Crain's Cleveland Business

VOL. 39, NO. 42

OCTOBER 15 - 21, 2018

Source Lunch

Akron A city built on heavy industry is seeing big gains in software. Page 24

Cuyahoga Community College executive VP William Gary Page 27

CLEVELAND BUSINESS

The List Largest grantmaking foundations Page 18 REAL ESTATE

CHALLENGES OF BEING A FEMALE CHEF | A CRAIN’S SERIES

FORGED IN FIRE

Proposed building is good test for market

By STAN BULLARD sbullard@crain.com @CrainRltywriter

co-worker in the walk-in freezer, getting “handsy,” forcing a kiss or worse.

A quick review of the numbers demonstrates the landscape. According to Data USA, male chefs and head cooks account for 78.4% of all positions (345,711 such top positions nationwide), leaving roughly 22% (95,093) of the spots for women. Unsurprisingly, salaries for male chefs eclipse those of women by roughly $6,000 annually: $34,523 vs. $28,316.

Search for new office space available in or near downtown Cleveland on CoStar, the online realty data provider, and you’ll find just two smallish spaces in new buildings.

One is about 20,000 square feet at Ernst & Young Tower in the Flats, and the other is about 40,000 square feet at Link59 in MidTown Cleveland.

In a nutshell that reflects the Batson opening that Chicago-based Harbor Bay Real Estate Advisors hopes to fill with the proposed 12-story office building component of a project with an adjoining apartment building and ground floor retail space on Lorain Avenue across from the West Side Market in Ohio City.

It’s a sharp-shooting real estate developer’s approach to Cleveland. It represents a strategy of trying to build in a downtown office market that has a 25% vacancy rate, according to the JLL Inc. brokerage firm’s new 2018 Skyline report.

It takes advantage of the fact that at the rarefied level of trophy buildings such as Key Tower, E&Y and 200 Public Square, where tenants are willing to pay high rents close to what’s needed for new construction, vacancy is just 9%.

Andrew Batson, director of research at JLL’s Cleveland office, said in an interview, “If you need (much) space, it’s getting hard to find it in a newer building. In textbooks, the theory is that office developers start putting shovels in the ground when vacancy is below 10%.”

SEE CHEFS, PAGE 11

SEE OFFICES, PAGE 6

Michele Gaw teaches culinary arts at Cuyahoga Community College’s Hospitality Management program. Gaw has been part of the Cleveland restaurant scene since the mid-1980s. (Tim Harrison for Crain’s)

Female chefs, owners make their own way in an often-heated, male-dominated field

By JOE CREA clbfreelancer@crain.com

In the age of #MeToo, it’s no surprise that professional women chefs are among those claiming harassment — except it’s anything but a modern complaint.

Generations of female culinary workers have quietly, or loudly, voiced concerns about the limitations placed on their rise to higher

pay and positions of leadership, and a seemingly endless array of personal abuse.

I’ve been hearing the claims since my earliest days in restaurant kitchens and later as a reporter. Usually the stories were of verbal put-downs, manto-woman: “You’ve got no place here.

You can’t handle the workload. What do you think you know?”

Often the snipes were accompanied by juvenile, underhanded moves: hiding or stealing utensils,

Entire contents © 2018 by Crain Communications Inc.

The kitchen gender gap The number of chefs and head cooks in American restaurants, by gender (2016 figures): Men

78.4%

Women 21.6% Source: Data USA

messing with seasonings and more.

But nearly as often the actions were physical: locking a female

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Cleveland, Akron are tech patent powers

By JAY MILLER

NEO patent leaders

jmiller@crain.com @millerjh

Here are the top 20 Northeast Ohio companies ranked by the number of technology patents granted between 2000-2015  Goodyear Tire & Rubber Co. 858  Bridgestone Corp.

482  Lincoln Electric Co. 477  General Electric Co. 473  Rockwell Automation Technologies Inc. 449  Lubrizol Corp.

361  The Cleveland Clinic Foundation 357  Case Western Reserve University 296  Eveready Battery Co. 247  Koninklijke Philips Electronics NV 241  NASA Glenn Research Center 215  Cisco Technology Inc. 201  Bendix Commercial Vehicle Systems LLC 190  University of Akron 170  Diebold Inc. 165  Avery Dennison Corp.

129  Nordson Corp.

123  Graftech International Holdings Inc. 122  Invacare Corp.

120  Go-Jo Industries Inc. 115

On Dec. 18, 2013, Lincoln Global Inc., a subsidiary of Euclid’s Lincoln Electric Co., filed patent application number 14/132,496 for a weld sequence editor. It is one of several patent applications the company, a maker of arc welding equipment, is seeking for a piece of equipment connected to a computer that steps a welder through any number of welds needed for a piece of work.

“Say a thing has 20 welds in it, (the sequencer) will tell you you should do this one first, and then it sends the parameters for that weld to the power supply, and then it shows where to go for the second weld,” said Tom Matthews, Lincoln’s senior vice president for technology and research and development. “It steps the human through the welds, optimizing the power supply and the welding procedures for each weld. It’s a pretty good poster child of what IoT (the Internet of Things) can do.”

Manufacturing regions like Northeast Ohio long have measured their economic growth in things like tons of steel produced, widgets made and cars that roll off assembly lines. As knowledge produced has come to matter more than the volume of metal bent, new yardsticks for economic growth are needed, and, to the extent patents are a fair measure of a region’s potential of economic growth through innovation, Northeast Ohio should be holding its own among the nation’s regions in the years ahead.

Source: U.S. Patent and Trademark Office

Thanks to the research at Lincoln Electric and other Northeast Ohio businesses and research labs, the combined Cleveland and Akron metropolitan areas rank 21st among regions producing technology-related patents over the 2000-2015 period, according to a tally by the U.S. Patent and Trademark Office (USPTO). That’s one shy of

the same spot it holds on a list of the country’s largest urban regions.

The patent office report excluded design patents and trademarks.

That patent ranking puts Northeast Ohio above comparable regions around cities such as Baltimore, Pittsburgh and St. Louis, but behind smaller metro areas like San Jose, Calif. — which includes Silicon Valley — and Austin, Texas; and just behind 20th-ranked Boise, Idaho.

According to the Patent Office tally, research operations in the Cleveland and Akron metros received 16,570 patents over the 15 years. That compares with 10,907 for the Pittsburgh metro, 10,574 for the Baltimore and 10,290 for St. Louis. The San Jose–Sunnyvale–Santa Clara, Calif., metro area led the list with 143,473. The much smaller Austin metro had 33,753, putting it in 12th place, and Boise, home of Micron Technology Inc., a semiconductor designer and partner of the giant chipmaker Intel Corp., had 19,188.

While patents issued is not an exact measure of a region’s future economic growth, they are “a major driver of long-term regional economic performance, especially if the patents are of higher quality,” according to a 2013 study by the Metropolitan Policy Program at the Washington, D.C.-based Brookings Institution.

The Brookings study found that “patenting is associated with higher metropolitan area productivity” and that, while some new technologies reduce the need for workers, “Overall, the evidence is that patenting is good for metro area labor markets. The

higher productivity does not seem to come at the expense of workers.”

Among the top technology patent generators in the region are corporations Goodyear Tire & Rubber Co. (858 patents issued), Bridgestone Corp.

(482), Lincoln Electric Co. (477), Rockwell Automation Technologies Inc. (449) and Bendix Commercial Vehicle Systems LLC (190). The ranks of top patent generators also includes the Cleveland Clinic Foundation (357), Case Western Reserve University (296) and the NASA Glenn Space Center (215).

There is no guarantee that patents generated in a specific location will generate wealth in that region. A set of regional conditions — the presence of a skilled and diverse labor force, an “ecosystem” of businesses providing complementary goods and services, financing and marketing capabilities among them — have to be met for invention to be commercialized in that region.

Because Lincoln Electric has business units around the world, Matthews couldn’t say how much Lincoln’s patent development adds to the Northeast Ohio economy. But he said the company has about 215 local research engineers working on a variety of products and services, some of which will be designed, made and sold from the company’s sprawling Euclid campus.

In addition to adding to the product lines of existing companies, patents spawn startup companies that take root and grow in Northeast Ohio.

In 2003, researchers at Cleveland Clinic developed a test that assesses a patient’s risk for cardiovascular disease. Clinic researchers got patent number 7223552B2 and several oth-

ers that became the basis for Cleveland Heart Lab Inc., which was spun off from the Clinic in 2009. While it has had its ups and downs, it has created jobs and brought investment to Northeast Ohio and, by its fourth year in business, it had $27 million in annual revenue and 120 employees.

Last December it was sold by the Clinic and follow-on investors to Quest Diagnostics Inc. for $94 million.

Another way patents spur regional economic growth comes from what’s called technology transfer.

On March 10, 2009, the Patent Office issued patent number 7,501,032 to a group of researchers at the NASA Glenn Research Center on Cleveland’s West Side for a unique shape-memory material.

A crumpled object made of a complex titanium, nickel and platinum alloy will return to its original shape when heated. What made the material in 7,501,032 patentable was its ability to return to its original shape at a high temperature.

As a federal research center, NASA Glenn can’t turn this material into a commercial product, so it may only use it in outer space. Back on the ground, though, it’s available for licensing to some company, in Northeast Ohio or elsewhere, that can figure out how to use it, hire workers to make it and turn a little profit.

“At NASA Glenn, we are a research center. We don’t sell products,” said Sandra Reehorst, acting director of Glenn’s Technology Incubation and Innovation Office. “But we have the foundation of something a company could take and turn into a product.”

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By JEREMY NOBILE

Who’s giving to whom

jnobile@crain.com @JeremyNobile

According to campaign contributions since 2016 of the state’s top finance industry trade groups and a sampling of some of the market’s largest banks, Ohio banks and credit unions are putting their money firmly behind the gubernatorial candidacy of Republican Mike DeWine. Dollar figures are approximate and combine donations from firms, bank or industry PACs and individuals who identified as members of the related group or institution.

If money talks, bankers are screaming for Mike DeWine.

Although the finance sector tends to be anti-regulation, pro-business and to lean right politically, its conservative firms and their trade groups often divvy up campaign contributions to both candidates in hopes of making nice with both parties. Some may avoid the race all together.

“The PACs want to stay friendly with everyone and create whatever bridges they can,” said Patricia Oliver, a prominent banking lawyer with Tucker Ellis LLP. In this year’s gubernatorial race, though, financial institutions are mostly channeling their efforts squarely behind DeWine whether they publicly endorse him or not.

Most worry about Cordray, the former director of the Consumer Financial Protection Bureau, calling the shots on banking regulations in Gov. John Kasich’s pro-business state.

Since 2016, Ohio’s key banking trade groups — and this market’s top financial institutions — have effectively stiffed Cordray while giving nearly $200,000 to DeWine, according to campaign finance reports.

(Cordray has received at least $3,400 from employees associated with Huntington Bank and JPMorgan Chase Bank, though.)

Huntington has given more than anyone. Its PAC and associated staff have gifted more than $124,400 to DeWine.

Comparable groups and people representing PNC Bank have given about $13,600. For KeyBank, it’s about $11,400.

It’s a dynamic that reflects the worries banks harbor over how Cordray could make their lives, and the ability to do business, more difficult with regulations that consumer advocates tend to like, but businesses usually don’t.

Frustration with regulation

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The finance sector has had a chip on its shoulder since the inception of new banking regulations designed to prevent the activities that contributed to the last economic downturn.

Although many would acknowledge the benefits of proper regulations, banks and credit unions as a group felt the rules established by the DoddFrank Act in 2010 were over-reaching and uniquely onerous. Industry trade groups nationwide have complained of the restrictions on lending and costs of implementing new reporting protocols since then because they say those have squeezed margins, hampered profitability and spurred industry consolidation in their wake.

The message by the finance sector is that those things make it harder for them to serve customers. And in many ways, that’s true.

But the reality is, it also impacts their balance sheets.

So when the former director of the CFPB — which was established by a Democratic president via Dodd Frank — seemed poised to run for Ohio’s governorship, the finance industry bristled.

“It’s interesting because it’s unusual to have someone who’s been the head of bureaus in Washington to

DeWine/Husted

Bank or credit union trade group

Cordray/Sutton

$15,700 $5,000

Ohio Credit Union League Ohio Mortgage Bankers

$0 $0

$6,750

Community Bankers Association of Ohio

$0

$15,500

Ohio Bankers League

$0

NEO’s five largest banks

$11,400 $124,428 $13,635 $0 $125

$0 $1,450

KeyCorp Huntington

$0 $0 $1,950

PNC Bank Citizens Bank Chase Bank

Source: Crain’s research

suddenly walk back in his own state where he had previously been attorney general,” Oliver said. “People are taking a position that’s so distinct given what (Cordray) has done in Washington.”

The Ohio Credit Union League — whose PAC and a couple officials have contributed at least $15,700 to DeWine and nothing to Cordray — is one of those groups.

The OCUL historically has focused on House and Senate races. But like others, the group has tacitly endorsed DeWine through its campaign contributions.

It appears to mark the first time the OCUL has taken a significant position in a gubernatorial race.

“After credit unions endured nearly a decade of burdensome federal regulation, the League’s constantly intensifying government advocacy carefully considered how involvement in the governor’s race could ensure a favorable regulatory environment for Ohio’s 273 credit unions. In the past, involvement in gubernatorial general elections was avoided out of concerns about possible political and regulatory retribution,” wrote the OCUL in a message to its members provided to Crain’s. “However, this year is unique with former CFPB Director Richard Cordray challenging Ohio Attorney General Mike DeWine to be Ohio’s next governor, creating concern that burdensome regulation could supplant the state’s current favorable regulatory scheme.”

OCUL vice president of government affairs Emily Leite said the group met with both candidates, but that its position largely boils down to some simple points.

“We enjoy the current environment in Ohio and we’d like to see that continue,” Leite said. She highlighted the preference for the regulatory dynamic with the Department of Commerce and Originating Depository Financial Institution in particular.

The OCUL quietly informed members of its position without announcing it publicly. Some members agree with the OCUL’s stance, but have expressed frustration with the group not being more vocal about it.

“This situation, it is weird and unique,” said the president of a Northeast Ohio credit union who wished to remain unidentified. “People want to talk about the regulatory

burden. But no one wants to say the reason we are in that mess … and it’s because of the CFPB, which was written by Cordray. I don’t know why people don’t want to put a flashlight on it.”

The side of the CFPB that caused the finance sector to “incur undue expense and process,” the executive said, is “the dirty side of the coin (people) don’t know about.”

Some are pro-Cordray While bankers are largely anti-regulation and therefore anti-Cordray, there are certainly exceptions.

Home Savings Bank chief operating officer Zahid Afzal, who has served on committees with Gov. John Kasich in the past, recently told Crain’s in a Q&A that while bankers “all hated the CFPB,” many understood why it and the surrounding regulations were put in place. Afzal said Cordray took a “truly customer-centric view that didn’t exist at the time, (and) to me that was tremendous.”

“It’s not about the government agency, it’s about customers,” he said, acknowledging that his perspective is in the minority among his peers. “And we have to look at the agency that way. Sure, some banks struggled with regulations. But I have to give Cordray a lot of credit. I think he did some wonderful things and, along the way, a couple crazy things.”

Although Afzal said he hasn’t made up his mind on who to vote for yet, he said he sees DeWine as more “samey-samey” with Kasich and that he may not bring the fresh perspective to the office he wants to see.

But most aren’t James Thurston, spokesman for the Ohio Bankers League — which has contributed at least $15,500 between itself and its top executive to DeWine and nothing to Cordray — said the OBL has had a “very long relationship” with both DeWine and John Husted, in addition to Cordray and Betty Sutton.

All those dynamics go back decades, he said, adding that Cordray had always been “pragmatic” and “accessible,” whether as Ohio’s attorney general or head of the CFPB — a sentiment the credit union sector doesn’t seem to share.

SEE BANKS, PAGE 5

10/12/18 3:20 PM

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BANKS

Groups’ goal is ‘on-ramp’ to degree

“But our bankers did not agree with a lot of positions the CFPB took,” Thurston said.

Institutions of all sizes, but smaller ones in particular, like community banks and credit unions, took issue with how the CFPB applied a one-size-fits-all approach to regulations.

Lending restrictions, designed to prevent the loose underwriting that led to the burst of the housing bubble, prevented them from doing business how they typically would.

The same rules were applied almost uniformly whether at a bank with trillions in assets or a small institution or credit union with several million.

Many expected the rules to eventually be reined in, especially for member-owned credit unions, but they never were.

Bankers haven’t forgotten that.

“Many people respect Cordray and his intellect and believe he was attempting to do a good job,” said a community banking official who wished to remain unidentified. “But nothing seemed to go the direction we thought it would. We had lots of conversations, especially early on.

We saw the rhetoric. But we didn’t see results.”

“If our institutions are leaning one way, they are likely leaning toward DeWine and Husted,” said Robert Palmer, president and CEO of the Community Bankers Association of Ohio — which has contributed at least $6,750 to DeWine and nothing to Cordray.

Partnerships between two- and four-year schools can ease the path to graduation

CONTINUED FROM PAGE 4

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Local colleges and universities are making it easier for students to transfer from two-year schools to fouryear ones — and to make sure the work they’re doing at community colleges isn’t going to waste.

Last week, Kent State University signed a partnership with Eastern Gateway Community College, and the University of Akron announced a new dual admission and enrollment program with Stark State College.

Stephanie Davidson, vice chancellor for academic affairs at the Ohio Department of Higher Education, indicated the state is excited to see these kinds of partnerships. The state has been encouraging more collaboration among its institutions of higher education, pushing for efficiency and reduced duplication.

And there are efforts underway to simplify the transfer process for students across Ohio. The state is creating 54 potential career pathways that will describe the courses students should take while earning their associate of science or associate of arts degrees at the state’s public two-year colleges, Davidson said. (Work on what these pathways would look like for applied degrees will begin in the future.)

If students follow those pathways,

Davidson

Dees

they’ll then be able to take their degree to a public four-year college in Ohio and receive credit for the work they’ve already completed.

This initiative isn’t designed to replace regional agreements like those reached by Kent State or the University of Akron, but to complement them.

“We want students to have multiple, we call them on-ramps, into education,” Davidson said. “So multiple ways to start their degree and get on a successful path.”

Students were able to try to do this on their own, but they might have taken courses that didn’t transfer, Davidson said. This standardizes the process, a common thread between the agreements announced this week.

The partnership between Kent State and Eastern Gateway Community College will allow the schools to create pathways to connect certain associate’s and bachelor’s degrees.

The goal is for the pathways to begin next fall, said David M. Dees, dean and chief administrative officer of

Kent State’s Columbiana County campuses.

Students will be able to transition from an associate of arts degree to a bachelor of science in information technology degree or a bachelor of technical and applied studies degree, the latter with an optional concentration in insurance studies. And Eastern Gateway will have a physical space on its campus for Kent State advisers, allowing them to talk to students early in their college careers about what courses they need to take.

Though it hasn’t been finalized, Dees said the university may in the future offer some introductory degree program classes to students while they’re at Eastern Gateway, either in person or through video conferencing.

Dees sees these pathways as just the first step, and he expects the partnership to grow. The programs being offered currently can be completed online, and since Eastern Gateway already has a large number of online students, it was a good place to start.

As the state has started to let twoyear colleges offer some four-year degrees, this partnership lets Eastern Gateway students pursue a four-year degree without duplicating what Kent State already offers. Dees said he hopes the partnership can become a model for the future.

“It just makes a lot of sense,” he said.

The University of Akron and Stark

State College’s new Direct Connect program will allow students to be dually enrolled at both schools. That means students at Stark State will be able to use resources at the University of Akron, like career services or the recreation center.

While there have been dual admission agreements in the past, the level of engagement the university will have with Stark State students in Akron and North Canton makes this one stand out, said Bill Kraus, associate provost for enrollment management at the University of Akron.

The program, which is open to current students, will allow the University of Akron to begin advising much earlier than they would with a traditional transfer student, working with them and their advisers to make sure students were taking the right courses for their future majors and that they were taking courses that would transfer.

Once the program is underway at Stark State, Kraus said the university may also look to other community colleges in the region to form similar programs.

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OFFICES

CONTINUED FROM PAGE 1

That also opens the door for alternatives, such as less-costly land in neighborhoods that office tenants might find acceptable and other strategies. Resurgent Ohio City might pass muster. It already has proven it can capture a top-tier tenant, as Skylight Financial Group moved three years ago to the United Bank Building, 2012 W. 25th St., from Skylight Office Tower, a Class A downtown building.

Meanwhile, the drawing-board competitors downtown are much bigger, costlier to build and harder to finance. Those are the 50,000 square feet still available at the long-proposed 51-floor NuCLEus project of Stark Enterprises and J-Dek Investments, both of Cleveland, and Harbor View, the 1 million-square-foot office campus proposed by Trammell Crow Co. of Dallas and Cumberland Development of Cleveland on the downtown waterfront.

David Browning, managing director of CBRE Group’s Cleveland office, said Harbor’s proposed building and the Skylight transaction reflect the rise of new opportunities for offices that are emerging nationally in gentrifying urban neighborhoods.

“Ohio City is a hotter real estate market than many people realize,” Browning said in an interview. “New coworking offices are doing well there. It creates an intriguing prospect. I hope they can get through the hoops (to make a go of it).” Indeed, he should. Browning said Dan Rose, one of his firm’s office-leasing agents, has the listing to represent Harbor’s proposed building.

Rico Pietro, a managing principal of Cushman & Wakefield Cresco in Independence, often speaks of demand for “wood and timber” office space downtown, in the Flats or in Ohio City, because of the attractiveness of nearby residential and entertainment districts.

That opening prompted an investor group earlier this year to buy the Stonebridge Center office building, 2019 Center St., and christen it Hive My Place in a push to land growing companies, particularly young, tech-oriented ventures. Although it’s technically in the Flats, the six-story structure is within walking distance and a short drive from the epicenter of Ohio City beer joints and eateries.

Batson said the unknown aspect of the equation is whether such a setting will win office tenants who will pay higher rents.

There is no easy way to analyze Ohio City’s office market for such an offering. It is technically outside the Central Business District. But that also means the site might pluck prospects from Northeast Ohio’s largest employment center, the home of, by JLL’s estimate, 12 million square feet of office tenants. That is a lot of potential prospects to find some who might move to the West Side.

“The closest peer set is the office space at mixed-use projects such as Crocker Park in Westlake, Pinecrest in Orange Village and Van Aken District in Shaker Heights, which are showing that amenities such as restaurants and live-work-play attract today’s office tenants,” Batson said. “There are also a lot of suburban office tenants who are being attracted to the city now.”

However, in real estate, actions speak louder than words.

MRN of Cleveland, the owner of the United Bank Building, is converting two floors of the structure to apartments from offices, according to brokerage data and Cleveland

Downtown office rental rates Over the last decade, downtown office rents have climbed upward, with the largest dollar-per-square foot gains in the trophy office space category. $35

Total Trophy

30

Class A Class B Class C

25

Rent per square foot

|

20 15 10 5 0

’08

SOURCE: JLL

’09

’10

’11

’12

’13

’14

’15

’16

’17

’18 YTD

Downtown office vacancy rates The volume of empty office space in Cleveland’s prized and pricey trophy buildings has dropped enough to make a case for a new office building.

50%

Percent vacant

PA G E 6

Total (%) Trophy

40

Class A Class B Class C

30 20 10 0

’08

SOURCE: JLL

’09

’10

’11

’12

’13

’14

’15

’16

’17

’18 YTD

The mixed-use plan that is proposed for the site of Market Plaza in Ohio City by Harbor Bay Real Estate Advisors would include upper-floor offices (on the left) and apartments (on the right). (Contributed rendering)

“Ohio City is a hotter real estate market than many people realize.”

— David Browning, managing director of CBRE Group’s Cleveland office

building permits. MRN either does not see the market for more office space there or chooses to go for higher apartment rents than office tenants might pay. Ari Maron, spokesman for the family owned Cleveland company that developed the East 4th Neighborhood downtown, did not return a total of three emails and phone calls.

To make a go of its office plan, Harbor still has multiple big hurdles to cross: close the purchase of the Market Plaza shopping center on the site, relocate its tenants, demolish it and finance construction of the 12-story office building and another structure with 200 apartments.

Dan Whalen, a Harbor director, said in an interview that his company believes it’s worthwhile to build on “irreplaceable sites that will be valuable for a long time.” That means it’s

willing to undertake difficult projects and take different approaches to markets, such as buying an existing strip center only to demolish it.

“I’m long on the Cleveland office market,” Whalen said, after analyzing downtown with many of the city’s office brokers.

The Willoughby native sees Ohio City as a parallel to the way office buildings have transformed Chicago’s meatpacking district as businesses seek to attract a young workforce that prizes a live-work-play lifestyle.

“It’s attractive to businesses who want to be near a workforce of young people who want to live and work near the lake,” Whalen said. “I also like it that this location is a differentiating factor from the downtown office market.”

Harbor’s proposal also has one other advantage: Although its building would rise 12 floors, it would contain just 140,000 square feet of office space, much smaller than the typical downtown office building.

(It’s a size typical for the region’s suburban office buildings.) And there’s another big advantage: The developer can build and lease up the structure with fewer tenants than a larger downtown office building would require.

SEE OHIO CITY, PAGE 8

10/12/18 3:00 PM

CRAIN’S CLEVELAND BUSINESS

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PA G E 7

With change looming, Forest City is still hiring

By STAN BULLARD sbullard@crain.com @CrainRltyWriter

As Toronto-based Brookfield Asset Management Inc.’s proposed $11 billion purchase of Forest City Realty Trust nears its final stages, the specter of Cleveland headquarters layoffs may resemble a carving knife more than a meat ax.

That is the image surfacing based on a perception among realty insiders that Brookfield will find value in the developer’s 500-person corporate staff, so the merger may prove far different for executives than Brookfield’s last purchase of a Cleveland-area real estate investment trust. In the 2015 purchase of Richmond Heights-based Associated Estates Realty Corp. for $1.7 billion, multiple AEC executives were terminated as the company became a regional office of Brookfield’s Fairfield Residential unit, and its 15,000 apartments went into the Fairfield fold.

However, a different outcome may be in the offing thanks in part of the complicated nature of Forest City’s far-flung holdings and sometimes decades-long public-private partnerships to produce projects of huge scale. That will put a premium on institutional memory as well as the key criteria in such businesses, ground-up real estate development expertise and efficient property management. The political connections and even deep relationships with stakeholders, sometimes developed over years, is likely to auger for continued retention of some executives.

The other compelling argument for a rump operation to remain at Forest City’s new Key Tower headquarters is found in recent actions by the company. In addition to an Oct. 4 U.S. Securities and Exchange Commission filing indicating that it would retain about

600 property-level employees — usually a given, as property-level people typically go along with office buildings and apartments when they are sold — Forest City has posted openings for jobs above the property level.

Why recruit senior executives this fall only to let them go if Forest City shareholders approve the deal at a so-far unscheduled vote and a timetable that calls for the deal’s conclusion by year end?

One of the posted openings is for a regional director of apartments based in Cleveland, an executive rank above the property-level people just given assurances of continued operations.

The other position is for a development manager in San Francisco for Pier 70, a joint venture between Forest City and the Port of San Francisco to remake a 28-acre oceanfront property as a mixed-use project expected to take at least 10 years to come to fruition. The job will entail contacts with the city government as well as relations with denizens of what’s called the Dogpatch neighborhood nearby.

Pier 70 is a classic Forest City undertaking, similar to its remake of Washington, D.C.’s Navy yard as apartments and office buildings. Within walking distance of San Francisco’s other waterfront destinations, Pier 70 includes historic buildings and vast gravel-covered former industrial properties.

Ralph McGreevy, president of the Northern Ohio Apartment Association trade group, said he won’t be surprised if more than a handful of mid-level Forest City executives survive the turmoil.

“With the level of talent it has built over the years, I can’t believe that they are not going to keep a majority of (executive-level) people in the multifamily unit. Higher-ups in the corporate suite may be less safe,” McGreevy said.

“Remember that this business is somewhat geographic. You’re not talking just about clicks but about bricks.”

In recent big-ticket company buys, Brookfield has put the assets ahead of rationalizing operating expenses, at least so far.

At General Growth Properties, the Chicago-based mall owner and developer, the company has not slashed staff yet but has rolled out a massive plan to update many of its malls since the $15 billion deal closed on Aug. 28.

Last February, Brookfield Residential Properties bought OliverMcMillan, a privately held, San Diego-based developer of large mixed-use residential properties. At that closing, Brookfield said OliverMcMillan would continue to develop large mixed-use properties as well as manage them.

The other factor in Forest City’s deal that may auger for continued operations is the nature of financing that Brookfield has said it will use for the purchase. Brookfield is a private equity operator of enormous scale, and funds for the Forest City deal are from what the Toronto company calls Brookfield Strategic Real Estate Partners III, a $10 billion global opportunistic real estate fund it raised with institutional investors. Its focus is not just on assets but operating companies and the project they bring, according to an investor presentation made to the State Universities Retirement System in February 2017.

That fund has a time horizon of 10 years. The fund also allocates a portion of overhead to Brookfield Property Group, which could provide a framework for managing Forest City assets in the future.

Although Forest City’s portfolio includes substantial office buildings, the trendy apartment market made it attractive to Brookfield.

In a report on a Sept. 26 investor day by Brookfield, stock analysts of the Keefe, Bruyette & Woods financial services firm wrote, “Multifamily is becoming a more meaningful piece of (Brookfield’s) portfolio and

would expand with a successful acquisition of Forest City. Management also believes the multifamily opportunity is large and that the U.S. urbanization trend will continue.”

Whatever restructuring is done may not begin immediately. According to SEC documents on the agreement, Forest City negotiated for a year of employment of executives retained at the time of the merger, in addition to requiring Brookfield to honor golden parachutes of top executives David LaRue, CEO, and Robert O’Brien, chief financial officer, and others.

That likely explains what is not emanating from suites at Forest City’s six-

floor offices at Key Tower: executive résumés. Two potential employers of such rarefied realty types say they are not seeing a rash of résumés from job-hunting bosses, at least not yet.

A New York-based spokesman for Brookfield declined comment.

Jeff Linton, Forest City’s spokesman, said the teams planning the integration have not gotten to final personnel issues.

Linton confirmed the regional apartment position the firm has on its website is not one of the property-level jobs already given assurance they will be retained unless there is a performance issue.

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CRAIN’S CLEVELAND BUSINESS

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Medical Service Co. wants to help more patients with sleep disorders get a good night’s rest.

The 68-year old company based in Oakwood Village near Bedford has spent decades serving as a distributor for home medical equipment and pharmacy needs. About a decade ago, MSC started getting into the business of sleep disorder management, responding to a growing awareness around disorders such as sleep apnea.

“It’s a disease and a condition that has become much more mainstream in the last two to five years, and something that remains very under-diagnosed and under-cared for, and it’s something that’s helped us accelerate our growth,” said Josh Marx, managing director of sleep and vice president of business development for MSC. Two years ago, the company formalized its sleep work, launching its MSC Sleep division, which now accounts for half of its business. Marx said he was seeing so many patients underserved or poorly served as they began using sleep disorder equipment that the division just made sense.

Since the establishment of this division, the third-generation, family owned business has seen accelerating growth in sleep, doubling revenue in each of the past two years, and adding between 1,000 and 2,000 patients every month. Today, it serves roughly 50,000 patients.

“We feel like it’s something that will continue to grow because of the number of people with sleep apnea and the fact that like three-fourths of them are undiagnosed,” Marx said.

“And so it continues to be a growing and more heavily diagnosed population each year.”

Helping to drive that growth has been the opening of eight MSC sleep locations in four states in the last two years, where patients can, by appointment, meet with a licensed respiratory therapist to get disease education about their equipment, resources on disease management and more.

The other half of MSC’s business — in-home medical equipment and pharmacy — has been growing as well, but not at the same rate as its marked growth in its sleep division.

The company distributes equipment needed to help manage sleep disorders, such as a continuous positive airway pressure (CPAP) machine and supplies.

“But what we really offer is a disease management process from the

OHIO CITY CONTINUED FROM PAGE 6 VOL. 39, NO. 16

April 16-22, 2018

Sponsored Content

Acquisition helps keep Ramco on growth track VOL. 39, NO. 16

Sponsored Content

April 16-22, 2018

Acquisition helps keep Ramco on growth track

VOL. 39, NO. 32

AUGUST 6 - 12, 2018

CRAIN’S 2018

ARCHER AWARDS

HR TEAM OF THE YEAR (PUBLIC) WINNER

People Analytics, KeyBank Aware that would-be and current employees must take priority, KeyBank has simplified its recruiting process and utilized data to reduce worker turnover.

Key’s information-driven efforts were led by Amanda Cruz, digital recruiting and analytics consultant, and initiative development manager Jeannie Fanning, the nomination stated. By taking a collaborative approach backed by detailed research, Key’s HR organization cut attrition in the company’s contact center by half over the previous year, reduced the number of pages in its applications by 40%, and estimate that candidates will spend 20% to 50% less time in completing an application.

According to the nomination, the team is also nearing completion of a candidate-centric Key career site redesign, providing additional trans-

parency around the information sought by applicants and eliminateliminat ing corporate speak and complex navigation.

Meanwhile, a comprehensive approach to “human capital” decision-making is at the core of Key’s People Analytics Community of Practice, a group of HR professionals who meet biweekly to discuss best practices in driving data-based HR decisions.

“The predictive modeling approach is being adopted by other groups, from redefining onboarding for new hires, to streamlining the training modules that impact perper formance, to prioritizing workload for compensation reviews,” the nomination stated. “Candidate exex perience work will result in more quality candidates in our recruiters’ pipelines and improve our employ-

Cruz

Fanning

er brand, conveying to candidates that Key is fast, efficient and tech savvy.”

In performing this undertaking, Key’s HR division helps meet longterm company priorities in developing a talented workforce, catalyzing employee engagement, and improving organizational effectiveness, the nomination said.

— Douglas J. Guth

gan to focus more on engineering

By DAN SHINGLER and less on producing common, low-priced parts like simple nuts. dshingler@crain.com “That’s a race to the bottom,” @DanShingler Melick said of the highly commodHudson-based Ramco Specialties itized realm of simple nuts and bolts, where foreign and domestic suppliis on an automotive roll.

VOL. 39, NO. 16 April 16-22, 2018 Sponsored Content After building and moving into a ers most often compete primarily on 185,000-square-foot headquarters and price and the cheapest part wins.

The company has found OEM more on engineering gan toitsfocus main plant a little over two years ago,

By DAN SHINGLER and less their on big producing common, the company has increased its size automaker customers,and with Ramlow-priced parts like simple nuts. with the acquisition of Michigan-based suppliers, willing to work dshingler@crain.com co’s engineers earlier in“That’s their own a race to the bottom,” Copa Tool earlier this month. @DanShingler allows Melick saidthe of the highly commodGrowth in Ramco’s automotive design processes. That to offer fastening systems itized realm of simple nuts and bolts, business, by far its largest Hudson-based end market, company Ramco Specialties can be integrated intoforeign other and domestic suppliwhere is fueling it all, Jeff Melick, Ramco’s di- thatroll. is on an automotive which can themost entireoften au- compete primarily on rector of sales and marketing, Aftersaid. building parts, and moving intomake a ers manufacturing process the cheapest part wins.

“This year, we’re up185,000-square-foot about 15%,” tomotive headquarters and price and Specialties’ 185,000-square-foot headquarters and main plant has andyears moreago, efficient.

Plus, they Ramco The company has found its focus OEM more on engineering gan to Melick said, adding that theplant compamain a littlefaster over two of warehouse room, too. (Dan Shingler for Crain’s) DAN SHINGLER notBydepend whollyautomaker on price customers, to plentyand and their less big on producing common, ny has been experiencing a similar hasdoincreased the company its size sales, Melick said.suppliers, willing to work with Ramlow-priced parts like simple nuts. growth rate since about 2008, when gain with the acquisition of Michigan-based dshingler@crain.com growing faster overall must be working, because while earlier co’s engineers in“That’s their than own a race todomestic the bottom,If ” the state’s automotive compait began focusing onCopa more Toolengiearlier thisItmonth. @DanShingler growth onlycommoddo nies as a whole can fare that well, it some other companiesdesign are alsoprocesses. find- production That allows theofrates Melick said the can highly neered products than a simple Growthnut. in Ramco’s automotive would be a good thing for Ohio, in two ways: They are either a bolts, growth inmarket, automotive, the induscompany to offersofastening systems itized realm of simple nutson and Copa Tool is a significant pickup business, by far itsing largest end Hudson-based Ramco Specialties which still has a huge automotive small where number of hotand products or asupplias is a whole has onroll. a downthat can be integrated into foreign other domestic for Ramco. Its $14 million in annual is fueling it all, Jefftry Melick, Ramco’s di-been on an automotive according to the Ohio number of where a industry, trend, said Edward “Ned” Hill, parts, which can make the entireoften au-products most compete primarily on sales will be added torector Ramco’s an-andward of sales marketing, Aftersaid. building and moving intolarger a ers few are picking marketpart share. a well-known Ohio economist and tomotive manufacturing process price and theupcheapest wins. Manufacturers’ Association. nual revenues of about $100 million.

“This year, we’re up185,000-square-foot about 15%,” headquarters and Specialties’ 185,000-square-foot headquarters a huge partand main plant has Seeing that the overall Ramco tide bouncprofessor public administration faster and years moreago, efficient.

Plus, they The company has is found its OEM“Auto supply remains Copa’s 40 employees bring Ramco’s Melick said, adding that theofcompamain plant a little over two warehouse room, too.

(Dan Shingler for Crain’s) enormous manufacturing ing around dead to low plenty … theyof either and city regional atits size doplanning not depend wholly on price automaker customers, and their of bigOhio’s headcount to about ny 175 haspeople, been experiencing a similar the and company has increased sector. State data has shown increasgood boatwilling or have Ohio State University’s gain sales,John Melickhave said.asuppliers, toattached work witha RamMelick said. growth rate sincethe about 2008, when with the acquisition of Michigan-based ingoverall investment among all decent boatengineers towhile a goodearlier motor.”

Glenn College ofearlier Publicthis Affairs. growing domestic If transporthe state’s automotive compaIt month. must be working, because co’s infaster theirthan own The acquisition brings things that it began focusing onCopa more engiTool tation Ramco is not at allows least Asked whether Ramco or any sinproduction growth rates equipment can only do manufacturers, nies as a whole can fare that well, it some other companies are also find-unique, design processes.

That the might be more important than just than neered products a simple nut.in Growth Ramco’s automotive and are jobeither growth been steady amongcompany Northeast supplicompany’s recent in aube a good thing for Ohio, soauto in two ways: They on ahas would ing growth inmarket, automotive, the industo Ohio offer fastening systems sales, too, such as increased CopamanuTool is agle significant pickup business, by far itsgrowth largest end transportation equipment ers.

Some report they are also other tomotive is annual due to Jeff a rising or has still has a huge automotive small number ofamong hot products or a which try as atide, whole onothers acan downthat be integrated into facturing capacity. While forRamco Ramco.traIts $14 million in is fueling it all, Melick, Ramco’s di-been manufacturers, employwell. just to a well-run boat, Hill hadtrend, a ready according to the Ohio number products wherepresently a industry, ward said Edward “Ned” Hill,canlarger parts, which make the entireofauditionally has focused sales on thewill female be added Ramco’s an- and rector of sales marketing, said.doing ing 125,000 OMA Association.

Adler, president of Cuyahoga “It’smillion. the boat.”

Manufacturers’ few are picking up over market share. Ohioans,” a well-known OhioBill economist and tomotive manufacturing process end of fasteners — nuts and related of answer: nual revenues about $100 “This year, we’re up about 15%,” Ramco Specialties’ 185,000-square-foot headquarters spokesman Augsburger Heights-based Products, Overall, domestic auto production “Autosaid. supply remains a huge partand main plant has thatPlus, the overall tide is Ryan bouncprofessor public administration faster andStripmatic more Seeing efficient. they threaded assemblies Copa’s — Copa has 40 employees bring Ramco’s Melick said, adding that theofcompaplenty warehouse room, for Crain’s) For… itsthey part,of Ramco expects itstoo. re-(Dan Shingler also sells heavily thearound automohas been in apeople, slump, Hill said.

He and notof Ohio’s enormous manufacturing dead to low either and city regional planning atintoing do not depend wholly on price high-volume screw machines headcountthat to about 175 ny has been experiencing a similar growth to continue and isState worktive industry, supplying a range data from Federal Reserve data has shown increashave a goodof boatcent or have attached a sector. the Ohio State University’s John gain sales, Melick said. can produce bolts and othersaid. small ed thatgrowth Melick ratethe since about 2008, when ing hard to earn its place supplying parts.

He, too, said Bank of Louisthat shows thaton U.S. auto- engiing overall investment among all decent boat towhile a good motor.” growing faster than domestic If transporthe state’s automotive compaGlenn College ofsmall, Public tubular Affairs.

It must be working, because precision parts Ramco does curcur The not acquisition brings things it St. began focusing more parts for up-and-coming vehicles, business is any good as of late. makersneered went from about tation equipment Ramco is not unique, at least nies as a whole can fare that well, it production growth rates can only do manufacturers, Asked whether Ramco or sinsome other companies are also findrently make, Melick said. might be more important than just making products than a simple nut.

Melick said.

Copa’s and on has “Stripmatic is at 15% over ourindus350,000 automobiles month be-pickup and are job either growth been steady among Northeast Ohiosoauto supplibe a good thing for Ohio, in two ways: presence They a would company’s recent growth in auing growth inleast automotive, the presAnd it never hurts tosales, havetoo, a pres such as increased manumanu Copa Tool is per agle significant added connections and around first-quarter and last year’s tween 2013 and tra2016 totomotive now making transportation equipment ers.been Some reportsmall they are also in still has a huge automotive number ofamong hot products or a which is to a rising or has try as tide, aforecast whole onothers a downence in the metropolitan Detroit facturing capacity.

While Ramco tra for Ramco.

Its $14 million in due annual Detroitlarger should only of help, since where it presently sales,” Adler “The short-term abouton 250,000 units month. manufacturers, employdoing well. according to the Ohio number products a industry, just atowell-run Hill hadtrend, a said. ready ward said Edward “Ned” Hill, area, where Copa is based, alongside ditionally has focused thewill female sales be per added Ramco’sboat, anputs few Ramco toshare.Ohioans,” backlog through June looks prettypresident other words, company isthe boat.” over 125,000 OMA Association.

Billeconomist Adler, of Cuyahoga Manufacturers’ are physically pickinging upcloser market “It’smillion. a well-known Ohio and domestic automakers end and ofmany of —In fasteners nuts andrevenues related ifofaanswer: nual about $100 many Seeing of itsProducts, big customers, hetide added. solid as well.” growing, they40 must be doing somespokesman Augsburger Heights-based Stripmatic “Autosaid. supply remains a huge part that the overall isRyan bouncOverall, domestic auto production professor of public administration their suppliers that arethreaded all potential assemblies — Copa has Copa’s employees bring Ramco’s “Ouring product development who said hisregional products most thingmachines right.

For … its engipart, either Ramco expects itsenormous realso sells heavily at into the automoof Ohio’s manufacturing they around dead low has been in apeople, slump,Adler, Hilland said.

He notcity and planning Ramco customers, he noted. high-volume screw thatto about headcount 175 neers have area very excited to able to theirState waytive into pickups, supplying a supplier is from a typically growth to continue and isState work-data has shown increasindustry, range ofboatcent a good orbe have attached a sector. ed that data the Federal Reserve thefind Ohio University’s John Ramco hopes to bring bear itsbolts “How cantoproduce andMelick other small performs said. offer He, domestically SUVs and heavy commercial function of not which itofisSt.things suping hard to earn its place tubular too,boat saidto amanufactured ing supplying investment among all transpordecent good motor.”

Bank Louis that shows that U.S. autoGlenn College ofsmall, Publictrucks, Affairs. parts. chief strength to Copa’sprecision existing cuscus parts Ramco does curcurvehicles The acquisition brings engineered assemblies and compothinks new taxabout laws and a reduction plying and how those important vehicles went sell,” for up-and-coming vehicles, business is good as of late. equipment manufacturers, Ramco is notparts unique, at least tation makers making Asked whether Ramco or any sintomer base, Melickrently said.make, That Melick said. might be more thanfrom just nents quickly toour our Tier 1 automoof regulations are having a big posi-in Hill to said intoo, email corresponMelick said.suppliCopa’s presence “Stripmatic is at leastamong 15% over and job and growth has been steady Northeast Ohio auto 350,000 automobiles per beglemonth company’s recent growth austrength is engineering, And he said.

AfAf hurts presit never have a an pres sales, such as increased manutive Melickadded said. connections tive impact sales. dence.facturing “An Detroit auto supplier that is 2016 and around forecast and year’s transportation equipment ers.last Some others report they are also inamong tween 2013 and totomotive now on making is duefirst-quarter to a rising tide, or customers,” ter the Great Recession, Ramco bebe metropolitan ence in the capacity.

While Ramco traDetroit should only help, since it presently employsales,” Adler said.

“The short-term manufacturers, doing well. about 250,000 units per month. just a well-run boat, Hill had a ready area, where Copa is based, alongside ditionally has focused on the female puts Ramco physically to prettypresident ing closer over 125,000 Ohioans,” OMA Bill Adler, of Cuyahoga other company “It’sisthe backlog boat.” through June looks domestic automakers end and of many of —Innuts fasteners andwords, relatedif aanswer: Reprinted with permission from the Crain’s Cleveland Business. ©be 2018 CrainsomeCommunications Inc. All Rights reserved. many of itsProducts, big customers, he added. solidauto as well.” spokesman Ryan Augsburger said.

Heights-based Stripmatic growing, doing Overall, domestic production their suppliers that arethreaded all potential assemblies — they Copamust has Visit Further duplication without permission www.crainscleveland.com. #CC117 “Ourthe product development Adler, whoHe said his products For itsengipart, Ramco expects its realso sellsmost heavily into automothing right.is prohibited.

Hill said. notRamco customers, he noted. high-volume screw machines that has been in a slump, neers areavery excited to begrowth able toto continue and is work findReserve their waytive into industry, pickups, supplying workrange of cent a supplier is from a typically ed that data the Federal Ramco hopes to bring bear its bolts“How cantoproduce and other small performs offer He, domestically SUVs and commercial ing hard to earn its place supplying small, trucks, tubular parts. too, said manufactured function of which vehicles supBankitofisSt. Louis shows that heavy U.S. autochief strength to Copa’sprecision existing cuscus parts Ramco does not curand compothinksmaking new taxabout laws and a reduction for up-and-coming vehicles, business is goodengineered as of late. assembliesparts plying sell,” from makers went tomer base, Melick rently said.make, ThatMelick said.and how those vehicles nents to our our Tier 1 automoof regulations arebehaving“Stripmatic a big posi- is at Melick said. Copa’s presence and leastquickly 15% over Hill to said in aan email350,000 corresponautomobiles per month strength is engineering, he said.

AfAf hurts And it never have prestive customers,” Melickadded said. connections in and around tive impact sales. first-quarter forecast and last year’s dence. “An Detroit auto supplier is 2016 tween that 2013 and to nowon making ter the Great Recession, Ramco bebe metropolitan ence in the sales,” Adler said. “The short-term Detroit should only help, since it area, where Copa is based, alongside about 250,000 units per month.

In other words, if a company is backlog through June looks pretty puts Ramco physically closer to domestic automakers and many of Reprinted with permission from the Crain’s Cleveland Business. © 2018 Crain Communications Inc. All Rights reserved. many of its big customers, he added. their suppliers that are all potential growing, they must be doing some- solid as well.”

Further duplication without permission is prohibited. Visit www.crainscleveland.com. #CC117 “Our product development engiAdler, who said his products most thing right.

Ramco customers, he noted. neers are very excited to be able to typically find their way into pickups, “How a supplier performs is a Ramco hopes to bring to bear its chief strength to Copa’s existing cus- function of which vehicles it is sup- SUVs and heavy commercial trucks, offer domestically manufactured tomer base, Melick said. That plying and how those vehicles sell,” thinks new tax laws and a reduction engineered assemblies and compoHill said in an email correspon- of regulations are having a big posi- nents quickly to our Tier 1 automostrength is engineering, he said. AfAf tive customers,” Melick said. ter the Great Recession, Ramco be- dence. “An auto supplier that is tive impact on sales.

Acquisition helps keep Ramco on growth track

PROMOTE. Why not?

Reprinted with permission from the Crain’s Cleveland Business. © 2018 Crain Communications Inc. All Rights reserved.

Further duplication without permission is prohibited. Visit www.crainscleveland.com. #CC117

Reprinted with permission from the Crain’s Cleveland Business. © 2018 Crain Communications Inc. All Rights reserved.

Further duplication without permission is prohibited. Visit www.crainscleveland.com. #CC142

Laura Picariello, Reprints Sales Manager Phone: (732) 723-0569 • Fax (888) 299-2205 Email: lpicariello@crain.com

P006_008_CL_20181015.indd 8

Moreover, small suburban-sized office buildings may solve the real estate developer’s dilemma with businesses demanding smaller, more efficient offices that are sapping the appetite for office space.

In the 1980s, when office buildings were springing up in Northeast Ohio like mushrooms after a rain storm, office brokers and developers often spoke of big new downtown buildings, something much bigger than the 40,000- to 160,000-square-foot size range of suburban buildings here.

Land costs are a big factor in driving the size of an office building. Bat-

Oakwood Village-based Medical Service Co.’s 2-year-old sleep division now accounts for half of its business. (Contributed photo)

time they need the equipment through the totality of their disease progression,” Marx said.

Once patients are determined to require such a device, MSC Sleep reaches out to them, enrolls them in its program and schedules them with one of MSC’s respiratory therapists.

MSC will take the patient through a comprehensive training and coach them through using the equipment.

The team at MSC continues to work with patients, contacting them every few months to see how they’re doing, whether they need ongoing disposable supplies and more.

Much of that work is done through MSC’s call center for ongoing patient support, where sleep coaches are available for patients’ questions and requests. Marx said he is looking to expand his employee base in the call center, which had 13 employees six weeks ago and today has 22. The plan is to add another 50 to 100 people to its staff in the next 24 months. In total, the company employs roughly 250 people, half of whom are in Northeast Ohio.

“That’s where we really are looking for investing heavily in Northeast Ohio with bringing on more customer-service patient-centered coaches,” Marx said. “And it’s a really good opportunity with super competitive wages on top of a commission-based incentive. And

we think Northeast Ohio’s a great place to continue to expand that.”

Maintaining relationships through the call center to ensure patients are compliant with their therapy has really helped MSC Sleep’s momentum, said Joel Marx, chairman of MSC and Josh Marx’s father.

“What Josh was able to do was focus on the execution. I think that’s what made a difference in the markets that we are in,” Joel Marx said.

“It’s somewhere they can call when my mask isn’t fitting properly, my equipment isn’t working. And the growth is because the way we treat the patients, the physicians appreciate. We’re not just setting them up and forgetting them.”

The country’s low unemployment rate has made hiring for the call center challenging, Joel Marx said. They can’t fill the spots as fast as they need them, but he’s hoping to draw entry-level, college graduates to come to Cleveland.

“That’s a challenge we all have in this market, but we’re committed to it,” he said. “We want to see Cleveland be that place where we can support our entire system throughout the five states that we’re in.”

MSC Sleep primarily does business in Ohio, Indiana, Kentucky, Pennsylvania and New York. But the company ships to most of the United States and has customers in all 88 counties in Ohio.

Joel Marx said he wants to see MSC continue to grow, not just for the sole purpose of growing, but so the company can add more resources and continue to develop its expertise.

“The more patients we have coming through, the more specialists we can hire (and) just get better at what we do,” he said.

son speculates a new downtown office building would have to be 300,000 square feet to fly today.

Whalen said he actually believes Ohio City could support a bigger office building.

“It’s a little taller than the United Bank Building, but it won’t overwhelm the neighborhood setting,” Whalen said. “There’s plenty of interest. We haven’t been to the market yet and have (letters of intent) out to tenants for two floors.”

A cutting-edge technology may also shape this project. No final decision is made, but Whalen said Harbor is “far along” in making it a wood timber building. Such new-breed projects use specially grown wood in engineered products such as beams and floors in-

stead of structural steel and concrete.

“You have exposed beams and ceilings combined with 21st-century technology,” Whalen said. Additionally, such projects can go up faster and with smaller construction crews than traditional methods. That also helps drive down costs.

However, Batson doubts a new multitenant office tower will gain traction in Cleveland because of what is afoot in more active office markets such as Columbus, Pittsburgh and others.

“In other markets, the downtown buildings that are going up are mixed-use,” Batson said. “You might see a 300,000-square-foot building go up in downtown Cleveland, but it would likely be half apartments and half offices.”

Joel Marx

Josh Marx

10/12/18 3:00 PM

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CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

Making things work better for the working class

Editorial

Roll with Rich Ohio voters have seen something unusual, in our current era of politics, during this gubernatorial campaign: a matchup of two smart and committed public servants who are capable of talking about meaningful issues and largely (though not completely) steering clear of personal attacks and divisive rhetoric.

Democrat Richard Cordray, 59, and Republican Mike DeWine, 71, both are lawyers with thick resumes in government life — Cordray as the state's former treasurer and attorney general, and head of the federal government’s Consumer Financial Protection Bureau appointed by President Barack Obama, and DeWine as, well, just about every political job a person can have. (He's the current attorney general, the former lieutenant governor, and has been in the state Legislature and the U.S. House and Senate.) Both represented a more moderate choice for their party during the primaries, and both are clearly qualified for the job they seek. Voters seem to sense that, as polls show the race has been tight from the start.

However, we believe Cordray is the better choice and deserves your vote on Nov. 6. He presents a more forward-looking approach on issues ranging from support of local governments and public transit to health care, workforce development and clean energy. Cordray also would break a Republican hold on power in Columbus that has seen a House speaker resign amid an FBI probe and a dearth of legislative momentum. The Legislature next year almost certainly will remain in GOP control, but an energetic Democrat in the governor's seat would change the dynamic in a state that needs some more dynamism, economically speaking.

The totality of Cordray's performance in public life shows that while he's generally liberal, he's also a pragmatist who will be capable of working with Republicans to find innovative solutions to the state's problems. DeWine, by contrast, is a status quo option who is unlikely to challenge his party's entrenched thinking. That was evident, for instance, in his opposition to the

Affordable Care Act and his joining of a lawsuit to upend the legislation, putting at risk coverage for pre-existing conditions and expansion of Medicaid coverage to more lower-income people. (Medicaid also is important in combating the opioid crisis, where Ohio is making some progress but remains among the most hard-hit of states.)

Cordray is better positioned to reverse the local-government funding cuts that outgoing Republican Gov. John Kasich has made to balance the state budget, to the budgetary detriment of rural areas and cities of all sizes across the state. He has pledged to put a bond package on the ballot to support infrastructure that also would include a commitment to public transportation, a key measure in linking workers with employers at a time when many companies have difficulty finding and retaining talent.

It's encouraging for the health of public debate in the state that the campaign has been conducted at a fairly high level, and that both Cordray and DeWine have talked about, and found common ground on, issues such as helping broadband reach all areas of the state and expanding preschool programs. Their sharpest disagreements have been on health care and state Issue One, which seeks to reduce drug penalties and shift more money into treatment; Cordray supports it, with DeWine opposed.

For the most part, though, the candidates are offering moderate-left and moderate-right prescriptions for Ohio. Both men approach the job with a seriousness of purpose that members of the Legislature would do well to follow.

During a news conference last week following the campaign's third, and final, debate, held in Cleveland, Cordray said, "I think the defining issue is leadership. I think the defining issue is who is going to be able to move this state forward, who is going to push this Legislature forward, which has been such a backward force holding Ohio back" We agree. And we believe Cordray is the candidate better able to do that.

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

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What happens when you assemble a bipartisan group in Washington, D.C., and ask, “How can we put the ‘work’ back in the working class?”

Believe it or not, the answer isn’t: “What does bipartisan mean?”

Bipartisanship seems to be forgotten in the nation’s capital these days. But this group addressing the struggles facing the working class also managed to put the “class” back into the process.

I was encouraged recently to see, amid the polarized political times we are living in, that a serious group of scholars and policy experts could still get together and have meaningful conversations resulting in a straightforward plan of action for our congressional leaders to hopefully consider.

Elizabeth McIntyre A group made up from representatives from Opportunity America, the American Enterprise Institute, the Brookings Institution, the Progressive Policy Institute and the Aspen Institute’s Future of Work Initiative will release its “Work, Skills, Community: Restoring Opportunity for the Working Class” report in late November.

Representatives of the alliance visited Northeast Ohio two weeks ago before touring western Michigan to hear from local economic planners, media and other voices in America’s heartland, many of them voters who supported President Donald Trump during the 2016 election.

The authors of the report defined working class as those with at least a high school diploma but less than a four-year college degree living in households between the 20th and 50th income percentiles — about $30,000 to $69,000 a year for a household with two adults and one child.

The working class in particular, the report notes, has faced strong economic and social headwinds since the 1970s that have left them disenfranchised and lagging other demographic groups.

“The American dream is fading for them,” Bruce Reed, cochair of the Aspen Institute Future of Work Initiative, said during a meeting with Crain’s.

They focus is on getting the working class who are not working back to work. And in increasing wages and prosperity for those who do work.

So how to make the things work better for the working class?

How can they get back into jobs that can support their families?

The key is lowering barriers, said Tamar Jacoby, president of Opportunity America.

To do that, the study offers several suggestions, including: JJexpanding the earned income tax credit JJmaking it easier to receive occupational licensing JJrequiring agencies to prioritize getting government benefit recipients back to work JJreforming unemployment and disability insurance to promote work JJembracing job-creating investments expected from the creation of Opportunity Zones JJrestructuring federal education financial aid to increase funding for programs that teach skills for the future, especially community colleges On that last point, the group is clear that college for all is a failed concept and that training in technical and vocational fields will be key.

Because community colleges play such a key role in putting the “work” back into the working class — in providing those necessary skills to fill important jobs and provide sustaining wages for the working class — I’ll explore in an upcoming column what Lorain County Community College is doing to achieve that goal.

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

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

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10/11/18 4:36 PM

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PA G E 11

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La Campagna owner Carmella Fragassi understands life in a male-dominated career field. Before she opened her Italian restaurant in Westlake, she worked in law enforcement as a parole officer. (Tim Harrison for Crain’s)

CHEFS

CONTINUED FROM PAGE 1

For all that, more women than ever are entering food service. According to Slate, in 2017 — the first time ever — women outnumbered male students at the Culinary Institute of America in Hyde Park, N.Y. Seventy years ago, the school’s first class included one female. Today, women account for 51.6% of enrollment.

And thousands of women play essential roles in the industry, from hotel kitchens to family style chains and everything in between. Whether cooking on the line, working as pastry chefs or in a less auspicious position, women are key players.

But it’s not easy for women trying to make their way in the business.

Start with a simple statistic. In Greater Cleveland, the number of female-owned and -operated food businesses is overshadowed by those with men at the helm, according to Cleveland Independents, a trade organization representing independently owned restaurants.

“Of our 84 member restaurants, we have 20 run by women, about 25%,” said Myra Orenstein, executive director for the group.

“There are husband-and-wife ownerships, of course … and there are women who are silent partners, who have a financial stake,” she added.

In addition to the often-reported incidents, the same age-old gender roles come into play. Women are child-bearers. After leaves of absence, they routinely extend their time off to care for their kids. They’re often prevailed upon to assist other family members. Company policies sometimes leave little room to slip back into the track.

Jill Vedaa, one of Northeast Ohio’s most prominent young female chefs, considered the current battle of the sexes in local kitchens.

“Have things gotten better or worse?” she pondered for a moment.

“Well, frankly, it’s both.”

Vedaa runs Lakewood’s Salt restaurant, which this summer celebrated its second year in business.

Her past gigs include high-profile stints at Saucy Bistro, Mise, the Wine Bar in Rocky River and Rockefeller’s in Cleveland Heights.

Vedaa said she’s run up against men in the kitchen who wouldn’t give an inch to a female co-worker, and she’s known men who were collegial and supportive.

P011_CL_20181015.indd 11

Heather Haviland is the chef and owner of Lucky’s Cafe In Tremont.

(Hannah Kiraly)

“But I can’t say, ‘Everything is wonderful; everything is great,’ ” she added. “Bottom line, it’s still a male-dominated business.”

La Campagna owner Carmella Fragassi knows “male-dominated.”

Before she opened her Italian restaurant in Westlake, she worked in law enforcement as a parole officer.

“Today, many women are stepping forward and getting into careers that were always male-dominated,” she said. “There are a lot more opportunities that afford themselves to people that just weren’t around back in the 1970s when I graduated.”

She continued, “Once you prove yourself and don’t let (men’s) attitudes get to you, and you hand it back to them whatever they’re dishing out, they find out they can’t manipulate you — a mutual respect can come in. … Frankly, after police work, restaurants were a breeze.”

Ownership, though, plays a big role for women running the show.

“I succeeded in ownership early on,” said Karen Small, chef-owner of the acclaimed Flying Fig in Ohio City.

“Maybe I’ve been fortunate. But all the stories don’t surprise me. The kitchen can be a very cutthroat place.”

Small said, though, she is not insensitive to what women face in the workplace.

“It’s awful what has happened with so many women,” she said. “But as I was coming up, it just wasn’t directed at me. In many ways, it’s the nature of the kitchen. … I guess I managed to hold my own from the start.”

Heather Haviland, who draws crowds to her Lucky’s Cafe in Tremont, said most men wouldn’t dare try handing her much trouble.

“Being the owner, I imagine I’ll be

affected less than some other people, because people wouldn’t have the audacity to sexually harass me,” she said. “But I hear it, repeatedly, from other women.

“I’ve worked primarily under men. I grew up with chefs who’d throw a can at my head! And I’ve had a couple of women bosses, and, frankly, I wasn’t crazy about them. They made me realize, ‘You’re that person who’s giving other women a bad reputation.’ ” Haviland said she’s had to learn that “if a man says it loud and hard, he’ll be credited for knowing what he wants and having high standards. If a woman does the same thing, she’s a reactionary, emotional. If I yell at someone or go toe-to-toe, I’m a bitch.”

In many ways, it’s about finding a leadership style that suits you, the chefs said.

You might call Michele Gaw a pioneer on the local scene. During the mid-1980s, she started working at The Watermark in Cleveland’s Flats, one of the first female-led kitchens in the city. Today she teaches culinary arts at Cuyahoga Community College’s Hospitality Management program.

“I’ve never tried to be anyone other than myself: a compassionate person,” Gaw says. “That may come across to some men as my being ‘weaker.’ That’s OK. I’ve always treated my employees, whoever they are, with respect and support.”

Small said she strives to communicate as effectively.

“It’s not about being ‘a bitch,’ ” she said. “It’s about expecting others to do things well, and consistently, and never letting anyone down — even when you’re in the heat of a battle. It’s what you work for. This is my work, my life, and you have to make it plain that this is what we all need to do. Which is why I look to hire long-term people who understand the demands of the job.”

Haviland added that she hires carefully, insists on a tryout period and watches for “attitude.”

“It’s no secret: I’m very hard-core in the kitchen,” she said. “I’m not all fluffy and putting hearts over the ‘I’s’ when I write a memo. I will ride your ass and make you cry.”

But she said if she balked at hiring anyone who may judge her because she is a woman or may smirk because she’s not running an expensive, marquee place, then she wouldn’t have a business.

“Instead, I think to myself, ‘You know what? I’ve going to be that person who changes their minds about being a woman in the kitchen.’ ”

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The Midwest is telling us an interesting growth story

By JUSTIN FOX/BLOOMBERG OPINION

Economic growth in the Midwest

The Midwest and the Northeast are the slow-growing regions of the United States, with estimated population increases of 1.9% and 2.1%, respectively, from 2010 through 2017, according to the Census Bureau, compared with 7.9% for the South and 7.6% for the West.

They’re growing slowly in very different ways, though.

As I discovered recently while working on a column about booming Sioux Falls, S.D., the Midwest has 23 metropolitan areas that have matched or exceeded the national population growth rate of 5.5% since 2010, while the Northeast has just two: Boston and State College, Pa. Yet population is growing faster overall in the Northeast than in the Midwest. That’s pretty weird.

What’s behind the disparity? My first thought was that perhaps the rural Midwest is still losing lots of residents to cities and their suburbs, while in the Northeast that process has mostly played out already. But it turns out the population outside of metropolitan areas has actually fallen faster in the Northeast since 2010 than in the Midwest.

No, the difference seems to be mainly that more than half the Northeast’s population lives in just three metropolitan areas, and all three have grown at or faster than the regional 2.2% rate since 2010.

The only other top-10 Northeastern

Compounded annual growth rate of the metropolitan-area real GDP, 2010 through 2017: 3.2%

Columbus 2.2%

Detroit Cleveland

2.1%

Minneapolis-St. Paul 2.1% 1.7% Cincinnati 1.6% Chicago 1.6% Indianapolis 1.6% Kansas City, MO 0.8% Milwaukee Source: Bureau of Economic Analysis Bloomberg Opinion graphic

metropolitan areas that are growing faster than the region — Bridgeport and Worcester — are on the fringes of the New York and Boston metropolitan areas, respectively, and included in the broader New York and Boston combined statistical areas (the same goes for Providence with Boston). In the Northeast, then, population growth is mainly about the big getting bigger.

The Midwest is more complicated, and more interesting. Two of its most populous metropolitan areas are barely growing, and the region’s population was less concentrated in its biggest metros to begin with.

There are lots of winners and lots of losers in the Midwest, then, and it’s not just a case of the big getting bigger. Ten of the 12 fastest-growing metropolitan areas in the region have populations of fewer than 500,000.

Population growth isn’t everything, of course. Some fast-growing areas don’t generate lots of economic value; some slow-growing or even shrinking ones do. Metropolitan Pittsburgh may be losing population, for example, but its rate of real gross domestic product growth is tops among the big Northeastern metros since 2010 (U.S. GDP grew at a 2.1% annual rate over this period).

The accompanying chart shows the GDP growth rankings for the big Midwestern metros.

Overall, the Midwest’s real GDP rose at a 1.7% annualized pace (in Cleveland, the figure is 2.1%) from 2010 to 2017; the Northeast’s, 1.1%.

That’s partly just because GDP fell much more during the Great Recession in the Midwest and thus had further to bounce back.

But I do keep getting the impression that the Midwest, after having a generally awful time of it in the 2000s, now has a lot of interesting things going on economically and demographically.

Did you know, for example, that the region is home to more than half the counties in the U.S. where the population got younger from 2010 to 2017?

The Midwest: Some stuff is going on there.

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Focus BUSINESS OF PHILANTHROPY

WHEN DONORS SPEAK, DAFs LISTEN

Capital from funds is reaching charities at record-high levels

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

Whether it’s for the tax benefits, low hurdles for participation, overall flexibility or a number of other factors, donor-advised funds (DAFs) are seeing capital flowing in and out of them reach record levels.

And even though new tax codes in 2018 have cast some uncertainty over how DAFs and their contributors might alter their giving through those vehicles, the sense is the popularity of DAFs will continue to grow.

“I think we’re entering a new phase now where donors are becoming more aware of this as a simple tool they’re not just using on a standalone basis, but in conjunction with other (philanthropic) strategies,” said Phil Tobin, who established a DAF via iGiftFund in Hudson earlier this year. “When put with

a DAF, it supercharges those other strategies.”

DAFs, which are established through public charities, allow donors to make a charitable contribution — while enjoying an immediate tax benefit — and then recommend grants from the fund over time. The National Philanthropic Trust (NPT) describes them as charity savings accounts. The fund works with the financial adviser of a donor (or several of them) who can put in as much money or other assets as they want into the fund and allocate grants to various charities in unique and customized ways from that — hence, “donor advised.”

According to the 2017 edition of NPT’s Donor-Advised Fund Report, which comes out at the end of each year and analyzes activity of the fiscal year prior, grants from DAFs to charitable groups reached a record $15.75 billion in 2016, up 10.4% from 2015.

SEE DAFS, PAGE 16

Illustration by akindo via Getty Images

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Q&A: Steve Cencula

FORM principal and chief technology officer You know, they’re nonprofits. So there’s always budgetary concerns.

And I think one of the things that we do for our clients is we return that money on investment. So we can directly correlate a new website to increased donations or a new website to increased memberships.

Or just a better utilization of internal resources. You know, maybe an organization was doing things by hand. Maybe they were processing memberships by hand, for example.

By automating that and moving it online, you could increase online memberships 20% or 25%, and there’s a human resources savings there.

A few years after its 2004 founding, digital marketing agency FORM shifted its work to focus exclusively on arts and culture and nonprofit organizations. ¶ Today, the agency has between 75 and 85 clients, said Steve Cencula, FORM’s principal and chief technology officer, who co-founded the firm with Teresa Kiplinger, principal and creative director. ¶ FORM’s clients are primarily in Northeast Ohio, but in the past year, it’s expanded to serve some in Pittsburgh, Toledo and Columbus. Also in the past year, the 12-person agency has grown its staff by 50% and its revenues by 35%, Cencula said. ¶ He called it an “exciting time” to be doing this work. ¶ “There’s a lot of changes happening with technology and a lot of new ways to kind of make nonprofits more successful by using technology to take the friction out of donating money or take the friction out of renewing your membership and those kinds of things,” he said. ¶ Crain’s spoke with Cencula about FORM and its work.

The conversation has been lightly edited for clarity. — Lydia Coutré What prompted you to shift your focus to exclusively work with nonprofits and arts and culture organizations?

Well, a couple reasons. The main reason was most of our client base was arts, culture and nonprofits. So it really was just kind of recognizing the focus in our client base and acknowledging that. The second thing is we really like working with nonprofit clients. The difference, I guess, between that and corporate clients generally is we’re typically working with a small team. ... The second thing is because we’re working with a lot of arts and cultural organizations, they appreciate design. They appreciate visual design and what it can, you know, how it can engage people. And then the third reason is every project we do, we’re helping people whether

that’s making them feel good about the arts or feeding people or raising money for cancer.

Give me an overview, if you could, of what your services are and how you support nonprofits.

We’re a creative service firm. And about 75% of our work has to do with interactive design, so that’s websites, interactive touch screens. … We’ve been doing more advanced things like voice-enabled applications.

We did a donation kiosk last year for our Great Lakes Theater. … And then we have a component of our business that does digital marketing for nonprofits, so we do everything from Facebook, Instagram campaigns to helping nonprofits segment their email lists to better target their audiences. And the other area of our business is print. So we

FORM’s Steve Cencula with co-founder Teresa Kiplinger do a lot of more traditional marketing where we’re doing annual reports, we’re doing brochures, we’re doing rack cards and other kind of materials that other nonprofits need.

What are some of the biggest marketing needs that you see among nonprofits?

Well, first and foremost is an effective website. We see a lot of websites that have been put up. ...

They’re generally simple websites that have basic information about a nonprofit, but they’re not very compelling; they’re not very technically sophisticated. So usually they don’t have the ability to do integrated donations or selling event tickets or selling memberships or

sponsorships, so everything that a typical nonprofit does, they’ve kind of brought together a mishmash of solutions. They might have a small website, but then to do events, they use another site, and then to do e-commerce, they use another service. And so it becomes a very inefficient way to operate the organization, because their data is in four or five different places. So our system kind of just unifies all that and it makes the organization overall more efficient.

What are some of the biggest challenges that nonprofits face in being able to do this on their own, being able to take on some of the services you offer in-house?

Why have nonprofits ultimately been a fulfilling and successful business model for FORM? Pretty simple. Our mission is to connect our clients' patrons with their organizations, and I think we’re very effective at doing that. I think, whether it’s websites or marketing, whether that’s digital or print marketing, I think we’re very effective at communicating our clients’ missions, making something that resonates with those audiences.

And I think we are able to generate lots of revenue for our nonprofits.

Like I said, we expect our work to pay for itself, whether that’s in terms of increased memberships or donations or whatever it is.

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BUSINESS OF PHILANTHROPY

‘Nuanced’ tax law is no gift to charities

— Tim Delaney, president and CEO of the National Council of Nonprofits

“We believe it is because they believe in the mission, they believe in the work that is being done,” she said.

Overall contributions to Akron Community Foundation through June 30 are close to 1% over the first half of last year, according to Medzie.

Representatives from the Kosher Food Pantry in South Euclid, Rainey Institute, a youth arts program located in Cleveland’s Hough neighborhood, and the Akron-Canton Regional Foodbank also said they have not seen a downturn in individual giving. What’s more, they don’t expect one.

“We’ve talked about it at the board and staff level,” said Rainey Institute executive director Lee Lazar, “and

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SALT • SALT • SALT

“It is going to be somewhat tricky in communicating to people about this change to charitable giving in part because Congress did not technically touch the century-old charitable giving incentive.”

+

+

Are Northeast Ohio nonprofits worried about the effect tax reform will have on end-of-year giving? Not really.

Do they want to talk about it? Not at all.

But, it’s not because nonprofit leaders are living in denial. There’s a broad-based understanding that the doubling of the standard deduction will likely hurt the bottom line of many charitable organizations, although the extent of the damage may not be understood for years.

Their dilemma is that talking about tax reform may cause some donors to rethink their holiday handouts. And, as for now, nonprofits appear to be clinging to an Oprah-esque philosophy of ask, believe and receive.

“It is going to be somewhat tricky in communicating to people about this change to charitable giving in part because Congress did not technically touch the century-old charitable giving incentive,” said Tim Delaney, president and CEO of the National Council of Nonprofits, a Washington D.C.-based advocacy for charitable organizations. “However, by doubling the standard deduction, they made it less valuable to approximately 21 million Americans.”

“This is a nuanced issue with a severe impact,” Delany added. “Things can be miscommunicated too easy, and there is too much at stake for that.”

The Tax Cuts and Jobs Act makes a number of changes that may discourage charitable giving, according to Howard Essner, a corporate, tax

dividual donations among issue-focused funds, such the Women’s Endowment Fund or Gay Community Fund, or its geographic funds like the Medina Community Fund.

we think the impact will be minimal, because Cleveland is a very philanthropic community.”

Lazar said roughly 20% of Rainey’s revenue comes from individual gifts.

Private and public grants make up a large portion of its funding. However, even organizations where individual donors provide a bigger slice of incoming gifts — individuals are about 46% of Akron-Canton Regional Foodbank’s total giving and close to 80% of the Kosher Food Pantry’s — are optimistic they will not see a significant donation drought this holiday season.

Debra Hagarty, major gifts officer at Akron-Canton Regional Foodbank, said nonprofits like hers have gotten a lot savvier in the last couple of years when it comes to developing relationships and communicating with its donor base. End-of-year pleas have been replaced by yeararound donor engagement, she said.

Another trend that bodes well for area nonprofits is the growth of donor-advised funds, said Rivka Goldstein, program manager at the Cleveland Kosher Food Pantry. By setting up a donor-advised fund, individuals and couples can bundle several years of charitable giving in a single tax year and get the tax benefit in that year. They can then dole out the money when and to whom they see fit.

“We had seen many of our donors gravitate to that strategy, even before the tax reform became an issue,” Goldstein said.

Essner said a similar tax strategy called bunching is gaining steam as well. Under this plan, taxpayers gift several years of charitable donations all at once.

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clbfreelancer@crain.com

and estate planning lawyer with Cleveland-based Ancora. By lowering the individual income tax rates, it reduces the value of all tax deductions, he said. It also caps the state and local tax deduction at $10,000 and increases the standard deduction to $12,000 for singles and $24,000 for couples.

The latter reforms, Essner notes, are what may ultimately reduce the number of households who opt to itemize deductions on their federal returns, which has long been an incentive for charitable giving. The charitable deduction is available only to individuals and couples who itemize.

Economists with the Tax Policy Center estimate the number of households that itemize will shrink from about 37 million in 2017 to about 16 million in 2018 under the new tax law. They project charitable giving could fall by as much $21 billion annually over the next couple of years.

Delaney doesn’t think individual giving will drop quite that far or that quickly.

“It will take Americans completing their tax returns for a year or two and then seeing that (a) there is not really the incentive and (b) not really that much more money in their own personal savings from taxes, and therefore they will not be giving as much,” he said.

Further complicating giving projections is the fact that many donors contribute because of the cause they are supporting, not solely for the tax savings, said Margaret Medzie, vice president and chief development officer for the Akron Community Foundation. Medzie said the foundation has not seen a decline in in-

+

By JUDY STRINGER

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“Like a donor-advised fund, this strategy allows you to itemize in one year and get the tax benefit of your donation and in subsequent years just take the standard deduction,” he said. “You should, however, tell the organization or organizations that you are making three or four or five years worth of donations this year and they shouldn’t expect a similar donation for several years.”

Despite local optimism, the national sentiment is a whole lot more downbeat. Concerns were highlighted in a recent report released by the Fundraising Effectiveness Project, which showed that total revenue to nonprofits during the first half of 2018 fell 2.1% compared with the first half of 2017.

The total number of donors plunged 6.6% on a year-over-year basis, while the donor retention rate, which measures the numbers of donors who contribute to the same organization from one year to the next, dropped 6.4%. And the numbers of new donors plummeted by 9.2%.

Megan Van Voorhis, president and CEO of Arts Cleveland, said Northeast Ohio nonprofits may know more about if and when they will feel the pain in January. About half of all nonprofits say more than half of their annual donations arrive between October and December. A rough first “giving season” since the tax bill passed would be eye-opening, Van Voorhis said.

“Right now, there is a lot of ‘wait and see’ going on,” she said. “We will have a better picture as we come out of the year-end, and what happens will position us better to really understand the impact and respond, if needed.”

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BUSINESS OF PHILANTHROPY

DAFS

CONTINUED FROM PAGE 13

Contributions into DAFs also hit an all-time high in 2016 of $23.37 billion, a year-over-year increase of 7.6%. And the total number of DAFs came just shy of 285,000 in 2016, another annual increase of about 7%.

All those metrics have been trending up for years.

Giving more The nonprofit Legal Aid Society of Cleveland has seen a significant increase in donations this past year, said spokeswoman Melanie Shakarian, with designations from both the Jewish Federation and The Cleveland Foundation growing. Much of it is coming via DAFs. Between 2013 and the end of 2017, she said grants from the Fidelity Charitable Gift Fund have increased 300%, and gifts made from that fund through the start of October this year already have outpaced all of 2017.

One of those donors giving more to legal aid through a DAF is the founder and namesake of Charna E. Sherman Law Offices in Cleveland.

“Whatever differences people have over the (Brett) Kavanaugh battle, it crystalized for all one salient point: legal rights matter. But rights don't

mean anything if they can’t be enforced in a court of law,” said Sherman of her motivations for giving to Legal Aid. “So for the most vulnerable in our community, legal aid ensures the cornerstone of the rule of law: access to the courts assisted by lawyers.”

Sherman said she has run into “administrative problems” trying to direct gifts to specific groups like Legal Aid through federated campaigns.

Sherman said she once learned a donation she earmarked for Legal Aid through such a campaign didn’t reach the organization. Now she exclusively uses a DAF. Her experience highlights the flexibility of DAFs, which are open to converting non-conventional assets to cash, including publicly and non-publicly traded stocks, bonds, real estate and other property. A spokesperson for Fidelity Charitable Gift Fund said they have even accepted surplus corn from a philanthropic farmer in the past. While the assets still require some liquidity to be used — art, for example, isn’t usually accepted in DAFs because of the difficulty in assessing its fair market value — the vehicles allow more options than just donating cash.

Giving through a DAF, Sherman said, is all done electronically and “couldn’t be easier.”

“My history of giving to any organization is right at my fingertips. It

even made a comprehensive bequest in my will to the fund and provided the Federation guidance for the distribution of gifts upon my death, including legal aid.”

Growing popularity

“In a way, DAFs have created a good bond between charities and donors because it allows them to be more involved.”

— Phil Tobin, who established a DAF via iGiftFund

makes compiling my contributions for my taxes incredibly simple. And it's even personalized: Acknowledgement notes are sent to recipients of my choosing, I can designate annual gifting, and I have multiple choices as to how to identify myself as the donor, including anonymously,” she said. “It's easy to direct contributions of stock to the fund. I have

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Tobin was an early adopter and promoter of DAFs. In the 1980s, he established one of the market’s earlier ones as chief financial officer of The Cleveland Foundation. The vehicles were created in the 1930s, although Congress didn’t establish a legal structure for them until 1969. It would take several years more, though, for them to see wide adoption.

Tobin, who in 1993 established the American Endowment Foundation, which he left in 2016 after helping it grow to the 21st-largest charity in the country, said the popularity of DAFs today is due to several factors.

Some are market-related, like tax advantages and a general increase in American wealth.

Some are world-related. NPT points out in its report analyzing the 2016 fiscal year the polarizing presidential election plus a slew of natural disasters and humanitarian crises, all of which spur charitable giving. Sherman’s increased donations in the wake of the recent Supreme Court controversy would fall into that camp.

Other factors still come back to the mentality of donors today, who increasingly want to be involved in their giving — which they can do by making various donations to separate groups versus cutting one large check to a massive foundation — and use DAFs to foster a giving spirit among family members for future generations.

“In a way, DAFs have created a good bond between charities and donors because it allows them to be more involved,” Tobin said. “Many younger generations in particular are just not

into plopping money somewhere and not seeing anything happen. They want to be involved and tend to like the idea of working with the charities and being involved with them.”

Other donors use DAFs to teach those younger generations, he said.

After all, he said studies show that when wealth is transferred to a second generation, 70% of the time that money dries up before reaching the next generation. Some DAFs, like Tobin’s, let children as young as age 8 participate in the related program.

There’s also the lower barrier to entry. While some of those benefits, like passing along a philanthropic mentality to a younger generation, exists with other charitable vehicles, like private foundations, they’re often only accessible by the extremely wealthy. Some funds, like those at iGiftFund, start at $5,000.

There is some uncertainty surrounding how the tax codes could impact giving to and through DAFs. An Oct. 10 report by Fidelity Charity shows that donors are unsure of how those tax laws could affect them. Some questions that donors ask include whether they might pursue “bunching” — the practice of grouping multiple years of deductions into a single year to surpass the standard deduction — or whether they’ll itemize deductions following the increase of the standard deduction.

Many of those questions loom now as philanthropists will make their donations at the end of the year and around the holiday season.

The report, however, shows that despite those uncertainties, four out of five donors intend to maintain their giving levels all the same.

“It’ll affect some people more than others, but those things could change the landscape for charitable giving,” Tobin said. “But overall, there is increased opportunity for charitable giving. And DAFs can help you get over those difficult things.”

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BUSINESS OF PHILANTHROPY

Crowdfunding can ease teachers’ ‘burden’

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Booster seats. Reading materials. A bass clarinet.

What do these things have in common? At the start of October, teachers in Ohio were trying to raise money to buy all of them for their classrooms with the help of online crowdfunding.

As of last Tuesday, Oct. 9, there were more than 1,600 active Ohio campaigns listed on DonorsChoose.org; more than 800 were listed on AdoptAClassroom.org. And those are just two of the popular sites where teachers can turn for fundraising assistance.

But while crowdfunding might make it easier for teachers to ask for financial help in the classroom, it also brings challenges.

This past summer, the Ohio Auditor of State’s office released a report on crowdfunding in education, encouraging districts to set official policies on the practice. Suggested guidelines included making sure campaigns don’t violate federal or state law, like those related to student privacy, and ensuring donations are the property of the school district and tracked as such.

The report surveyed the state’s more than 600 districts; about 20% replied. And of those, only about 41% had a crowdfunding policy in place.

The Cleveland Metropolitan School District doesn’t currently have a policy on crowdfunding, but teachers in the district have already made use of the approach.

“CMSD is not unlike public schools everywhere that have a tradition of using donations to augment their aca-

Ohio teachers are turning to websites like DonorsChoose.org in order to raise money for classroom supplies. (DonorsChoose.org)

demic experiences in the classrooms or to fund items or projects that maybe their school or their district budget can’t afford,” said chief communications officer Roseann Canfora.

Teachers in the Cleveland Metropolitan School District have raised about $1.6 million on the DonorsChoose website since 2007, according to information provided by the district. That funded more than 2,000 classroom projects.

The Akron Public Schools updated its policies to include crowdfunding this August, said chief financial officer Ryan Pendleton. The district’s policy outlines “dos and don’ts” of fundraising, Pendleton said, like not working with sites that require teachers to use their personal bank accounts.

But crowdfunding has value, Pendleton said, allowing teachers to connect to a broader audience. It can help those teachers support their classrooms and lessen the amount they’d have to pay themselves for

things the district can’t afford. Pendleton said the campaigns he’s seen are often supporting PTA or booster initiatives, raising funds for things like field trip expenses, non-book library supplies or technology.

Pendleton said he views crowdfunding as complementary to more traditional school fundraising avenues like bake sales.

“We still see there’s some value in that, building team,” Pendleton said.

“But this is complementing in a modern era. And so I see it really just bringing additional value. We’re not afraid of crowdfunding, at all. We think it definitely complements the classroom and maybe even relieves some of that burden that our teachers see year to year as requirements go up and funds go down.”

In Akron, teachers have to first gain approval from building principals for crowdfunding campaigns, which the district categorizes as “local partnership grants.” The funds or

Untitled-2 1

P017_CL_20181015.indd 17

materials raised through crowdfunding are kept separate from the district’s general fund, Pendleton said. If the campaign raises fewer than $1,000, that building-level approval is all the teacher needs, Pendleton said. Campaigns that raise $1,000 to $10,000 require principal and grants advocate approval. And anything above that needs central office approval, as well. Almost all of the crowdfunding campaigns Pendleton has seen have aimed below $10,000, though.

Peggy Greiner, grants manager for the Akron Public Schools, said most crowdfunding requests range from $100 to $300. These are small requests, as varied as headphones, a composting bin or wobble chairs.

“They’re really asking for things that just support their classroom,” Greiner said.

Greiner has been in this part-time role for about six years, after retiring as a

teacher and administrator. Greiner said crowdfunding has grown in popularity in the years she has been overseeing those fundraising efforts. She thinks that’s in part because the district’s millennial teachers are used to doing things online. And it’s often more difficult for young teachers to spend their own money on such supplies, since they don’t make as much early on.

Since the district’s crowdfunding approval process is new, Greiner monitors sites like DonorsChoose and reaches out if she sees a campaign on there that wasn’t approved. The district wants to know what teachers are asking for, because it may be able to provide funds for items on its own.

Pendleton said the district is “sensitive about how much we canvass our communities and for what purposes,” and that it has funding for general supplies. Crowdfunding campaigns should be to add extra value to classrooms.

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CRAIN’S CLEVELAND BUSINESS

THE LIST

Largest Grantmaking Foundations Ranked by grants awarded in 2017

FOUNDATION

GRANTS LARGEST AWARDED ASSETS (MILLIONS) (MILLIONS) GRANT 2017 2017/2016 2017

1

Cleveland Foundation, Cleveland (216) 861-3810/clevelandfoundation.org

$101.0 $93.6

$2,451.0

$3,100,000

$250

Neighborhood Connections, Case Western Reserve University, ideastream, Cleveland Metropolitan School District

1914 78

Ronald B. Richard, president, CEO

2

KeyBank Foundation, Cleveland (216) 689-7397/www.key.com/foundation

$27.7 $15.6

$8.6

$24,000,000

$500

JumpStart Inc., PlayhouseSquare Foundation, University Hospitals Health System Inc., Cleveland Clinic Foundation

1969 5

Margot James Copeland, chair

3

The George Gund Foundation, Cleveland (216) 241-3114/gundfoundation.org

$22.4 $22.5

$564.7

$2,000,000

$2,500

Foundation Fighting Blindness, Cleveland Metropolitan School District, Case Western Reserve University, Coalition on Homelessness and Housing in Ohio

1952 12

David T. Abbott, executive director

Akron Community Foundation, Akron (330) 376-8522/akroncf.org

$13.3 $11.4

$219.0

$85,000

$50

Building for Tomorrow, City of Akron Neighborhood Partnership Program, Child Guidance and Family Solutions, Boys and Girls Club of the Western Reserve

1955 19

John T. Petures Jr., president, CEO

5

Stark Community Foundation, Canton (330) 454-3426/starkcf.org

$9.7 $13.2

$282.5

$428,214

$100

John H. and Evelyn L. Ashton Preservation Association, Friends of Stark Parks, United Way of Greater Stark County, National First Ladies Library

1963 13

Mark J. Samolczyk, president, CEO

6

Nordson Corporation Foundation, Westlake (440) 892-1580/nordson.com

$9.5 $8.7

$27.1

$300,000

$1,500

College Now, Breakthrough Schools, Invent Now!, Food Bank for Larimer County

1988 4

Cecilia H. Render, executive director

Eaton Charitable Fund, Cleveland (440) 523-5000/eaton.com

$9.4 $9.2

NA

$625,000

$5,000

United Way, Salvation Army

1953 NA

Taras G. Szmagala Jr., SVP, Public & Community Affairs

8

Saint Luke's Foundation of Cleveland, Cleveland (216) 431-8010/saintlukesfoundation.org

$8.4 $8.5

$178.3

$480,000

$600

Cleveland Neighborhood Progress, Legal Aid Society of Cleveland, Greater Cleveland Food Bank, The Food Trust

1997 11

Anne C. Goodman, president, CEO

9

The Kelvin & Eleanor Smith Foundation, Cleveland (216) 591-9111/kesmithfoundation.org

$7.4 $6.7

$167.9

$2,000,000

$5,000

Hawken School, Case Western Reserve University, Playhouse Square, Cleveland Museum of Art

1955 2

Ellen Stirn Mavec, chairman, president

10

Nord Family Foundation, Amherst (440) 984-3939/nordff.org

$7.1 $6.5

$167.6

$300,000

$50

Second Harvest Food Bank, Oberlin Center for the Arts, Mercy Foundation of Lorain County and Lorain County Health & Dentistry

1988 6

John Mullaney, executive director

11

Parker Hannifin Foundation, Mayfield Heights (216) 896-3000/parker.com

$7.0 $7.0

$0.0

NA

NA

Not disclosed

1953 0

Thomas L. Williams, chairman, CEO

$7.0 $7.2

$155.1

$1,650,737

$250

Jewish Federation of Cleveland, Case Western Reserve University School of Medicine, Cleveland Clinic, Cuyahoga County Board of Health

1994 6

Mitchell Balk, president

THIS YEAR

4

7

Sinai Health Care Foundation, Cleveland 12 Mt. 421-5500/mtsinaifoundation.org THE(216) LIST

SMALLEST GRANT 2017 LARGEST GRANTS

FOUNDED/ LOCAL TOP LOCAL STAFF (1) EXECUTIVE

Largest Grantmaking Foundations Ranked by grants awarded in 2017 SOUND SOLUTIONS FOR YOUR FOUNDATION

THIS YEAR

FOUNDATION

GRANTS LARGEST AWARDED ASSETS (MILLIONS) (MILLIONS) GRANT 2017 2017/2016 2017

13

The Youngstown Foundation, Youngstown (330) 744-0320/youngstownfoundation.org

$6.6 $6.2

$114.9

14

Char and Chuck Fowler Family Foundation, Mayfield Heights (216) 906-4578/fowlerfamilyfdn.org

$6.3 $7.5

15

GAR Foundation, Akron (330) 576-2926/garfoundation.org

16

FOUNDED/ SMALLEST Contact Pam Lebold + plebold@maloneynovotny.com + 216.363.0100 LOCAL GRANT TOP LOCAL 2017

LARGEST GRANTS

STAFF (1)

EXECUTIVE

$1,000,000

$5,000

Youngstown amphitheater, Public Library of Youngstown and Mahoning County, Potential Development School, Walnut Grove Field of Opportunity

1918 2

Janice E. Strasfeld, executive director

$32.5

$1,050,000

$1,000

University Hospitals, Case Western Reserve University, Cleveland Museum of Art, LAND Studio

2003 1

Chuck Fowler, president

$6.1 $6.2

$169.1

$333,333

$60

Fund for Our Economic Future, United Way of Summit County, Summit Education Initiative, Akron Public Schools

1967 6

Christine Amer Mayer, president

In His Steps Foundation, Twinsburg (330) 528-1785/ihsfound.org

$6.1 $5.1

$31.0

$499,992

$150

Cru, Christian Broadcasting Network, Maranatha Bible Church, Westside Christian Academy

1998 2

Robert S. Cathcart, executive director

17

Community Foundation of Lorain County, Elyria (440) 984-7390/peoplewhocare.org

$6.0 $5.9

$137.8

$783,679

$50

Mercy Foundation of Lorain County, Lorain County Metropolitan Park District, Common Ground, Lorain County Alcohol and Drug Abuse Services

1980 11

Cynthia Andrews, president, CEO

18

Burton D. Morgan Foundation, Hudson (330) 655-1660/bdmorganfdn.org

$5.2 $7.2

$167.6

$350,000

$600

Case Western Reserve University, Kent State University Foundation, Lorain County Community College Foundation, Western Reserve Historical Society

1967 8

Deborah D. Hoover, president, CEO

19

Case Alumni Foundation, Cleveland (216) 231-4567/casealum.org

$5.1 $4.1

$71.1

$2,000,000

$500

Case School of Engineering and College of Arts & Sciences at Case Western Reserve University

2004 9

Stephen Zinram, executive director

20

Community West Foundation, Westlake (440) 360-7370/communitywestfoundation.org

$4.8 $4.7

$120.5

$713,677

$5

Fairview Hospital, Lutheran Hospital, Greater Cleveland Food Bank, North Coast Health

1997 8

David T. Dombrowiak, president, CEO

21

Peg's Foundation (2), Hudson (330) 655-1366/pegsfoundation.org

$3.5 $4.0

$101.0

$350,000

$7,500

Northeast Ohio Medical University, Kent State University, Active Minds, National Alliance on Mental Illness affiliates

2001 4

Rick Kellar, president

22

The Raymond John Wean Foundation, Warren (330) 394-5600/rjweanfdn.org

$3.3 $2.3

$84.5

$1,050,000

$500

Youngstown Neighborhood Development Corp., Trumbull Neighborhood Partnership, Ohio Transformation Fund, Revitalize Home Mortgage

1949 5

Jennifer E. Roller, president

23

Martha Holden Jennings Foundation, Cleveland (216) 589-5700/mhjf.org

$3.3 $3.5

$71.5

$65,000

$666

Literacy Cooperative of Greater Cleveland, Cleveland Clinic, YMCA, Cleveland Play House

1959 4

Daniel J. Keenan, executive director

24

Sisters of Charity Foundation of Cleveland, Cleveland (216) 357-4460/socfcleveland.org

$3.2 $2.7

$101.9

$150,000

$50

Ursuline Sisters of Cleveland, St. Vincent Charity Medical Center, Enterprise Community Partners, YWCA Greater Cleveland

1996 11

Susanna H. Krey, president

25

The Lubrizol Foundation, Wickliffe (440) 347-1797/lubrizol.com

$3.2 $3.1

$16.4

$212,250

$260

United Way of Greater Cleveland, United Way of Lake County, MetroHealth Foundation, United Way of Greater Houston

1952 2

J. Mark Sutherland, president

26

Reinberger Foundation, Cleveland (216) 292-2790/reinbergerfoundation.org

$3.2 $3.0

$74.5

$300,000

$3,000

Salvation Army of Greater Cleveland, Providence House, Fund for Our Economic Future, Community Shelter Board (Columbus)

1968 1

Karen R. Hooser, president

27

Barberton Community Foundation, Barberton (330) 745-5995/barbertoncf.org

$2.9 $2.9

$84.5

$55,000

$200

College Now Greater Cleveland

1996 5

Patti Cleary, interim executive director

28

The Hoover Foundation, Canton (330) 458-0143

$2.7 NA

$56.0

$315,000

$100

United Way of Stark County, Pro Football Hall of Fame, Arts in Stark, North Canton City Schools

1946 0

Lawrence R. Hoover, chairman

29

John Huntington Fund for Education, Cleveland (216) 321-7185

$2.5 $2.5

$34.4

$765,000

$33,333

Case Western Reserve University, College Now, John Carroll University, Ursuline College

1954 1

Peter W. Adams, president

30

Eva L. and Joseph M. Bruening Foundation, Cleveland (216) 621-2632/brueningfoundation.org

$2.4 $2.4

$63.4

$300,000

$2,500

MetroHealth Foundation Nurse-Family Partnership; Cleveland Public Library early literacy training; Literacy Cooperative; PRE4CLE

1987 4

Cristin N. Slesh, executive director

RESEARCHED BY CHUCK SODER (CSODER@CRAIN.COM)

Want the full version of this list — and every other Crain's list? Become a Data Member: CrainsCleveland.com/data The full list includes 37 foundations plus additional information and executives. Information is supplied by the foundations. Send feedback to Chuck Soder: csoder@crain.com.

(1) Full-time equivalent as of June 30, 2018 (2) Formerly The Margaret Clark Morgan Foundation

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NORTHEAST OHIO NOTABLE WOMEN IN FINANCE

POWER PLAYERS

Influential women illustrate progress in corporate leadership roles, though barriers persist

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

In the C-suite, where women still are fighting for representation equal to their male counterparts, Northeast Ohio’s finance sector is illustrative of some of the strides businesswomen have made so far — even if there’s still a long way to go.

This market is home to a number of powerful women in finance — from Loretta Mester, president and CEO of the Federal Reserve Bank of Cleveland, and Tricia Griffith, presi- Teresa Metcalf Beasley, dent and CEO of Progressive Corp., partner, Calfee to KeyCorp’s Beth Mooney, who’s repeatedly been named the most powerful woman in the banking industry.

That’s not something every market can tout.

A December 2017 analysis by Korn Ferry of the top 1,000 U.S. companies by revenue found that just 23% of senior executive positions with a title including the word “chief” were held by women. And, in the wake of movements like #MeToo, it may surprise some to know that figure is actually down from 24% in 2016.

In the finance sector, the Korn Ferry analysis found that 29% of C-suite jobs were held by women, the highest of any other industry. That said, Tricia Griffith, president and CEO, women were largely kept out of se- Progressive Corp. nior roles. Only 5% of CEOs and 8% of CFOs in finance were female, which is among some of the worst levels in tion to Advance Collegiate Schools of the survey.

Business). “And I think smaller comSo while it’s difficult to prove the panies, too, are doing the same thing.

Cleveland region is ahead of the But they also have to be equipped to curve in terms of elelead these companies.”

Spake pointed to vating women to “I think that KSU’s business school, C-suite roles in finance, increasingly in where there’s a 60-40 that kind of representa- large corporations tion feels signifcant. there is an effort to split between males and females in the stuOther posts held by be intentional women in this market dent body, noting there about diversity and are noteworthy as well, are simply more womregardless of the equity and en studying business C-suite. Among others, inclusion.” today for any number Northeast Ohio is of reasons including a home to Cindy Crotty, Deborah Spake, dean of more progressive sociPeoples Bank execu- Kent State University’s ety and a gradual lowering of some barriers tive vice president; Ju- College of Business for women. lie Boland, the central Administration region managing part“But when I talk to ner and former local market presi- groups of women, one thing I almost dent for Ernst & Young; and Teresa always point out is we won’t have Metcalf Beasley, a partner at Calfee women in leadership roles unless focusing on real estate development they step up when the opportunity presents itself,” Spake said. and public financing.

That doesn’t mean the glass ceiling “I will have to say that Ohio is blessed to have so many corporate has been destroyed and doors are headquarters and I think that in- swinging open, though.

According to a recent survey of creasingly in large corporations there is an effort to be intentional about 220 female business leaders by Keydiversity and equity and inclusion,” 4Women, a community network desaid Deborah Spake, dean of Kent veloped by KeyCorp dedicated to State University’s College of Business helping entrepreneurial and profesAdministration (who is among some sional women succeed in business, 20% of female business school deans women are confident about the year in America, according to the Associa- ahead, with 71% reporting they’re

Julie Boland, central region managing partner, Ernst & Young

Loretta Mester, president and CEO, Federal Reserve Bank of Cleveland

Cindy Crotty, executive vice president, Peoples Bank

Beth Mooney, chairman and chief executive officer, KeyCorp

highly optimistic they will achieve their goals over the next 12 months.

However, respondents said that gender barriers in business are due to the lack of equity in politics/government (59%), media portrayals of women in business (46%), implicit male bias (45%) and even implicit female bias (35%).

But whether it applies to diversity overall or women, while companies are growing ever-more sensitive to their demographics, Spake emphasized the importance of simply furthering a culture where women are empowered to seek out influential roles.

“Women have to pursue these things,” she said. “You don’t accidentally end up being the CEO of KeyBank.”

Editor’s note: Profiles included in Northeast Ohio’s Notable Women in Finance represent women nominated by companies and organizations within Northeast Ohio. To be considered, completion of an extensive survey, including a letter of endorsement, was required.

Stories included in this section are based on submitted survey information. Additional women were submitted for inclusion by an internal selection committee for purposes of a diverse and comprehensive list.

FOR MORE FACES OF NOTABLE WOMEN IN NORTHEAST OHIO’S FINANCE INDUSTRY, SEE PAGES 20-23 P019_023_CL_20181015.indd 19

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NORTHEAST OHIO NOTABLE WOMEN IN FINANCE

Susan Clausen

Danielle Gisondo

Lynn-Ann Gries

Vice President, Financial Adviser, CAPTRUST

Partner, Skoda Minotti

Managing Partner, First Check Fund

In her 20-year tenure at Skoda Minotti, Dani Gisondo has embraced numerous leadership roles. She became the Mayfield Village-based business advisory’s first female partner in 2013 and was named to its executive committee last year. Gisondo also leads the firm’s 22-member employee benefit plan audit group, oversees recruitment and hiring, and is a member of the compensation review committee — all while growing her own book of business by approximately $325,000 over the last five years. “She approaches every management issue with a thorough knowledge of the relevant facts and a sound understanding of the impact that her decisions will have on the organization and its employees,” Skoda Minotti partner Robert Ranallo said in the nomination. Among other key contributions, Gisondo was the co-creator of the women’s development program, which seeks to foster female talent, and has been instrumental in an initiative aimed at shaping the vision and future direction of the firm.

Lynn-Ann Gries began her career in the mid1980s in New York City, but her biggest impact has been on early-stage financing here on the North Coast. Over the course of her career, she has made investments in 90 seed stage companies and has advised hundreds of entrepreneurs. As a co-founder of JumpStart Inc., Gries led a team that invested $32 million in 80 startups over 12 years, including

CAPTRUST senior vice president Steve Wilt can pinpoint three core decisions that have made the financial advisory’s Akron branch successful. One of them, he explained in the nomination, was hiring Susan Clausen. “Partnering with her 17 years ago has allowed the team to elevate beyond expectation,” according to Wilt. Over the past five years, the Akron office has doubled its client base with Clausen, both growing prospect opportuni“Partnering with her ties and being a part of each fi17 years ago has nals presentation. She helps manage more than $8 billion in allowed the team to client assets. Among other conelevate beyond tributions, she created a plan expectation.” design benchmark — a resource that compiles and anaCAPTRUST senior vice lyzes data on more than 1,100 president Steve Wilt, on plans — which is now used Susan Clausen firm-wide, and she helped revise the firm’s fiduciary training materials for which she wrote training segments and recorded podcasts.

Clausen was also active in the planning committee for CAPTRUST women’s initiative group and is a member of the firm’s way committee, a group that promotes and preserves its unique culture.

Congratulations

“Lynn-Ann’s professional approach to due diligence and support of the entrepreneurs in her portfolio has left a lasting legacy in Cleveland.”

Michael Goldberg, assistant professor at Case Western Reserve University’s Weatherhead School of Management, on Lynn-Ann Gries

investments in CoverMyMeds, Mr. Beam, CardioInsight and Embrace Pet Insurance. In the nomination, Michael Goldberg, assistant professor at Case Western Reserve University’s Weatherhead School of Management, said, “Lynn-Ann’s professional approach to due diligence and support of the entrepreneurs in her portfolio has left a lasting legacy in Cleveland.” In addition to her tenure at JumpStart, she founded Gries Consulting, is a longtime board member of Summer on the Cuyahoga and leads a small group of women making seed investments in women-run or women-founded businesses. Most recently, New Hampshire-based Alumni Ventures Group tapped Gries to manage its new First Check Fund, which will focus on deals at the seed stage.

Sarah Hannibal Partner, Walden Wealth Partners LLC

Notable Woman in Finance Award Recipient - Crain’s Cleveland Business

Annie McCauley, CFP® Senior Vice President Family Wealth

1 (888) 225-3777 www.sequoia-financial.com Sequoia offers wealth planning, asset management, estate planning, family wealth services and corporate retirement plan services with locations in Ohio, Michigan and Florida.

Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor.

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NORTHEAST OHIO NOTABLE WOMEN IN FINANCE

Shaquira Johnson

Kristen Laughlin

Kara H. Lewis

Vice President and Initiative Development Manager of the Business Banking Segment, KeyBank

Founder and CEO, Avion Consulting Group

Director, Bernstein Private Wealth Management

Shaquira Johnson’s banking career has straddled two heavy-hitting financial institutions. She has worked in various leadership capacities at both Bank of America (formerly MBNA) and KeyBank, the latter of which she joined in 2006 as a customer loan origination manager. She “We value her currently is responsible contributions as we for sales execution programs and supporting execute on our strategic initiatives for strategic agenda.” national commercial and business banking Amie Churpita, clients. “Shaquira conbusiness banking tributes to delivering program execution programs that help to leader at KeyBank, drive ease, value and exon Shaquira Johnson pertise for our business banking clients,” said Amie Churpita, business banking program execution leader at KeyBank. “We value her contributions as we execute on our strategic agenda.” Johnson is deeply rooted in community outreach and mission-driven work. As president of the National Black MBA Association Cleveland Northeast Ohio chapter, she oversees that organization’s efforts to promote the region’s intellectual and economic wealth, with membership growth increasing by 235% since she assumed leadership in 2015. Among her involvements, she is on the alumni board at Hawken School, and is a member of the board of directors at Boys & Girls Clubs of Cleveland.

Sarah Hannibal co-founded Walden Wealth Partners, a boutique wealth management firm, building on a successful financial services career that included work as a CPA and a chartered financial analyst in the U.S. and abroad. Since launching Solon-based Walden Wealth Partners, Hannibal has helped grow assets under management from $70 million in 2015 to $200 million today. In the nomination, colleague Karin Maloney Stifler said among Hannibal’s greatest strengths “is an ability to quickly assimilate complex information and clearly and calmly communicate a recommended path forward that is in the best interests of others.” Outside the office, Hannibal is an active member of the Cleveland chapters of the CFA Society and the Estate Planning Council and is a volunteer mentor for entrepreneurs affiliated with JumpStart Inc. She also regularly speaks about financial careers with business students at local universities and spearheaded a paid internship program at Walden Wealth Partners for finance students.

Kristen Laughlin’s passion and career experience in international business consulting and private equities propelled her to launch in 2016 her own firm, Avion Consulting Group. Her consultancy provides business development, M&A consulting and capital-raising strategies for global clients in the health care, biotech, real estate and technology sectors. “I have known Kristen for several years, and she has been an invaluable business resource for my law firm clients, particularly in the technology space,” said Suzann Moskowitz, owner of Cleveland Heights-based The Moskowitz Firm, which advises clients on intellectual property matters. Previously, Laughlin worked at the Cleveland International Fund and was the lead capital raiser for global private equity funds within the real estate and health care space, raising $220 million in foreign capital that was allocated toward U.S. investments. She was a 2017-18 Marshall Memorial Fellow with the German Marshall Fund of the United States and is chair of the board of directors of Global Ambassadors Language Academy, a dual language immersion school on Cleveland’s west side.

AB Bernstein, the third-largest money manager in Northeast Ohio in terms of value of assets under local management, recently named Kara Lewis as director of its Ohio private wealth practice. She oversees the firm’s client service, management and strategic growth of the global firm’s regional business. Prior to her appointment, the top local executives listed in Northeast Ohio’s top 10 money management firms were all men, according to Crain’s 2018 Money Managers List. Lewis previously served as a vice president, advising high-net-worth investors and institutions on sophisticated investment and wealth planning strategies. “Finding a leader skilled at shepherding a fast-growing firm through a complex economic environment is never easy,” said her predecessor, Shane McRann Bigelow. “Her past success as president of another firm, combined with her time leading the Columbus region for Bernstein in Ohio, sets Bernstein up to have the most dynamic and capable leader in investment management in all of Ohio. I am proud to have Kara take over my position and lead Bernstein to even greater heights.”

Celebrating Women in Finance.

We offer proprietary investment strategies, wealth planning and retirement plan solutions - all with a personalized service to help you get more out of life.

216-825-4000 / www.ancora.net

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NORTHEAST OHIO NOTABLE WOMEN IN FINANCE

Kim Jenkins Manigault

Annie McCauley

Stephanie McHenry

Executive Vice President and Chief Diversity and Inclusion Officer, KeyBank

Senior Vice President, Family Wealth, Sequoia Financial Group

Kim Jenkins Manigault oversees KeyBank’s nationally recognized diversity and inclusion initiatives, which are committed to equity throughout the workforce, workplace and marketplace. She spearheads the company’s employee resource groups and works closely with the human resources department to incorporate diversity and inclusion in all aspects of the talent lifecycle, from recruiting and onboarding, to retention, development and succession planning. “Kim Manigault ensures that KeyBank is committed to diversity and inclusion as business accelerators and as foundational to our culture. And that award-winning culture of diversity and inclusion serves as a testament to our commitment as both a responsible bank and citizen,” said Trina Evans, executive vice president and chief of staff for Key Bank. “Kim is indeed a powerhouse.” Manigault also is a member of KeyBank’s executive council. She previously served as CFO for the firm’s Technology, Operations and Procurement groups. She was recently recognized as CFO of the Year by the National Association of Black Accountants, CFO of Excellence by the Technology Business Management Council and was named one of the top 12 business women in Ohio by the Ohio Diversity Council.

Five years ago, Akron’s Sequoia Financial Group managed a small group of family wealth clients — those with net worth in excess of $25 million. Annie McCauley had the option to continue managing this elite group or to build a team and grow this niche into a fully functional division of the firm. According to president Thomas Haught, McCauley chose the latter. “Always believing that teamwork, collaboration and growth lead to client success, she elected to think beyond the next client opportunity to instead focus on the long-term growth and sustainability of a multi-faceted and sustainable business unit,” Haught said in the nomination. With McCauley’s stewardship, revenue for Sequoia Financial Group’s family wealth group grew 52% in the last three years, and an additional 12% in the first half of 2018. She is also youngest and only female member of the Sequoia’s five-person executive committee, which is charged with managing strategic initiatives.

Chief Financial Officer and Senior Vice President for Business Affairs and Finance, Cleveland State University

entrepreneurs p

leadership adership ad e rs shi hip p rris risk is Congratulations innovation novation a at opportu o ppo n Lynn-Ann ytion opportunity Gries

hard ard ar a rd wor w work or

Stephanie McHenry is responsible for the enterprise management of critical university functions for an institution that serves 17,000 students. Under her leadership, the university has maintained credit ratings of A+, Stable and A1, Stable from Standard &

“I have found her to be detail-oriented and fully committed to achieving the optimum financial and fiscal position for Cleveland State University students.”

Teresa Metcalf Beasley, Calfee partner, on Stephanie McHenry

Poor’s and Moody’s respectively. The university has managed to operate within its annual budget of $300 million without tapping into its cash reserves, despite constraints of state funding support. “In my numerous interactions with Stephanie, I have found her to be detail-oriented and fully committed to achieving the optimum financial and fiscal position for Cleveland State University students (whom she refers to as her ‘babies’),” said Teresa Metcalf Beasley, a partner at Calfee. “She cares deeply about the students and the university she serves with a quiet tenacity that enables her to be effective in every nuance of her role.” Among her community commitments, McHenry serves as chair of Midtown Cleveland, continuing to build on the university’s economic engagement. McHenry also serves on the board of trustees of The Democracy Collaborative in Washington, D.C.

Cheryl Norman Principal, Flagship Capital Advisors

for Being a Leader in Venture Financing! new w companies i commitm commitment m m

smarts t returns t From Women Supporting Women in Venture Capital Anonymous Laura Bennett Becca Braun Heather Ettinger Lauren Rich Fine

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Gina Gunning Doris Korda Susan Luria Jennifer Neundorfer Rachel Rawson Meredith Weil

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M. Patricia Oliver

Sarah Parker

Hallie Sturgill

Partner and Chair of Financial Services Industry Practice, Tucker Ellis LLP

Senior Managing Director, Hartland

Chief Financial Officer, Universal Screen Arts Inc.

M. Patricia Oliver trained as a corporate generalist early in her law career, but quickly developed an affinity for financial services. The former chair of Squire Sanders’s financial services practice and executive vice president of Fortune 500 BB&T Corp. joined Tucker Ellis in 2014 to lead the Cleveland firm’s financial services practice. She also sits on

“Pat has a flair for bringing people together and negotiating challenging deals.”

Glenn Morricals,Tucker Ellis partner, on M. Patricia Oliver

the board of directors for Civista Bancshares Inc. At Tucker Ellis, Oliver manages a team of attorneys responsible for multi-million dollar transactions.

Some recent notable deals include the $40 million merger of Liberty Bank and Middlefield Banking Co., the $40 million merger of Ohio Legacy Corp. and United Community Financial Corp., and the $115 million merger of United Community Bancorp and Civista. At Civista, she is a member of a board that oversees a $1.5 billion operation. “Pat has a flair for bringing people together and negotiating challenging deals,” Tucker Ellis partner Glenn Morrical said in the nomination.

Sarah Parker began her career at Hartland in 2010 as that independent institutional and wealth advisory firm’s only female investment consultant at the time. Since then, she’s ascended to the ranks of senior managing director, providing thought leadership and guidance for the firm’s defined contribution practice, which is responsible for more than 60 defined contribution plans and over $8 billion in assets. Parker said she is passionate about educating and advising the firm’s institutional clients on market trends and shaping participant retirement plans accordingly. “Sarah is Hartland’s inhouse expert on corporate retirement plans, and she developed an industry leading target date match-up tool for 401(k) plan sponsors,” said Satricia Rice, a fellow senior managing director at Hartland. “As a result of her hard work, drive, and compassionate leadership, Sarah became one of only six female shareholders of Hartland in 2017.” Parker also co-chairs the firm’s women’s initiative committee, which provides networking opportunities and professional development for Hartland’s female employees.

Hallie Sturgill’s greatest strength “is in identifying what needs to be done and then actually doing it,” Universal Screen Arts Inc. CEO Matt Bender said in her nomination. “She is knowledgeable, energized and drives urgency throughout her teams and the organization.” Sturgill joined the Hudson internet retailer in 2017 as senior vice president of finance, and was promoted to CFO one year later. In addition to leading “She drives urgency the accounting and financial throughout her team that she built, Sturgill di- teams.” rects the contact center, IT and inventory demand plan- Matt Bender, Universal ning departments, overseeing Screen Arts Inc. CEO, on 55 employees and six direct Hallie Sturgill reports. She also has initiated several task forces, including the improvement of IT security and the reduction of outbound shipping costs, which have resulted in multi-six-figure savings.

Outside of the office, Sturgill is treasurer of the St. Vincent de Paul St. Mary Catholic Church, where she developed a reporting protocol for donations and personally visits clients requesting assistance.

A chartered financial consultant and owner of Valley View-based Flagship Capital Advisors, Cheryl Norman manages $50 million in assets among a local and national client base. Norman provides investment, savings and retirement guidance to a diverse set of clients, although her commitment to women’s financial well-being is particularly notable. She works with women in transition in terms of divorce and widowhood, helping women who are the primary breadwinners make quality decisions with regard to their assets, according to First Federal of Lakewood vice president Suzanne Hamilton. “She is also a lifestyle coach in terms of how she works with me and her other clients on the choices that individuals and families make with their money to manage cash flow and to save and invest for current needs as well as long-term financial needs,” Hamilton said in the nomination.

Norman also provides financial education and mentoring for men and women through workshops and other financial service industry events.

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Akron’s new and growing industry: software

By DAN SHINGLER dshingler@crain.com @DanShingler

For a town built on heavy industry, Akron is finding success with a business cluster that might surprise some: software and information technology.

Just ask Doug Weintraub, CEO of downtown Akron’s Bounce Innovation Hub, an incubator for all sorts of fledgling companies.

“It’s bio health care-related entities and software — those are the biggest categories,” he said of his client/ tenant mix.

Software really is Bounce’s largest category in terms of the businesses operating there. Bounce lists 17 software and IT tenants on its website and another 13 at its Bit Factory accelerator for software companies.

That compares to nine in its biomedical/health care group, and some of those companies also work on software development.

Weintraub said Bounce is finding success because it has what software companies want: a progressive workspace with the amenities of an urban

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Dakota Kincer and Tamra Moroski enjoy some video gaming during a break at Drips in Akron. Besides games, the company provides a full-time chef to cook for employees, in-house benefits like flu shots and other amenities that help it retain top talent. (Shane Wynn for Crain’s)

environment.

That helped lure SaberLogic (perhaps better known by the name of its flagship product, Bezlio) to Bounce from Wadsworth in September. The 24-person firm makes a mobile app that allows businesses to track their

workforce while integrating other business software platforms.

“It wasn’t a hard sell, because we have what they wanted in terms of being able to support their business,” Weintraub said, noting that includes strong and fast internet connectivity.

Bounce now has another software firm coming. CompanionLabs will move from Akron’s Wallhaven neighborhood to Bounce in late October and occupy the top floor of Bounce’s building on South Main Street. CompanionLabs makes software that helps users monitor, measure and manage advertising on Facebook — and soon Google, too, founder Brian Deagan said.

CompanionLabs only has about 10 employees, but Weintraub and others are enthusiastic because Deagan’s last startup, a software firm called Knotice, grew to employ 100 people and still operates in Akron. It was acquired in 2014 by another marketing technology company, New York-based IgnitionOne. Deagan said he’s looking for new hires, following a raise of $1.5 million in seed capital that CompanionLabs completed in summer.

“We’re growing rapidly,” said Deagan.

At some point in the next two years, he’ll need marketing and other professions, but “right now, engineering talent is the primary interest,” he said.

Akron’s growing software cluster is not restricted to Bounce, though.

Other firms are growing and springing up downtown.

One is Metisentry, a firm that works on software-as-a-service products for itself and customers. It was formed in 2006 by Marling Engle and employs 25 people on South Main Street in the heart of downtown Akron.

“Marling is next-level savant smart. He’s like Lex Luther!” said Aaron Christopher “A.C.” Evans, founder of another software-driven company downtown, Drips.

Evans was quick to add that Engle has far better intentions than Luther and is a greater asset in the local IT world.

Metisentry also has resulted in the spinoff of other companies, most recently Macedonia-based Station Check, an application that helps fire departments track and monitor their equipment and its maintenance.

At 32, Engle is a bit of an elder statesman among Akron software developers, and he’s seeing more firms pop up.

“I do see more. I think in Northeast Ohio, investment is conservative, but I think (venture capitalists from) the coasts are finally catching on that you can’t just shoot for the coasts and expect profitability. So, I think there will be more startups coming here, and we have a really strong IT community,” Engle said.

It’s not just capital from the coasts.

SaberLogic was the first Akron investment for Chicago-based M25, a venture capital firm focused on the Midwest that says the Rubber City recently climbed in its internal ranking of top cities in which to invest.

SaberLogic has been growing rapidly since Bezlio was introduced in 2016, company founders Adam and Brian Ellis said. The firm now has 24 employees, with more to come, it says.

Then there is Drips, on North High Street downtown. Drips has a software-driven product that allows call centers to first communicate with customers via text to arrange phone contacts that are wanted and effective.

Founded in 2016, Drips employs 35 people. It occupies a floor in a building Tony Troppe owns and has first right of refusal to take over more space as needed.

“We can fit another 12 or 13 here with our current floor plan, and we

Handmade gourmet pizza is just one dish that chef Kevin Hamric whips up for the Drips staff.

have a right of refusal on another floor,” Evans said.

Evans said he thinks the company is well ahead of any potential competitors in a space it basically invented, but it wants to stay ahead and will need more good people to do that.

“The market is going to take off, and we need to be equipped to stay out in front of it. In technology, no one knows who No. 2 is,” Evans said.

The real questions for Akron, though, are whether these companies can survive and grow, and whether more can follow in their footsteps.

That’s certainly the plan, said Heather Roszczyk, innovation and entrepreneurship advocate with Akron’s Office of Economic Development.

She’s pleased with what she’s seeing.

“I do think we’re seeing some things bubble up,” Roszczyk said. “Being candid, I’m not sure if this is due to the city entirely, or if we’re just seeing an acceleration. But either way, I think we’re seeing more activity than we’ve seen in a while, and that’s great.”

Like others, Roszczyk said one of the greatest challenges is helping new and growing firms find talent.

While that’s always a “work in progress,” she said schools such as the University of Akron and Kent State University help, as do new training programs by workforce development organizations such as ConxusNEO and private entities like DriveIT. That’s an old problem that hasn’t gone away, said Bill Whitlock, a longtime technical recruiter from Akron and currently business development manager at the Independence office of Modis, an IT consulting and staffing firm.

“The demand is as high as I have seen it,” Whitlock said via email. “Unemployment is extremely low in the IT sector, and developers are in particularly high demand … Demand is just as high in Akron as in Cleveland or other markets around the country.”

So far, the software companies in Akron say they’ve been able to find the talent they need.

Engle said he’s found the people he needs by word of mouth and has recruited some folks from outside the area. About 70% of Metisentry’s people are from the local area, though, he said.

He plans to continue to find and train the talent he needs to continue growing downtown.

“We really tried to build our headquarters here and are going to keep expanding it here. We have people around the country, but Akron’s definitely where we’re going to keep our headquarters and will have the most growth,” Engle said.

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VHT looks to grow under new owner, leadership

By BETH THOMAS HERTZ clbfreelancer@crain.com

As the new CEO and president of Fairlawn-based VHT, Matt DiMaria is taking the time to meet with each of the about 140 employees at the company that provides businesses with software to improve how they interact with customers on the phone and online.

“We are interested in growing the business, and our motto is ‘People First,’ so we are spending a tremendous amount of time getting to know the team, getting to know the customers and beginning a process of ultimately crafting a growth strategy that we think will bring a lot of value to all stakeholders over the next several years,” he said.

DiMaria came to the company when Alpine Investors, a San Francisco-based private equity firm, acquired VHT in August. VHT officials declined to outline terms of the deal.

With Alpine behind it, VHT plans to expand on its suite of software, which includes products that allow companies to have more efficient interaction with customers by decreasing wait time on calls, offering callback options and staying connected via other technology.

VHT serves just about any market you can think of where communication with customers is important, including cable, utility, retail, financial, travel, government and health care.

“We are very excited to have a chance to bring our approach and philosophy and strategies to what we think is a great company,” DiMaria said in an interview with Crain’s.

Although he’s based in Nashville, Tenn., DiMaria is at the company’s Embassy Parkway location in Fairlawn weekly. He brings 30 years of experience in software, SaaS and the

Internet of Things, spending the past 10 years as a CEO and general manager in both public and private companies.

He began working with AlDiMaria pine in May 2017 through its CEO in Residence Program, which looks for businesses in which to invest. Alpine says it concentrates its investments on lower middle-market companies in the software, online and business services industries.

“Through that process, over a year or so, we looked at probably over 30 different businesses. We started chatting with VHT late last year, and worked really hard to arrive at the spot that we have arrived at,” he said.

Wes Hayden, who served as CEO of VHT since 2012, is still active in the company, serving as a senior adviser.

“I’m very fortunate to have the ability to continue to seek advice and support from him on matters related to the business,” DiMaria said.

DiMaria said he’s not only working on getting to know the employees, but also the company’s 300 customers, which represent some of the biggest call center operations in the United States (many have 35,000 people fielding over 80 million calls a year). This list includes American Airlines and Delta Airlines.

VHT’s suite of software and services allows it to advise callers of their approximate wait time and give them the option to hang up and receive a call back when their place in line comes up. The technology saved callers more than 2 billion minutes of hold time last year alone, he said.

“The benefit is massive to the lives of the consumer. They can work with the vendors that they rely on for things like their cable service or financial services or travel without having to wait to get their questions answered,” he said.

Large call centers invest tens of millions of dollars in making their systems responsive to customers, and VHT can offer a very personalized experience, he said.

VHT was founded in 1995 and was known as Virtual Hold Technology until April, when it was shortened to reflect the fact that the company now offers a wider array of products, such as ones that help companies better interact with customers online. Some VHT software can transition a frustrated customer from a self-service chat to a live agent.

“Our set of management tools, and reporting and analytics capabilities, helps companies optimize their customers’ user experience in a strategic manner, because their goal is ultimately to create happy, loyal customers that are going to buy more products and services from them,” he said.

Alpine was attracted by VHT’s success in acquiring and serving its customer base, he explained.

“If you were to go through our complete customer list, what you would see is 300 names that you recognize, the best companies in the United States.” DiMaria said. “Those businesses, and many of those relationships, are multiyear relationships with large companies that can do business with anybody that they choose.”

Alpine was also drawn to the quality of the VHT team, DiMaria said, which he described as people who prioritize customer success to the very highest level.

Expanding plastics firm finds a lot to like in Stark County

By JIM JOHNSON jpjohnson@crain.com

A plastic container maker is setting up temporary shop in Stark County to be closer to a customer as it plans for a permanent facility in the area.

Stark County officials said IML Containers is leasing about 35,000 square feet in Plain Township to make containers for Land O’Lakes Inc.’s nearby facility.

IML currently has sites in Saint-Placide, Quebec; Le Mars, Iowa; Lyons, Ill.; and Flagstaff, Ariz., according to the company’s website.

“What they did was they were looking for a location that was near.

We’re getting a lot of inquiries from the plastics industry, which is one of our targets for the community,” said Ray Hexamer, president of the Stark Economic Development Board.

Stark County isn’t far from where Royal Dutch Shell is building an ethane cracker plant in Beaver County, Pa. Shell is taking advantage of the re-

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gion’s resurgent natural gas production brought on by fracking in both the Utica and Marcellus shale regions, located at different depths below the earth’s surface.

And Hexamer said his county’s proximity to the increased production will help drive economic development. The area also is a hub for food production, so creating an expanded plastics economic hub locally makes sense to better serve those markets.

“The industry is very important for our future. IML is our great first tenant for us and a great company.

They were extremely easy to work with,” Hexamer said. “We were able to find a facility that they will lease for two years, and they will be building a new manufacturing facility in the area for future growth.”

IML Containers of Ohio (IML is short for in-mold labeling) is in the process of setting up equipment in its 35,000-square-foot temporary home at 5365 E. Center Road NE and expects production to begin soon.

Hexamer admitted he sounded

like an economic development salesman when he touted Stark County’s advantages.

“When we look at the plastics industry, we are within a six-hour drive of a majority of the business that’s done in that industry,” he said.

“We’re centrally located. We have rail. We have air. We have great interstates,” Hexamer said, describing the situation as “stars lining up for our community.”

Hiring already has begun at IML Containers of Ohio, which eventually expects to employ about 85 workers, the economic development official said.

A representative of IML, owned by Lacroix Emballages of Bois D’Amont, France, could not be reached for comment.

The company expects to be in its permanent facility during the next two years and currently is looking at two potential locations, Hexamer said.

This story originally ran in Plastics News, a sister publication of Crain’s Cleveland Business.

STATEMENT OF OWNERSHIP, MANAGEMENT AND CIRCULATION (STATEMENT REQUIRED BY THE ACT OF AUGUST 24, 1912, AS AMENDED BY THE ACTS OF MARCH 3, 1933, JULY 2, 1946 AND JUNE 11, 1960 (74 STAT. 208) SHOWING THE OWNERSHIP, MANAGEMENT AND CIRCULATION OF:

1. Title of Publication: Crain’s Cleveland Business 2. Publication number: 532-210 3. Date of filing: September 30, 2018 4. Issue frequency: Weekly, except last issue in Dec. 5. Number of issues published annually: 52 6. Annual subscription price $64.00 7. Location of known office of publication: Crain Communications Inc., 700 W. St Clair Avenue, Suite 310, Cleveland, Cuyahoga County, OH 44113-1230.

8. Location of headquarters or general business offices of the publisher: Crain Communications Inc., 700 W. St Clair Avenue, Suite 310, Cleveland, Cuyahoga County, OH 44113-1230.

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Editor Elizabeth McIntyre, Crain Communications Inc., 700 W. St Clair Avenue, Suite 310, Cleveland, Cuyahoga County, OH 44113-1230.

Managing Editor: Scott Suttell, Crain Communications Inc., 700 W. St Clair Avenue, Suite 310, Cleveland, Cuyahoga County, OH 44113-1230.

10. Owner (if owned by a corporation, its name and address must be stated and also immediately thereunder the names and addresses of stockholders owning or holding 1 percent or more of total amount of stock. If not owned by a corporation, the names and addresses of the individual owners must be given. If owned by a partnership or other unincorporated firm, its name and address, as well as that of each individual must be given.): Crain Communications Inc., 1155 Gratiot Ave., Detroit, MI 48207-2997; K.C. Crain, 1155 Gratiot Ave., Detroit, MI 48207-2997 11. Known bondholders, mortgages and other security holders owning or holding 1 percent or more of total amount of bonds, mortgages or other securities: None.

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Actual number of single issue published nearest to filing date (Sept. 30, 2017); Total number of copies: 21,886; Paid distribution outside the mails including sales through dealers, carriers, street vendors, counter sales and other paid distribution outside USPS: 2; Mailed outside-county paid subscriptions stated on PS Form 3541: 4,140; Mailed in-county paid subscriptions stated on PS Form 3541: 7,106; Paid distribution by other classes of mail through the USPS: 0; Total paid distribution: 11,246; free or nominal rate outside-county copies included on PS Form 3541: 10,039; Free or nominal rate copies mailed at other classes through the USPS: 0; Free or nominal rate distribution outside the mail: 100; Total free or nominal rate distribution: 10,139; Total distribution: 21,385; Copies not distributed: 501; Total: 21,886; Percent paid: 52.59%.

17. Publication Statement of Ownership, if the publication is a general publication, publication of this statement is required. Will be printed in the October 15, 2018 issue of this publication.

18. I certify that the statements made by me above are correct and complete. Elizabeth McIntyre, Publisher 09/24/18

To place your listing in Crain’s Cleveland Classifieds Contact Kate Rozek at 216-771-5276 or email CLBClassified@crain.com

Copy Deadline: Wednesdays @ 2:00pm All Ads Pre-Paid: Check or Credit Card

CLASSIFIEDS BUSINESS FOR SALE Home Improvement Company for Sale Sales $1.8M Will listen to offers mike@empirebusinesses.com www.empirebusinesses.com 440-461-2202

BUSINESS SERVICES Named 2017 Cleveland

“Power Broker”

-CoStar

COMMERCIAL REAL ESTATE

LIST YOUR AD HERE

Contact Kate Rozek at 216-771-5276

www.davisonandcompany.com 216.861.0600

FLYNN ENVIRONMENTAL UST REMOVALS - REMEDIATION DUE DILIGENCE INVESTIGATIONS

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ADVERTISING SECTION

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

ENGINEERING & CONSULTING

Greg Kronstain CTL Engineering CTL Engineering is excited to announce the addition of Greg Kronstain to its team.

In his role as Regional Manager of Transportation Services, Construction Administration and Construction Inspection, Greg Kronstain will be managing Construction Administration/ Construction Inspection and testing services on State, County, and Local transportation, aviation, and utility infrastructure projects. He will be instrumental in increasing CTL’s Construction Services in Northeast Ohio and other markets.

MBA

WEATHERHEAD SCHOOL OF MANAGEMENT

ENGINEERING & CONSULTING

Steven Bryan CED Technologies, Inc. CED Technologies is proud to announce the addition of Steven Bryan to its forensic engineering team in Cleveland. Bryan will be assisting law firms, insurance companies and risk managers in determining the cause and origin of losses. His background is in manufacturing and industrial product modification. Previously he worked at BPR/RICO and GE. Steven has a bachelor’s degree from The Ohio State University, a master’s degree from The University of Akron and is a licensed PE in Ohio.

weatherhead.case.edu

FINANCE

INSURANCE

Grant Pollack Candlewood Partners

Leo Genders Western Reserve Group

Candlewood Partners is pleased to announce the promotion of Grant Pollack to Associate.

Grant will continue to support the marketing and execution of capital markets transactions, such as debt and equity capital raises, fairness opinions, and buy-side acquisition advisory. Prior to joining the firm in 2017, Grant began his career in banking with KeyBanc Capital Markets. Grant earned his Bachelor of Science in Finance and his MBA from the University of Denver.

Leo Genders joins Western Reserve Group in Wooster as the Vice President of Information Technology. Leo is a U.S. Army veteran and a graduate of Miami University with a B.S. in Systems Analysis/ Computer Science. He has spent several years in the insurance industry serving in various IT Director positions.

Leo and his wife have five children. In his spare time, he enjoys fishing, boating, and is an avid strategy board gamer. Leo is a welcome addition to the Executive Team at WRG.

LAW

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John P.L. Mills Walter | Haverfield

Katherine Esshaki Wensink McDonald Hopkins

Isabelle BibetKalinyak McDonald Hopkins

Ryan Neumeyer McDonald Hopkins

Walter | Haverfield is pleased to announce that John P.L. Mills has joined the firm as an associate in its Litigation Services group. Mills has an extensive background in litigation, based upon a practice that has involved environmental matters, public interest law and transactional law. He previously served as an Assistant Director of Law for the City of Cleveland, and also worked for the Ohio Environmental Protection Agency as an in-house counsel. For more information, visit www.walterhav.com.

McDonald Hopkins LLC announced the election of Cleveland attorney Katherine Esshaki Wensink to the firm’s membership. Kate advises clients in the areas of estate and charitable planning, estate administration, taxation, corporate law, and employment benefits planning for both individuals and corporations. She earned her J.D. from the University of Michigan Law School at Ann Arbor in 1999 and received a B.A. from Purdue University in 1996.

REAL ESTATE

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McDonald Hopkins LLC announced the election of Cleveland attorney Ryan Neumeyer to the firm’s membership. Ryan represents and counsels management on a variety of employment law matters, such as employee leave, overtime, disability accommodations, termination and layoff decisions, and workplace injuries. He earned a J.D. from Cleveland-Marshall College of Law, cum laude, and a B.A. from Mount Union College. He is an Ohio State Bar Association.

Michael E. Smith Frantz Ward LLP Frantz Ward Partner Michael E. Smith is appointed as the firm’s General Counsel, responsible for all ethics and legal issues relating to the firm and its attorneys. Mike will take on this role in addition to his current role as Partner in the firm’s Litigation Practice Group, where he focuses on broad-based general litigation involving both business litigation and defending personal injury claims, including product liability, premise liability, and employer intentional tort cases.

PROFESSIONAL SERVICES

Katarina Dempsey, Boyden Katarina (Kat) Dempsey has joined Boyden as Principal, leading the firm’s efforts in NE Ohio.

Kat, a Düsseldorf native and Cleveland area resident, partners with her clients, local and multinational, to build their leadership teams across multiple industry sectors including industrial, consumer and retail, financial institutions and professional services.

She previously served as Global Practice Director at another top 10 global search firm, and held senior roles with BCG, McKinsey, and AIG.

NEW GIG?

Nichole Booker, Ph.D SVN Summit Commercial Real Estate Group

Preserve your career change for years to come.

Plaques • Crystal Keepsakes Frames • Other Promotional Items C O N TAC T

SVN Summit Commercial Real Estate Group, LLC in Akron welcomes Nichole Booker, Ph.D. as an Associate Advisor. Nichole joins SVN with an extensive background in developing strategic partnerships; her most recent role being Vice President of Strategic Affairs at United Way of Summit County. Nichole is a graduate of The University of Akron and holds a Ph.D. in Public Administration/Urban Studies. With Nichole’s strong performance and background, we are confident she will be a powerful addition to SVN.

McDonald Hopkins LLC announced the election of Cleveland attorney Isabelle Bibet-Kalinyak to the firm’s membership. Fluent in French, her native language, Isabelle has more than 27 years of international business experience in the healthcare, aerospace and plastics industries. She is a frequent presenter at national and local conferences like AHLA, Ohio Hospital Association, and the Academy of Medicine of Cleveland and Northeast Ohio on topics related to health care and business immigration.

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Laura Picariello Reprints Sales Manager lpicariello@crain.com (732) 723-0569

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William Gary

Executive vice president for workforce, community and economic development, Cuyahoga Community College William Gary had a long career in the private sector, largely in human resources, before crossing over to serve as vice president for workforce development for Northern Virginia Community College. After 14 years there, he was lured to Northeast Ohio by Alex Johnson, president of Cuyahoga Community College to be the college’s vice president for workforce, community and economic development in 2014. In four years, he has completely restructured Tri-C’s programs. That restructuring was designed to make students more aware of the skills certificates that qualify the students for jobs — including jobs as nursing assistants, truck drivers, police officers and welders — and to be a more prominent player in the region’s efforts to attract new businesses and help existing businesses expand. — Jay Miller

The Gary file Hobby Wine tasting and collecting

Role model Uncle Charles R. Hadley, a substitute father figure

Travel destination Gary wants to revisit South Africa.

Book you’re reading “Born to Rebel,” by Benjamin Mays

Lunch spot Hot Spot Cafe 1332 Carnegie Avenue, Cleveland 216-239-1141

The meal One had a Greek salad and an Arnold Palmer. The other had a burger and Diet Coke.

The vibe Through a number of owners and names — including Verve, Juniper Grille and Carnegie Kitchen — it continues to attracts downtowners to its diner style — and free parking.

The bill $32.52 with tip

How many non-degree, or certificate, programs does the college offer?

Probably about 100. By the way, one of the things we created was dual pathways. If you come to Tri-C uncertain of your career path, we offer you both workforce training and degree-seeking opportunities at the same time. If you want, you can get a credential and put it in your back pocket so in the event you have to go out in the world before you get a degree, you’ve got that. And you can be working on more than one certificate. I may be taking welding but I’m also doing work toward a building construction certificate, which is great. We have 22,000 students. Some have more than one certificate. If you can get multiple certifications, it increases your likelihood of success. I keep telling people I still have my water safety instructor’s license. I knew I wanted to go to college, but I couldn’t afford it. I eventually got scholarships, but I taught swimming to make ends meet.

Looking ahead, what are your priorities?

Strengthening our collaboration with community-based organizations, including other workforce organizations; deploying our workforce programs throughout Cuyahoga County; making sure that Tri-C is the training provider of choice to companies like Amazon and in the fields of health care and information technology — we already do it for manufacturing. Engaging the business community as an equal partner in defining our programs and funding the programs.

You’ve created a board of visitors of business and community leaders, to get the employer community more involved in the training work you’re doing. What else can businesses do to help you build your programs, which are designed to provide employers with trained workers?

Funding our programs is critical, since our workforce programs are self-sustaining. So now I’m saying to the business community, “I need your help to support this.” I’ll put together the business plan, but I need businesses to supply some of the cost. Now, one way businesses are stepping up to the plate is in the form of scholarships. They donate the money to the (Cuyahoga Community College) foundation and the foundation helps students who couldn’t otherwise afford our programs. So we’ve gotten $1.3 million for scholarships.

Beyond your training programs, what else are you now doing to funnel trained, qualified workers to businesses?

I got a call from Spectrum (which provides cable television, internet and telephone services) recently.

They will be hiring 150 new people for their call center and for customer service and other positions. They didn’t know where to turn, so they called us. My response to them was, “You’re not unique. There are shortages all over.” I said we could be a one-stop for them. We’re going to put together a recruitment plan for them. We’ll even conduct that on-site at our facilities or at their facilities. I get calls like that every day.

What are you doing to reach smaller businesses?

We have our Goldman Sachs 10,000 Small Businesses program in Cuyahoga and Medina counties.

That’s where small businesses not only train to grow their revenue, but we train them on how to identify avenues for increasing their employment base and increasing their skill levels.

You’ve mentioned working in Medina County. Isn’t it Cuyahoga Community College?

Yes, but when you stop and think about workforce development, it’s regional. More and more of the employment base is outside of the footprint of Cuyahoga County. So we have to convince those employers to take advantage of our resources and graduates. Also, we’re trying to collaborate with other community colleges to leverage resources and share curriculum. If we excel at manufacturing training and another community college doesn’t, how can Tri-C step up to help?

What else should businesses be thinking about when they think about finding skilled workers?

First, they need to realize that a lot of people can’t afford to come to Tri-C for a training program without keeping a job with sustainable wages. We need businesses to realize they may already have a good candidate (for a skilled position) in a less-skilled job. I want to convince more of the business community to pay for their existing, entry-level workers to get training. We call it upskilling. That is a priority.

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

Chairman Keith E. Crain Vice chairman Mary Kay Crain President KC Crain Senior executive VP Chris Crain Secretary Lexie Crain Armstrong CFO Robert Recchia G.D. Crain Jr., Founder (1885-1973) Mrs. G.D. Crain Jr., Chairman (1911-1996) Reprints: Laura Picariello, 732-723-0569 or lpicariello@crain.com Customer service and subscriptions: 877-824-9373 Volume 39, Number 42 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for the last week of December, at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230.

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THE WEEK Deal takes flight

In SITE

Something new in store

Cleveland-based TransDigm Group announced Oct. 10 that it’s buying Esterline Technologies Corp. for about $4 billion, including the assumption of debt.

TransDigm, a producer, designer and supplier of aerospace components and systems for commercial and military aircraft, will pay about $122.50 a share in cash for Esterline’s stock outstanding, representing a 38% premium to Esterline’s closing price of $88.79 per share on Oct. 9.

Directors of both companies approved the deal, which is expected to be completed in the second half of 2019.

Bellevue, Wash.-based Esterline makes equipment for commercial jetliners, business jets and military aircraft. Its anticipated fiscal year 2018 revenue is about $2 billion. Esterline has more than 12,500 employees.

Completing another step in its transformation, Beachwood-based DDR Corp. changed its name to SITE Centers Corp. and its stock symbol to “SITC,” effective Oct. 12.

The company’s shares will continue to trade on the New York Stock Exchange.

The name change reflects the company’s effort to focus on the real estate development of its portfolio of more than 200 shopping centers — most historically openair big box centers.

DDR became the firm’s name after it was taken public by real estate developer Bertram Wolstein.

Historically, its name was Developers Diversified Corp., and it once was Developers Diversified Realty Corp.

A $70 million Richmond Heights mixed-use development is planned

by Los Angeles-based real estate developer DealPoint Merrill, which just acquired the closed Sears store at Richmond Town Square mall.

DealPoint plans to use the 23 acres currently occupied by the department store and associated parking for a 375-unit luxury apartment, a 98room hotel and a restaurant. The new apartments will have ground-floor retail in addition to a combination of tenant amenities, a plaza and a public park.

Through an affiliate, Richmond Heights Town Square Owner LLC, the real estate developer on Oct. 3 bought the Sears store, 622 Richmond Road, and associated land used for parking for $1.8 million.

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TransDigm Group — a Cleveland-based producer, designer and supplier of aerospace components and systems for commercial and military aircraft — is buying Esterline Technologies Corp. (Contributed photo)

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