mentor/mentee pairs, said CEO Lee Friedman. That includes the approximately 800 students being matched with mentors for Say Yes, but also for College Now’s other mentorship programs. Friedman estimated the addi-

tion of Say Yes created about 600 additional pairs, as some of the students would have been in other mentorship programs anyway.

As Say Yes scales up, College Now will need to recruit more mentors. Friedman said the organization will begin its big recruitment push later this fall.

“The community has just been amazing,” Friedman said.

That leaves the question of funding.

Say Yes Cleveland already has raised about 73% of what it needs to sustain its scholarship fund for 25 years. The goal is for the program to raise $125 million; to date, it has raised about $91 million, Downing said. That figure stood closer to $88 million when the chapter was announced.

Beyond scholarships, Downing said Say Yes Cleveland is still “braiding” together the funding it needs to fully implement the program beyond the seed money from the national organization.

For example, there have been commitments from the county and the school district to pay the salaries and benefits of the family support specialists, and a task force is studying how the philanthropic community can get more involved as the program grows.

Say Yes Cleveland has, from the start, been a study in collaboration.

“From the very beginning of the planning for Say Yes, the announcement of the chapter, and the work that we’ve been doing to get student scholarships, as well as to get these services in the schools, has really been and is and continues to be a community effort,” Downing said.

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Tuff Shed built its Mayfield Village plant big for growth Local factory is significantly larger than company’s typical spots

By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty

Tuff Shed Inc. has expanded to Northeast Ohio, opening a larger-than-normal factory in Mayfield Village and planning for growth.

Tuff Shed makes, as its name suggests, sheds, in addition to other outdoor structures like garages and studios.

Those structures have evolved over time based on customer wants and needs, said Phil Worth, vice president of marketing. The company has responded to customers’ desire for “curb appeal,� he said, offering a variety of designs. Customers can customize the structures based on size and aesthetics.

The company offers retail sales to customers at its own locations, as well as at Home Depot stores. Tuff Shed is based in Denver and has 57 factories across the country.

Its new Cleveland-area factory is at 600 Beta Drive in Mayfield Village.

The company wanted something with quick access to the highway, to make it more efficient for its drivers, and with high visibility, said Marke Densmore, general manager for the Mayfield Village location, which has been operational since January. Tuff Shed began offering retail sales at the site a couple of months ago and held its official grand opening in September.

Tuff Shed makes kits for its building shells at its factories, building components like wall panels, trusses and doors. The remodeled building in Mayfield Village has space for retail and administration, as well as the factory itself.

Densmore said the Mayfield Village plant has room to increase capacity as business grows. Currently, there are 15 employees there; Densmore said he sees that doubling within the next year.

The Mayfield Village location is almost 35,000 square feet, Worth said, which makes it a larger-than-usual facility for Tuff Shed. Typically, its factories are 20,000 to 25,000 square feet.

Tuff Shed makes sheds and other outdoor structures like garages at its new Mayfield Village factory. (Tuff Shed Inc. photo)

That was intentional, as the company planned for the Mayfield Village plant to serve a large footprint from the start. In the past, the company has allowed what it calls cross-dock loca-

“The less we can have installers spending their time driving and the more time installing is a winning combination for us.� — Phil Worth, Tuff Shed Inc. vice president of marketing

tions that a plant serves to grow over time. These locations receive assembled kits from a Tuff Shed factory before they’re picked up for installation.

Worth said the benefit of having these sites is that it makes the company more “hyperlocal� in terms of the

contractors it uses for installation. “The less we can have installers spending their time driving and the more time installing is a winning combination for us,� Worth explained.

In the Cleveland market, Tuff Shed opted to open three cross-dock locations at the same time as the Mayfield Village plant. Those locations are in Columbus, Pittsburgh and Buffalo.

All three are already in use for deliveries, Densmore said. The Pittsburgh and Columbus locations have already had soft openings for retail sales and will host grand openings next month. Buffalo will begin offering retail sales soon, with a grand opening likely for November, Densmore said.

Worth said he wouldn’t be surprised if the company used the model of opening a factory and its crossdock locations at the same time in the future. The only issue would be that the company now has strong coverage across the United States, he said.

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CRAIN’S CLEVELAND BUSINESS

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Cleveland Bar wants key role in Justice Center planning

By Kim Palmer kpalmer@crain.com @kimfouroffive

Members of the Cleveland Metropolitan Bar Association (CMBA) were rebuffed from joining the 12-person committee tasked with deciding the way forward for the new Justice Center project.

The group, a collection of representatives from Cleveland city government, Cuyahoga County Council, the judicial branch and the public defender’s office, are the stakeholders tasked with deciding whether to renovate the existing Justice Center or build a new home for the municipal court, county court and jail.

At the beginning of the committee’s Sept. 17 meeting, CMBA members made their case for seating one of the organization’s attorneys on the committee. During the public comment period, CMBA president Ian Friedman sparred with committee members about whether the request from his group was appropriate.

“We believe that these decisions should be made by those who play a critical role in the Justice Center, and we believe that we do as the lawyers, almost 5,500 of us,” Friedman said.

The CMBA’s request was stymied after Cuyahoga County Council member Michael Gallagher cast the sole “no” vote on a procedural matter, signaling he also would vote against the private attorneys group’s effort to get a seat on the committee, which required unanimous agree9/17/19 PM ment1:29 by committee members.

“The committee was aware of our (the county’s) position since even before the agenda was put out,” Galla-

gher said. “It was clear that the council was voting no, yet it was still put on the agenda for a vote. It was unnecessary to vote.”

Friedman said the matter is not over and that having a say on the project is a priority for CMBA members.

“Our leadership is now examining all available options, as we are committed to advancing the interests of our legal and nonlegal members, our clients and the community at large,” he said in a statement released after the committee meeting.

Regardless of what approach is taken, the Justice Center is likely to be the most expensive public project in Cuyahoga County, and possibly state, history. Cost estimates begin at $500 million and tick up significantly from there, depending on who is asked and the project’s ultimate scope.

A CMBA member, if added to the committee, would represent the only nongovernmental, elected or appointed person to weigh in on the project.

“To date, we have not heard one legitimate reason as to why the CMBA’s participation — and thus the participation of the private bar and the clients represented by the private bar — should be denied,” Friedman said in his statement.

The committee, according to some members, does want community opinions, especially from other groups with a vested interest, such as private attorneys. Gallagher’s no vote allowed other committee members to remain outwardly neutral on the issue.

“As a matter of fact, we consider the bar’s input on this project to be invaluable, as we consider (MetroHealth’s) input to be invaluable,” Gal-

lagher said. “There are groups that we think must be partaking in the process. We want this to be done and done right.”

In an August letter about the issue, he agreed that many constituencies have much to contribute to the planning process “by virtue of their occupancy of the Justice Center and their critical role in the function of the justice system.” However, Gallagher and others believe those groups should be involved only as part of the project’s working groups and subcommittees, not as voting members.

The CMBA, Friedman said, has a broad base of members with “a significant diversity of thought, experience, need and interest.” The bar, he added, represents “a full complement of members of the community who are (more) diverse in age, race, ethnicity, gender, military status, physical ability, sexual orientation, identity and socioeconomic status” than the other groups.

Gallagher counters that the committee, as members of county and city councils, have a unique fiduciary responsibility to taxpayers for the multimillion-dollar project, and groups that are not elected or appointed do not.

“If another Juvenile Justice Center happens, it is on my head. I’m responsible and I pay the price. The council and the mayor are there and they have a duty to the people of Cleveland,” Gallagher said, adding that “the voice of the people are at the table.”

The project committee has now met four times. Each full council and subcommittee meeting is streamed online, and presentation materials are posted on a website.

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Drilling into the future of robot-assisted dentistry

By Lydia Coutré lcoutre@crain.com @LydiaCoutre

With not even a fraction of a millimeter to spare, Jonathan Ross centered in on his surgical site and was able to successfully complete a dental implant with the help of new robotic technology.

Developed by Maimi-based robotics health care startup Neocis, the Yomi Robotic Dental System markets itself as the first and only U.S. Food and Drug Administration-cleared robotic device for dental implant surgery.

While surgical robotics have been available in the health care setting for many years, they have taken longer to reach the dental space.

Ross, of Ross Periodontics and Dental Implants (which has locations in Mayfield Heights and Willoughby), said he imagined robotics would come to dentistry “eventually” but didn’t realize there was a commercially available device until earlier this year.

“I was intrigued by it but didn’t just jump on in,” he said. “I mean, as you can imagine, this technology is expensive to implement in the office. But the more I thought of it, I kind of saw that Yomi was meeting me at kind of the intersection of what my goals are for dentistry, for implant dentistry and the changing technology.”

In May, Ross became the first and only provider in Ohio to adopt the technology.

Yomi enables a surgeon to plan a dental implant procedure based on

Jonathan Ross is the first provider in Ohio to offer the new Yomi robotic technology, which assists him in dental implant surgery.

(Contributed photo)

imaging of the patient. Using anatomical references, the surgeon can map out a procedure, planning around the nerve or other teeth or the sinus. Once the plan is set, the robot arm assists the surgeon during the procedure. It doesn’t act autonomously, but instead will physically resist motion outside the bounds of the planned procedure. A screen shows the surgeon where they are at all times.

“It’s very much like a lane-assist for a car; it’s going to keep you exactly where you want to be,” said Alon Mozes, CEO and co-founder of Neocis.

Neocis received FDA clearance for Yomi in 2016 and began its commercial efforts at the start of last year.

Over the past decade, Ross has placed most of his implants freehand, measuring the site and then placing the

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implant by hand. He had considered existing technology solutions in the space, but didn’t feel they fit his needs.

Navigation systems are optical systems that show on a screen where the handpiece is in relationship to the patient and the planned implant, Ross said. Though this gives the dentist a better view of the surgery, it is still freehand, he noted.

He’d tried guided surgery, which uses a physical restriction on the placement.

“With the physical surgical guides, if it doesn’t fit on the teeth, you can’t use it,” Ross said. “If you don’t realize that it’s not fully seated, you’re going to go off angle, and if you planned it wrong in the first place, it’s not going to work. And if the patient can’t open wide enough — because with these surgical guides you need extra-long drills — if the patient can’t open up wide enough, you can’t use it. So all those limitations: I have not really gotten into guided surgery.”

Guided surgery is also considered more static, without the freedom to change course during the procedure if needed, said Stephanie Carter, clinical sales representative with Neocis who’s been working with Ross. Yomi allows the surgeon to “dynamically plan,” meaning if things change during the surgery, the robot can adjust.

“Now, if I go in there and I see that it’s planned wrong or it’s going in the wrong direction … I can change the plan on the fly, and then get it into the right position without having any special surgical kit,” Ross said.

Dr. Faisal Quereshy, residency director and professor of oral and maxillofacial surgery at Case Western Reserve University, said transoral robotic surgery has been performed with some of the same surgical robots used in urology and oncology.

He said he believes that part of the reason the industry hasn’t seen dental-specific robotics sooner is that the mouth is so accessible and visible.

Also, some surgeons are more old-fashioned and haven’t adopted newer technology, to which younger surgeons may be drawn.

“From what we learned, the dental industry is often ignored. It’s a very separate market from the traditional medical markets,” Mozes said. “So you’ll see robotic systems in the cardiac space, in orthopedic space, in neurosurgery, but the dental market has just been completely different in terms of the medical device manufacturers that address that market. So it was really a wide-open opportunity.”

So far, in the cases in which Ross has used Yomi, he said he doesn’t believe he’s stretched the boundaries of what the technology is capable of.

He’s been starting with simpler cases.

Mozes said there are a variety of procedures that Yomi could help make more consistent and reliable.

He sees opportunity in not just the dental implant space, but in the dental industry more broadly. Yomi, Mozes said, has the capacity to be valuable in every dental office.

Quereshy, who hasn’t used Yomi, said he would like to see more research into newer technology in general to determine what it means for patient outcomes, looking at patient safety, success rates and efficiency.

“In terms of patient outcomes assessment, whenever you have technology, I think it’s important to look at does it really help outcomes and patient care?” he said.

Mozes said that while clinical studies have focused on safety and effectiveness of the robot, there are additional ongoing studies to examine outcomes compared to traditional methods.

9/20/2019 11:13:12 AM

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9/16/19 3:39 PM

PA G E 10

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CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

U.K. firm perfect example of ‘Why not Cleveland?’

Editorial

Yes to education If you care about addressing the skills gap, reducing income inequality and expanding employment opportunities to more citizens, a strong local community college is essential.

We’re fortunate in Northeast Ohio to have several good ones, including Cuyahoga Community College, which is asking voters in November to renew a 1.9-mill tax and approve a 0.4-mill increase. (Tri-C has two alternating, 10-year operating levies, with separate renewals, five years apart. Voters in 2017 also approved a 25-year, 0.5-mill property tax increase to pay for new buildings and repairs.) The increase sought this fall amounts to about $14 per year on a $100,000 home, and it would help Tri-C keep tuition low, support technical education and workforce training, and expand services at its community access centers.

We understand the sensitivity about any increase in taxes in Cuyahoga County. However, this is a case of relatively low cost and high reward, and to our mind, it’s a no-brainer: Vote in favor of the levy.

Tri-C, founded in 1963, is Ohio’s largest and oldest community college. It serves more than 51,000 students a year, the vast majority of whom, when they graduate, stick around the region and help improve both the size and quality of the Northeast Ohio workforce. Talk for a bit with virtually any business owner and one of the main topics of conversation will be the difficulty in finding people to fill open positions. A stronger Tri-C helps preserve and expand a valuable pipeline of qualified workers.

Tri-C has established Centers of Excellence in six critical areas — creative arts; hospitality management; information technology; manufacturing technology; nursing; and public safety — and it offers more than 1,000 credit courses each semester in more than 200 career and technical programs. The trajectory of degrees and certificates awarded over the last few years is consistent in a positive direction, from 2,380 in fiscal year 2010 to 4,430 in fiscal 2018, according to data provided by Tri-C. We’re impressed by the work done by Tri-C’s president, Alex

Johnson, since he started in that role in 2013. He has placed an emphasis on educational access, retention and completion, and the school’s numbers in those areas have shown marked improvement. Tuition for a typical full-time student at Tri-C is less than $2,800 per year, the lowest rate in Ohio. As college tuition has soared, making higher education a stretch for many families, Tri-C’s focus on affordability is crucial to providing opportunities for students.

Tri-C also has worked closely with the corporate community to create relevant training programs for prospective and incumbent workers. In an interview last week with Crain’s editorial board, Johnson said Tri-C’s mobile training unit, a 53-foot, hands-on lab and classroom that trains professionals for manufacturing jobs, is booked for the next 48 weeks, and the school is preparing to add more such units, focusing on areas such as health care and IT. A recent project from the Community College Research Center at Teachers College of Columbia University looked at a few institutions, including Tri-C, that are managing “the broadbased transformation of programs, student services and related support systems.” A 20-page report looked at changes Tri-C has made to achieve “substantial increases in degree completion rates.” Tri-C’s graduation rate now stands at 21%, below the national average for community colleges (about 25%) but better than the 18% rate for urban institutions.

The trend here is much more important than the number.

Tri-C reaches out to people who otherwise might not consider college, including people with families, full-time workers seeking to bolster their training, or those who are older and seeking a new life direction. Community college helps give people a shot — or maybe a second or third shot — at getting ahead.

“We have a lot more work to do,” Johnson said. A yes vote helps the school do that. Early voting starts Oct. 8, ahead of Election Day on Nov. 5. The increase Tri-C seeks is modest, but the school’s impact is big.

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

CLEVELAND BUSINESS P010_CL_20190923.indd 10

Managing Editor:

Scott Suttell (ssuttell@crain.com)

Contact Crain’s:

216-522-1383

Read Crain’s online: crainscleveland.com

Alexander Mann Solutions’ love affair with Cleveland is still going strong.

Seven years after the London-based provider of talent acquisition and management solutions committed to Cleveland as home for its U.S. headquarters — leaving Raleigh, N.C., at the altar — AMS founder and CEO Rosaleen Blair said she would do it all over again.

“There hasn’t been a day gone by when we have regretted this decision,” the Irishborn and London-based CEO told a gathering at a celebratory event last week for Global Cleveland’s Welcoming the World Week. “It’s one of the best decisions I think I’ve ever made.”

The marriage was meant to be. In seven years, AMS has grown its U.S. footprint from Elizabeth a one-man office — “I literally went to the McIntyre office on Day One and was given a set of keys,” said Mark Jones, AMS senior vice president who relocated from the U.K. to run the firm’s U.S. operations center — to nearly 200 employees today. It’s one of seven AMS global centers.

Blair admits that she is still asked, “Why Cleveland?” when people hear our town is the U.S. headquarters for the global service provider, which supports clients in more than 84 countries.

“Why Cleveland?” That struck me, considering the headline on the Sept. 16 cover of Crain’s Cleveland Business: “Why not Cleveland?” It was on an article about efforts by local politicians, business leaders and academics to woo Silicon Valley tech executives to Northeast Ohio.

Despite my journalistic reticence to answer a question with a question, “Why not Cleveland?” is, in fact, the perfect answer to “Why Cleveland?” And we must answer not just with words, but with actions that back it up.

The choice Alexander Mann Services made offers the perfect example of “Why not Cleveland?” in action.

“Cleveland came to fruition because Cleveland really wanted us,” said Jones in an interview last week. Thanks to a “consolidated and concerted effort” by many organizations and people, from Team NEO, Downtown Cleveland Alliance and Jobs Ohio and from businesses such as Park-Ohio Holdings Corp., universities and colleges, and then-Gov. John Kasich, Cleveland went from not even being on the radar to top of the short list.

“Other cities had meetings and wanted us,” Jones said, but “it was the passion that Cleveland has” that eventually convinced AMS leaders to settle here.

Blair told the Global Cleveland audience, “There’s a real heartbeat in AMS. … We genuinely care passionately about our customers and we care passionately about our people. What my team said (after visiting Cleveland) is this feels like AMS, this feels like home.”

It’s not a sign of desperation, but a sign of confidence, to woo someone by letting them know you want them more than anyone else. But desire has to be backed with action. And that’s where our economic development muscle was flexed.

It started with a local connection, an introduction, a visit to Cleveland, and then a full-court press.

“I said to the team in Cleveland, if you can hit this deadline, we will be there,” Blair said. “Incredibly all the different agencies worked together and they just pulled it out of the bag. They absolutely met and hit the deadline, and that’s why we are here.”

Their time here hasn’t been without challenges. Losing the United Airlines hub at Cleveland Hopkins International Airport has made travel more difficult, Jones said. But they’re one of us now, and AMS is working to overcome challenges, celebrate the successes, and thrive.

Like Clevelanders always do.

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

Sound off: Send a Personal View for the opinion page to emcintyre@crain.com.

Please include a telephone number for verification purposes.

9/19/2019 4:14:29 PM

CRAIN’S CLEVELAND BUSINESS

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The best podcast for the busiest business owner.

New episodes every Wednesday.

From the Akron Beat

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PRICE REDUCED Ian Schwarber was a true believer in the potential of Akron as a hub of entreprenuership. Schwarber died unexpectedly at the age fo 38 on Sept. 17. (Jason Miller/Pixelate Photography for Crain’s)

Akron and its entrepreneurs lost an advocate and friend in Ian Schwarber

12,828 9% Long-term tenants: Akron Located in a beautiful Square Cap As a kid, you learn young that there are It struck home these past few days that I’ve General Medical Center and surreal setting with great feet rate three kinds of adults. been lying.

The Spa at Yellow Creek access to Interstate 77 First, there are those who unreservedly As annoyingly chatty as I might be, and promise you anything, from fishing trips to as many people as I have met at Akron SVN SUMMIT COMMERCIAL help with your homework. They love to see Family, I would not have met them had it REAL ESTATE GROUP, LLC you smile — just not enough to deliver. not been for Ian. CONTACT Then there are those who are slow to The CEOs, local investors, entrepreneurs, Ben Christopher promise, which you soon realize is because judges, professors, politicians and just orAssociate Advisor 3009 Smith Road, Suite 25 they respect you enough not to lie to you dinary folks who stopped by our table Ben.christopher@svn.com Akron, OH 44333 and disappoint you. crossing the room to meet me — weren’t Dan 330.631.7285 (234) 231-0200 Finally, there’s a very rare third group. Shingler just Ian. They make their promises as unreservedly It wasn’t the same as when you’re sitting as the first, but with the conscientiousness of the sec- with a big CEO, either. This wasn’t a line of ring-kissond, because they’ve learned to live with a compelling ers: I’m sure most of them made more than Ian and I put together, many by multiples. heart that they and others can count on.

Akron lost a friend from that third group, as did I, Nor were they trying to sell Ian something. If anyFOR PRESTIGE AND ELEGANCE,​ with the passing of Ian Schwarber. thing, they knew they were likely to walk into a solic9-23-2019 SVN ad.indd 1 He passed away unexpectedly on Sept. 17, aged itation themselves. Probably not for Ian personally, just 38. but for someone he knew who needed help with a Ian was perhaps best known for founding the Uni- business or organization. Who approaches a known versity of Akron’s EXL Center in 2016, where he is me- asker of favors, right?

People who like the asker, and those are the people morialized for teaching any interested student about how to start and run a business. Most recently, he was who routinely stopped by our table.

They liked, even loved Ian, because he was a true an executive president running strategy for Centerbeliever in Akron, its people, its businesses and its Link Technologies in town.

But most probably knew Schwarber from encoun- success — their success. To an old-school reporter, tering him at other organizations and initiatives aimed Schwarber’s relentless positivity could be annoying at getting Akron’s entrepreneurs up and running, such at first. But misconceptions always cave in under the as the annual Startup Bus pitch competitions in which weight of enough evidence.

People, including me, realized that Ian’s optimism teams from Akron regularly participate, thanks in part and spirit were real. They saw him back it up by helpto Ian. I wasn’t one of Ian’s closest friends, but one of many ing countless people, including sometimes themfriends he made. Our meetings began with him as a selves. If Ian was asking you to help someone or source and me as a reporter. Over time, we became something else, it meant he was already doing more friends with the arm's-length relationship that my job than he was asking for himself.

Firestone Country Club is an exclusive, prestigious sometimes unfortunately requires. I only heard him Now, he’s gone? At 38? private club that welcomes Members and guests sing the praises of his wife, Mackenzie, though, and I’m not sure anyone knows what to say to that. I alike to host events in our famed clubhouse. never met her. Same with his young kids. My talks with don’t.

Ian were usually over eggs or burgers or coffee someExcept damn it. Worse in private, with tears I didn’t BOOK YOUR SPECIAL EVENT TODAY. where in Akron; about business in Akron and about know I had.

And goodbye, my friend. We’ll all miss you and are life, music and the world generally.

330.644.8441 | firestonecountryclub.com He introduced me to the Akron Family Restaurant. already poorer for your loss.

Ever since, I’ve told newcomers to Akron: “You need to © ClubCorp USA, Inc. All rights reserved. 44574 0419 BB just get up early or go in late — and have breakfast there Shingler covers Greater Akron and its surrounding regularly. You’ll meet everyone who’s anyone in Akron.” counties for Crain’s Cleveland Business.

9/13/19 10:21 AM

THINK FIRESTONE COUNTRY CLUB.

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9/19/2019 3:27:50 PM

PA G E 12

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CRAIN’S CLEVELAND BUSINESS

GOLF

A ‘holistic approach’

CONTINUED FROM PAGE 1

Golf Datatech, which compiles numbers from courses around the country, said the increases in Northeast Ohio have been minimal: a 0.5% jump in rounds played. But the firm’s numbers are only through July, and courses said business in August and September — with Mother Nature being especially kind — has been terrific.

And even a slight increase in rounds can be seen as a relief after respective drops of 7.8% and 5.9% in 2018 and ’17, according to Golf Datatech.

Joe Salemi, a commercial developer who designed his picturesque Boulder Creek Golf Club in Streetsboro, doesn’t want to hear about those stats, however.

“People talk about rounds,” Salemi said. “Rounds mean nothing. It’s rev-

StoneWater Golf Club’s annual men’s invitational features a crab leg and sausage boil. This year, there was a waiting list. (Contributed photo)

enue. Revenue is what matters.”

Boulder Creek has done well there: a double-digit jump this year.

“And last year was up from the year

before,” said Salemi, who in 2014 told Crain’s that he didn’t see “a light at the end of the tunnel” for the declining golf industry.

Golf is the headliner, and the reason many people come through the doors at StoneWater, but it’s just one arm of a six-pronged business that was revamped when Stuart Neidus became the club’s managing partner late in 2015.

Neidus’ three daughters — Kathryn, the executive chef; Lindsey, the head of marketing and operations; and Whitney, the general manager of events — run day-to-day operations at the club.

Golf, Whitney Neidus points out, is the only seasonal part of the business.

There’s a full-service restaurant and bar, the Rustic Grill, plus catering, events, a pro shop and what Lindsey Neidus refers to as “happenings” — gatherings, such as a kids movie night, that are open to the public.

The Rustic Grill was added and the events space expanded after the Nei-

dus family took over the operations.

The club hosts high-end dinner-andwine and dinner-and-liquor pairings, is capable of hosting 200 guests for sit-down events and 300 customers for standing-room-only gatherings, and even delivers its wide array of food offerings via Uber Eats.

Since 2016, revenue has increased 150%. The food-and-beverage business is up 300% in that span.

“All the businesses here, we look at it from a larger, holistic approach,” Lindsey Neidus said. “They all springboard each other.”

Contracts Whitney Neidus negotiates for weddings, rehearsal dinners and baby or bridal showers include a mention of golf. And the club’s members — a total that has increased about 30% since 2016 — support the other areas of the business.

“Golfers, we try to push them to the restaurant,” Lindsey Neidus said.

“When we host (smaller) events, wine-and-dinner pairings, those aren’t huge moneymakers. Those are marketing tools.”

A discounted plan Stuart Neidus joined Little Mountain — whose operating team, like that of StoneWater, includes Hanlin and developer Steve Calabrese — earlier this year.

After what Hanlin said was a fouryear run during which, no matter what they tried, the rounds played at the public course were about even, Little Mountain enlisted the help of a marketing company.

As it approaches its 20th birthday in May 2020, Little Mountain created an anniversary membership. For $199, members get unlimited golf, with a cart fee of $21 and just a pair of catches: They can’t play on Saturdays and Sundays before 11 a.m. (that’s when the majority of the club’s already-established members play) and they can’t make tee times more than three days in advance.

The program, Hanlin said, has been “wildly successful.”

Even with a rain-soaked May and June that the golf pro described as “horrible,” Little Mountain topped its 2018 numbers by mid-August. And if the quality weather continues, the stats from the last few years are going to get “blown out of the water,” Hanlin said.

The club’s expenses have increased, too, as Little Mountain has put more money into the course.

That’s similar to StoneWater, which has been boosted by sizable investments the last few years. But the overall approach at Little Mountain couldn’t be more different.

“The funny thing is it’s the exact opposite of what we do at StoneWater,” Hanlin said. “We provide a really good product and we charge for it there. But StoneWater is also in the middle of 1,000 houses (the Community of Aberdeen).”

Instead, Little Mountain has offered golf at a stark discount, and it’s bolstered other areas of the business.

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P012_013_CL_20190923.indd 12

A ‘really good’ year Salemi, too, has invested heavily in his Streetsboro course.

A new grill room and bar, men’s locker room and events center were added at Boulder Creek in 2015 and ’16. Work on a second events center, capable of accommodating more than 300 guests, is expected to begin next year.

Salemi recently purchased a new line of Club Cars, which are equipped with 10-inch screens and GPS and Bluetooth capabilities.

Those, he said, are crucial for a club he believes is “10 to 15 years younger on average.”

9/19/2019 4:23:36 PM

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Valleaire Golf Club’s facilities offer picturesque views for weddings.

(Contributed photo)

The club can now host events big and small, and its 90-plus golf carts are plenty for almost any outing.

Valleaire also is versatile, with an 11,000-square-foot banquet center completed in December 2015, plus indoor golf simulators and redesigned lounge areas.

Cindy Cole, the Hinckley club’s general manager, said rainy weather is the lone reason the facility isn’t going to have a record year.

Still, she's seen a significant increase — as high as 75% — in women playing the course, and a strong economy has meant more disposable income for Valleaire’s senior players.

In true golf fashion, Cole said another reason business has been good for Valleaire are the closings of several nearby courses — one of which, Skyland Golf Course (which shut down in late 2017, after more than 90 years in business), was in Hinckley.

Since 2017, at least 15 Northeast Ohio golf courses have shut down, according to Crain’s research and the reporting of Northeast Ohio Golf publisher Allen Freeman. The tally doesn’t include the numerous driving ranges that shuttered.

A head professional at a prominent Northeast Ohio golf course who didn’t want to be identified said the

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PA G E 13

“residual effect of courses closing has helped everyone.”

At Briardale, a modest course that GM David Hoyt said is “driven by our rates,” the stats have also been encouraging.

The Euclid facility has been managed by Virginia-based Billy Casper Golf since 2010. That deal has since been renewed twice, and the most recent five-year extension will run through 2025.

“So we’re doing something right,” Hoyt said.

Maybe the surest indicator that things finally are looking up: Westlake for the last year-plus has been evaluating the possibility of a golf course addition.

The new-and-improved course would replace the city-owned Meadowood Golf Course. Westlake has hired Hanlin as a consultant on the possible project, and the golf pro and course operator said proposals will be coming in soon from architects.

The city, should it select one of the options, likely will go with a “new-age type of proposal” — one Hanlin said could include loop options in which the course would play in different directions, depending on the day, and customers could play three or six holes, rather than the customary nine or 18.

Those are some of the many ways in which golf facilities are catering to customers’ changing tastes while developing businesses that go way beyond the game.

And the outlook, for once, isn’t grim.

“2016 was better than previous years. But nothing has been really good,” Hanlin said. “This year has been really good.”

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9/19/2019 4:24:08 PM

PA G E 14

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CRAIN’S CLEVELAND BUSINESS

Focus

REAL ESTATE

Moving on up to the East Side Previously the domain of dedicated not-for-profit development groups, a surprising set of new players and projects are springing up on Cleveland’s East Side

Construction on the 63-unit Glenville CircleNorth, at 1400 E. 105th St. in Cleveland, is nearly complete.

(David Kordalski)

By Stan Bullard sbullard@crain.com @CrainRltyWriter

F

ive Knez Homes “For sale” signs dot empty lots on a Cleveland street. Three of them note the home sites on grass-covered parcels have been sold.

Is it Tremont? Or Ohio City, where Knez signs seem to be everywhere?

No, these are on East 123rd Street between Wade Park and Ashbury Avenue.

Walter Jacobs, who lives nearby, considers the big, looming change on the short block OK. “I’d rather see structures there than wide open spaces,” Jacobs said. “Late at night, people dump stuff on empty lots, so it’s not safe for the neighbors.”

In pockets on Cleveland’s East Side, from the lake to I-490, for-profit builders and real estate developers are staking claims near high-pover-

P014_015_CL_20190923.indd 14

Near where Wade Park and Ashbury avenues end at Lakeview Road, Knez Homes has three buyers for five sites on East 123rd Street it received from the City of Cleveland’s land bank. The block they are on has six empty lots and five occupied houses. (Stan Bullard)

ty areas that have not seen the stunning changes of the city’s West Side. Areas that previously were the domain of dedicated not-for-profit development groups are seeing a surprising and substantial set of new players and projects.

Consider the corner of Hough Avenue and Ansel Road. That’s where an affiliate of Signet Real Estate Group of Akron has started constructing the Axis at Ansel, a 163-unit apartment building costing $35 million to develop. It’s a site some insiders think may be ahead of its time: The other end of its block on Hough is home to a boarded-up midrise apartment building.

The Hough address is not offputting to Kevin Belt, Signet’s vice president of development, regardless of its decades-old association with the Hough riots.

“Go to the site,” Belt said, “and you’ll see the transformation. With all that is happening there, the Hough name didn’t scare us. It’s the next area of development for the city and University Circle. It makes a lot of sense for us to be where we’re at.”

A big part of the target market for the five-story building is medical students studying nearby at the $500 million Health Education Campus of the Cleveland Clinic Foundation and Case Western Reserve University. The developer is constructing the project where the neighborhood Orr Park formerly stood, and is replacing the park nearby as part of its purchase agreement with the city of Cleveland.

Signet’s Axis is on the west side of the landmark Rockefeller Park. Meanwhile, other action is on its east side, technically along East 105th Street between Superior and Ashbury avenues, in the Circle North area, one of three Neighborhood Transformation Initiatives that Mayor Frank Jackson launched in 2017 with the goal of increasing commercial, residential and business development in parts of the city that haven’t seen the reinvestment remaking the city’s near West Side.

Most visibly, the $15 million Glenville CircleNorth Building is nearing completion at 1400 E. 105th. It contains 63 moderately priced rentals with retail on its first floor, including a City of Cleveland-sponsored retail incubator that will open this fall. The developer, Finch Group of Boca Raton, Fla., has completed multiple University Circle projects, and was selected for the formerly city-owned site through a requestfor-qualifications process.

On the blocks around the structure other things are happening. The Orlean Co. of Beachwood plans to build 26 homes on single-family sites within the Circle North boundaries.

Also surfacing in Circle North is Rick Maron, the founder of MRN Inc., which developed th East Fourth Neighborhood and Uptown in University Circle. Maron has won city approvals to build an eight-suite apartment building at 11427 Ashbury that’s designed to unite the micro-apartment trend with moderately priced rentals. Maron did not return five calls to his cellphone., and three phone messages and an email to MRN also were not returned.

Meantime, Knez Homes of Concord Township is “heavily involved” not only at the Circle North area but other parts of the East Side as

9/19/2019 3:04:00 PM

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CRAIN’S CLEVELAND BUSINESS

The Signet Real Estate Group of Akron is investing $35 million to develop the Axis at Ansel in Cleveland’s Hough neigborhood.

(Contributed rendering)

well. Bo Knez, founder and owner of Knez, said he believes big parts of the area near Circle North will look different within the next year.

“Our investment in land for the last three years has emphasized the East Side,” he said.

The company has sold 15 houses on the East Side and has another 15 under contract in neighborhoods ranging from Glenville to Fairfax. The product is similar to what Knez builds on the West Side but carries prices slightly lower, in the range of $250,000 to the low $300,000s.

Knez also recently got approval from the city for a 15-suite townhouse project called Ashbury

Pointe at East 120th Street and Ashbury.

Meantime, multiple other projects are afoot throughout the East Side, ranging from the proposed adaptive reuse of Longfellow School, 650 E. 140th St., to senior-citizen housing by Vesta Corp. of Weatogue, Conn., to Vazza Real Estate Group of Boston’s One Midtown, a 23-unit townhome condominium development at East 73rd Street and Euclid, where units start at $409,000.

Multiple factors account for the upswell.

Knez said he believes it’s a natural movement because the entire city is “primed for development,” adding that the East Side has the advantage of more empty land than other parts of the city. He also emphasized that buyers want to be near the cultural aspects of University Circle, which he described as “second to none.”

Construction workers on his projects have

been boots on the ground in Glenville for two years, Knez noted.

“We have had zero police reports,” he said. “We’ve not had a piece of graffiti or any broken windows.”

Residential and commercial developments today are reaping the benefits of Blue Donald investments in infrastructure made over years, said Brian Smith, the founder of Health Tech Development LLC of Cleveland, a real estate development company he formed after retiring from the Cleveland Clinic as director of construction. That and other jobs give him more than 30 years of experience working on East Side projects.

“I don’t mean just roads and bridges,” Smith said, but things such as the addition of the Dave’s Supermarket at Hemingway Development’s Link 55 project between Euclid and Chester Avenue, which benefits consumers farther east than its former Payne Avenue location.

Another factor is simply that “the economy is good,” Smith said. Combine that with record low-interest rates and real estate developers’ constant need, after a decade of growth, to find new markets and the East Side starts to pop up as a potential overlooked market. It’s a local variation on the desire of Columbus apartment developers to finally venture north with projects from Ohio City to Rocky River.

Smith said that Cleveland has a unique opportunity because so much vacant land surrounds University Circle and the city’s health care institutions. “That’s not the case in most other cities with major hospital systems,” he noted.

Chris Ronayne, president of University Circle Inc., said a decade of sustained real estate development in University Circle and the adjoin-

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ing MidTown area have created momentum for the other projects.

Incentives are another part of the formula. One is the Greater Circle Initiative, which provides $10,000 in down-payment assistance for homebuyers from UniBelt versity Circle institutions.

More is on the way. David Ebersole, Cleveland director of economic development, said the city is preparing to unveil later this year a partnership with several local banks to offer $44 million in acquisition and development loans in a mixture of city and bank funds.

Ayonna Blue Donald, director of the Cleveland Department of Building and Housing, said Glenville CircleNorth and other initiatives take advantage of the years of effort the city and others have put into demolishing foreclosed and abandoned homes. Since 2006, the city has razed 1,473 structures in Glenville and a total of 10,522 in the city as a whole.

“I am over the moon in terms of excitement,” Donald said in an interview. “We have created a clean palette and we are starting to see development.”

In Smith’s case, he launched his company to focus on opportunities in areas near the Greater Cleveland Regional Transit Authority and city of Cleveland’s HealthLine, the bus rapid transit system on Euclid, and the new Opportunity Corridor connecting East 105th Street with the I-490 interchange at East 55th.

His first project in the new venture became a reality when he and his partners opened the first Tru by Hilton hotel in the region this summer at 6955 Euclid Ave. SEE EAST SIDE, PAGE 21

Usually, 1+1=2 .

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Blockchain could cut construction delays Commercial real estate and construction professionals take note: The adoption of blockchain technology in the design and construction industry presents a great opportunity.

Projects come in all sizes and complexities, and involve multiple levels of participants, in multiple phases.

Delays and disputes often occur when communications break down among the project parties. Issues can include change orders being performed without full agreement of the parties; the application of different definitions to contract terms; and delays incurred, but not communicated until the project is behind schedule.

The list is endless, but in almost every instance the left hand is unaware of what the right hand is doing. No other industry is in such dire need of a process upgrade. From acquisition to financing to design to construction, a successful project requires open communication and collaboration at all levels.

Blockchain technology can provide this new level of project transparency.

In layperson’s terms, blockchain is a secure database that is datestamped and shared among a network of participants. The parties in the network initially agree to the rules of the blockchain, and the blockchain acts as an electronic record of the project. The operative documents, agreements and records are stored in a series of blocks that can be updated by any party within the network. The blockchain records the time and sequence of each amendment or update and instantly notifies all participants.

Each amended block becomes a new block that is linked to the preceding block. This forms a successive chain, which becomes the permanent record of the project. The agreements in the blockchain, or smart contracts as they are called, are designed to be self-enforcing, with the terms and conditions of the agreements connected to the flow of funds and sequencing of events during construction.

So, how can blockchain enhance

Amburgey is an associate with Walter | Haverfield’s Business Services group.

communications and streamline the process? Imagine a commercial development where the progress of construction and flow of payments are completely automated and transparent. Project milestones can be verified by all parties in real time, and payments are automatically released upon completion of such milestones. Owners can track the flow of payments downstream to ensure subcontractors and suppliers are being paid. General contractors can track the approval process for payment applications, as well as funding from lenders upstream.

This transparency would reduce the likelihood of payment disputes and enable parties to identify potential issues in advance of work stoppage, allowing projects to proceed on time.

The applications for blockchain technology in the design and construction industry are endless. Project information would be universally available to every level of the project team, leaving no more excuses for breakdowns in communication.

Lenders, owners, design consultants, engineers, architects, general contractors, subcontractors and suppliers would all have the ability to update the project database in real time.

The lines of communication would be wide open. Shipments could be tracked, inspections shared, workflow schedules updated, change orders processed and submittals reviewed, all in real time, and all with a complete historical record of the contractual obligations and timelines surrounding such items.

Blockchain technology is here. The industry must now educate itself and push for mainstream adoption.

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Richardson Design finds a home in hospitality The Cleveland firm’s work can be found in restaurants and sports venues around the country

Scott Richardson: “Hospitality is a big, huge umbrella with lots of exciting verticals to explore.” (Contributed photo)

post-college years at the Fitch retail and brand consultancy in Columbus.

For a dozen or so years, he operated the business as a sole proprietor while teaching classes at CIA. When he watched a particularly talented class of interior design students depart Northeast Ohio for jobs elsewhere, Richardson decided it was time to fully focus on building his company.

“They were leaving for the same reason that I had moved to Columbus years earlier: There were no companies in town where they could do the kind of work they wanted to do,” he said.

Children’s Museum Cleveland (Mark A. Steele)

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Scott Richardson was certain he had a unique approach to bring to Cleveland when he launched a commercial interior design service 25 years ago. The Cleveland Institute of Art (CIA) graduate also likely could have predicted that as business owners became more design savvy, Richardson Design would grow and widen its sphere of influence and inspiration.

Even Richardson, however, is a little surprised at how quickly and broadly that is happening today.

His firm has quadrupled in size over the last five years, going from four employees in 2014 to 16 now, while two expansions more than doubled its Superior Avenue loft to 6,900 square feet. In 2017, Richardson Design formally added graphic design and branding to its portfolio — although, Richardson noted, those services often were already baked into bigger projects aimed at creating a cohesive visual package.

The studio’s once regional footprint is now a national one, fueled primarily by the hospitality industry.

“We began in the hospitality space with designing for restaurants and are really starting now to make some inroads into other areas, like hotels, resorts, leisure environments and convention centers,” Richardson said. “Hospitality is a big, huge umbrella with lots of exciting verticals to explore.”

He formed the design consultancy in 1994, after spending his first two

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At the time, according to Richardson, the Cleveland design aesthetic was largely borne out of architecture, “whereas our firm or my pedigree from CIA took a different approach — one that more closely aligned to industrial design, where the design process is more user- or customer-focused.

“Still, today," he added, "before we even think about the physical buildout of an interior space, we are really diving into research and getting an understanding of what is the experience that restaurant or hotel or shop owner wants to create for the customer."

The firm’s customer-centric approach is on full view at the bright and whimsical exhibition spaces at the 40,000-square-foot new home of Children’s Museum Cleveland in the restored Stager-Beckwith mansion in MidTown, the clean and modern 24,300-square-foot Van Aken Market Hall in Shaker Heights and the rustic and industrial new Brew Wall pizzeria and 50-beer taproom in Copley.

Richardson Design also is the visual force behind Michael Symon's B Spot burger joints and East Fourth Street Mabel’s BBQ venture, as well as the fast-casual Packo's Eastern European Kitchen, the next-gen progeny of Toledo's iconic Tony Packo's restaurants. The firm had a hand in the interior reboot of Crowne Plaza Cleveland’s Ghost Light Restaurant & Lounge and the designs of both Boss Dog Brewing Co. in Cleveland Heights and the new Fat Head's Brewery & Beer Hall in Middleburg Heights.

Beyond Northeast Ohio, Richard-

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REAL ESTATE son and his team partnered with King of Prussia, Penn.-based Paladar Restaurant Group to reimagine the interior of its Paladar Latin Kitchen & Rum Bar chain, which has a location in Woodmere, and conceptualize its offshoot Bomba in Beachwood, Rocky River and Montrose.

They also styled Erie restaurant newcomers The Cork 1794 and The Skunk & Goat Tavern and — through client Aramark — have become the design darlings of stadium and arena concession stands across the country.

“We are dealing with everything from hot dog carts to suites and private clubs,” said Richardson, estimating the company has been involved in around a dozen “fan-focused, game-day experience” projects at major stadiums, from FirstEnergy Stadium downtown to the Houston Astros’ Minute Maid Park, and as many as 30 stadium installations when factoring in smaller venues.

“That has been a lot of fun and takes us all over the place,” he said.

Richardson envisions hotels and resorts as a growing portion of the company’s clientele as it enters its second 25 years in business. He especially likes the opportunity to help hoteliers “do a lot of unique storytelling” in their properties through the creative use of local culture and artifacts.

The studio’s retail business is poised to grow as well, said Richardson, who foresees opportunity in the cannabis design space in particular.

“Obviously, it’s approved medically in Ohio, but I think as early as the next three to five years, it could be legal nationally for recreation,” he said. “So we are keeping our eyes on that and visiting places like California and Colorado, where it’s legal, and just seeing how people are using design to influence that business.”

Adviser: David Lum

There’s gold in them thar brownfields With the seemingly endless suburbanization of Northeast Ohio, including manufacturing and industrial complexes, the number of viable greenfield locations for manufacturers to purchase today is small, at best.

Such scarcity, in addition to an array of financial incentives, makes brownfield sites more attractive than ever.

The Comprehensive Environmental Response and Compensation Act (CERCLA) defines a brownfield as a property, the expansion, redevelopment or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant or contaminant. Why is the redevelopment of these sites complicated? Because there is significant cost in first assessing the environmental contamination (Phase I and Phase II environmental site assessments), there is significant cost and risk in the cleanup of the site, and finally, the commercial financing of a brownfield site is extremely hard, if not impossible.

So, if brownfields are so complex, expensive and risky to redevelop, why should you consider a brownfield site?

The answer, to paraphrase the gold miners of the 1800s, is: There’s gold in them thar brownfields. With a little vision and some work and coordination, the redevelopment of a brownfield site can be a huge economic win for a manufacturer or other landowner.

Economic development incentives Local communities, counties, states and even the U.S. Environmental Protection Agency (EPA) have a tremendous incentive to

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easily reach into the hundreds of thousands or even millions of dollars, depending upon the scope of the project and job-creation potential.

Lum is a real estate attorney with Cleveland-​ based McCarthy, Lebit, Crystal & Liffman Co. LPA.

Opportunity Zones/ New Market Tax Credits Many old brownfield sites are located within federal and state Opportunity Zones that provide investors an ability to defer, defray and possibly eliminate capital gains taxes on capital invested there. Likewise, many brownfield sites are in federally designated low-income areas and may be eligible for New Market Tax Credits (NMTCs). The NMTC program attracts private investment into low-income areas by providing tax credits (up to 39%) and offering better and more flexible loan terms to the property developer.

Both the NMTC and Opportunity Zone programs are extremely complicated and require significant work to qualify for and implement, but the potential rewards are significant.

With a little vision and some work and coordination, the redevelopment of a brownfield site can be a huge economic win for a manufacturer or other landowner. clean up brownfields and put those dead sites back to work, thereby creating jobs and generating tax revenue. That’s why government agencies are willing to put their resources behind such efforts.

For example, the city of Cleveland, Cuyahoga County, JobsOhio and the federal EPA all have programs to help defray and/or eliminate the cost of the environmental assessments. Once assessed, there are also grants and low-interest loan programs to help with the cost of the cleanup. These entities also offer grants, low-interest and forgivable loan and tax credit programs to help defray the cost of redevelopment once a site has been cleaned up. The combination of these incentives can

Real estate tax breaks Finally, the state of Ohio has a little-known real estate tax break for those courageous enough to undertake a brownfield redevelopment.

If you purchase or own a brownfield and go through the Ohio Voluntary Action Plan (VAP) — a program that allows owners of environmentally contaminated sites to investigate and clean up a site and then receive a legal release from the state called a covenant not to sue —

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For example, if you purchase a brownfield site for $500,000 and are able to go through the VAP, many of the costs could be defrayed and/or paid for by the economic development incentives mentioned above.

Receiving a covenant not to sue would be icing on the cake. Further, if you invest another $1.5 million in redevelopment of the site (many of the costs of which may also qualify for the economic incentives, tax deferrals or tax credits mentioned above), you are likely to end up with a property worth approximately $4 million and the county will likely increase your real estate tax value accordingly. However, because you went through the VAP and received a covenant not to sue, you are exempt from all real estate taxes on the increase in value over $500,000 (the property value at the commencement of the cleanup) for a full 10 years.

Those savings add up quickly when you consider a typical corporate real estate tax rate of 3.5% of market value: 3.5% x $3.5 million (exempt value) x 10 years = $1,225,000 in property tax savings alone.

With the abundance of economic development incentives and tax breaks (assuming you have the courage and determination to undertake a brownfield redevelopment), the rewards can be significant and long-lasting.

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A new era of office preening gains ground JLL Inc. data show which added amenities will bring prospective office tenants to the signing table

By Stan Bullard sbullard@crain.com @CrainRltyWriter

The fountains, statues and amphitheater that new office buildings boasted a few decades ago don’t win a prospective tenant’s heart anymore.

Instead it’s now a café, plants, flowers, patios and soft seating in the lobby that may send prospects to the signing table for new leases and help landlords reap richer rents.

Andrew Batson, a Cleveland-based vice president of research for the JLL Inc. real estate brokerage, just completed a study that quantifies the impact of investing in worker-focused amenities at existing and new rental office properties.

After studying the experiences of 16 properties in Northeast Ohio over a five-year period, Batson concluded that such updates do yield benefits.

He found that investments of that sort produced a 7% average increase in rent and an 11% average increase in occupancy. He estimated the average investment was $4.7 million, but that includes expenses such as heating and air conditioning and technology updates. The study, which sampled investments only costing more than $1 million, also covered five other cities in the Midwest and found an 11% increase in asking rents and a 16% boost to occupancy in the region.

Batson conducted the study because he hadn’t found much research on the impact of amenities on economic fundamentals.

“The conversation around amenities is of extreme focus for our investor clients who are looking to in-

Greenery, a cafe, soft seating and other amenities like those shown in Key Tower’s lobby are what landlords need to offer office tenants these days, according to JLL Inc.’s Andrew Batson. (Tim Harrison for Crain’s)

crease their asset value and be competitive,” Batson explained in a Sept. 16 phone interview. “All of our corporate clients are focused on what they need to recruit and retain talent.

Given how tight the labor market is, it’s a topic of increasing focus for our corporate clients.”

Rico Pietro, an office broker and principal at the Cushman & Wakefield/Cresco brokerage in Independence, said real estate fundamentals of location and parking are the top two criteria for office tenants.

“After that, it’s a jump ball,” Pietro said. “In the past, it was a sundry

shop and conference center. Now, it focuses on something employees will use that is important to an office dweller. It’s not just a convenient place to get some gum.”

Part of the discussion, too, is based on the idea that tenants want to have such services available to them — just not in their space where they pay for them in their own rent.

“At the Western Reserve Building renovation (in downtown Cleveland, developer) Fred Geis wanted a whiteboard in the fitness center for tenants who might like to kick around ideas while they are exercising,” Pietro not-

ed. “It’s about being able to go to a coffee shop for a group of attorneys meeting on a case rather than reserving a conference center.”

David Browning, managing director of CBRE’s Cleveland office, said the rise of amenities goes along with companies emphasizing attraction and retention of employees.

“It’s about being in the right environment,” Browning said, “whether it’s downtown or in a suburban location. If you are not thinking about that, you are putting your firm at risk in terms of attracting and retaining talent.”

Given that most office buildings in

the region are older, owners are trying to figure out what improvements need to be made. For example, at the East End project in Akron, developers Stuart Lichter and Chris Semarjian took steps to change the environment at the old Goodyear Tire & Rubber Co. headquarters.

“They built a little strip shopping center with a Starbucks and an ice cream shop,” Browning said. “They made Goodyear Hall a concert venue. Along with renovating the office building, they added food service.”

Such measures helped the developers win tenants such as health insurer SummaCare and the headquarters of Babcock & Wilcox Enterprises Inc., an advanced energy and environmental technology company.

However, Bob Redmond, the Ohio broker for Mohr Partners Inc., said such amenities matter more to tenants of more than 20,000 square feet who go to larger buildings, while small tenants of 1,500 square feet or so will opt for a smaller building. He added, however, that 1980s- and 1990s-era suburban office parks are seen at a disadvantage if food service and retail are not nearby.

For his part, Batson said investments

by Millennia Cos. in adding furniture, food kiosks, a coffee shop and indoor and outdoor patios helped improve rents and occupancy at Key Tower on Public Square. He added that JLL agents often think of office space in the terms of a 3-30-300 rule: that a company pays, per square foot monthly, $3 for utilities and $30 a month for rent but $300 per employee.

That means keeping workers happy is likely to pay dividends over the long haul.

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NUCLEUS CONTINUED FROM PAGE 1

Brian Smith stands in the Tru by Hilton hotel in MidTown Cleveland, the first project he and an investor group completed under a venture he formed to develop real estate near the HealthLine and the route of the Opportunity Corridor on the East Side. (Stan Bullard)

EAST SIDE CONTINUED FROM PAGE 15

Through North Park Place Partners Inc., he and his partners shelled out $750,000 in August to buy the onetime Kaiser Emergency Hospital at 11203 Stokes Blvd. from the Cleveland Clinic. Smith said he plans to demolish the four-story building, which dates from 1965, to redevelop the site with townhouses.

At the same time, the impact of the new for-profit projects is strictly baby steps.

Frank Ford, senior policy adviser of the Western Reserve Land Conservancy, worries that attention to East Side gains may undercut efforts to continue fighting the East Side’s housing woes.

“A small pocket does not mean you have affected the larger neighborhood. Let’s not forget the job is not over,” Ford said. “Just blocks away from Ashbury there are people who can’t get $10,000 for their home.

There are parts of Glenville where residents live surrounded by abandoned homes, who worry about what happens when the sun sets.”

Meantime, John Anoliefo, executive director of Famicos, a nonprofit that has worked on community organizing and residential rehabilitation on the East Side for more than 45 years, said he is happy to see Signet, Knez and others arrive.

“The work that Famicos or any nonprofit does in a community is not to become the main developer,” Anoliefo said in an interview. “What we have

done is serve as the developer of last resort because no one is doing it. In Hough and Glenville, we have taken the time to set the table. The for-profits can see a market taking shape now and can make their money.”

For example, Famicos did various projects, from new homes to rehabs, in the Circle North for the last 15 years. One effort involved buying 13 huge, historic homes nearby on Wade Park Avenue and converting them from doubles back to single-family homes and selling them for $200,000 to $300,000.

“We sold the last one in 2018,” Anoliefo said. “That and other projects on Ashbury have allowed Knez and others to come in.”

That means the nonprofit has moved on to other adjoining areas in Glenville, where challenges remain in terms of decent, affordable housing, and has undertaken a broader mission in health and wellness.

Stanley R. Miller, a Methodist minister and retired Ohio Bell Telephone Co. vice president who grew up in Glenville and moved back from Pepper Pike, said in an interview that he believes East Side real estate development outside University Circle and MidTown is not broadly appreciated because few suburbanites travel the side streets.

“People only talk about flight from the East Side,” Miller said. “A house on Wade Park does not stay empty.

Drive it any Saturday and you see guys working from ladders. You see people walking around pushing baby carriages. So much is being done, it’s amazing.”

L oc a t e d on S W C orne r of M em p h is A ve . a t T i e d ema n R oa d C onve ni e nt l y lo c a t e d b e t w e e n I- 7 1 a n d I 480 L oc a t e d ne a r b y offi c e s for: M e d i c a l Mut ua l Inog e n R hi noSys t e m s TRG Reality HM I

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The proposed nuCLEus project remains alive, according to Ezra Stark, chief operating officer of Stark Enterprises of Cleveland. This is the view from Huron Road near Rocket Mortgage FieldHouse of the 24-story apartment and office towers that was unveiled in April 2019. (Contributed rendering)

introduced in the Ohio House on June 27 and referred on June 30 to the committee on economic and workforce development. As of Thursday, Sept. 19, it had not been scheduled for a committee hearing.

An analysis by the Ohio Legislative Service Commission estimated that each insurance tax credit would cost the state a minimum of $5 million and that there is no limit on the number of projects that could be funded.

However, to receive the funding, the

recipient of the credit would have to certify to the Ohio Development Services Agency that the project could not proceed without it.

Ezra Stark said, “No comment” when asked about the importance of the insurance tax credit to the project.

Separately, Stark Enterprises has suites on the market at its 29-story The Beacon, a 187-unit property at 515 Euclid Ave., as construction crews finish work on that project.

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Two big efforts to advance the project have come to naught since then. A waiver that Stark and J-Dek sought from prevailing wage requirements of the Cleveland-Cuyahoga County Port Authority as a requirement for financing the project was dead on arrival. That, in turn, prompted Cleveland City Council to suspend activity on a measure to provide a $12 million forgivable loan for nuCLEus based on the increase of parking tax revenues to the city due to development of the project.

David Wondolowski, executive secretary of the Cleveland Building and Construction Trades Council, said Stark Enterprises also had asked the trades to OK allowing a portion of the project to be constructed by nonunion workers.

“We’re never going to be in a position to say it’s OK to build nonunion,” Wondolowski said. “We built this city, and we’re going to continue to build it.”

However, Wondolowski said even though the trades passed on the request, Stark said it would be able to proceed if the state approved legislation to create a tax credit against insurance premiums for mixed-use projects costing more than $15 million.

The measure was approved by the Ohio Senate on June 26. It was then

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9/20/2019 11:28:01 AM

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CRAIN’S CLEVELAND BUSINESS

THE LIST

Wealthiest Suburbs

Ranked by estimated median household income POPULATION MEDIAN OWNEROCCUPIED HOUSING VALUE

5-YEAR ESTIMATE (2013-2017) (1)

HIGHEST DEGREE % CHANGE SINCE CENSUS (1)

HOUSING AVERAGE RENTER COMMUTE % (MINUTES)

RANK

COMMUNITY (1)

MEDIAN HOUSEHOLD INCOME

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

Hunting Valley

$250,000 (2)

$1,198,500

713

705

1.1%

38.4%

43.7%

267

91.4%

8.6%

26.2

Cuyahoga, Geauga

Bentleyville

$183,438

$574,800

943

864

9.1%

31.8%

49.6%

325

98.5%

1.5%

25.8

Cuyahoga

Pepper Pike

$166,786

$418,300

6,213

5979

3.9%

32.5%

45.6%

2,172

98.4%

1.6%

22.3

Cuyahoga

Gates Mills

$151,042

$488,400

2,269

2270

-0.0%

33.6%

38.7%

917

95.3%

4.7%

25.4

Cuyahoga

Moreland Hills

$141,681

$384,500

3,309

3320

-0.3%

38.9%

36.3%

1,305

91.8%

8.2%

24.6

Cuyahoga

Hudson

$128,324

$328,800

22,250

22262

-0.1%

40.0%

32.0%

7,972

85.2%

14.8%

26.3

Summit

Kirtland Hills

$117,411

$486,300

776

646

20.1%

25.8%

28.5%

285

89.5%

10.5%

25.8

Lake

Waite Hill

$116,000

$607,100

415

471

-11.9%

33.1%

29.4%

178

92.1%

7.9%

22.8

Lake

Boston Heights

$115,781

$347,500

1,209

1300

-7.0%

29.6%

24.7%

439

92.0%

8.0%

25.8

Summit

Orange

$105,167

$312,500

3,280

3323

-1.3%

31.5%

36.6%

1,326

91.0%

9.0%

19.9

Cuyahoga

South Russell

$104,219

$327,500

3,818

3810

0.2%

46.5%

26.0%

1,480

91.7%

8.3%

30.2

Geauga

Highland Heights

$103,787

$277,900

8,380

8345

0.4%

27.1%

28.8%

3,167

94.7%

5.3%

22.3

Cuyahoga

Sugar Bush Knolls

$103,750

$296,400

177

177

0.0%

19.4%

45.1%

75

92.0%

8.0%

20.3

Portage

Brecksville

$101,060

$255,900

13,522

13656

-1.0%

31.7%

22.6%

5,407

84.1%

15.9%

23

Cuyahoga

Silver Lake

$100,486

$204,900

2,450

2519

-2.7%

35.8%

20.4%

961

95.6%

4.4%

20.5

Summit

Peninsula

$99,306

$257,300

671

565

18.8%

33.5%

22.0%

271

80.8%

19.2%

29.3

Summit

Solon

$99,050

$274,400

23,068

23348

-1.2%

31.1%

31.5%

8,391

82.5%

17.5%

24.7

Cuyahoga

Bay Village

$95,524

$218,800

15,426

15651

-1.4%

38.3%

25.9%

6,062

91.9%

8.1%

25.2

Cuyahoga

Independence

$93,443

$228,900

7,132

7133

-0.0%

27.1%

15.0%

2,685

93.3%

6.7%

20.8

Cuyahoga

Avon

$92,883

$265,800

22,538

21193

6.3%

28.7%

18.8%

7,866

81.4%

18.6%

25.5

Lorain

Macedonia

$91,116

$203,300

11,715

11188

4.7%

28.1%

18.2%

4,554

92.4%

7.6%

26.7

Summit

Valley View

$88,462

$254,500

2,051

2034

0.8%

21.3%

10.7%

746

89.5%

10.5%

22

Cuyahoga

Chagrin Falls

$86,607

$335,600

4,081

4113

-0.8%

41.1%

25.8%

1,841

69.8%

30.2%

25.3

Cuyahoga

Glenwillow

$86,250

$211,800

1,047

923

13.4%

20.7%

27.3%

338

89.6%

10.4%

23.2

Cuyahoga

Beachwood

$86,026

$283,500

11,743

11953

-1.8%

24.0%

35.2%

4,598

59.5%

40.5%

22.1

Cuyahoga

Broadview Heights

$85,339

$223,900

19,262

19400

-0.7%

26.9%

20.4%

7,561

82.4%

17.6%

28

Cuyahoga

Aurora

$84,657

$246,200

15,766

15548

1.4%

32.9%

18.2%

6,193

80.8%

19.2%

27.2

Portage

Bratenahl

$84,500

$269,000

1,281

1197

7.0%

29.6%

37.1%

716

81.4%

18.6%

18

Cuyahoga

Richfield

$84,457

$239,000

3,649

3648

0.0%

26.8%

17.0%

1,394

90.1%

9.9%

26

Summit

Strongsville

$84,135

$197,000

44,711

44750

-0.1%

28.0%

17.7%

17,890

80.9%

19.1%

27.8

Cuyahoga

Shaker Heights

$82,830

$218,500

27,749

28448

-2.5%

25.3%

39.4%

11,180

64.2%

35.8%

22.9

Cuyahoga

Westlake

$81,966

$241,900

32,387

32729

-1.0%

31.7%

21.4%

13,751

73.6%

26.4%

24.9

Cuyahoga

Mayfield Village

$81,845

$245,400

3,408

3460

-1.5%

28.9%

23.0%

1,493

69.1%

30.9%

20.3

Cuyahoga

Avon Lake

$80,943

$229,300

23,489

22581

4.0%

29.3%

20.4%

9,288

80.7%

19.3%

26.5

Lorain

Westfield Center

$79,250

$204,900

1,156

1115

3.7%

22.7%

14.0%

485

90.3%

9.7%

24.1

Medina

Kirtland

$77,530

$276,500

6,819

6866

-0.7%

22.2%

17.2%

2,665

82.0%

18.0%

26.1

Lake

Seven Hills

$77,384

$166,500

11,694

11804

-0.9%

23.1%

12.1%

4,927

92.4%

7.6%

25.8

Cuyahoga

Reminderville

$76,343

$184,300

3,996

3404

17.4%

29.1%

21.1%

1,511

84.2%

15.8%

27.4

Summit

Twinsburg

$75,365

$209,000

18,849

18795

0.3%

28.5%

17.3%

7,722

73.7%

26.3%

25.5

Summit

Sheffield Village

$73,456

$194,800

4,067

3982

2.1%

15.7%

14.2%

1,624

72.8%

27.2%

22.9

Lorain

University Heights

$71,007

$158,000

13,201

13539

-2.5%

28.4%

29.2%

4,388

64.4%

35.6%

22

Cuyahoga

Green

$70,706

$186,100

25,741

25699

0.2%

24.0%

11.2%

10,060

74.3%

25.7%

22.6

Summit

Mentor

$70,625

$169,400

46,933

47159

-0.5%

20.6%

11.8%

19,621

86.0%

14.0%

22.7

Lake

Lyndhurst

$70,496

$141,200

13,678

14001

-2.3%

28.4%

20.7%

6,222

82.0%

18.0%

23.1

Cuyahoga

Timberlake

$70,357

$150,900

718

675

6.4%

14.7%

7.3%

302

94.0%

6.0%

24.7

Lake

Rocky River

$69,989

$223,100

20,273

20213

0.3%

28.9%

26.7%

8,965

72.0%

28.0%

24.3

Cuyahoga

North Ridgeville

$69,848

$164,900

32,443

29465

10.1%

21.1%

11.3%

12,381

85.5%

14.5%

27.7

Lorain

North Royalton

$69,236

$196,000

30,325

30444

-0.4%

23.5%

14.4%

12,798

72.5%

27.5%

28.1

Cuyahoga

2010 CENSUS

POST-GRAD BACHELOR'S % %

OCCUPIED UNITS

OWNER %

COUNTY

RESEARCHED BY CHUCK SODER: CSODER@CRAIN.COM

There are 136 communities on the full list. To see them all, become a Data Member: CrainsCleveland.com/data

Source: U.S. Census Bureau 5-year American Community Survey (2013-2017). The list includes communities in Cuyahoga, Lorain, Medina, Summit, Portage, Geauga, Lake and Stark counties. Send feedback to Chuck Soder: csoder@crain.com (1) All figures (other than 2010 Census population) are estimates based on surveys conducted between 2013 and 2017. Estimates for smaller communities tend to be less reliable. Margin of error information can be accessed through the bureau's FactFinder database. (2) Income exceeds $250,000. Census database would not report a higher number.

P022_CL_20190923.indd 22

9/20/2019 10:58:23 AM

CRAIN’S CLEVELAND BUSINESS

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S E P T E M B E R 2 3 - 2 9 , 2 019

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PA G E 2 3

LIST ANALYSIS

Chagrin Falls quickly climbs list of wealthiest suburbs Chagrin Falls median household income

By Chuck Soder csoder@crain.com @ChuckSoder

In 2016, Chagrin Falls was ranked No. 63 on our Wealthiest Suburbs list — nowhere near high enough to make the print version of the list.

But the East Side suburb has spent the past three years leaping past other towns on the list.

This year, Chagrin Falls is ranked No. 23, with an estimated median household income of $86,607, up nearly 50% since we first published the list in 2016, according to historical data included in the Excel version of the list, which is available to Crain’s Data Members.

Numbers on this list are from the U.S. Census Bureau’s American Community Survey. The survey doesn’t collect data from every resident in town; thus, the $86,607 figure has a margin of error of nearly $15,000 (so there’s a 90% chance the real number is within $15,000 of that figure).

But a 50% increase over four years — which equates to nearly $29,000 — is well outside the margin of error, even if this year’s figure was particularly high and the 2016 figure was particularly low.

There’s no way to be sure what

2013-2017 survey:

$86,607

2012-2016 survey:

$75,260

2011-2015 survey:

$65,523

2010-2014 survey:

$57,978

Source: U.S. Census Bureau 5-year American Community Survey

could be causing those income estimates to rise, but Rob Jamieson, chief administrative officer for the village of Chagrin Falls, has a few ideas.

First, he said a handful of high-end developments have sprung up in town over the past decade. He pointed to the Falls Walk and Bramley Court housing developments, and townhouses on West Orange Street.

He also cited a rise in the rehabilitation of historic homes over the past five to seven years.

The timing is key: Income estimates on this year’s list come from surveys conducted over the course of five years, from 2013-17.

During that period, “the desire for a small, walkable community has increased,” Jamieson said, The economy also grew considerably during that time, which likely helped a lot of towns on the list.

The vast majority of the 73 munici-

palities that were on the full digital list in 2016 saw their median household income increase significantly since we published that list. The median increase for that group was 6.25%.

As for the 136 communities on the digital version of this year’s list, most saw their median household income estimates rise compared to last year’s list.

The median increase was nearly 2.8%, which beats inflation for any of the five years in the survey period.

Granted, changes show up slowly on this list, given how the American Community Survey is conducted: Data on this year’s list was collected from 2013-17 and thus overlaps significantly with last year’s data, collected from 2012-16.

So if everyone in a given city won the lottery or lost their jobs in 2017, data from those survey respondents would be mixed in with/blunted by data collected in previous years.

As always, Hunting Valley is No. 1 on the list, with median household income there exceeding $250,000 (the U.S. Census Bureau’s database won’t spit out a higher number than that for median household income).

The highest-ranked city with a population of at least 10,000 is Hudson at No. 6, with an estimated median household income of $128,3234.

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3550 Lander Road • Pepper Pike 9/20/2019 1:27:16 PM

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CRAIN’S CLEVELAND BUSINESS

AKRON

New president comes on board at Segmint Former Deluxe Corp. VP is replacing Segmint founder, will attempt to increase company’s 5% market share

By Dan Shingler

“This is a small business, so we need to grow our active customer base. When we do that, we’ll need more people.”

dshingler@crain.com @DanShingler

Segmint founder Rob Heiser isn’t stepping away from the company, but he is moving over to make room for a new president as the 12-yearold data analytics business enters its next stage in its life and prepares to raise new capital.

Segmint has hired Adam Craig, a former vice president in charge of the digital engagement business unit at Deluxe Corp. in Atlanta. Deluxe is a company known to many consumers as a printer of checks, but more banks and small businesses are getting to know it as a provider of broad-based digital and traditional marketing services.

That’s a good fit with Segmint’s core business of providing data analytics to banks and other financial service providers in order to help them better understand their customers and the performance of their products, Heiser and Craig said.

“About four months ago, we went on a search to hire a president,” Heiser said. “We’re growing really fast, and the board and I both wanted someone with experience. I’m not going anywhere, but we really wanted someone who would be able to ramp up and grow the business. …

— Adam Craig, new Segmint president

We’re a great yin and yang. I’m a great product guy and am an entrepreneur, and he’s a great business guy.”

Heiser will remain with the company as a board member to help it with future direction and strategy while Craig runs the day-to-day business as president, Heiser said.

For at least the time being, Craig will commute from Atlanta and spend his weekdays at Segmint in Akron, he said. There’s a chance the company eventually will have satellite operations in Atlanta, but Segmint will keep its headquarters and main operations in Akron, he said.

“If we can get our growth to where it needs to be, maybe a satellite office in Atlanta,” Craig said. “There are more fin-tech (financial technology) companies in Atlanta than any other whole state, … but I’ll be in Akron every single week.”

He added with a laugh, “I do not have secret plans to move the company to Atlanta.”

Privately held Segmint does not disclose its revenue, but Craig’s main mission will be to grow sales and increase the number of relationships the company has with financial institutions, he and Heiser said.

That means increasing market share beyond the roughly 5% of the nation’s approximately 11,000 banks and savings institutions that Segmint serves and moving upstream to provide those services to larger clients, Craig said. He said the business itself, which principally provides its products in a software-as-a-service format, can be easily scaled up, but it first will require more investment in marketing, probably more people and more money.

“This is a small business, so we need to grow our active customer

base. When we do that, we’ll need more people,” Craig said.

“Like many small businesses, we certainly need capital, and we will do a raise,” he continued.

He declined to specify yet how much new capital Segmint will seek, but said that will likely come out soon.

“We’re literally days away from putting together that capital raise,” Craig said in a Sept. 17 interview during his third day at his new post.

As for Heiser, he said he’ll remain focused on Segmint, though he doesn’t rule out the possibility of founding another startup at some point.

If he does, he’ll likely bring along some of the same investors who have backed Segment. Though the company still needs to grow, investors have been pleased with its performance and Heiser’s leadership, said Tom Tyrrell, a current and founding investor with Segmint who’s been involved with many entrepreneurial endeavors in Northeast Ohio over the past 30 years.

Tyrrell said Segmint has had solid growth and is just making the natural transition from the stage where it needs a visionary entrepreneur to having a more purely managementoriented president at the helm.

Venture capital investors have learned to be more patient in recent

years, Tyrrell said, especially with investments in companies trying to penetrate the financial services and health care arenas. That can take more time but also offer more reward, Tyrrell said.

“You find out when you’re in the institutional investing arena or you’re an early stage investor: It used to take five to seven years for an investment to come to fruition. Now, it’s more like 12 or 15,” Tyrrell said.

He said Segmint has taken a bit longer than expected to reach the point where initial investors might cash out, but by today’s standards, its performance is in line with other successful startups.

Tyrrell said he thinks the company will reach its next goals and possibly afford some investors a profitable exit soon.

“You need the company to get to $5 million to $10 million in revenue, which we’re on a path to do in a reasonably short period of time. Once you get there, two things can happen.

One, someone decides they want to buy you out, or two, you get an investment from a private capital firm … and that enhances the value of the company,” Tyrrell said.

But if Tyrrell cashes out, he said he hopes Heiser does another startup so he can put his money into that.

“I’ll always invest in him,” Tyrrell said.

EASiBuy’s winning bid: saving governments money Reverse auctioneer will move from Hudson to Kent in early 2020, does biz with likes of New York and L.A.

By Judy Stringer clbfreelancer@crain.com

Ben Koberna isn’t timid when it comes to goal-setting for his reverse auction company EASiBuy. “There are 44,000 political entities in the country,” he said. “We just want to talk to every single one of them and tell them what we do.”

EASiBuy helps organizations get the most bang for their buck by developing and running digital reverse auctions where suppliers compete against one another to offer the lowest price or the best value. Since launching the software and bidding service a decade ago, Koberna said the Hudson company has saved buyers $316 million. More than 70% of its 200-plus clients are municipalities, states or the federal government.

And that’s just the tip of EASiBuy’s public procurement iceberg, so to speak. Between General Services Administration qualification — which means the company and its contracted fees are listed on the federal vendor schedule — and a slew of state contracts, Koberna estimates 80% of public procurement officers could use EASiBuy’s services today.

“Part of this move is to grow into that,” he said of a planned relocation to Kent early next year. “We have got to get operations teams built to run a higher volume of bids, for example, and sales teams to manage a higher number of accounts and assist clients through the contracting process. …

This was an opportunity to take a raw space and create what we needed.”

P024_CL_20190923.indd 24

The “raw space” is the upper level of 265 W. Main St., a vacant building that sits just over the Cuyahoga River from Kent’s main commercial district. Koberna said a $75,000 JobKoberna sOhio grant is helping to fund the $300,000 buildout of the space, which is currently “two large warehouse-like” rooms.

Plans call for an open central desk area in each of the large rooms, with private “phone rooms” and offices on the perimeter.

“Everything here is very collaborative,” Koberna said, “so our guys and girls like to work together, especially when they’re running a bid. But it is not uncommon for the EASiBuy team to need to contact 100-plus suppliers a day, and they need a quiet space for that.”

Supply-side help While a number of companies sell or license software that allows federal buyers to conduct their own reverse auctions, Koberna said EASiBuy is one of the few that manages auctions, too.

The distinction is important for a number of reasons. Chief among them is finding and qualifying suppliers. For an auction to be successful, there have to be multiple bidders.

But becoming qualified to bid for a public contract is a high bar, he said.

Many contractors either don’t know

how or don’t want to bother with the paperwork.

So a big portion of EASiBuy’s process is researching potential suppliers once it gets bid specs and holding the supplier’s hand through qualification.

As a third-party administrator, EASiBuy helps mitigate any appearance of impropriety as well. Contact during the auction is between EASiBuy and the vendor, or EASiBuy and the client, and everything is logged and recorded.

Koberna said EASiBuy software, developed in-house, also handles more complex auction requests, such as scoring vendors on factors other than price and flagging problematic bids. When contract specs are based on a buyer’s previous contract, for instance, sly vendors often deeply discount prices on large-quantity items they know won’t be purchased in the same degree during the current contract to boost their overall score.

“Our software sniffs out those bids,” he said, “and our team drills in to confirm with the suppliers that they will honor the abnormally low price.”

One of EASiBuy’s most prolific clients is Los Angeles. Since 2011, Koberna said, the company has run 119 reverse auctions for the city and saved taxpayers there an estimated $25 million. It also has a contract with New York, where a recent reverse auction shaved 30% off the state’s previous office supply contract with Staples, reducing spend from $24 million to $16.7 million.

“That’s probably closer to a $60 million dollar contract because we only had the direct state volume,” he

said, “but every school district in the state buys off of this.”

Other clients include Koberna’s hometown of Hudson, Chicago, Rhode Island and the Cayman Islands.

EASiBuy gets paid, according to Koberna, when organizations purchase goods from the auctions it facilitated, from 1% on major multimillion-dollar contracts to 3% on small $100,000 deals. If the purchasing organization does not achieve its savings goals, EASiBuy waives its fee.

Koberna said a surge of fees for contracts it managed in the past three to five years began fueling pretty healthy revenue growth in late 2017. In 2018, revenues for the privately held firm increased by 45%. It met that same benchmark by August of this year.

“We call this gravy time,” he said.

Zoning in A move to Kent has been on Koberna’s radar for some time. The Kent State University music major said he “never really left” the college town. In addition, the bulk of the company’s new hires are right out of college — many of them from KSU — and the Kent vibe appeals to that crowd.

Kent is also in a federal Hub Zone.

Small businesses based in the city can qualify for federal dollars set aside for spending in historically underutilized business zones, which are determined by census data.

“What that means is that if I am up against a competitor that is not headquartered in a Hub Zone, I will have an advantage,” Koberna said. “And in some cases, when there’s more than

one Hub Zone supplier, they don’t allow anyone else to bid on it.”

Other local Hub Zones include Akron and Canton, according to Rich Delisio, procurement specialist at the Ohio University Voinovich School Procurement Technical Assistance Center. The Small Business Administration program runs parallel to “set asides” (i.e., limited competition) objectives for small businesses owned by women, disabled veterans and/or individuals with a low personal net worth, Delisio said.

The federal government’s goal is to award at least 3% of all federal contracting dollars to small companies located in Hub Zones. However, Delisio said, “35% of the employees also must live in a Hub Zone for the business to be certified by the SBA for that program.”

Koberna does not expect the 35% requirement to be an issue. For one thing, those employees can live in any Hub Zone, not just Kent. Commuters from Akron and Canton or even remote workers in other designated zones — EASiBuy currently has a Cincinnati-based employee — would contribute.

And the company plans to continue hiring from KSU, anticipating many of the recent grads will stay in town. As part of the JobsOhio grant, EASiBuy agreed to add 15 employees over the next three years. The company currently has a staff of nine.

“As we hire to fulfill the grant obligations, this will absolutely play into our position marketing and decision process, which I think is the point of the program,” Koberna said.

9/20/2019 11:05:34 AM

NOW ANNOUNCING THE 2019 40 UNDER 40 CLASS! These young professionals are scaling businesses to new heights, making decisions that put their organizations on the map and producing a seemingly infinite stream of impactful

NOV. 25 6 – 9:30 PM

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work all over Northeast Ohio. Crain’s Cleveland Business congratulates this year’s 40 under 40 class!

Tyler Allchin

James Hardy

Vishal Bhatt

Dionne Hernandez-Lugo

Henry “Champ” Burgess III

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Ricardo León

BioEnterprise

Akron Children’s Hospital

University Hospitals

Apple Growth Partners

Cleveland Cavaliers

Calfee, Halter & Griswold LLP

Minds Matter Cleveland

Bialosky Cleveland

Porter Wright Morris & Arthur LLP

Kendra Gardiner JumpStart Inc.

Stacey Gardner-Buckshaw

Northeast Ohio Medical University (NEOMED)

Kenya Guess

Bonnie Speed Logistics

Mark Hamer

Garage Creative Studios

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Summit County Council

City of Akron

NASA Glenn Research Center

Akron Urban League

Drink Local Drink Tap

Athersys Inc.

The MetroHealth System

Ancora

TRG

Metro West Community Development Organization

Marianella Napolitano

The Centers for Families and Children & Circle Health Services

Kevin Nowak

CHN Housing Partners

Ramya Ramadurai Rockwell Automation

Isaac Robb

Western Reserve Land Conservancy

Autumn Russell

MAGNET: The Manufacturing Advocacy and Growth Network

Tiffany Scruggs

Greater Cleveland Food Bank

Alicia Stone KeyBank

Danielle Sydnor

Economic & Community Development Institute (ECDI)

Paul Tesar

Cleveland State University

Case Western Reserve University School of Medicine; Convelo Therapeutics Inc.

Kristen Lucas

Julia Tosi

Fairport/Luma Wealth

Squire Patton Boggs

Erin Luke

Howard Washington II

Thompson Hine LLP

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LEARN MORE ABOUT THE CELEBRATION AND REGISTER TODAY: crainscleveland.com/crains-events | #crains40 Event/registration questions: clevents@crain.com | Sponsorship opportunities: Megan Lemke • mlemke@crain.com PRESENTING SPONSOR:

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PEOPLE ON THE MOVE CLASSIFIEDS

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

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RDL Architects, Inc.

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American Cancer Society

GrayWolf Residential Services

RDL Architects is pleased to announce the appointment of Haley Christopher to the leadership position over the firm’s internal operations groups. In this newly created role, Haley will develop operation standards, procedures and practices in support of the firm’s continued growth. Haley will remain active in the Interior Design Studio in a lesser capacity than her previously held position as ID Studio Director.

Centric Consulting is pleased to welcome Tim Hoolihan to its Cleveland office as Practice Lead for Data & Analytics. Tim will work with Centric clients to solve business problems with a focus on data strategy, organization, visualization, machine learning, statistics, and artificial intelligence. Tim organizes the Cleveland R User Group, has created a set of video courses for Machine Learning in R and has given conference talks on R, Python and Machine Learning.

Constance Pyles joins Aurum as a Client Service Manager. She has more than 25 years of financial services experience in areas that include brokerage, banking, institutional trusts and wealth management.

Connie utilizes her client-first administrative expertise to strengthen existing relationships and cultivate new opportunities.

Connie has a Master of Business Administration from the University of Phoenix.

The American Cancer Society, North Central Region is pleased to announce that Donna Ferrante has been named the Executive Director of the Cleveland/Northern Ohio Area.

Ferrante is responsible for leading community development and volunteer engagement to drive mission, advocacy and revenue growth across the market. Previously, Ferrante served as the director of business development at the Cleveland Clinic. Ferrante is an accomplished leader with more than 20 years of experience.

GrayWolf Residential Services is pleased to announce that Melissa P. Mitchell has been appointed as Director of Operations and Jay Etling has been named Lead Service Mitchell Technician. Melissa leads GrayWolf Residential Services, a scheduled preventative home maintenance service company.

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LAW FINANCIAL SERVICES

RDL Architects, Inc. RDL Architects is pleased to announce the promotion of Katalin Signs, MBA, to Interior Design Studio Director.

Katalin joined the firm in 2017 holding a bachelor’s degree from the Art Institute of Colorado, an MBA from the University of Dayton and 14 years of experience in design and business. Katalin’s focus on relationships, her incisive business practices and leadership qualities will continue to structure and grow RDL’s Interior Design Studio across markets and regions.

Aurum Wealth Management Zachary G. Williams, RICP®, joins Aurum as a Financial Advisor, Education Specialist.

He helped individuals and businesses make sound and informed decisions regarding their current and future finances throughout his 10 years in the financial services industry. With a focus on each individual’s unique circumstances, Zach primarily works with corporate retirement plans and their participants to achieve their desired financial goals. He has extensive experience assisting individuals with 403(b) and 457 accounts.

CONSTRUCTION

Dunlop & Johnston, Inc. Dunlop & Johnston, Inc. has announced a new addition to their team. Gina Pastuszynski joined the 109-year old Construction Management firm as their Marketing & Business Development Manager. Gina brings over 20 years of marketing, communications, branding, and business development experience. In her role, Gina will focus on strategically securing new opportunities in the educational, healthcare, government, institutional, religious, arts/ culture, recreational, and commercial industries.

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Weston Hurd LLP Weston Hurd welcomes new partner Jonathan A. Good.

Jon has extensive experience in employment and labor, health care, business and transactional matters. He represents clients in matters involving: FLSA, retaliation, ERISA, workers’ compensation, medical board issues, long term care, HIPAA compliance, breach of contract, fraud, acquisitions, joint ventures, and operating and distribution agreements. Jon received his B.A. from Dartmouth College and his J.D. from Cleveland-Marshall College of Law.

FINANCIAL SERVICES

Weston Hurd LLP Korinna Gundrum has joined Aurum as Manager, Retirement Plan Services. She has worked in the financial services industry for 15 years, specializing in selling, servicing and administering retirement plans.

Korinna assists clients in their role as Plan Sponsor. She strives to expand clients’ retirement plan understanding while identifying potential ways to enhance their current retirement benefit programs. Korinna graduated from Purdue University with a bachelor’s degree in economics.

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SOURCE LUNCH

Brian Lane President and CEO, The Center for Health Affairs/CHAMPS Healthcare At 31, Brian Lane became the youngest senior executive in the American Hospital Association’s history. ¶ He worked for the national association for eight years before his mentor told him that they’d groomed him to be a “Swiss Army knife” in health care, so it was time to leave and get some new experiences. ¶ In 2008, he left the AHA and over the following decade gained experience in medical devices, medical education, marketing, technology, entrepreneurship and more. Now, he’s brought all of those skills to Northeast Ohio’s health care scene. ¶ In May, Lane became president and CEO of The Center for Health Affairs, the nonprofit advocate for Northeast Ohio hospitals, and its business affiliates, CHAMPS Group Purchasing and CHAMPS Oncology. He succeeded Phil Mazanec, who had been interim president and CEO since January 2018, following the December 2017 departure of then-CEO Timothy Jarm, who held the role for less than a year. ¶ Lane said as long as he’s challenged and welcomed by the community, he sees himself in Cleveland for decades. ¶ The conversation has been edited for clarity and length. — Lydia Coutré

The Lane file Favorite musician Currently, Greta Van Fleet

Favorite food Lasagna (he’s open to recipe suggestions)

Hobbies Spending time with his wife, daughter and dogs. Plus, bicycling, hiking and spending time outdoors.

Something he wishes he could do Complete a triathlon and climb mountains

Lunch spot Republic Food and Drink 1425 Euclid Ave., Cleveland 216-400-7133

The meal Cream of chicken soup, garden salad and iced coffee; Beyond Burger with fries and iced tea

The vibe Nestled in the heart of Playhouse Square, Republic for lunch offers soup, salad and sandwiches with an option for a trio. If catching a show in the evening, the dinner menu offers the likes of braised shortribs, rainbow trout and baked mac and cheese.

The bill $44.69 with tip

You came into the organization after some turmoil in leadership.

What are your immediate goals?

I don’t know if it’s turmoil. You know what I like to think of it as: There was a revolving door, and there were evolving expectations. My focuses and priorities are No. 1, we’re in strategic planning at this immediate time. I’m out to increase overall membership value. I am enhancing the overall connections within the community. I’m enhancing the relationships as well as the connections with every single one of the top health care leaders of this health care community, along with just the membership base. And then I’m doing (something) a little bit different, which is I’m reaching out to all the state and metropolitan associations. The regional associations and the metros have now become part of the states.

Or the metros or regional associations have dissipated, they’re gone. And part of it’s because of dues dependency. So membership pays dues into an association. That’s typically how it works. Many are still extremely dependent. We’re not.

Eight percent of our revenue comes from membership dues. Champs Oncology plus Champs GPO (help).

The buoyancy is the fact that we have one of the largest (group purchasing organizations) in the market. Then, you’ve got the other buoyancy, which is you’ve got one of the largest oncology practices within the market. My focus (has been to) make sure that the members are happy, which is primarily consisting of the board.

And then at the same token, increase our visibility.

What are the things you’re doing that people don’t know about, that you’d like to raise awareness of?

Number one, we’re in the process right now of building now what they call the community health assessment. So the assessment itself is a really unique situation where you have community health care leaders, departments of health, hospitals and the community all sitting at the table. So we’re the convener. ... Another intention, along with the core staff, is to build out an educational platform and hub for the center.

platform for the membership and for national.

Why is education so important to you?

Well, one, it’s the No. 1 means to get messaging out. And as an association, it’s a duty. It’s a duty to provide that education to not only your membership but to your community. And so in the past, what we’ve done is we’ve done events, but what we haven’t had is a platform to actually provide that education with, such as webcasts, web conferences, continued education. That we’re talking about now. That’s the evolution. Many years ago, we used to actually do videotapes. We used to have a library and then we would push out the education to the different hospitals back in the ’70s and ’80s.

So you want to create a model that other associations can emulate to be able to stick around?

One hundred percent. Not only do I want to create the model that they can emulate, I want to be able to actually give them that model and then work with them on how to actually implement it, use it and then get it up off the ground and make it successful.

So you’re getting back that education piece?

Yeah, we are. We’re getting back to the roots of the education and providing education on a variety of different issues. We will be building out a full educational

What do you see as the biggest challenges going forward?

Well, one, it’s running three different organizations. So you’re running an association, you’re running two for-profit businesses. And then you’re trying to obtain additional visibility within the space. And I’m actually building new companies as well as new partnerships. My aim is to offset the dues and then build out new service provisions, which other associations can use to survive.

That’s my big goal.

What do you see as some of the other opportunities?

The biggest one, and what’s needed here more than anything, is there needs to be a central datapoint of the different hospitals and start building out additional analytics, reports, data queues. But basically, each hospital has been building out their own data powerhouse. What they’ve never done is, people haven’t been able to pool their data together, because they’ve never had like a neutral party to do that.

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

Chairman Keith E. Crain Vice chairman Mary Kay Crain President KC Crain Senior executive VP Chris Crain Secretary Lexie Crain Armstrong CFO Robert Recchia G.D. Crain Jr., Founder (1885-1973) Mrs. G.D. Crain Jr., Chairman (1911-1996) Reprints: Laura Picariello, 732-723-0569 or lpicariello@crain.com Customer service and subscriptions: 877-824-9373 Volume 40, Number 38 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for the last week of December, at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230.

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THE WEEK End of an era

construction on a new global headquarters and innovation center.

The fluid systems maker said the new building will be at the same site as its current headquarters in Solon.

The new space will be about 130,000 square feet, with room to house 250 current associates and more as the company grows in the future. The three-story building will wrap around the manufacturing plant on the site.

Beth Mooney, the chairman and CEO of Cleveland-based KeyCorp since May 2011, will retire from the financial services giant next year.

And her successor already is in place.

Key announced that in anticipation of Mooney’s retirement on May 1, 2020, it has appointed Chris Gorman as president and chief operating officer, and as a member of the board of directors, effective immediately. Gorman, who is currently president of banking, then will succeed Mooney as chairman and CEO next May. Mooney, who joined Key in 2006, has become one of the most prominent figures in the U.S. banking industry.

That’s a wrap Swagelok Co. soon will begin

P027_CL_20190923.indd 27

Timken grows

Beth Mooney, who has been KeyCorp’s CEO since 2011, will retire in May. She will be succeeded by Chris Gorman. (Contributed photo)

The Timken Co. of North Canton bought BEKA Lubrication for $165 million.

BEKA, based in Pegnitz, Germany, supplies automatic lubrication systems for wind energy, food and beverage manufacturing, rail, on- and off-highway vehicles and equipment, and other industries.

Timken did not disclose BEKA’s revenues, but said the company employs about 900 people and will complement Timken’s existing international power transmission and bearings businesses.

Checks in the mail The Ohio Bureau of Workers’ Compensation is about to start sending up to $1.5 billion in dividend checks to employers.

The rebates are the result of what BWC said were strong investment returns, falling injury claims and other agency cost savings.

BWC said it will mail about 177,000 checks, in seven batches, over four weeks. Checks for public employers will be sent starting Sept. 26, followed by private employers through Oct. 24.

9/20/2019 1:16:58 PM

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