Crain's Cleveland Business

FINANCE

MOVES: Crain’s Cleveland Business names Mike Schoenbrun as publisher. PAGE 23

Lightship Capital is bullish on Northeast Ohio. PAGE 6

CRAINSCLEVELAND.COM I SEPTEMBER 28, 2020

WHAT’S NEXT?

The city of Cleveland said it will seek out the ‘highest and best use’ for the 2.2 million-square-foot I-X Center, which announced on Sept. 16 that it will close, citing the pandemic as the cause.

| PHOTOS BY JEFFREY L. KLAUM/I-X CENTER

Ideas for the I-X Center range from new management to distribution — or even demolition

BY MICHELLE JARBOE

The looming shutdown of the I-X Center presents a 136-acre opportunity — one that's being met with ideas ranging from new management to demolition.

The fate of the 2.2 million-squarefoot building next to Cleveland Hopkins International Airport rests with its landlord, the city of Cleveland. And, so far, officials aren’t saying much.

In the wake of this month’s announcement that the center’s longtime private operator is closing the

doors, Mayor Frank Jackson simply said the city will seek out the “highest and best use” for the property.

The city hasn’t offered a timeline for making a decision.

So what is that highest and best use?

Well, it depends on whom you ask.

Event producers say the I-X Center, one of the nation’s largest convention facilities, is unparalleled in its ability to host giant consumer shows. It’s five times the size of downtown’s Huntington Convention Center of Cleveland and surrounded by 7,200 parking spaces.

One casualty of the I-X Center’s closing is the Indoor Amusement Park.

But real estate brokers and economic development professionals argue that there’s a higher calling than hosting the Cleveland Auto Show, the Great Big Home and Garden Show and other events. They see potential to remake the building, a World War II-era bomber plant, as a distribution and logistics hub or an aerospace facility.

Or, perhaps, the I-X Center should be razed for a new airport terminal.

“I think we’ve got to be a little bit bolder and not just be attached to a building,” said John Sankovic, pres-

ident and CEO of the Ohio Aerospace Institute, a nonprofit research outfit with an office near the airport and NASA Glenn Research Center.

Constructed in 1942, the I-X Center has evolved from manufacturing space to storage to a mecca for event-goers. Ray Park, founder of the Park Corp. business conglomerate, bought the then-distressed property in 1977 and opened the I-X Center eight years later.

See I-X CENTER on Page 21

FOCUS

ECONOMY

MEETING AND EVENT PLANNER

Turning the tide on the regional economy

COVID-19 begs the question: When will we meet again? PAGE 12

NEWSPAPER

VOL. 41, NO. 35 l COPYRIGHT 2020 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

P001_CL_20200928.indd 1

Cleveland Innovation Project moves to scale up water-related industries

BY JAY MILLER

The latest approach to rejuvenating the regional economy began a quiet rollout last week when the federal Economic Development Administration (EDA) awarded a $600,000 grant to the Cleveland Water Alliance (CWA), a 6-year-old nonprofit that will use the money to support the scaling up of the region’s water-related industries.

It’s the first visible step in a plan to stimulate the region’s struggling economy developed by the Cleveland

Innovation Project (CIP), a collaboration among two philanthropies — the Cleveland Foundation and the Fund for Our Economic Future — and three business and economic development groups — the Greater Cleveland Partnership (GCP), JumpStart Inc. Pinney and Team NEO. The alliance was a reaction to several stark, public reminders that the region’s economy is not reversing its long-term decline.

In February 2018, the Fund for

Our Economic Future issued its ”Two Tomorrows” report that argued that maintaining and growing the region’s economic vitality will depend on the ability to provide training and equal opportunity for jobs for everyone in the region. Then in June 2018, attorney Jon Pinney offered an unvarnished assessment of the regional economy in a City Club of Cleveland speech.

See INNOVATION on Page 22

9/25/2020 1:58:47 PM

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GOVERNMENT

Matt Zone to step down from Cleveland City Council

Zone will replace Jim Rokakis as vice president at the Western Reserve Land Conservancy BBY KIM PALMER

After 19 years on Cleveland City Council, Ward 15’s Matt Zone announced in a letter to constituents that he will step down in November and replace Jim Rokakis at the Western Reserve Land Conservancy.

Zone, who has represented the Detroit Shoreway, Edgewater and parts of the Ohio City, Cudell and Stockyard neighborhoods since 2001, plans to recommend Jenny Spencer, current managing director of the Detroit Shoreway Community Development Organization (DSCDO) and Cudell Improvement Inc., for his seat.

Cleveland City Council members with less 50% of their term pending are permitted to recommend a replacement for their vacant seat, which is then up for vote by the full council. There is no word on who would replace Spencer at DSCDO and Cudell Improvement.

The councilman’s decision came after months of deliberating on his next career step, which included a possible run for Cleveland mayor in 2021.

“I made up my mind that I was not running for re-election for City Council, which I shared at community meetings. I was seriously contemplating running for mayor, but stepping away from politics was also very intriguing,” Zone said.

Zone will leave his position as vice chairman of council’s Finance Committee and as chair of the Public Safety Committee, a position he has been criticized for holding as the father of a Cleveland Police officer.

“Matt is going to be a tremendous loss,” said City Council president Kevin Kelley, who has served on council with Zone for 15 years.

After the fatal shooting of Tamir Rice by a Cleveland Police Department officer in 2014, Zone brought city officials, council members and police union president Steve Loomis together and held community listening sessions around the city.

“He said we are not going to talk.

We are going to go out and we are going to listen and get feedback from people and let them know we are here to listen,” Kelley said. “That action took a lot of the steam, a lot of the pure anger, out of the air and was a step toward healing.”

In the nearly two decades of Zone’s time on council, his ward has seen development on a transformational level as Detroit Shoreway became one of the fastest-growing neighborhoods in the city.

“Zone is very good at looking at the big picture and is constantly bringing people together,” said Raymond Bobgan, executive artistic director at Cleveland Public Theatre and a Detroit

Zone

Rokakis

Shoreway neighborhood resident.

Bobgan, who moved to the neighborhood 25 years ago, has worked with Zone on developing the Gordon Square Arts District.

“Back then, it was like starting from ground zero. Buildings were boarded up and the streets were not maintained,” Bobgan said. “There was almost nothing here. The only economy was a black-market economy.”

An impressive $30 million was raised and invested — including more than $15 million for the restoration of the Capitol Theatre and renovations at the Cleveland Public Theatre — in rehabilitating the parking and streetscape around the West 65th Street and Detroit Avenue neighborhood, which in 20 years has made a complete transformation.

During Zone’s tenure, just north of Gordon Square saw more than $200 million spent on development of new high-end townhomes and apartments on a former industrial brownfield at

Battery Park, and the redesign of Cleveland’s West Shoreway added lake and beach access for bikes and pedestrians.

Zone’s work on development always has been paired with his commitment to sustainability, according to David Beach, former executive director of EcoCity Cleveland.

Zone’s work with Cleveland EcoVillage — a special design district committed to energy-efficient, green and transit-oriented development — began when he was on a steering committee in the 1990s. That work helped to motivate Zone to run for City Council, he said.

“For Matt, it is not just sustainability for the political reasons. He really believes in sustainability and over time became an impressively informed advocate for sustainability in the neighborhood,” said Beach, who partnered with Zone and DSCDO to create EcoVillage.

Following in Rokakis’ footsteps as senior vice president of the Western Reserve Land Conservancy, a nonprofit conservation organization, and as director of Thriving Communities Institute, a program designed to use land banks to help revitalize urban communities, is a natural fit for Zone, who also was integral in creating the city’s Office of Sustainability in 2004.

Zone stressed that he has been a “big fan” of Rokakis since his days in

college interning at Cleveland City Council. Rokakis also served for 19 years on the council, then was elected Cuyahoga County treasurer from 1997 to 2011, before leaving government to help lead the land conservancy.

During his tenure as treasurer, Rokakis was instrumental in crafting state legislation that streamlined the foreclosure process for abandoned properties, and he founded the Cuyahoga County Land Reutilization Corp., the first county land bank in the state.

“We went from a few land banks to 61 individual land banks,” Rokakis said. “Through the land conservancy and this network, we raised more than $440 million. We have taken down more than 40,000 vacant structures.”

Rokakis said he always had planned to leave the land conservancy after 10 years but will continue to consult when needed. He has plans to work in the private sector beginning in 2021.

Zone joins the organization just as it kicks off an ambitious “Reforest Our City” program aimed at rebuilding Cleveland’s tree canopy.

The program goals are to raise $350 million to help plant more than 50,000 trees in Cleveland between 2020 and 2030 and to grow the tree canopy from 19% to 30% by 2040.

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

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BY STAN BULLARD

Hanna Commercial Real Estate, the Cleveland commercial brokerage belonging to Pittsburgh-based Howard Hanna Real Estate Services, is taking a page from its corporate parent’s playbook and entering business brokerage.

It’s a natural move for the Howard Hanna empire that offers homebuyers one-stop shopping for related services typically provided by third parties.

The company not only includes its household-name residential brokerage but offers services from lending, title and escrow to insurance services.

That provides opportunities for cross-selling and additional profit centers from peddling properties.

And in typical Hanna fashion, it’s jumping into business brokerage by acquisition. In this case, it bought Clifton Capital, a business sales firm operated by Tom Jelepis, a high-profile commercial real estate professional, and business partner Dennis Dunn.

Mac Biggar, president of Hanna Commercial, said in a video interview that the move “checked a lot of boxes” for an ancillary business the commercial brokerage has long wanted to pursue, also a new endeavor for Howard Hanna.

“In our experience, it’s very common for business owners to have specific needs in both real estate and business planning,” Biggar said.

“Now, with our expanded services, Hanna Commercial will be able to better support business owners and help them make the connections and plans they need to succeed.”

Biggar said Hanna Commercial sees it as another step in building a full-service organization that can benefit from Howard Hanna’s network and wide geographic reach.

“We run across a lot of businesses that may want to sell the real estate as well as the business that goes with it,” he said.

Conversely, Jelepis said on the same video call, Clifton thinks there are advantages to associating with

Dunn

Jelepis

Hanna Commercial because of the 13,000-agent reach of Howard Hanna.

Jelepis said venturing into business brokerage, where he received professional certification, was like an additional education. “(Dunn) and I have both sold businesses and know what it takes to sell a business, which is different than selling a building,” he said.

Jelepis previously launched Bass Real Estate and sold it to Coldwell Banker Commercial before going into business sales. Dunn operated and sold Garden Food Services, a Middleburg Heights food vending business he expanded into a coffee service for companies.

While business brokerage is commission-based like realty brokerage, it requires the ability to assess the intangible assets of the business itself, profit and loss statements, and analyzing a company’s growth potential.

“We do an analysis ourself to see if there is a business there that’s marketable,” and then bring in accountants and other experts to fully assess the value of the business, Dunn said.

Hanna Business Brokers will provide that service at no cost because it will be compensated by its sales fee, Biggar said, while larger merger and acquisition shops may charge $50,000 for such a service.

“This is like the other things Howard Hanna has done,” Biggar said.

“We find people with the right skills and experience. We will put money into it to market it and build the business over time.”

Prospective clients are small businesses, which Biggar and Jelepis de-

scribe as those with sales of $250,000 to $10 million. Typically investment bankers who provide such services pursue larger prospects with sales of more than $10 million.

There are additional opportunities now, Jelepis said, because of the challenge that the pandemic has posed for businesses, rattling some such as restaurants to the core but aiding others such as medical supplies providers.

Jelepis, who was formerly the mayor of Bay Village, said he undertakes the challenging situation as providing a passionate purpose because the retirement plans of many business-owning baby boomers have been put at risk by the recession.

While going into business brokerage is rare for commercial firms, it often is an area that residential agents pursue as an allied sale.

Barry Berkowitz, chair of the board of governors of the Independent Business Brokerage Association trade group based in Independence, said in a phone interview that more residential brokers have gotten into business sales since the end of the Great Recession. Most have not fared well because it requires financial acumen, although it is likely a good fit for a commercial brokerage due to synergy.

The president of Berkowitz Acquisitions of Boynton Beach, Fla., said he also holds a real estate license for the same reason. He said he has found that more real estate companies are moving into business brokerage than in the past, but some fail if the principals do not have adequate experience dealing with business issues.

“You can have two Subway franchises a few miles apart,” Berkowitz said, “but understanding each one and how it functions can be quite different. We’ve got to worry about licenses, lawsuits and is the income they are reporting real? Did they really file that tax return? With a business, it’s all under the covers.”

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

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A $50 million Cincinnati-based venture fund designed to channel investor dollars behind an historically overlooked swath of women- and minority-led startups in the Midwest sees plenty of potential in the Cleveland market.

Lightship Capital, announced in June as the largest-ever VC fund of its kind, is looking for women, people of color, individuals with disabilities and members of the LGBTQ community building innovative businesses in five key sectors: artificial intelligence, consumer packaged goods, sustainability, e-commerce and health care.

However, Lightship general partners (and married couple) Candice Matthews Brackeen and Brian Brackeen are keen to point out they are capitalists at heart, and this is not about charity.

“Lightship Capital Fund I is not a social impact fund. We are here to get market-rate returns just like our majority peers in venture capital,” Matthews Brackeen said. “What that means for us is we are not necessarily structured to create societal impact.

But that is what we are doing.”

Spurring Lightship is a recognition of the void of support for minority-led businesses, a longtime blind spot which the VC industry is paying more attention.

A 2018 report by Morgan Stanley — which makes the “trillion-dollar case” for investing in female and multicultural entrepreneurs — found that the median investment by equity investors in business opportunities is nearly $1 million. That investment is more like $213,000 and $185,000 for womenand minority-led , respectively, however. (While not accounting for size of each company, those figures still indicate women and minority business enterprises, or WMBEs, do not raise as much as their counterparts.)

“The problem is a lot of the capital is really siloed. We are locked out of that ecosystem,” said Justin Bibb, a Cleveland-based chief strategy officer with Spokane, Wash., startup Urbanova, which is described as a private-public partnership for building smarter, healthier cities. “Many of us don’t have the right social networks, 9/18/20 11:06 AM unfortunately. And access to capital is a major barrier for us in terms of being able to grow and start a business.”

“There are a lot of what I call ‘baby Einsteins’ walking across the entire city,” Bibb added. “They just need the opportunity and resources to achieve their God-given potential.”

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While the Brackeens are no strangers to the startup world, at $50 million, the size of Lightship’s inaugural VC fund speaks to the investor interest into which they’re tapping.

They’ve already raised about $48 million from private and institutional investors, including Delta Dental and the Ohio Third Frontier Fund, plus a major $20 million infusion from SecondMuse Capital, the global investment arm of SecondMuse, which describes itself as an “impact and innovation company.”

The idea for Lightship was largely born out of Matthews Brackeen’s

Lightship Capital general partners Brian Brackeen and Candice Matthews Brackeen. | SECONDMUSE

work as CEO of Cincinnati’s Hillman Accelerator, where she witnessed the dearth of support for minority business owners and saw how hard it was to raise a VC fund while being Black.

During Black Tech Week in Miami in 2018 she met Brackeen, who was winding down work with facial recognition startup Kairos. (Brackeen faced an ouster from Kairos due to disagreements over the technology’s use in law enforcement, as reported

by TechCrunch, and settling surrounding lawsuits there in 2019.) He eventually moved to Ohio to be and work with Matthews Brackeen.

The duo made plans for raising a VC fund with the multipronged goal of supporting minority businesses, getting those businesses to operate in the Midwest (if not there already) and ultimately keeping investors’ dollars in markets like Ohio, Michigan, Chicago and elsewhere in the Midwest.

The Brackeens planned to raise $20 million before connecting with SecondMuse. Interest in the fund only snowballed from there, even drawing backing from celebrities like comedian Hannibal Buress.

A country increasingly engaged with matters of racial equity drew more attention to Lightship as well.

“After the murder of George Floyd, a number of folks who said they planned on making investments soon in this fund or the next came back and said, ‘We are going to be more intentional in this space,’ ” Brackeen said.

There’s also the broader goal of simultaneously growing Midwestern economies by supporting minority-led businesses, which equally inspires SecondMuse. But the outright business case for investing in an underserved demographic can’t be understated.

“We are excited by this intersection of underrepresented entrepreneurs who just don’t raise as much money for really dumb reasons,” said SecondMuse founder and co-CEO Todd Khozein. “You have more talent per capita here because these people are not getting invested in.”

Studies show minority businesses are often secondary thoughts by investors, if thought of at all. Morgan Stanley’s research finds startups led by men and non-minorities are simply prioritized more than those run by women and minorities.

“Women and people of color, they are traditionally underfunded because there are biases, whether conscious or not, among traditional venture investors who tend to be old white guys,” said Ari Lewis, co-founder of self-described

technology and innovation partnership OhioX. “This is not a criticism of anyone. These are just the facts.”

Meanwhile, VC in Midwest companies has the potential to produce better returns. The cost-effectiveness of running a business in the Midwest versus expensive coastal cities is a factor there.

The Brackeens declined to disclose the returns they’re guaranteeing investors, but say the potential is there for outsized returns.

Bullish on Ohio, Cleveland The fund has made five deals so far, marking its first investment in July with FreshFry, a Louisville, Ky.based food technology company. It also invested in artificial intelligence-enabled “productivity platform” Undock in August, which is based in New York but will relocate to somewhere in the Midwest.

While no deals have been made here yet, Matthews Brackeen, a native of Toledo, said Lightship is actively vetting prospects in Ohio and Greater Cleveland, specifically.

“There is not a surplus of capital in the state,” she said. “So there are lots of different people and places that we can search, and Cleveland is definitely at the top of our list.”

Lightship said its foundation arm will offer some programming in Cleveland, which could also help identify prospects.

Brackeen said Lightship will look at about 2,000 deals in the year, and 20% to 30% of those prospects are in Ohio.

“We are super, super bullish on Ohio,” he said, adding that many companies in other markets, like Undock, are open to relocating here or elsewhere in the Midwest as a condition of funding. He said in a recent survey of 117 companies, 30% said they would move to Ohio specifically.

The importance of supporting both underrepresented minorities and the Midwest economy, particularly amid an economy-rattling pandemic, excites SecondMuse and its co-CEO Khozein, a native of Iran who fled the country amid violent unrest. He said it’s his hope the fund can contribute to “catalytic” change.

“This idea of negative externality, that the economy grows at the cost of humans, it’s a design flaw we enshrine at the altar of capitalism,” Khozein said. “The economy will be better and stronger and more resilient if it’s actually inclusive and all people participate in that economy.”

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EDITORIAL

Keep working A

couple recent data points for Cleveland show how far the city has to go to be an economically vibrant place for all its citizens. In both cases, though, there are signs of improvement that reinforce the idea that things can get better, as long as the challenges are recognized and key players in government, business and nonprofits are working to address them.

U.S. Census Bureau estimates for poverty rates nationwide in 2019 put Cleveland, unfortunately, at No. 1, with a rate of 30.8%. (The government currently defines living in poverty as a household income of no more than $25,926 for a two-parent family of four, or $20,598 for a single parent with two children.) The Great Lakes region dominates the top of the poverty list, with Cleveland followed by Detroit (30.6%), Buffalo (28.8%) and Toledo (25.2%).

The poverty rate in Cleveland and the other cities is tragically high. It is, however, down fairly substantially from 2018, when the Census Bureau estimated Cleveland’s rate at 33.1%.

That’s due largely to the strong pre-pandemic economy, of course, but it suggests that at a time when too many people want to give up on cities or CENSUS DATA SHOWED THAT use them as political CLEVELAND NOW RANKS AS punching bags, real improvement is possible.

THE WORST-CONNECTED A year ago, when we looked at the 2018 poverBIG CITY IN THE NATION, figures, we wrote that BASED ON THE PERCENTAGE ty Cleveland and other citOF HOMES WITH INTERNET ies needed to focus on an agenda of “job training, ACCESS. improved schools, quality housing and access to affordable and reliable public transportation, to build on good work already being done in the community.” That remains the case and will be critical as we tally the damage done to the economy by the pandemic.

Meanwhile, other census data showed that Cleveland now ranks as the worst-connected big city in the nation, based on the percentage of homes with internet access. There’s no good time to be without that vital resource, but it’s especially problematic as the need for online learning has soared while school buildings are closed in whole or in part during the pandemic.

Almost 31% — not coincidentally, almost exactly the same percentage as the poverty rate — of Cleveland households have no internet access at home at all, not even through cellphones. That’s the highest percentage of all cities with 100,000 or more households.

Rankings from a year earlier placed Cleveland as fourth among the worst-connected large cities. Similar to the poverty data, though, Cleveland actually improved its rate by about three percentage points; other cities improved by more.

This is a reminder of the vital work being done by organizations such as DigitalC, which is working with its partners to make sure all Cleveland Metropolitan School District students are connected by 2022. It’s a big goal, and it can’t come fast enough. Improved education is a big part of attacking poverty, and connections to the internet are vital.

As with the poverty data, the internet connectivity numbers should make us reflect on where we stand — but not give up hope.

Play to win The Cleveland Indians made it — not just through a weird, fanless, pandemic-shortened baseball season relatively healthy (with the significant exception of the manager), but back into the playoffs.

As of this writing, we don’t yet know who the Indians will play, or whether baseball’s expanded playoffs will be a hit.

But this we do know: The team in town that takes the most criticism from fans for the way it’s run has posted eight straight winning seasons, and it’s in the postseason for the fourth time in the past five years. That’s a testament to an organization that manages its resources wisely and knows how to execute its strategy. Those principles were put to the test by manager Terry Francona’s long absence and a personnel matter that could have split the team, but the Indians’ solid structure held firm.

The past couple of Indians playoff appearances have been short, but as every baseball fan knows, hope always springs eternal. We can’t be there in person to root on the team, but we’ll be there in spirit, cheering for 2020 to finally deliver a memory worth savoring.

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

Each presidential election, we are reminded of Ohio’s reputation as a bellwether state in national politics. No doubt we will be hearing the phrase “As Ohio goes, so goes the nation” re- Richard is president and CEO of the prised in the com- Cleveland Foundation and Tramble ing weeks, as Cleve- is president and CEO of the Saint land hosts the first Luke’s Foundation. presidential debate of 2020 and the candidates continue to court voters across the state.

But while Ohio may be a leader in picking presidents, our state is shamefully at the back of the pack when it comes to picking winners in the energy sector. States like Iowa, Oklahoma, Kansas, South Carolina and Texas (all red states) — as well as all the forward-looking states on the East and West coasts — are aggressively investing in clean energy opportunities because they see the tremendous potential for environmental and economic benefit. Meanwhile, Ohio has made headlines for the corrupt and allegedly criminal efforts on the part of some public sector leaders to cater to special inter- WHILE OHIO MAY BE A ests and subsidize a declining fossil fuel industry, footing tax- LEADER IN PICKING payers and consumers with the PRESIDENTS, OUR bill. It doesn’t have to be this way. During the energy crisis of STATE IS SHAMEFULLY the 1970s, NASA’s Glenn Re- AT THE BACK OF THE search Center in Cleveland was a leader in the U.S. Wind Ener- PACK WHEN IT COMES gy Program, working to devel- TO PICKING WINNERS op turbine technology that could be transferred to private IN THE ENERGY industry. Now is the time to put SECTOR. Ohio back on the map as a leader in the advanced energy economy. Our recovery from the current crisis may depend on it.

In short order — and in no uncertain terms — the pandemic has revealed the deadly implications of social determinants of health. Poverty, exposure to air and water pollution, lack of access to health care and chronic underlying health conditions dramatically increase your risk for hospitalization and death due to COVID-19. In the city of Cleveland, many residents are subject to all of these risk factors. While Cleveland is home to world-class educational and medical institutions, entertainment venues and access to a dynamic system of Metroparks, it is also the poorest large city in the United States, edging out Detroit in recently released data from the U.S. Census Bureau. Cleveland also ranks ninth worst in the country for sooty air pollution. Due to the legacy of redlining and other racist policies that continue to affect access to resources in our city, Black and Latinx residents face an even higher likelihood of risk factors and have been hit disproportionately hard by the health and economic impacts of COVID-19. The pandemic has only exacerbated the longstanding racial disparities in health and economic outcomes.

If we don’t do anything to mitigate climate change, we can expect pandemics to happen with greater frequency.

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

See ENERGY on Page 9

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8 | CRAIN’S CLEVELAND BUSINESS | September 28, 2020

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OPINION

We’re Hiring ENERGY

From Page 8

Compounding the alarming realities of the COVID-19 pandemic, not to mention its estimated $8 trillion cost to the U.S. economy, natural disasters are becoming more frequent and intense due to climate change. Already this year, communities across our country have been devastated by tornadoes, hurricanes, forest fires, flooding and more. Setting a new record, 2020 marks the sixth consecutive year with at least 10 separate billion-dollar natural disasters. Here in Ohio, we can expect heavier precipitation and flooding as climate change progresses, as well as the continued warming of the Great Lakes — all of which will negatively impact water quality. Warming water is expected to create more toxic algal blooms and harm fish, while heavier rains will increase the amount of pollutant runoff into our lake, threatening beach safety and our drinking water supply. Right now, experts believe we have 10 years left to take meaningful action. After that, the effects of climate change will be catastrophic and difficult to contain.

Again, it doesn’t have to be this way. Viewed another way, we stand on the precipice of an incredible opportunity: Riding the wave of growth that is predicted for the advanced energy sector in the coming years. In New Jersey, the advanced energy sector is beating statewide job growth overall, with more workers in advanced energy than in hotels, motels and casinos — and nearly triple the number of workers at colleges and universities. We must address the root of the problem, and investments in advanced energy should be a priority in our approach.

Imagine a future where Greater Cleveland and Ohio

are recognized as a Midwestern hub for the growing advanced energy industry, where good jobs that pay family-sustaining wages are available to people of all backgrounds, races and ethnicities — helping to close the racial gaps in our community and allowing more residents to build wealth and invest back into their neighborhoods. Imagine a future where we can eat fish from Lake Erie any time we want, not just the once-aweek limit recommended by the Ohio Department of Natural Resources due to high mercury levels in the lake caused by coal-fired power plants. Imagine a future where the air we breathe and the water we drink doesn’t cause serious underlying health conditions, reducing overall health care costs and preventing premature disability or death for many individuals.

This future is possible if we invest in the advanced energy industry and other climate-friendly policies today — both here in Ohio and across the nation.

In this seminal moment for our country — as we contend with a global pandemic, a historic reckoning with systemic racism and an escalating cycle of natural disasters — Northeast Ohio, backed by a supply chain from across our entire state, has an opportunity to lead from the heartland by making environmental and clean energy policy a focus of our recovery strategy. On Sept. 29, President Donald Trump and former Vice President Joe Biden will take the stage here in Cleveland for the first presidential debate of the campaign. According to recent reports, the environment is not among the topics that will be covered in the debate questions. This is unfortunate. If we were moderating, there is one question that we would be sure to ask the candidates: What will you do to promote a resilient, clean energy future here in the Midwest and across the United States? The answer matters now more than ever.

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SEPTEMBER 28, 2020 | CRAIN’S CLEVELAND BUSINESS | 9

SPORTS BUSINESS

Cleveland, Akron marathons have virtual success, but ha Organizers hoping for ‘something positive’ in the future BBY KEVIN KLEPS

The Cleveland and Akron marathons will have a combined 5,000 participants in 2020.

That’s about one-sixth of a typical year, and the runners who took part did so virtually.

Running, Akron Marathon Charitable Corp. president and CEO Anne Bitong said, “isn’t canceled” because of the pandemic. The longtime Northeast Ohio road races were, however.

On Saturday, Sept. 26, the FirstEnergy Akron Marathon kicked off its virtual race, which will run through Oct. 31. There were pre-race announcements, a motivational video, a video to mark the start of the events and a post-race virtual concert.

About 2,000 runners are expected to participate. That’s 8,000 fewer than the average September draws for the marathon, half marathon and team relay, and about 13,000 below the total tally for the Akron Marathon Race Series. (The series also includes the National Interstate 8K and 1-mile race in June and the Goodyear Half Marathon and 10K in August.)

During a year in which so many are feeling disconnected, the Akron marathon focused on “how can we be a motivational source for our run-

ners and encourage them to continue on their running journey, whatever that might look like?” Bitong said.

In mid-May, the Rite Aid Cleveland Marathon’s virtual race concluded. The event drew about 3,000 participants, which is 10,000 or 11,000 below what executive director Jack Staph expected to have on hand for year 43 of the marathon.

“All things considered, I thought it was very successful,” said Staph, who was the chairman of the first Cleveland marathon in 1978 and acquired the rights to the race from CVS in 2002.

A teacher, at a time in which schools were closed, devised a marathon route for herself that went by all of her students’ homes.

“They were out there cheering her on. We had inspiring stories like that,” Staph said.

In Akron, Kolt Codner is planning to run 26 laps around Akron Children’s Hospital so his 4-year-old son, who has cancer, can watch him from a hospital window.

“I think the virtual experience is a unique experience where runners can be creative and be resilient,” said Bitong, who became the Akron marathon’s executive director in 2008.

“They basically can play race director for the day and they can plot their course.”

Virtual previews The experience goes beyond the many ways in which competitors design their 26.2-mile course.

The Cleveland marathon set up virtual exhibits on the websites of two marathons that were scheduled for the Buckeye State in September: races in Akron and Dayton.

Beginning Sept. 1, the Air Force Marathon’s online health and fitness expo had a link to the Cleveland marathon’s virtual booth. There, visitors were given a discount code to register for the 2021 Rite Aid Cleveland Marathon, plus links to purchase T-shirts and enter a contest for a free race entry.

It has all the information the marathon would provide when it set up an in-person booth at a race.

“What’s missing is the candy that we give away and all that kind of stuff,” Staph said.

Akron’s health and fitness expo, which kicked off virtually Friday, Sept. 25, featured a nutrition segment, interviews with runners, a preview of available merchandise, and even yoga practice and a happy hour.

The marathon also partnered with Event Hub for a “Vendor Village” that includes virtual booths and an opportunity to set up a Zoom call with a

The three events in the Akron Marathon Race Series combine to bring in about 15,000 participants in a typical year. | CONTRIBUTED PHOTO

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ut have bigger plans for 2021 staffer who can answer questions about uploading results from virtual races.

Staph believes the virtual expos will continue to improve.

The Cleveland marathon hopes to return to its traditional format, or some version of it, in May 2021, but the marathon’s owner still expects

of which, for now, includes plans for a virtual race.

“We’re looking for something positive to happen,” the Cleveland marathon’s executive director said. “This brings in $15 million of economic impact for the city. And that’s something that you have to keep in mind also. We feel obligated to a lot of different people.”

The first event “WE’RE LOOKING FOR for the Akron MarSOMETHING POSITIVE TO athon Race Series, 8K and 1-mile HAPPEN. THIS BRINGS IN the races, are sched$15 MILLION OF ECONOMIC uled for June 26, 2021. That event IMPACT FOR THE CITY.” usually draws — Jack Staph, Rite Aid Cleveland about 2,000, and Marathon executive director Bitong said Summit County health virtual expos to be part of the equa- officials “and other stakeholders” are confident races of that size can be tion.

“It could be a sign of the future,” run safely.

Registration for the main event, Staph said. slated for Sept. 25, 2021, likely won’t Uncertain course for 2021 be open to “10,000 people out of the gate,” Bitong said.

The Akron marathon will start Staph is more concerned with the immediate outlook, which for the smaller and, depending on the panCleveland marathon is its 2021 race demic, could make more entries available as the race draws closer. weekend, slated for May 15-16.

“We are confident in the fact that Registration for the events began in late August, and marathon officials we will be hosting physical races in are consulting with city, county and 2021,” Bitong said. state officials on what is possible.

Staph said his group has put to- Kevin Kleps: kkleps@crain.com, gether at least seven scenarios, none (216) 771-5256, @KevinKleps

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MEETING AND EVENT PLANNER

PAGE 15

WHEN WILL WE

Sav

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Weddings lead comeback in private events, but corporate recovery will be painfully slow

BY JUDY STRINGER

When the I-X Center announced it would close permanently on Sept. 16, it was the biggest public symbol — both literally and figuratively — of a truth meeting and event insiders have been facing for months: Some aspects of the ailing industry will never wake up from their COVID-induced comas.

The coronovirus pandemic brought the events industry to a standstill. While local venue operators say many couples are now proceeding with wedding and reception plans — and limited-attendance, often outdoor, public events are coming back — other aspects of the events business have yet to show meaningful signs of recovery.

Corporate engagements are at the top of that list.

Sherrif Karamat, president and CEO of the Professional Convention Management Association (PCMA), a Chicago-based network of business event managers, predicts it will be another two years before the meetings industry is anywhere close to pre- Karamat COVID levels. That is “an optimistic outlook,” he added, and assumes a coronavirus vaccine is available and widely distributed by then.

According to Karamat, the business events industry accounted for $400 billion in direct spending in U.S. and $1 trillion worldwide just before the coronavirus hit.

“That pretty much got taken away completely,” he said. “We went from like a major injection in which every one of our cities across the country was realizing record levels of meeting activity to like zero in less than a month.

“And not for a short time or because of something like an economic downturn, where people still meet but maybe in limited numbers. This is people are not meeting because they don’t know that it is safe to do.”

Karamat based his third-quarter 2022 recovery forecast on a study PCMA conducted with the help of McKinsey & Co., which also found

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MEET AGAIN? — not surprisingly — that small corporate events like board or staff meetings and regional conferences/ conventions will rebound first.

“The area that is really profoundly impacted, maybe forever, is expos and trade shows,” he said.

Ron King, general manager of the Huntington Convention Center of Cleveland, said facility manager ASM Global is repositioning the convention center for “alternatives uses” as it slowly reopens. Earlier this month, the convention center set up six court rooms allowing visitors of the Cuyahoga County Common Pleas Court to assemble there in a more socially distanced fashion than they could at the neighboring Justice Center.

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While that’s not the kind of room-night-generating activity for which the convention center was built, King — who had to furlough 70% of his staff when the center closed in March — is “excited to have life back into the building.” He expects event-driven business to trickle in slowly over the next 12 months and ramp up in the fourth quarter of 2021, depending, again, on the presence and utilization of a COVID vaccine.

As of August, King said, the sales staff had booked 48 new events into 2021 and beyond, representing $3.2 million of revenue for the center and 48,000 room nights. It had rebooked another 57 events, originally planned for 2020 or 2021, which represents an additional $6.2 million in revenue and more than 75,000 room nights, according to King.

Still, those numbers suggest the convention center is a far cry from record-breaking 2019, when the center raked in $14.1 million with 204 events.

“We’ve actually been very busy on the sales end. We are just seeing it push out a little bit, which is also good,” he said. “Now we are starting to see we are getting a solid book in future years, something that Cleveland has been a little behind in.”

King said another “silver lining” is that the convention center’s “midsize” might help it emerge as a postCOVID hot spot as events trend toward smaller in-person numbers accompanied by live-streaming and other digital content delivery.

Save the date While meeting spaces dependent on business traffic have a long road ahead, local venue operators say weddings have resumed — with safety protocols in mind — and are keeping some venues up and running.

Music Box Supper Club vice president Mike Miller said the Flats venue typically hosts 50 to 60 weddings among about 500 total private events

Wedding bookings are slowly returning to the Music Box Supper Club, which expects to clear 2020 with 30 nuptial celebrations on the books. | CONTRIBUTED

each year. While the nonwedding side of the business is relatively stagnant, he expects to clear 2020 with 30 weddings, “which is better than we might have anticipated earlier this year.”

Neither Miller nor near West Side caterer Tricia Coyne, however, anticipate 2021 will represent a full recovery, even among bridal bookings.

Coyne, owner of Coyne Catering, exclusive caterer at Toscana Party Center in Cuyahoga Heights and St. Demetrios Cultural Hall in Rocky River, said half of her 2020 bridal cancellations have rebooked for 2021.

“We are hoping 2021 will be very busy, so we can recoup some of our losses,” she said. “My fear is that some of the postponed brides did get married and are just planning their reception. So, if they get pregnant or decide to buy a house instead, I will be out a prime date for 2021.”

The sprawling grounds of Akron’s Stan Hywet Hall & Gardens, meanwhile, have allowed the nonprofit to be operational, hosting limited-capacity outdoor public events in addition to weddings, according to president and executive director Sean Joyce. Recently, Stan Hywet sold out six outdoor movie screenings in partnership with the shuttered Nighlight Cinema and

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replaced its crowded Molto Bella Auto Show with an exclusive, 300-ticket, Cocktails and Cars event.

Joyce said thanks to “strong donor support” and a Paycheck Protection Program loan, he did not have to lay off employees. (According to Small Business Administration data, Stan Hywet received a loan in the $350,000 to $1 million range). He projects the deficit will be held at about 10% to 15% in 2020, despite private event cancellations, foregoing the popular Ohio Mart and Molto Bella events, flagging membership and the inability to offer guided tours.

Because it’s difficult to speculate when, and if, large-scale events will return, these venue operators said the million-dollar question for now is how long it will take until U.S. businesses to feel comfortable asking employees and clients to gather.

A lack of holiday party bookings, Music Box’s Miller lamented, suggests it’s not anytime too soon.

“This would be the typical time of year, starting in September, that we would really start getting some inquires about office Christmas or holiday parties, and we’ve gotten none,” he said.

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SEPTEMBER 28, 2020 | CRAIN’S CLEVELAND BUSINESS | 13

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FOCUS | MEETING AND EVENT PLANNER | ADVISER

NEO nonprofits should rethink event fundraising beyond COVID-19

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The pandemic threw a giant wet blanket over all aspects of fundraising for nonprofit organizations. As many corporate and individual donors conserve cash and with most in-person fundraising events on hold, Northeast Ohio nonprofits face funding challenges that threaten the vital services they deliver. With no return to normalcy in sight, some nonprofits have dipped into their reserves and applied for government loans.

Soon after the pandemic began, we all followed shelter-in-place guidelines. During this time, 41% of food banks reported a critical funding shortfall, according to Feeding America. Further, before the pandemic, about 37 million people experienced food insecurity — and this number is expected to grow by 17 million due to the pandemic. These statistics hit home: At the beginning of the pandemic, the Akron-Canton Regional Foodbank reported an overwhelming number of requests.

We recently hosted a roundtable discussion with a panel that included local nonprofit leaders. We talked about how they’ve adapted to the current environment — from creating virtual fundraisers to rethinking how their organizations operate.

Here’s what we found:

Transition to virtual events To continue to provide those in need with food, shelter, medical support and more, nonprofits must first secure financial commitments from donors. In an era of social distancing, many organizations turned planned in-person fundraisers into virtual events. And, for the most part, these virtual events have been successful.

This success shouldn’t come as a surprise. After all, attendees can join from anywhere, even their vacation home. And there’s no capacity limit for a virtual event. Also, since attendees aren’t spending money on travel,

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Further, nonprofit organizations spend a significant amount of time and money putting on fundraising events. Virtual events eliminate the need for venue rental and catering fees — though, not always — and are easier to deploy. So, organizations can host more virtual events than in-person events. But they must craft the agendas to keep less captive virtual audiences engaged. For example, lengthy programs probably won’t work in a virtual event. But interactive Q&As might. Post-event surveys can help nonprofit organization leaders determine what works and what doesn’t.

Let’s talk about one of the more successful virtual fundraisers in Northeast Ohio to date. The Women’s Endowment Fund of the Akron Community Foundation took its annual gala virtual, with a twist. More than 700 guests attended its “For Women,

Prepare Our roundtable participants agreed that now is the time to focus on what they can control: Providing services to those most in need and staying in touch with their donors.

Nonprofits should continually revisit their messaging to ensure they remain relevant and compelling against the backdrop of today’s fast-moving news cycle. Additionally, they should seek to make a personal connection with donors. Some nonprofit leaders have sent handwritten thank-you notes, which can help strengthen relationships.

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From Home” event. As part of this event, the Women’s Endowment Fund delivered dinners and a swag bag to each attendee’s home. This fall, several annual events — the 13th annual Taste of the Pro Football Hall of Fame, Girl Scouts of North East Ohio’s Women of Distinction Luncheon and Project GRAD Akron’s 14th Annual Achieving Dreams Celebration Gala — have shifted to a virtual environment.

When we move past the pandemic, in-person fundraising will return.

But organizations should ensure they hold onto the gains they have made in their virtual fundraising efforts and move toward a hybrid fundraising approach. For example, many younger donors prefer casual events over black-tie galas. Could nonprofits host in-home, weekday receptions for these donors and include a virtual component for those who can’t attend in-person? A post-pandemic fundraising future for Northeast Ohio nonprofit organizations will have a healthy mix of virtual and in-person engagement.

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FOCUS | MEETING AND EVENT PLANNER

Starting small has been a successful formula for Cavs, FieldHouse Venue has hosted almost 50 events since COVID-19 pandemic paused NBA play in March

BY KEVIN KLEPS

Rocket Mortgage FieldHouse has hosted almost 50 events since the COVID-19 pandemic brought a halt to the NBA season in March.

It hasn’t been the usual array of professional basketball and hockey games. Also absent have been the concerts and big-name touring acts that often made the FieldHouse one of the 50 busiest arenas in the world.

Instead, it’s been a scaled-down collection of youth basketball and hockey clinics, small gatherings for corporate partners and season-ticket holders, as well as blood drives and a voter registration event. There’s even been yoga on the Gateway Plaza.

“It definitely feels a bit different,” said Brooke Bockelman, the vice president of booking and events for the Cavs and Rocket Mortgage FieldHouse.

Bockelman was hired in April 2019. Eleven months later, the FieldHouse was shut down for months.

Beginning in July, the Cavs slowly opened things back up, with the emphasis on small, safe events geared toward youth and community impact.

The vast majority of the gatherings have been basketball and hockey clinics.

There are shooting clinics in which 10 to 15 kids, each accompanied by one guardian, participate in competitions on the court at the FieldHouse. Everyone wears a mask.

“For a lot of these kids, the most exciting part is being on the court that the players they love so much are on,” Bockelman said. “The building is empty around them, but it’s still a pretty cool experience to play in front of the scoreboard and stuff like that.”

The Cavs have hosted a plethora of youth clinics at Rocket Mortgage FieldHouse since July. | CLEVELAND CAVALIERS PHOTOS

The hockey clinics are for beginners and played with a street hockey ball. Kids learn how to hold a stick, shoot and pass.

The events aren’t big money-makers, and they require quite a bit of work to meet all the pandemic protocols.

The skills and shooting clinics cost $50, and participants receive a Cavs Academy shirt, basketball and tickets to a future Cavs home game. The maximum capacity for the skills events is 30, and the hockey clinics are capped at 40.

“We really want to be cautious and make sure everyone feels safe and just ease into things so that we can

learn from them,” Bockelman said.

What the Cavs find out — from how customers enter and move around the building, to what makes them feel comfortable and what might make them uneasy — will be valuable once the gatherings are expanded into the hundreds.

The Department of Health’s Responsible RestartOhio guidelines limit the Cavs to a crowd of 300 at the FieldHouse. The Cavs, as the Browns did in hosting crowds of about 6,000 at each of their first two home games, could apply for a variance, but that would depend on the type of event that is being pitched by an organiza-

tion or promoter, Bockelman said.

For now, though, the Cavs and Cleveland Monsters are content to continue along their current path and await word from the NBA and American Hockey League.

The NBA season likely won’t tip off until at least January, commissioner Adam Silver said on Sept. 22. The AHL, meanwhile, pushed back the start of its season to Dec. 4 — a date that, like everything else in 2020, is subject to change.

And even if the two leagues begin play early in 2021, it’s likely attendance will be limited and the list of protocols will be

longer than the Cavs’ draft history.

“It’s a big puzzle that once the leagues are able to give us some scheduling answers will start to fall into place and become more clear,” Bockelman said.

At the midway point of 2019, the FieldHouse rose to No. 27 in Pollstar’s list of the world’s busiest arenas. The trade publication’s rankings don’t include sports events, which account for about two-thirds of the organization’s ticket sales.

Now, safely accommodating a crowd in the double digits feels like a win.

“The next six to 12 months are going to be super interesting,” Bockelman said. “We’re going to continue to remain focused on health and safety.

We’re not going to stop doing these small events anytime soon because we have been successful with that.”

Kevin Kleps: kkleps@crain.com, (216) 771-5256, @KevinKleps

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Before COVID-19 drew a curtain on most Northeast Ohio businesses this spring, Cleveland Axe Throwing was “going gangbusters” as a cutting-edge team-building experience for area corporations, general manager Matthew Dixon said.

Customers, including Caterpillar and Hyland Software, rented out Cleveland Axe’s Valley View facility for holiday parties. With robust league and walk-in business, and ongoing corporate activities, the franchise was ready to sign a lease on a new 6,400-square-foot space right down the road on Bank Street.

Statewide stay-at-home orders sunk those plans, erasing a considerable chunk of Cleveland Axe’s revenue stream. Though regional entertainment venues began reopening this summer, most are dealing with the fallout of commercial clients working remotely and still skittish about indoor gatherings. Surviving the downturn means ensuring guest safety, even as the business model’s long-term prospects remain cloudy.

“We’re seeing 20% to 30% of the corporate bookings that we used to get,” Dixon said. “Core team-building was our bread and butter.”

Since opening in March 2017, Cleveland Axe has hosted dozens of companies for outings where participants toss foot-and-a-half axes in walled-off throwing lanes. The venue added a fourth range in April 2019, providing more room for returning clientele concerned about social distancing, Dixon said.

Additional mitigation measures include stringent cleaning and a reduction in capacity from 75 patrons to 30.

The throwing range relaunched in June, hiring back some of the 14 staff members laid off earlier in the year. (Cleveland Axe did not qualify for a Paycheck Protection Program loan.) While a few corporate customers have returned, team building during the virus crisis is not a priority for many businesses.

“It’s been tough to find those (customers),” Dixon said. “It’s been a lot of beating the traditional paths with social media, calling and e-mailing. We used to make visits to companies, but with nobody in the office, that’s hard to do.”

Getting the word out In a normal year, ProXimity Golf Lounge owner Robert McMahon would be readying bookings for winter from companies hankering to hit

the virtual links. Not so in 2020, as the pandemic has mostly dried up corporate gatherings. Nor is McMahon certain if or when that side of the business will recover.

“We don’t know how it will impact us moving forward,” he said. “There’s still a lot of people who don’t want to be in an inside space if they don’t have to.”

McMahon and his wife, Meghan, opened ProXimity in October 2019 in the second-floor hall of the Heights Rockefeller Building in Cleveland Heights.

Pre-pandemic, ProXimity enjoyed a steady influx of customers utilizing five golf bays programmed with top-of-theline simulators. Food and a full bar added to the atmosphere, McMahon said.

“With company holiday parties starting, we opened at the right time,” he said. “People knew the space from attending weddings here. Without any advertising, we had a dozen corporate events before we had to close.”

McMahon adhered to Centers for Disease Control and Prevention sanitation and distancing guidelines upon reopening in May, including removing seats from the bar to keep guests farther apart. But aside from a couple of wedding parties, larger group events — including on the corporate side — are a rarity. Revenue is down 75% com-

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16 | CRAIN’S CLEVELAND BUSINESS | SEPTEMBER 28, 2020

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ProX

pare said bers W the whe othe Clin tanc U ents bach

“THERE’S STILL A LOT OF PEOPLE WHO DON’T WANT TO BE IN AN INSIDE SPACE IF THEY DON’T HAVE TO.” — Robert McMahon, ProXimity Golf Lounge owner

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han, n the ckeghts. d a five theaddd. rties me,” rom hout corose.” for anipon ving fare of ents e— om-

ProXimity Golf Lounge adheres to Centers for Disease Control and Prevention guidelines since it reopened in May, but large group events are a rarity. | CONTRIBUTED

pared with last year, and McMahon said he had to lay off three staff members.

Winning trust requires getting out the word about a safe environment where organizations can use golf and other sports simulators, as Cleveland Clinic did recently for a socially distanced staff graduation get-together.

Uncertainty about corporate clients has McMahon marketing toward bachelor parties and other group

events. ProXimity did receive Economic Injury Disaster Loans (EIDL) to make up for what he hopes is a temporary loss of revenue, but there is no guarantee that even a long Cleveland winter will bring in new team-building business.

“If you’re a golfer, you know how much of a bonding experience it can be for people,” McMahon said. “You can see a side of people from the office that you normally wouldn’t.”

Looking ahead Trapped Escape Room, part of a growing trend of live interactive entertainment, now has five sites spawned from the success of its original Cleveland Heights and Middleburg Heights locations.

Owner Alan Applegate said the new Broadview Heights, Willoughby and South Park Mall sites offer new challenges for guests interested in a

few hours of collaborative fun. Similar to escape rooms throughout the country, Trapped mixes elements of theater and video games with live-action puzzle-solving, hands-on props and special effects.

EIDL and PPP loans helped Trapped through the pandemic’s initial wave, though today the company is making about 20% of the $600,000 to $700,000 it made in 2019, Applegate said. (Applegate declined to talk

specifics about the loans, and Small Business Administration data doesn’t identify companies that received PPP loans under $150,000.)

Games now are staggered to keep visiting groups from interacting in puzzle rooms, although company events remain nonexistent as summer ticks over to fall.

“I haven’t started to remarket to that segment, because I’m not getting a vibe or even queries saying, ‘Hey, we’d like to do this with our business,’” Applegate said.

Any future pitches will include newly enacted safety procedures, particularly as Trapped prepares seasonally themed games for Halloween and beyond. Though Applegate puts it at “50-50” as to whether his business will survive, he hopes executives wanting to reinstill office culture will choose Trapped once the pandemic dissipates.

“There’s not much in-office interaction now, so this would be a good place to get people together to get to know one another,” Applegate said.

“Every experience is new and different. There’s still nothing else like it.”

Contact Douglas J. Guth: clbfreelancer@crain.com

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CRAIN'S LIST | CUYAHOGA COUNTY EMPLOYERS Ranked by full-time equivalent employees in county as of June 30, 2020 RANK

COMPANY

STAFF IN COUNTY

TYPE OF ORGANIZATION

TOP LOCAL EXECUTIVE

CRAIN'S LIST | SUMMIT COUNTY EMPLOYERS Ranked by full-time equivalent employees in county as of June 30, 2020 RANK

COMPANY

STAFF IN COUNTY

TYPE OF ORGANIZATION

TOP LOCAL EXECUTIVE

1

SUMMA HEALTH 1077 Gorge Blvd., Akron 330-375-3000/summahealth.org

6,013

Health care provider

Cliff Deveny, president, CEO

Thomas Zenty III, CEO

2

CLEVELAND CLINIC 9500 Euclid Ave., Cleveland 216-444-2200/clevelandclinic.org

4,990

Health care provider

Tomislav Mihaljevic, president, CEO

12,856 1 Staffing and employment services firm

Jay Lucarelli, CEO

3

MINUTE MEN COS. 3740 Carnegie Ave., Cleveland 216-426-9675/minutemenhr.com

4,289 1

Staffing and employment services firm

Jay Lucarelli, CEO

U.S. OFFICE OF PERSONNEL MANAGEMENT 1900 E St., N.W., Washington D.C. 202-606-1800/opm.gov

12,386 2 Federal government

Michael Rigas, director

4

AKRON CHILDREN'S HOSPITAL One Perkins Square, Akron 330-543-1000/akronchildrens.org

4,260

Pediatric health care provider

Grace Wakulchik, president, CEO

5

PROGRESSIVE CORP. 6300 Wilson Mills Road, Mayfield Village 440-461-5000/progressive.com

9,876

Insurance company

S. Tricia Griffith, president, CEO

5

GROUP MANAGEMENT SERVICES INC. 3750 Timberlake Drive, Richfield 330-659-0100/groupmgmt.com

3,704 1

Staffing and employment services firm

Michael Kahoe, president

6

GROUP MANAGEMENT SERVICES INC. 3750 Timberlake Drive, Richfield 330-659-0100/groupmgmt.com

9,202 1

Staffing and employment services firm

Michael Kahoe, president

6

AKRON PUBLIC SCHOOLS 10 N. Main St., Akron 330-761-1661/akronschools.com

3,583

Public school district

David James, superintendent

7

CUYAHOGA COUNTY 2079 E. 9th St., Cleveland 216-443-7220/cuyahogacounty.us

7,586

County government

Armond Budish, county executive

7

SUMMIT COUNTY 175 S. Main St., 8th floor, Akron 330-643-2893/co.summit.oh.us

2,756

County government

Ilene Shapiro, county executive

8

CITY OF CLEVELAND 601 Lakeside Ave., Cleveland 216-664-2406/city.cleveland.oh.us

7,006 3

Municipal government

Frank Jackson, mayor

8

GOODYEAR TIRE & RUBBER CO. 200 Innovation Way, Akron 330-796-2121/goodyear.com

2,703

Tire manufacturer

Richard Kramer, chairman, president, CEO

9

THE METROHEALTH SYSTEM 2500 MetroHealth Drive, Cleveland 216-778-7800/metrohealth.org

6,974

Health care provider

Akram Boutros, president, CEO

9

FIRSTENERGY CORP. 76 S. Main St., Akron 800-736-3402/firstenergycorp.com

2,316

Electric utility holding company

Charles Jones Jr., CEO

10

CLEVELAND METROPOLITAN SCHOOL DISTRICT 1111 Superior Ave., Cleveland 216-838-0000/clevelandmetroschools.org

6,100

Public school district

Eric Gordon, CEO

10

SIGNET JEWELERS 375 Ghent Road, Akron 330-668-5000/signetjewelers.com

1,872

Jewelry retailer

Virginia Drosos, CEO

11

KEYCORP 127 Public Square, Cleveland 216-689-6300/key.com

4,712

Banking and financial services company

Chris Gorman, chairman, president, CEO

11

UNIVERSITY OF AKRON 302 Buchtel Common, Akron 330-972-7111/uakron.edu

1,864

Public university

Gary Miller, president

12

CASE WESTERN RESERVE UNIVERSITY 10900 Euclid Ave., Cleveland 216-368-2000/case.edu

4,458

Private university

Barbara Snyder, president

12

CITY OF AKRON 166 S. High St., Room 502, Akron 330-375-2316/akronohio.gov

1,826

Municipal government

Daniel Horrigan, mayor

13

AMAZON 21500 Emery Road, North Randall 206-266-1000/amazon.com

4,275 4

Online retailer

—

13

WALMART 702 S.W. 8th St., Bentonville Ark. 501-273-4000/walmart.com

1,663 2

Operator of retail supercenters, groceries and club stores

Jay Cordray, regional manager

14

THE SHERWIN-WILLIAMS CO. 101 W. Prospect Ave., Cleveland 216-566-2000/sherwin.com

4,257

Manufacturer of paint, coatings and related products

John Morikis, chairman, CEO

14

GIANT EAGLE INC. 5300 Richmond Road, Bedford Heights 412-967-4551/gianteagle.com

1,338

Multi-format food, fuel and pharmacy retailer

Brian Ferrier Sr., VP, regional retail operations

15

SWAGELOK CO. 29500 Solon Road, Solon 440-248-4600/swagelok.com

3,966

Manufacturer of industrial fluid system products and assemblies

Thomas Lozick, chairman, president, CEO

15

GOJO INDUSTRIES INC. One Gojo Plaza, Suite 500, Akron 330-255-6000/gojo.com

1,337

Manufacturer of skin health and hygiene products

Carey Jaros, president, CEO; Marcella Kanfer Rolnick, executive chair

16

GIANT EAGLE INC. 5300 Richmond Road, Bedford Heights 412-967-4551/gianteagle.com

3,412

Multi-format food, fuel and pharmacy retailer

Brian Ferrier Sr., VP, regional retail operations

16

HUNTINGTON NATIONAL BANK 200 Public Square, Cleveland 800-480-2265/huntington.com

1,324

Banking and financial services company

Sean Richardson, Cleveland regional president

17

LINCOLN ELECTRIC HOLDINGS 22801 St. Clair Ave., Euclid 216-481-8100/lincolnelectric.com

2,872

Manufacturer of arc welding, cutting and robotic products

Chris Mapes, chairman, president, CEO

17

STATE OF OHIO 30 E. Broad St., Columbus 614-466-2000/ohio.gov

1,314

State government

Mike DeWine, governor

18

MEDICAL MUTUAL OF OHIO 2060 E. 9th St., Cleveland 216-687-7000/medmutual.com

2,105

Health insurance company

Rick Chiricosta, chairman, president, CEO

18

JO-ANN STORES LLC 5555 Darrow Road, Hudson 330-656-2600/joann.com

1,250

Craft and fabric retailer

Wade Miquelon, president, CEO

19

STATE OF OHIO 30 E. Broad St., Columbus 614-466-2000/ohio.gov

2,083

State government

Mike DeWine, governor

19

DIEBOLD NIXDORF INC. 5995 Mayfair Road, North Canton 330-490-4000/dieboldnixdorf.com

1,100

Financial, retail selfservice technology and services provider

Gerrard Schmid, president, CEO

20

GREATER CLEVELAND RTA 1240 W. 6th St., Cleveland 216-621-9500/riderta.com

2,079

Public transit agency

India Birdsong, general manager, CEO

20

MGM NORTHFIELD PARK 10777 Northfield Road, Northfield 330-908-7625/mgmnorthfieldpark.com

878

Gaming, dining and entertainment destination

Matt Buckley, senior VP, marketing and operations

21

WALMART 702 S.W. 8th St., Bentonville Ark. 501-273-4000/walmart.com

2,044 5

Operator of retail supercenters, groceries and club stores

Jay Cordray, regional manager

21

BWX TECHNOLOGIES INC. 24703 Euclid Ave., Euclid 216-912-3000/bwxt.com

870

Pressure vessels, steam generators and electro-mechanical parts provider

Dave Broussard, GM, BWXT Nuclear Operations Group Barberton

22

HYLAND 28500 Clemens Road, Westlake 440-788-4988/hyland.com

1,983

Content services software developer

Bill Priemer, president, CEO

22

ASSOCIATED MATERIALS INC. 3773 State Road, Cuyahoga Falls 330-929-1811/associatedmaterials.com

840

Manufacturer of exterior building products

Brian Strauss, president, CEO

23

ARCELORMITTAL 3060 Eggers Ave., Cleveland 216-429-6000/usa.arcelormittal.com

1,834

Steel manufacturer

Mike Madar, VP, general manager

23

WESTERN RESERVE HOSPITAL 1900 23rd St., Cuyahoga Falls 330-971-7000/westernreservehospital.org

797

Health care provider

Robert Kent, president, CEO

24

SOUTHWEST GENERAL 18697 Bagley Road, Middleburg Heights 440-816-8000/swgeneral.com

1,829

Health care provider

William Young Jr., president, CEO

24

BRIDGESTONE AMERICAS INC. 10 E. Firestone Blvd., Akron 330-379-7000/bridgestoneamericas.com

784

Tire manufacturer

25

FORD MOTOR CO. 5600 Henry Ford Blvd., Brook Park 800-392-3673/ford.com

1,777 6

Automobile manufacturer

Kevin Heck, plant manager

Nizar Trigui, chief technology officer, Bridgestone Americas; VP, Bridgestone Corp.

25

U.S. OFFICE OF PERSONNEL MANAGEMENT 1900 E St., N.W., Washington D.C. 202-606-1800/opm.gov

694 3

Federal government

Michael Rigas, director

1

CLEVELAND CLINIC 9500 Euclid Ave., Cleveland 216-444-2200/clevelandclinic.org

36,398

Health care provider

Tomislav Mihaljevic, president, CEO

2

UNIVERSITY HOSPITALS 11100 Euclid Ave., Cleveland 216-844-1000/uhhospitals.org

17,481

Health care provider

3

MINUTE MEN COS. 3740 Carnegie Ave., Cleveland 216-426-9675/minutemenhr.com

4

Researched by Chuck Soder: csoder@crain.com | Information is supplied by the employers. Employment figures

are full-time equivalent as of June 30, 2020. NOTES: 1. This is a staffing firm; the vast majority of these employees work on behalf of other companies. 2. As of December 2019, the most recent data available. 3. Full time only 4. Crain's estimate for facilities in North Randall and Euclid; excludes Whole Foods 5. Crain's estimate 6. This figure is from the employer’s website; it represents total employment, not full-time equivalent employment, and thus is higher than it otherwise would have been.

Researched by Chuck Soder: csoder@crain.com | Information is supplied by the employers. Employment figures

are full-time equivalent as of June 30, 2020. NOTES: 1. This is a staffing firm; the vast majority of these employees work on behalf of other companies. 2. Crain's estimate 3. As of December 2019, the most recent data available.

18 | CRAIN’S CLEVELAND BUSINESS | September 28, 2020

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AKRON

MARKETING

Niche digital marketing hedge pays off for Hudson small business Pandemic-prompted e-commerce helps drive firm that specializes in automotive aftermarket

BY JUDY STRINGER

Hedges & Co. is one of those rare small businesses that has flourished, rather than languished, as a result of coronavirus disruptions.

The digital marketing agency, owned

by Hudson residents Julie and Jon Hedges, specializes in the automotive aftermarket, helping manufacturers, retailers and suppliers of replacement parts and car accessories use online channels to connect with customers.

It also tracks e-commerce trends related to aftermarket purchasing, which went up — way up — when we were all stuck in our homes earlier this year.

The company originally pegged 2020 online aftermarket revenue at $14 billion in the U.S. but recently updated its forecast to $16 billion, citing $1.9 billion in incremental online shopping as a result of the pandemic. Overall, it expects to see e-commerce spending on aftermarket parts and accessories to increase 30% this year over 2019.

That’s good news for the Hedges, whose 12-person operation manages tens of millions of dollars in annual online marketing for aftermarket clients. Collectively, those clients, according to Jon Hedges, have more than $100 million in annual revenue.

“And they are located across the United States, Canada and Europe,

Jon and Julie Hedges are the owners of Hedges & Co., a niche digital marketing company that has flourishd during the pandemic. | CONTRIBUTED

which is sometimes hard even for me to believe,” he said.

The Hedges started their company in 2004, combining Jon Hedges’ two decades of experience in the automotive industry — including marketing and advertising roles at Cuyahoga Fallsbased Summit Racing and Stylin’ Trucks in Independence — with Julie Hedges’ knowledge of market research.

Early on, she said, much of aftermarket sales was still catalog-based, and the two-person firm focused on

research and consulting.

“I would have to convince people to do online surveys,” she recalled. “That was a radical concept back then.”

As e-commerce began to take off, the couple saw an opportunity to leverage their knowledge of and contacts in the automotive aftermarket category and pivot into digital marketing focused on that niche. Jon Hedges said their company was the first Premier Google Partner and Microsoft Advertising agency “fully

dedicated to the parts and accessories automotive aftermarket.”

The company made its first hire and moved out of the Hedges’ home in 2008. Today, its Darrow Road offices are on the city’s south side.

Hedges & Co.’s capabilities include search engine and pay-per-click optimization as well as email marketing on the digital side.

“An important component of it is making sure our clients get in front of the right buyers,” Julie Hedges said.

“It’s a finesse sort of marketing (that involves) being in front of qualified buyers without showing up for everyone who goes online to, say, buy tires.”

The company also sells mailing lists and vehicle data information and has emerged as a thought leader for the aftermarket industry. The Hedges have been featured speakers at automotive industry conferences, and their research and trends are regularly published in trade publications and by national news organizations.

Jon Hedges said the company handles the ongoing digital marketing needs of about 40 clients. Those include merchants selling OEM replacement parts, in addition to specialty suppliers that offer items such as restoration components for classic cars and parts for off-road and heavy duty vehicles and even watercrafts.

“It’s all over the place, but all within

that automotive aftermarket category,” he said.

Remaining centered on its niche expertise has been the company’s secret sauce. When clients leave big advertising outfits for Hedges & Co., “they often say it’s because previous agency did not know much about automotive,” Jon Hedges said.

While the private company does not publicize financial information, the couple expects 2020 revenues to be 35% higher than 2019, with the bulk of that growth coming from those digital marketing services. Employment will also see a 30% bump.

“We’ve got the bandwidth here to add another four people by the end of the year,” Jon Hedges said. “We are onboarding two new employees this month.”

He sees no reason why growth will not continue. E-commerce spending in the automotive aftermarket was increasing by 14% to 16% annually even before the pandemic surge.

“In addition, the economy is hurting right now, but the automotive aftermarket is historically recession-resistant,” Jon Hedges said. “That, combined with the continued shift to e-commerce, has made us very optimistic for the next several years.”

Contact Judy Stringer: clbfreelancer@crain.com

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SEPTEMBER 28, 2020 | CRAIN’S CLEVELAND BUSINESS | 19

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FINANCE

Northeast Ohio bank deposits surge during pandemic KeyBank, with almost a quarter of the market, regains top spot in region from Huntington Top 10 depository banks

BBY JEREMY NOBILE

Driven by government stimulus programs, credit needs and the safety offered by the Federal Deposit Insurance Corp. in uncertain economic times, Ohio bank deposits have surged as of midyear 2020 amid the COVID-19 pandemic.

While multiple banks enjoyed growth in deposits this year, Cleveland’s KeyBank appears to be a major benefactor. According to updated FDIC data through June 30, Key has regained its top spot in the Northeast Ohio market from Columbus’ Huntington Bank and closed the gap with it in statewide market share.

The largest bank in Ohio by deposits remains Minneapolis’ U.S. Bank (19.43%). Rounding out the top five in the state are Fifth Third Bank (14.85%), Huntington Bank (14.08%), KeyBank (8.79%) and JPMorgan Chase Bank (8.6%).

In Northeast Ohio, Key (24.71%) reports much more in deposits than its next competitor in Huntington

Companies listed by market share and in-market branches OHIO, STATEWIDE Rank

Market share

Bank

1.

2.

3.

4.

5.

6.

7.

8.

9.

U.S. Bank Fifth Third Bank Huntington Bank KeyBank JPMorgan Chase Bank PNC Bank Citizens Bank The Park National Bank Third Federal Savings and Loan Association of Cleveland 10. First Financial Bank

In-market branches

19.43% 14.85% 14.08% 8.79% 8.60% 8.36% 2.94% 1.60% 1.44%

241 293 422 203 253 304 93 105 21

1.35%

64

NORTHEAST OHIO Rank

Market share

Bank

1.

2.

3.

4.

5.

6.

7.

KeyBank Huntington Bank PNC Bank Citizens Bank JPMorgan Chase Bank Fifth Third Bank Third Federal Savings and Loan Association of Cleveland 8. U.S. Bank 9. New York Community Bank (dba Ohio Savings Bank) 10. Premier Bank

24.71% 16.78% 12.15% 8.87% 7.48% 4.95% 4.65%

112 200 114 79 85 70 21

2.58% 1.78%

67 28

1.64%

SOURCE: FEDERAL DEPOSIT INSURANCE CORP. DATA AS OF JUNE 30, 2020

(16.78%). Following them are PNC Bank (12.15%), Citizens Bank (8.87%) and Chase (7.48%).

According to the latest FDIC data through June 30, compared to the same point last year, total bank deposits spiked 23% across the state —

In-market branches

26 CRAIN’S GRAPHIC

eclipsing $455 billion — and 29% in Northeast Ohio.

In 2019, banks grew deposits while shrinking their footprints. But annual growth in Ohio and Northeast Ohio last year over 2018 were 7.6% and 4.4%, respectively.

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Stimulus efforts such as the Paycheck Protection Program led to an increase in money parked at U.S. banks, but that’s not the only factor.

“A lot of borrowers that took cash for defensive purposes and have been keeping cash in the bank that otherwise might have gone to other purposes,” said Charlie Crowley, a managing director with Boenning & Scattergood who tracks banks in Ohio and elsewhere. “There were some people who took PPP money and drew on unused lines of credit with the rainy-day mentality.”

This leads to a “bit of an artificial bump” on both sides of a bank’s balance sheet, he said, as PPP loans and credit draws appear as loans and money sits in the bank as deposits.

Nonetheless, Key logged a significant spike in deposits, growing its

statewide market share by two percentage points and its Northeast Ohio share by nearly seven. Other banks grew their own deposit levels as well, but many of their year-overyear market shares actually decreased as Key absorbed so much new volume.

Key indicated there’s no particular anomaly behind their market share jumping from 6.68% in the state to 8.79%, or from 17.73% in Northeast Ohio to 24.71%.

“KeyBank is in a strong position in our home market of Northeast Ohio,” said KeyBank Northeast Ohio market president Timothy Burke. “We believe our standing demonstrates that our clients value the personal relationships and expertise we offer to help them make confident financial decisions. We have seen deposit growth in Northeast Ohio in many of our lines of business, including our consumer bank deposits.”

There are 209 banks in Ohio today, compared with 217 last year.

The number of FDIC-insured institutions operating in Northeast Ohio is unchanged. However, the figures now show Premier Bank, which formed with the merger of Home Savings Bank and First Federal Bank of the Midwest, as the 10th-largest bank in Northeast Ohio by market share.

In terms of branches, there are 3,443 locations in Ohio today (2.4% less than last year) and 1,129 in Northeast Ohio (4% less than last year).

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I-X CENTER

From Page 1

He sold the real estate to Cleveland in early 1999, in the midst of an escalating eminent domain battle between the city, which wanted the site for a potential runway addition for the municipally owned airport, and neighboring Brook Park. Park maintained control of the I-X Center through a long-term lease. That lease isn’t set to end until Aug. 31, 2024.

On Sept. 16, though, Park’s I-X Center Corp. said the business cannot withstand the novel coronavirus. The exposition center has been quiet since March, sidelined by the pandemic and a statewide ban on most large gatherings. I-X Center Corp. recently told the state it has cut 75 jobs, turning monthslong furloughs into permanent layoffs.

The cuts were immediate, according to a notice filed with the Ohio Department of Job and Family Services.

Workers will receive two months’ worth of pay and benefits. The full wind-down of the facility will take a few months, the notice said, but will be complete by Dec. 31.

Through a spokeswoman, the I-X Center’s management declined interview requests for this story. The company did not answer emailed questions about its obligations to the city.

“It’s going to have a huge impact on income-tax dollars for the city of Cleveland,” said Carl Pecoraro, secretary-treasurer and principal officer of Teamsters Local 507, which represents union workers at the I-X Center.

At the height of the show season, he said, it’s not unusual for employment at the facility to reach 400 to 500 people.

Public records show that I-X Center Corp. pays $2 million a year in rent to Cleveland’s Department of Port Control, which oversees the airport. The company also covers the property taxes, about $750,000 a year, and is responsible for utilities, insurance and the costs of repairs and

the future of the nearly 80-year-old structure, perhaps initially repurposing it for airplane painting and repairs and eventually replacing it with a modern building that could help Hopkins attract international flights and appeal to growing employers.

“Would I rather have a new airport terminal where that sits? Absolutely,” he said. “And the opportunity is to build a new terminal there while still operating the other one. It’s probably the only way we could get a new terminal.”

Industrial real estate brokers said it would be a shame to demolish the building, which is mammoth enough to house upward of 800 recreational vehicles at one time and has ceilings that allow for a 10-story Ferris wheel.

“It’s a world-class distribution cenThe I-X Center’s sprawling interior, seen here, offers five times the amount of space as ter with columns wider than I’ve ever the Huntington Convention Center of Cleveland. | JEFFREY L. KLAUM/I-X CENTER seen, 20 acres of extra land and ceil“In a perfect world, to get the most ings higher than they build now. Why maintenance, according to the lease.

Ed Rybka, the city’s chief of regional opportunities, you would say this is not embrace the market?” asked Terry development, said during a Sept. 17 available for lease or purchase, no Coyne, vice chairman of the Newmark virtual news conference that Cleveland question about it,” said Vince Adamus, Knight Frank brokerage in Cleveland.

Coyne and other real estate profeswill have to shoulder some of those ex- vice president of real estate and busipenses. The city was unable to answer ness growth services for the Greater sionals said Park has been a meticuEvent detailed follow-up questions by Crain's Cleveland Partnership and a former C Rlous A I N ’steward S C L E V EofL Athe N Dbuilding.

BUSINES S | deadline for this article, including que- economic development commissioner organizers agreed, describing the I-X ries about lost tax revenues from scut- for Brook Park. “But I just don’t see that Center as Park’s pet project.

That’s one reason the closure news tled events; the I-X Center’s impact on purchase option as a scenario here, saddened Amy Girton, who spent the economy; and whether the build- unless lightning strikes.”

At Hopkins, a 20-year master-plan- nearly 16 years as the center’s maring, if it goes dark, could be reclassified ning effort is underway. The pan- keting director and now serves as exas tax-exempt real estate.

Onlookers said one thing is cer- demic delayed the anticipated roll- ecutive director of the Great Lakes tain: Cleveland won’t let go of the out of that plan from late this year Recreational Vehicle Association.

Her organization produces the yearly into early 2021. property.

Consultants working with the city say Ohio RV Supershow at the I-X Center, “We know that they are not in the business of selling good assets,” said Na- the airport has sufficient runway space, billed as the nation’s largest indoor than Kelly, managing director of Cush- but it’s grappling with a parking crunch recreational vehicle show.

Such events don't fill hundreds of man & Wakefield/Cresco Real Estate in and other infrastructure challenges.

Independence and a former Cuyahoga During a Sept. 3 virtual public meeting, hotel rooms or lure the volume of they said the aging terminal “will be a corporate travelers who, in a typical County director of development. year, flock to the downtown convenThat’s not unreasonable, he said, big focus” of the forthcoming plan.

Ohio Aerospace Institute’s San- tion center. But Girton’s RV dealers, noting the I-X Center’s proximity to the airport and the fact that the prop- kovic said he appreciates the I-X Cen- hailing from eight counties, make erty is the only logical expansion site ter. He isn’t looking to lead the charge 20% to 30% of their annual sales for Hopkins, which is landlocked. But to knock down a building with signif- during the five-day show. It’s unlikely that event could fit into another vencity ownership will complicate rede- icant history.

Still, he hopes that Cleveland will ue in the region, she said. velopment talks and will impact the “Our No. 1 goal is to keep the I-X take a long view when considering terms of any future lease.

Center going in the hopes that we can be there,” she said, acknowledging that a January 2021 show isn't possible, at this point, so she’s focused on 2022 and beyond.

The Greater Cleveland Automobile Dealers’ Association says the Cleveland Auto Show, a 10-day event in late February and early March, fuels notable jumps in sales of new cars and trucks. It would be possible to move the show downtown, but every exhibit and experience would shrink dramatically, said Lou Vitantonio, president of the auto dealers.

“We can make it work downtown, but it is certainly not our desired goal," he said.

Event producers expect to have a conversation about the future of the I-X Center with city officials this week. They’re also watching to see whether, and how, Gov. Mike DeWine will allow trade shows and conventions to resume.

ASM Global, the events giant that manages the downtown convention center on behalf of Cuyahoga County, Swouldn’t E P T E M B Ediscuss R 3 - 9 , whether 2 018 | it's PAraising GE 22 its hand to take over the I-X Center.

“ASM Global is certainly always willing to entertain new business opportunities,” a spokesman for the convention center said. “We don’t know if there is a business opportunity here or not.”

Tom Baugh, the CEO of Solon-based Marketplace Events, asked whether it might make financial sense to turn the I-X Center into a hybrid facility. Events like his company’s annual home and garden show could move to the expansive south hall, after renovations. The soaring main hall could become distribution or logistics space.

“I think you can have both,” he suggested. “These are shows that are culturally ingrained in the community, and you can still have the economic development.”

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

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P021_CL_20200928.indd 21

9/25/2020 2:04:56 PM

INNOVATION

From Page 1

KeyBank has regained its crown as the Northeast Ohio market’s largest bank from Columbus’ Huntington Bank. | ROGER MASTROIANNI

BANKING

From Page 20

Branches consolidated in 2019 over 2018 at a similar clip. But regional banks in particular are likely to ramp up closures amid the pandemic, which has sped up companies’ digital banking initiatives as more customers adjust to remote, online and other tech-enabled services. CEOs with KeyCorp and PNC Financial Services said earlier this month that they intend to ramp up branch closures. PNC in particular could reduce its total U.S. branch network by 12% as of the three-year period ending 2021.

While banks are seeing significant deposit growth, they’re not necessarily lending out more as banking activity has softened in recent months, according a Beige Book report from the Federal Reserve Bank of Cleveland on Sept. 2.

The Fed reports that demand for business loans declined as PPP wound down across its district,

though weakness there was offset partly by strong demand in purchase mortgages and mortgage refinancing. Banks that provided PPP loans also will get a bump in income as government-paid fees come in for processing those loans as many of those are forgiven.

Banks may face an even more challenging environment in the coming quarters and the new year, though.

“Delinquency rates of commercial and consumer loans remained relatively low because of forbearance agreements and various fiscal relief measures,” the Fed notes.

“However, if the economy remains weak, most contacts expect delinquencies to rise as consumer and commercial deferral programs end.

Bankers were uncertain about the future, particularly because of the lack of clarity about future government stimulus and the path of the coronavirus.”

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

“We’re getting our butts kicked.

We’re dead last or near the bottom in most economic metrics,” he said at the time. “Our population continues to decline at an alarming rate (and) our economy has not evolved into an innovation economy quickly enough.”

The Cleveland Innovation Project was announced in June 2019 and has been spending the past 15 months building an understanding of how best to move forward. The project has a two-part focus. In addition to accelerating innovation in three sectors of the regional economy, a goal is to make Cleveland the leader in minority-led innovation and to increase the economic strength of the region’s minority communities.

In a meeting with Crain’s reporters at the time of the kickoff announcement, the group’s leaders said CIP intended to gather information from 250 companies and organizations of all sizes, and more than 400 individuals, to assess how to turn around the regional economy.

While it plans to continue the region’s longstanding focus on health and manufacturing industries — and it expects to make public its plans to build those industry sectors in the coming weeks — Baiju Shah, a senior fellow for innovation at the Cleveland Foundation and a member of CIP’s steering committee, said the group thinks the region has an opportunity to become an international leader in developing new water technologies and businesses.

“The partners selected water technology as one of our strategic sectors for focus given Cleveland’s unique position, not just being on fresh water but having an industry of companies here that are active in water technology already,” he said in a telephone interview. “The growth of the

water sector year over year has been stunning, and we believe we are well-positioned as a region to leverage that strong foundation.”

The CWA leads a network of corporations, universities, research institutions, public agencies and utilities. It has tallied 300 companies or organizations in Northeast Ohio connected to the water economy. They include everything from businesses and research centers tackling the algal blooms in Lake Erie and companies that make sensors used by municipal water systems to assure quality water supplies, to suppliers of plumbing fixtures and parts.

The sector includes companies such as Kinetico Inc., Moen Inc. and Oatey Co. that, respectively, make water softening and filtration systems and residential plumbing fixture and offer plumbing supplies to professionals and do-it-yourselfers.

The EDA grant, which must be matched locally, will help the CWA develop what it calls its “Blue Economy Innovation Initiative.” The goal is to grow the region’s water economy by providing water industry innovators from all over the country a place to develop innovative water technology and demonstrate the technology to customers. In June, the Cleveland Foundation made a grant of $300,000 to CWA for part of that match.

“We actually started getting some really positive data about the impact of the water economy in Greater Cleveland,” said Bryan Stubbs, executive director and president of the nonprofit. “There are over 16,000 employees in the water economy, and we’re adding about 300 net new jobs annually, with (annual) salaries ranging from $62,000 to $109,000. And they do

not all require advanced education.

We have people with associate degrees all the way up to Ph.Ds.” A key element of the initiative is what the water industry calls test beds, which are demonstration sites for taking lab research out into the real, watery, world.

“There are some existing test beds out there, but they’re very limited,” Stubbs said. “This could be a game changer for Northeast Ohio, and it’s a significant value add for the water (industry).”

Stubbs said one pilot test bed already is operating at the mouth of Old Woman Creek in Huron in Erie County, where the creek flows into Lake Erie.

“We’re developing the platform to test new sensors for things such as nutrient monitoring. Nitrogen phosphorus, which leads to harmful algal blooms, is a worldwide problem and huge growth opportunity,” he said.

“If we can figure out ways to monitor it much more cheaply, we’re going to be able to do much better managing it.”

While CIP isn’t quite ready to make a broader announcement of its plans, in addition to the water economy initiative, it is involved in the plan to create an innovation hub near the planned Cleveland Foundation headquarters on Euclid Avenue at East 66th Street. That’s in Cleveland’s Midtown neighborhood, which connects downtown with University Circle and has become a home for more than 100 health and technology businesses bundled into what has been dubbed the Health-Tech Corridor.

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

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22 | CRAIN’S CLEVELAND BUSINESS | September 28, 2020

P022_CL_20200928.indd 22

9/25/2020 2:11:48 PM

CRAIN’S CLEVELAND LOOK BACK | COUNTY CORRUPTION

Cuyahoga County copes with corruption

crainscleveland.com

A massive FBI raid in the summer of 2008 laid bare a culture of pay-to-play corruption rampant throughout Cuyahoga County’s government. The investigation led to the arrest and eventual conviction and imprisonment of longtime county commissioner and county Democratic party leader Jimmy Dimora and county auditor Frank Russo. Nearly 70 others would be brought down by the state’s largest corruption scandal, which in 2010 resulted in a voter-approved change to the form of government from commission-based to an elected county executive and council. — Kim Palmer

``THE HISTORY

``IN THEIR OWN WORDS

Since before the Civil War, Cuyahoga County’s government structure remained “I’m not an angel, but I’m no crook. I’m not doing anything unchanged, withstanding infrequent reform attempts that began in 1917. different than any other public official does.”

In the end, it would be the Federal ——Jimmy Dimora, former Cuyahoga Bureau of Investigation and a series County commissioner, after his of illuminating wire taps starting in arrest on corruption charges 2007 that would bring down more “You will see a level of political than 60 politicians, public officials and business owners, and force a thuggery the likes you have governmental restructuring. never seen.”

That investigation led to a three——Eric Brewer, former East Cleveland week federal court trial in which formayor, on the ballot proposal (Issue mer Cuyahoga County commissioner 6) to reform Cuyahoga County’s and county party chair Jimmy Dimogovernment and the proposed ra received a 28-year sentence, the executive position he said would result of his convictions on 32 give one person too much power charges, including racketeering, “Greed — that is the bribery, conspiracy and tax evasion.

Dimora’s trial exposed rampant corfundamental motivation ruption that included job patronage, behind these crimes. You have bribes, kickbacks, undervalued home people in leadership positions appraisals and sham campaigns. The that either went into public details ran the gamut from the mun- Former Cuyahoga County commissioner Jimmy Dimora was convicted of 32 charges dane — like free granite countertops, for his role in a corruption scheme that had wide-ranging implications. | CRAIN’S FILE service for the wrong reasons Tiki bars and televisions — to the luor they forgot why they went rid, including Las Vegas trips and funds for trysts with sex workers. into it in the first place.

What happens when you set that The U.S. Attorney’s office in the Northern District of Ohio, under the leadership of assistant U.S. attorney Ann Rowland, did claw back more than $5 example at the top is it gives tacit permission for all kinds of million in restitution. But under Dimora’s leadership, the county lost mil- misconduct below those levels.” lions in property taxes and overspent heavily on a number of land and prop- ——Ed FitzGerald, Cuyahoga County’s first county executive, speaking erty purchases. about former county politicians at a pre-election event in 2009

``WHY IT MATTERS TODAY Reeling from what federal prosecutors dubbed “Operation Airball” — still considered to date one of the largest political scandals in Ohio history — a number of community leaders and municipal politicians took on the task of improving the structure of Cuyahoga County’s government.

After the November 2009 election, a new county charter that included an elected county executive and an 11-member council replaced the three-commissioner structure. The new county charter meant the executive appointed a slate of officials who had formerly been elected, including sheriff, law director and fis-

cal officer, a position that took the place of treasurer and auditor.

The change was not without controversy. Two issues were presented to voters (Issue 5 and Issue 6) with differing plans and backers. Many of the region’s Black politicians, including Cleveland Mayor Frank Jackson and then-county commissioner Peter Lawson Jones, came out against Issue 6, saying it was a power grab by those outside of the city of Cleveland. They backed Issue 5, which offered fewer changes to government structure.

Issue 6, which passed with 61% of the vote, was backed by prominent Republican mayors from the suburbs and the Greater Cleveland

Partnership. Issue 5 was defeated soundly, with more than 70% of the vote going against the reform.

Former Lakewood Mayor Ed FitzGerald, a FitzGerald Democrat, was elected as the first county executive in 2010 and proceeded to make changes to stave off corruption and foster a more regional approach to economic development. During his tenure, cities in the county agreed not to compete on business tax incentives, and the county created an

REPORTERS

Stan Bullard, senior reporter, Real estate/ construction. (216) 771-5228 or sbullard@crain.com Lydia Coutré, Health care/nonprofits.

(216) 771-5479 or lcoutre@crain.com Michelle Jarboe, Enterprise reporter.

(216) 771-5437 or michelle.jarboe@crain.com Rachel Abbey McCafferty, Manufacturing/energy/ education. (216) 771-5379 or rmccafferty@crain.com Jay Miller, Government.

(216) 771-5362 or jmiller@crain.com Jeremy Nobile, Finance/legal/beer/cannabis.

(216) 771-5255 or jnobile@crain.com Kim Palmer, Government.

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inspector general’s office and established a Board of Control to oversee contracts and agreements.

FitzGerald was succeeded by current County Executive Armond Budish, who took over in 2015, was re-elected in 2018 and has vowed to promote “the economic well-being and prosperity of the county on a fair and equitable basis.” In 2019, law enforcement raided the county administrative offices as part of a larger investigation into corruption around the management of the Cuyahoga County Jail and former director Ken Mills, who faces trial in October. Budish, who has not been charged, called the raid “a political attack.”

PUBLISHING

Crain’s Cleveland Business names Schoenbrun as publisher Crain’s Cleveland Business is reorganizing its executive team and adding a new publisher to deepen its engagement within the Northeast Ohio business community.

Mike Schoenbrun, most recently the vice president of corporate partnerships for the Cleveland Browns, has been named publisher, effective Wednesday, Sept. 30.

Before joining the Browns in 2018, Schoenbrun spent 13 years in executive and sales positions at media companies, including Politico, the Atlantic Media Co. and Time Warner/AOL. Elizabeth McIntyre, who had served in a dual role of publisher/ editor since 2016, has been named executive editor, focusing on audience growth and engagement.

“We had combined the roles of publisher and editor for a number of

years, but there’s so much opportunity in Cleveland, we are now doubling down,” said Group Publisher Mary Kramer.

“We were pleased to discover that the Schoenbrun perfect person to lead our entire team in Cleveland was right in our backyard.”

Schoenbrun’s prior experience focused heavily on building business relationships and partnerships as well as creating new digital and event products.

“With Mike on the business side, we’re strengthening our ability to serve advertising clients by becoming stronger marketing partners

through all of our channels — including digital, events, which are virtual for now, and our growing custom media department that helps clients tell their own stories,” Kramer said.

“I am honored to join Crain’s Cleveland Business,” said Schoenbrun, who lives with his wife, Keri, and their two sons in Chagrin Falls.

“I look forward to working with the many talented individuals who excel at keeping the Cleveland business community informed and connected, especially during these unprecedented times. I am also eager to provide our business leaders with high-impact opportunities, through technology and innovation, that will enable them to grow their respective brands.”

The changes also will allow McIntyre to focus primarily on creating

Publisher/editor Elizabeth McIntyre (216) 771-5358 or emcintyre@crain.com Group publisher Mary Kramer (313) 446-0399 or mkramer@crain.com Managing editor Scott Suttell (216) 771-5227 or ssuttell@crain.com Assistant managing editor Sue Walton (330) 802-4615 or swalton@crain.com Creative director David Kordalski (216) 771-5169 or dkordalski@crain.com Web editor Damon Sims (216) 771-5279 or dasims@crain.com Assistant editor Kevin Kleps (216) 771-5256 or kkleps@crain.com Senior data editor Chuck Soder (216) 771-5374 or csoder@crain.com Editorial researcher William Lucey (216) 771-5243 or wlucey@crain.com Cartoonist Rich Williams

compelling journalism as the newsroom’s leader, Kramer said, noting that earlier this year, Crain’s Cleveland Business won 27 awards — a record for the brand — from the Press Club of Cleveland’s All-Ohio Excellence in Journalism awards.

“I applaud Crain Communications for its deep commitment to the business community in Northeast Ohio by expanding Crain’s Cleveland’s executive team to better meet the needs of our clients and audience,” McIntyre said. “I look forward to working even more closely with our award-winning journalists to create more impactful content and grow our readership.”

Crain’s Cleveland Business is celebrating its 40th year as the leading business news and information provider in Northeast Ohio.

Local sales manager Megan Norman, (216) 771-5182 or mnorman@crain.com Events manager Erin Bechler, (216) 771-5388 or ebechler@crain.com Integrated marketing manager Michelle Sustar, (216) 771-5371 or msustar@crain.com Managing editor custom/special projects Amy Ann Stoessel (216) 771-5155 or astoessel@crain.com Associate publisher Lisa Rudy Director of advertising sales Scott Carlson Senior account executive John Petty Account executives Laura Kulber Mintz, Loren Breen People on the Move manager Debora Stein, (917) 226-5470, dstein@crain.com Pre-press and digital production Craig L. Mackey Office coordinator Karen Friedman Media services manager Nicole Spell Billing YahNica Crawford Credit Thomas Hanovich CUSTOMER SERVICE

Customer service and subscriptions: (877) 824-9373 or customerservice@crainscleveland.com Reprints: Laura Picariello (732) 723-0569 or lpicariello@crain.com

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 Chief Financial Officer Robert Recchia G.D. Crain Jr., Founder (1885-1973) Mrs. G.D. Crain Jr., Chairman (1911-1996) Editorial & Business Offices 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 (216) 522-1383 Volume 41, Number 35 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for the first issue in January, July and September, the last issue in May and the fourth issue in November, at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230.

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September 28, 2020 | CRAIN’S CLEVELAND BUSINESS | 23

P023_CL_20200928.indd 23

9/25/2020 2:25:40 PM

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BUSINESS STRATEGIES TODAY

Total Money Management from the professionals at First National Bank

IN THIS ISSUE:

Thriving in Unconventional Times

THE FIRST NATIONAL BANK DIFFERENCE First National Bank, the largest subsidiary of F.N.B. Corporation (NYSE: FNB), is a growing

Vincent J. Delie, Jr.

Chairman, President and CEO F.N.B. Corporation First National Bank

financial services organization with a longstanding tradition of helping our customers and communities thrive. Throughout more than 150 years of service, we have remained dedicated to providing total money management solutions for our consumer, small business and

We operate in a rapidly changing, complex environment. Resourcefulness, strategic thinking and strong leadership are all factors that fuel business survival, innovation and growth. The COVID-19 health crisis and resulting financial challenges have reminded us that leaders who embrace change and

commercial clients. We have a core business concentration on middle and upper-middle market companies and serve their needs as a value-added partner.

proactively adapt are best positioned to guide their businesses to financial success regardless of the challenge. A strategic partner that provides valuable perspective and guidance is an important part of sustaining business success even in the most uncertain times.

In this edition of Business Strategies Today, our experts provide insights on how FNB serves businesses as a trusted, strategic partner. As an essential business, FNB has continued to provide undisrupted financial services to its communities and has taken decisive steps to protect the health and financial well-being of its employees, customers, communities and stakeholders.

Our ongoing investments in technology and our digital platforms, including online appointment setting, enabled FNB to quickly meet small business’ needs in a new pandemic environment. We were able to develop an online application system in a week’s time to capture and process tens of thousands

MORE INSIGHT FROM FNB You can always look to FNB for expertise on the topics and trends that have the greatest impact on you and your business. In Business Strategies Today, experts from across our Company have covered a wide range of subjects, such as making the most of the economic environment, staying the course to innovation and planning for the future of your business. Just a few of the topics we’ve covered recently include:

of applications and $2.6 billion in funding to small businesses through participation in government-funded programs. This was all made possible by our exceptional employees, who have gone above and beyond to ensure our

check International Expansion

clients have the support they need in this challenging environment.

check Interest Rate Management

Our bankers understand the markets and businesses we serve, and regional

check Payments Solutions

leaders are empowered to make decisions at the local level. We have

check Wealth Management

established professionals from commercial and retail banking, international services, treasury management, private banking, insurance and wealth management who collaborate and interact with our clients to bring comprehensive solutions for their personal and business banking needs.

Because every client has unique circumstances, we encourage you to learn more about this issue’s topics on our website and use our convenient online appointment feature to talk with a specialist in your area of interest. As your strategic banking partner, we are here to work with you through both challenges and opportunities, so you can deliver results and achieve business growth and success.

check Succession Planning check Cybersecurity check Mergers and Acquisitions check And more To review articles that may benefit your business, call us at 1-866-362-4603 or visit

fnb-online.com/bst

02

FULL-SERVICE SOLUTIONS COMMERCIAL BANKING*

CONSUMER BANKING*

• Corporate & Business Banking

• Deposit Products

• Investment Real Estate

• Mobile & Online Banking

• Asset-Based Lending

• Mortgage Banking

• Lease Financing

• Consumer Lending

• Capital Markets • Treasury Management

04

WEALTH MANAGEMENT

investing for any market

• Indirect Auto Lending

• International Banking • Government Banking

*B ank deposit products and services provided by First National Bank of Pennsylvania. Member FDIC.

INSURANCE

WEALTH MANAGEMENT

• Property & Casualty

• Trust & Fiduciary

• Employee Benefits

• Retirement Services

• Personal

• Investment Advisory

• Title

• Brokerage

• SBA Lending

06

INTERNATIONAL BUSINESS

navigating international supply chain challenges

• Private Banking Not FDIC/NCUSIF Insured

Not Financial Institution Guaranteed

Not Insured by Any Federal Government Agency

May Lose Value Not a Bank Deposit

08

Pennsylvania

BUSINESS BANKING

Ohio

Maryland

clicks, bricks and covid-19

West Virginia

Virginia

10

North Carolina

South Carolina

Branch/ATM Planned Expansion Branch/ATM

RISK MANAGEMENT

reinforcing security for a remote environment

wealth management

any market

INVESTING FOR

COVID-19 SHOCKED THE WORLD, WITH A STARK IMPACT ON FINANCIAL MARKETS AND ECONOMIC ACTIVITY. 04

FNB-ONLINE.COM

As the virus outbreak broadened, anxiety levels increased due to the uncertainty surrounding the path, magnitude and duration of the virus. Recessionary fears have turned into reality for some countries.

Investors can anticipate elevated volatility as the response to the virus continues to evolve and as the U.S. elections approach.

Economic indicators, such as inflation and an accommodative monetary policy, are the ones to keep in mind when making strategic investment decisions. Rather than focusing on the day-to-day noise, it is beneficial to revisit one’s investment approach, such as long-term goals and risk tolerance.

Adjust as Needed With increased market volatility, the first response may be to cash out of stocks. A more strategic approach is to gradually rebalance an investment portfolio to lower stock exposure. Rebalancing the portfolio to a target ratio, such as 60 percent stocks and 40 percent fixed income, is a methodical way to create a more defensive market position with increased holdings of more stable fixed-income assets. Keep in mind that rebalancing could also mean purchasing more stocks if the decrease in stock value in a down market has impacted the ratio to a hypothetical 55 percent stocks and 45 percent fixed income ratio. The point is to set a target ratio based on individual preferences and periodically rebalance in consultation with a financial adviser.

FNB IS HERE FOR YOU

Hedge Against Risk If the market comes under further pressure, options include taking a

FNB is well prepared to offer

stronger position in gold (a safe haven during tumultuous markets) or

assistance to help meet the

other alternative investments that aren’t closely correlated to the stock

financial needs of our customers

market and can serve as a hedge against risk.

and communities as they continue to navigate our

The Road Ahead A long-term perspective and a focus on economic activities are necessary to identify the signal from the noise when devising an investment portfolio strategy. Talking with an FNB Relationship Manager about your specific situation is the best way to develop a plan for the road ahead based on your preferences and risk tolerance.

new normal.

Individuals and businesses in need of banking support or consultation can contact their local FNB office or our Customer Service Center at 1-800-555-5455. We are available 8 AM - 9 PM ET

We want to be proactive, not reactive when planning investment strategies, but we also weigh tactical changes and their potential benefits for at least six to nine months in the future. What we don’t want to do is be involved with excessive trading or trying to time the market.” dan crawford Chief Investment Officer

Monday through Friday and 8 AM - 5 PM ET Saturday and Sunday.

We also have an easy-to-use online appointment scheduling tool, so individuals and businesses can safely speak to an FNB financial professional in person or over the phone.

BUSINESS STRATEGIES TODAY

•

FALL 2020

05

international business

navigating

International Supply Chain Challenges

The aftershocks of trade wars and the global response to COVID-19 will be felt in the international supply chain for the foreseeable future. Supply chain dynamics and uncertain financial markets may create pricing pressures and higher capital costs, which will require businesses to make complicated financial and supply chain decisions.

E

ven before the pandemic, debates surrounding tariffs were creating uncertainty in the market about the long-term stability of trade

agreements between countries. This could potentially lead businesses in the nations included in those debates to delay making new investments in one another — or to shift investments to another

PLAN AHEAD

country altogether.

COVID-19 has compounded these disruptions.

With a supply chain resiliency plan, a business can prepare in advance for a range

Manufacturing and logistics shutdowns have had a

of scenarios, ensuring they can maintain an ample supply base, protect their

ripple effect throughout the supply chain, and certain

margins and safeguard jobs. A trusted international business partner can work with

goods and services took a significant hit due to fears

a company to analyze their supply chain for risks and pre-approve workflows to

regarding the increased spread of the pandemic and

assess, triage, communicate and make sound decisions in various crisis situations.

the corresponding increased reliance on e-commerce.

06

It is important to engage suppliers and customers in this process, tightening

Even as processes normalize, business leaders carry

relationships and creating mutually beneficial outcomes. Conversations about

forward hard-earned lessons about the importance of

risk management should also include evaluation of payment cycles, foreign

contingency planning and diversification. Decision-

exchange risk and inventory management strategies for opportunities for increased

makers should look to foundational strategies for

efficiency. The goal is to optimize working capital now so that it is available in the

navigating such challenges and uncertainty.

event of more challenging conditions.

FNB-ONLINE.COM

Diversification is Key

CreatE a Common Denominator for Currency Exchange

The pandemic highlighted the need for diversification at

Geopolitical factors will always be in some level of flux, so it is important to

every point of the supply chain. From raw materials to

minimize complexity in foreign exchange transactions wherever possible.

critical parts, it is prudent to identify backup suppliers in multiple regions, including domestically. Combined with the resiliency plan, this positions a business to adjust quickly, keeping the supply chain intact and production on track. Companies can further insulate their supply chain by bulking up domestic warehousing to increase inventory levels to accommodate potential shutdowns or other international disruptions.

Think of the global payment landscape as a math problem with fractions.

Countries are the denominators, with many individual nations using their own custom payment system, making settling payments a complicated process.

Getting money from country A to country B is simplified with a system that serves as a common denominator. FNB’s membership in the SWIFT network, an international global payment system, supports high-speed cross border payments in minutes or seconds. SWIFT Global Payment Initiative (GPI) is efficient, reduces transaction costs and tracks payments end-to-end for maximum visibility as money moves through the system.

Pay in Local Currency

Work with a Trusted Financial Partner

A counterparty in another country that receives U.S.

International trade is inherently complex, and relationships and risk management remain key to safeguarding the supply chain. Proactive, integrated communication with suppliers and customers builds transparency and loyalty that is especially invaluable in a crisis.

dollars directly and exchanges money in local currency could realize the benefits of a strong dollar against the local currency. A simple, effective solution for a U.S. company is paying in the counterparty’s local currency, thereby mitigating the risk and realizing the foreign exchange benefit for itself.

The same is true on the financial side. Going it alone as a business without a comprehensive plan informed by a banking partner with firsthand international experience can lead to significant downside risk.

Not mitigating this risk can be costly. Speak with an FNB Relationship Manager to determine the best path for your international business financial logistics.

The opportunities international business presents to grow and strengthen your business are well worth the challenges, daunting though they may seem. FNB excels at solving international challenges with our extensive international banking knowledge and trusted network. It all comes back to having strong global relationships when you need them.” yenner karto Head of International Banking Services and Foreign Exchange

BUSINESS STRATEGIES TODAY

•

FALL 2020

07

business banking

clicks, bricks

covid-19

AND

HOW TECHNOLOGY AND PERSONAL SERVICE INTERSECT TO KEEP BUSINESSES ON TRACK IN A CRISIS Business owners are increasingly looking to their banking partner to deliver advanced technology and data-driven insights with timely guidance from professionals who understand their business.

The business banking relationship is evolving, and Relationship Managers are adopting an information-based advisory approach with client-specific knowledge, industry expertise and targeted, bank-provided solutions, according to Greenwich Associates.

COVID-19 and the rapid response to both the health crisis and economic challenges demonstrated in real time the value 24/7 digital access provides when it is brought to life by bankers who care.

08

FNB-ONLINE.COM

Adding Value An essential part of business banking’s future is providing effective interactive digital tools that clearly demonstrate products and services with account opening capabilities — especially in a world where remote contact is increasingly a part of everyday life. As part of its Clicks-to-Bricks initiative, FNB’s innovative technology and leading-edge products and services bring together digital and traditional bank platforms to deliver a more seamless business banking experience.

FNB’s website (www.fnb-online.com) delivers a customized experience for business customers by offering enhanced digital products, learning tools and an interactive Solutions Center. Business owners with hectic schedules can use the website’s convenient online appointment scheduling feature to talk with a specialist. In addition, the website also serves

OUR EMPLOYEES MAKE THE DIFFERENCE. Countless customers have reached out to thank FNB’s compassionate bankers for their support during the pandemic.

Here is what one business owner had to say when their PPP funding came through.

as an educational resource, with a Knowledge Center featuring timely content designed to help customers learn and take steps toward their personal or business banking goals.

FNB Bankers also are equipped to provide business owners and their employees with an educational and collaborative experience, using touchscreen technology to enhance access

Before I heard the term

to products and services. The FNB Business app supports the ability to securely manage

‘PPP,’ our FNB bankers

organizational finances from a mobile device.

were communicating with us to let us know that they were looking out for us

Innovation in a Crisis

… Today we received our

From account management to remote deposits to securing financing, FNB’s digital tools have made it possible for business owners to keep their professional and personal banking on track while adhering to social distancing protocols. The enhanced website served as a

PPP funding ... This is the happiest day I have had

vital communications vehicle as the coronavirus situation evolved, and online scheduling

in over a month … I know

for in-person consultation filled a particularly crucial need in the early days of shutdowns. In

now more than ever that

fact, the number of monthly scheduled appointments jumped from 26 to 2,700 from January 2020 to April 2020, and the number of monthly average users for FNB’s mobile and online channels have each increased by approximately 50,000 users over 2019 figures.

FNB’s continuous investment in technology was also key in the billions of dollars of relief

we will be OK. It is thanks to the hard and tireless work of our bankers that

the Company provided to small businesses through the Small Business Administration’s

we are in this position, and

Paycheck Protection Program (PPP). Leveraging digital capabilities and expertise that were

I can’t communicate how

already in place, along with the exceptional efforts of its team, FNB was one of the first banks in the industry to deploy an automated PPP processing system. Built in real-time as

thankful we are for them

the PPP was being launched nationally, FNB’s online platform enabled its bankers to provide

and First National Bank for

efficient funds and support that ultimately protected hundreds of thousands of jobs.

watching out for us at a

Talk with an FNB Relationship Manager to learn how FNB’s technology and data-driven

time like this.”

insights are tailored to client needs, offering guidance to navigate the changing business landscape.

SUPPORT WHEN IT MATTERS FNB has innovated and adapted quickly to support customers during the pandemic – and was identified

by Greenwich Associates as a Standout for its COVID-19 response based directly on feedback from commercial banking clients.

Provided $2.6 billion

Contacted 100+

Donated $1 million

Launched relief and

in relief through nearly

community groups

to its Foundation for

support programs

20,000 PPP loans

to connect businesses

COVID-19 relief

in underserved areas to resources

for customers and employees

BUSINESS STRATEGIES TODAY

•

FALL 2020

07 09

RISK management

REINFORCING

FOR A REMOTE ENVIRONMENT

COVID-19 upended professional life, turning kitchens and living rooms into makeshift offices overnight. Widespread work from home practices have kept productivity humming, but the disruption and pace of the transition have opened the door for a spike in cyber threats.

The outlook for when, how and even if many companies will return to physical workplaces remains unclear. As the new normal continues to be defined, businesses should carefully evaluate information security protocols to ensure they are protected in any environment.

10

FNB-ONLINE.COM

Know the Risks Inside and Out

manual approvals one can easily secure in an office. It is critical that

Internal systems should be reviewed for potential vulnerabilities on a regular basis, and especially when conditions change as drastically as they have in 2020. The assessment should be inclusive of vendors and service providers to ensure third party practices are in line with established data security guidelines.

for remote authorization. For example, automated online and mobile

Many companies have looked to new, cloud-based technology to facilitate the rapid shift to remote work. This has allowed for greater speed and agility, but it has also presented novel risks. Before implementing new tools, a business needs to have a firm grasp on functionality, access, and how data is managed to be certain there is no conflict with existing protocols, systems or programs.

Educate Employees While significant attention is given to IT infrastructure, one of the greatest security risks a company faces is its employees — a threat that is multiplied with large numbers working remotely for the first time. Businesses should train employees about safe behaviors and the importance of information security protocols, which can help them avoid becoming unwitting victims of schemes that open the network to fraud.

digital business banking tools replicate these same rigorous standards account reconcilement tools like FNB’s Positive Pay identify, flag and report unauthorized transactions. FNB customers can implement additional controls through a customizable ACH debit filter, which enables preauthorization of specific transactions, such as those from a payroll vendor, with all other debits blocked and returned or presented for review. These tools not only enhance a business’s critical risk management security, but also increase efficiency while managing risk and offering peace of mind.

Prepare for the Worst Even with the best defenses, breaches can occur. When they do, cyber insurance can help to defend against losses. It is designed to protect companies when confidential information is exposed or stolen by someone with unauthorized access to a computer or network infrastructure — including helping to indemnify an organization if it is held liable for releasing customers’ personal data in an attack.

In fact, one of the most common scams relies on employee error.

This phishing scheme, known as Business Email Compromise, occurs when a fraudster impersonates a team member (usually an executive) and requests via email a transfer of data or funds. Without training to recognize fraudulent communications, an employee can easily make a

Talk with an insurance expert

costly mistake simply by trying to do the right thing.

visit the Knowledge Center at

from FNB to determine the best cyber insurance coverage for your business. For more tips to protect a business from digital threats, fnb-online.com/business and select “Combat Fraud.”

Choose the Right Tools Cybersecurity processes can and should be bolstered through relationships with trusted partners. A business should look for vendors and services that require multi-factor identification and employ control mechanisms that add to its layers of defense.

This is particularly true in a banking relationship. In an at-home environment, it can be cumbersome to track down the multiple,

Technology makes it possible for many employees to work anywhere, anytime. Unfortunately, more widespread adoption also creates opportunity for cyber criminals to strike. Mitigating these risks is an active process. By collaborating with their teams and partners, a business can create strong and dynamic defense systems to navigate an evolving working environment.

BUSINESS STRATEGIES TODAY

•

FALL 2020

11

BANK FOR YOUR BUCK. We’re committed to helping the Ohio business community do more. It starts with more advanced banking solutions to help launch new products, expand operations and enter new markets. We also offer more options for financing, from loans and lines of credit to asset-based, commercial real estate and SBA loans as well as equipment financing and leasing. We offer more treasury management solutions to give you greater control over receivables and payments. We even offer more sophisticated capital markets solutions, including interest rate risk management, foreign exchange, trade finance, syndications and global trade solutions. Plus, we always deliver more personal assistance and more local expertise, making it easier for more Cleveland businesses to achieve more of their goals.

To learn — and get — more, visit fnb-online.com.

Jeff Bechtel REGIONAL PRESIDENT CLEVEL AND

APPROX. 350 BRANCHES NEARLY 4300 EMPLOYEES

COV I D

President’s “E” Award for Export Service

APPROX.

550 ATMS NEARLY

2.7 million customers

S TA N D O U T

50

MORE THAN

Greenwich Associates Excellence and Best Brand Awards in the last decade

NEARLY

$38 billion

in assets

MORE THAN

$28 billioN

in DEPOSITS

Top 50 Largest U.S. Bank Holding Companies FNB10-255CLEV

*Recognized for our response to the COVID-19 pandemic by Greenwich Associates in a study among small business respondents ($1M - $10M).

NMLS #766529