Issuu

VOL. 40, NO. 43

OCTOBER 28 - NOVEMBER 3, 2019

Source Lunch

Akron Main Street Gourmet was enticing option for PE firm. Page 20

The List

Elyse Ball, University of Akron Research Foundation Page 22

NEO’s top privately held companies Page 16

TRANSIT

PRESSURE POINTS

An RTA train heads west on a rail viaduct in the Flats. A recent report claims the cost of maintaining the RTA’s extensive rail lines does not match expected revenues. (David Kordalski)

Fiscal analysis questions RTA’s administrative costs and $240M railcar replacement plan By Kim Palmer kpalmer@crain.com @kimfouroffive

This year, while dealing with continual declines in funding and ridership and conducting a nationwide search for a new general manager, the Greater Cleveland Regional

Transit Agency (RTA) began the initial steps of a comprehensive systemwide redesign. In the month before the new general manager, India Birdsong, came on board, the first of five studies commissioned by RTA, an analysis of fare rates and collection methods, was released. That analysis held few surprises, with the excep-

tion of the revelation of a decade-old contract for a transit “smart card” that was never delivered. On Oct. 22, a fiscal analysis and economic forecast study commissioned by the Greater Cleveland Partnership (GCP) and conducted by Canadian firm WSP made some decidedly more pointed observations about the eco-

nomic viability and future of RTA. The Financial Analysis and Economic Forecast report questioned RTA’s current and future funding gaps and recommended, among other things, privatization of the paratransit operations and cutting more than $12 million in administrative costs “to gain efficiencies and maximize revenue.”

The report also questioned the viability of a pending RTA railcar replacement plan set to cost an estimated $240 million. RTA has so far acquired less than half ($108 million) of the funds. Recently, the state rejected a request for Transportation Review Advisory Council (TRAC) funds for the project. SEE RTA, PAGE 6

SPORTS BUSINESS

Subscription plans connect Cavs to new fans By Kevin Kleps kkleps@crain.com @KevinKleps

Sports fans who aren’t looking for a long-term commitment are finding a partner in teams that are offering monthly subscription plans. And the clubs believe quite a few of the fans who participate will end up getting hooked. The Cleveland Cavaliers’ monthly subscription program recently tipped off, and more than 1,000 passes have been sold for October and November.

A limited number of lower-level passes, which are $89 a month, quickly sold out. The $49 monthly option, with Loudville seat locations that are delivered via Flash Seats within 24 hours of the game, is a few hundred subscriptions away from reaching its cap for October and November. At its current pace, the Cavs’ monthly pass would result in more than 42,000 tickets sold, which is a nice boost for a rebuilding club that no longer plays before a capacity crowd on a nightly basis. SEE CAVS, PAGE 18

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The Cavs are offering monthly passes that start at $49 for games at the renovated Rocket Mortgage FieldHouse. (Ken Blaze for Crain’s)

How it works Some key features of the Cavs’ monthly subscription plan: Cost: $49 for Loudville seats and $89 for lower-level seats. The $89 option is sold out for October and November. Ticket delivery: Via Flash Seats, 24 hours before the game. Game selection: The passes are good for every home game each month. Auto-renewal: Fans who want to opt out of the program must do so by the 25th to avoid a charge the following month. All together: Passes purchased at once will sit together. The limit is six passes per account, and there is no discount for purchasing multiple passes. Resales: Passes can’t be resold and can’t be transferred.

10/25/2019 2:25:38 PM

CONTENT

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NEWS AND TRENDS FROM NORTHEAST OHIO’S TECHNOLOGY SECTOR

TECH MATTERS WORKING WITH ROBOTS

ON THE HORIZON

atalie Pierce is co-chair of global robotics, artificial intelligence and automation practice group at Littler Mendelson P.C., a global law firm with a Cleveland office. As part of her role, Pierce educates the law firm’s employees and its clients about the workplace impacts of these emerging technologies. She shares some of her insights into the trends and future of workplace robotics. Pierce What should we expect to see in the coming decade? Part of the reason we expect to see a much heavier proliferation of robotics in the workplace is due to stunning advancements in collaborative robotics – those small, portable, sometimes mobile robots capable of safely working alongside their human coworkers. “Co-bots,” for short, are increasingly dexterous, have advanced motion, 3D and audio sensory, and are very affordable, easily programmable and reprogrammable to perform any number of repetitive tasks. These human enhancement tools perform the dull repetitive tasks their human coworkers would rather not, and are capable of multiplying by many times workplace productivity, efficiency and effectiveness. Where will we see the most growth in this particular technology?

or many, the thought of robots in the workplace conjures up images of mechanical assembly-line arms, soldering circuit boards or attaching doors onto auto body frames, and, yes, often displacing humans. Workplace automation today, however, goes way beyond industrial uses, as advances in engineering and artificial intelligence are creating new opportunities for machines to carry out repetitive, easily replicated tasks alongside human coworkers. “It’s about augmentation,” said Ethan Karp, president and CEO of MAGNET, a Cleveland-based manufacturing advocacy group. “If you can free up employees from doing some of the more menial tasks, you expand their time and opportunities to perform higherlevel, value-added tasks.” Karp said a recent MAGNET survey found that among the 56% of members who use some form of automation, 48% augment – rather than replace – their human workforce. Only 7% said they use robots in place of humans. In manufacturing environments, collaborative robots – or “cobots” – are already being used for tasks, such as tending electronically controlled machinery or picking up and placing materials to and from a conveyor. Robot-enhanced manufacturing offers potential for reducing employee injuries, resulting from programming errors, repetitive motions and lack of worker vigilance, Karp said. In offices, “software bots” – specially designed software applications – take over mundane and administrative computer work, such as checking, verifying and transferring data. Quentin

CALENDAR OF

EVENTS A PRODUCT OF

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Fisher, CEO of Chardon-based Health Care Analytics, said using software bots to automate low-level, repetitive and time-consuming processes clears up employees’ schedules to focus on more strategic projects, such as troubleshooting or building customer relationships. In both cases, the executives say, robotics are playing an important role in reducing employee burnout and helping companies gain productivity, especially in the face of labor shortages. Fisher said behavioral health facilities, for example, are facing stiff new Medicare filing demands. Meanwhile, it’s hard to find entry-level workers to do the claims work because of the complexities of the filing process, plus it is time-consuming to train the people they can hire. Health Care Analytics’ software bots perform the billing requirements with more accuracy and “keep the lights on” for clinics struggling to hire and train human workers, he said. Meanwhile, Twinsburg-based General Die Casters Inc. installed robots on five of its 17 production lines about 18 months ago, ahead of three new customer contracts. Securing those new orders would not have been possible without robotic augmentation, given the tight labor market, CEO Brian Lennon said. The new additions “make the job a lot of more interesting too,” by freeing up humans to program and manage robots rather than tediously tending diecast machines, he said. “Our people on the floor really enjoy learning about the robots and how to program them,” he said. “It’s been a very positive experience.”

We can expect to see co-bots – now only 3% of the global robotics market – rise to account for about one-third of the global robotics market by 2025. Look for the greatest rate of proliferation in the health care, electronics, manufacturing and food service industries. What does this potentially mean for displacement of employees and a simultaneous need to fill new types of jobs? By 2025, we can expect to see one in every three existing jobs performed by software, robots and smart machines. What we also expect to see, as it has been with past workplace revolutions, is new job creation. Some predict many more jobs will be created than lost due to automation. So in these next five years, expect to see much displacement of office support, food service, transportation, logistics and customer service roles. In the same time period, expect to see new jobs created in STEM fields, business services and work requiring greater creativity, collaboration and personal interaction. We will have a real mismatch when it comes to job supply and demand. Across the globe, 120 million workers will need retraining if they are to take on jobs of the future

OCTOBER 30

NOVEMBER 6

NOVEMBER 14

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MAXIMIZING RETURNS: 5:30 p.m. to 8 p.m., The Global Center for Health Innovation, 1 St. Clair Ave., Cleveland. With support from PNC, North Coast Angel Fund will host this session for both NCAF and non-NCAF angel investors alike on how to bolster investment returns. eventbrite.com/e/angel-education-maximizing-returnstickets-63016347592

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

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Acquisitions signal growth for Walter | Haverfield By Jeremy Nobile jnobile@crain.com @JeremyNobile

Some acquisitions by Walter | Haverfield put the business firmly in growth mode. The Cleveland-based firm is rolling up two smaller Ohio firms: Hurtuk & Daroff, a real estate and finance firm in Mayfield Heights, and Nardone Ltd., a tax planning and business services firm in Columbus. They mark WH’s first acquisitions since the firm was founded in 1932. It’s all part of a strategy to beef up work in what the firm sees as highgrowth practice areas as it plans for the future. “This really represents the evolution that we have undergone as we’ve grown,” said WH managing partner Ralph Cascarilla. “We’ve been able to take on larger-scale activity and we feel we are well-positioned now to take on the acquisitions of these two firms. Frankly, next year, I’m looking at others.” Nardone, founded in 2008, is the smaller of the two outfits with five staffers, including two attorneys. They’ve moved into WH’s existing Columbus office, which the firm opened with a couple of attorneys in September 2018. That deal was effective as of mid-October. Concurrent with that move, managing principal Vince Nardone has been named partner-in-charge at the Columbus location, which now staffs six lawyers. He’s also joined the firm’s executive committee. “We’re eager to combine our business and tax law practices with those at Walter | Haverfield, and to leverage the collective expertise of our groups,” Nardone said in a statement. “This consolidation marks the start of a new growth phase for us as Walter | Haverfield continues to expand in

the Columbus market.” Hurtuk & Daroff has 13 employees, including seven lawyers. The merger is effective Nov. 1. That operation will continue working out of its existing Mayfield Heights location, adding a new presence for WH on Cleveland’s East Side and bringing the firm’s total footprint to four offices (the other locations are in downtown Cleveland and Avon). “For many years, we’ve been privileged to guide clients in significant transactions in Ohio and elsewhere throughout the country,” said Edward Hurtuk in a statement. “Partnering with Walter | Haverfield is a natural next step for our firm because of the pre-eminent role its real estate practice group has played in deals that are transforming Cleveland and beyond.” Hurtuk & Daroff complements WH’s existing real estate practice, bringing a bit more national scope to it. The combination also works into a succession plan for the acquired firm, although there are no immediate retirement plans for anyone there. Cascarilla described Nardone as someone who built up a good practice that has about reached its capacity. “He needed a bigger resources base to go to the next level, and we were looking for exactly that person, someone who had energy to build and grow a practice with concepts we embrace as a firm,” Cascarilla said. With the combinations, the WH bench grows to about 90 attorneys. The business reported 77 attorneys

for Crain’s 2019 law firms list. With almost all of those in the Northeast Ohio market, WH ranked as the 11th-largest firm in Cleveland (by number of inmarket attorneys). Cascarilla With the new lawyers added in, the firm cracks the top 10, leapfrogging McDonald Hopkins and falling between Roetzel & Andress and Ulmer & Berne in terms of its size in the regional legal market. WH has increased in size by about 50% in the past decade with lateral hires, but no firm acquisitions. Planning for the future is what’s spurring deals now, Cascarilla said. The retiring of baby boomer firm leaders, meanwhile, presents opportunities for mergers that weren’t as prevalent in years past. Perhaps not coincidentally, law firm mergers across the U.S. “exploded” in the third quarter of this year, with 38 combinations announced after otherwise little activity through the first half of the year, according to Altman Weil MergerLine. A handful of Ohio deals played into that merger frenzy, including Frantz Ward (Cleveland headquarters, 56 law-

yers at the time of the deal) acquiring Kadish Hinkel & Weibel (Cleveland, 11 lawyers) in July; Taft Stettinius & Hollister (which was founded in Cincinnati, but lists Indianapolis as its main office, 474 lawyers) acquiring Briggs and Morgan (Minneapolis, 135 lawyers) in August in the largest deal of the quarter; and Green and Spiegel (Toronto, 34 lawyers) acquiring Ritter Halliday (Beachwood, four lawyers) in September. “Every corner of the marketplace was on display last quarter,” said Altman Weil principal and merger adviser Tom Clay in an Altman Weil report. “Big deals, regional plays, AmLaw firms cherrypicking premium boutiques and the meat and potatoes of incremental growth by small firms in local markets.” Forward-thinking firms like WH are stepping into buying roles. The firm had its best year yet for revenue in 2018, Cascarilla said, adding the company is “building from a strategy we put in place over the last five to 10 years.” Cascarilla said a concerted effort to draw in younger lawyers and partners has lowered the firm’s median age from about 57 to 47. Nine people on the executive committee there are now younger than 50. That’s come with some cultural evolution, which WH seems to embrace. Cascarilla recently spoke with Crain’s

about how the legal industry is evolving in general as the millennial workforce moves through the profession and how the firm is adapting as a result to attract and retain those people. Law firms of the 1970s and ’80s were very structured, top-down organizations. Now, even young associates are more involved in the business itself, at least at more progressive firms. “It’s a more democratic flow of information, with younger lawyers typically part of a team for a particular client matter,” Cascarilla said. “Fifteen or 20 years ago, associates rarely interacted with clients. That was all done through the partners.” He added he is trying to build a firm that allows for participation at all levels, which “we think is a significant cultural advantage.” In terms of the pipeline for other deals, Cascarilla indicated more are likely in store for 2020, but emphasized that growing to a certain number isn’t as important as selecting the right people. “We do want to grow and develop that Columbus office. How that growth and development occurs will really be a work in process because I think you make bad decisions if you say, ‘Oh, we need to have eight more lawyers by the end of the year,’ ” Cascarilla said. “I don’t want to just have bodies that are not going to be a good fit.”

Correction JJAn article in the Oct. 21 edition of Crain’s Cleveland Business included incorrect information on RVshare CEO Jon Gray. Gray was previously the chief revenue officer of HomeAway.com and took a one-year hiatus between that job and joining RVshare.

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NRP, University Settlement team on Slavic Village plan By Stan Bullard sbullard@crain.com @CrainRltyWriter

A joint venture by University Settlement, a long-established social service provider in Cleveland’s Slavic Village neighborhood, and Cleveland-based apartment developer NRP Group stands to replace a vacant five-acre site at 5163 Broadway Ave. with a $16 million housing development. The plan, dubbed Slavic Village Gateway, calls for constructing two four-story apartment buildings facing Broadway and low-rise townhouse suites on the block’s eastern perimeter. Backers hope it will spur additional real estate development on nearby vacant parcels on the northern stretch of Broadway, which differs vastly from the largely intact Broadway commercial district near Fleet Avenue. Chris Alvarado, executive director of the Slavic Village Development nonprofit that serves the neighborhood, said he hopes it sparks additional housing investment in the area widely known for an epidemic of home foreclosures during the housing collapse. “We’ve had more success combating vacancy near Fleet than here,” Alvarado said in an interview. “Slavic Village Gateway is not just an investment in our neighborhood — it’s also an investment in our families and individuals who will call this home. By incorporating University Settlement into the development, we are signaling that we are committed to the long-term well-being of our residents and our community.” The new development also fits in with the Northeast Ohio Areawide Coordinating Agency’s plans for transit-oriented development on Broadway, as well as a bike trail. Next

Slavic Village Gateway is designed to foster added development on lower Broadway Avenue. (Contributed rendering)

door to the project site is Velodrome Cleveland, a nonprofit-operated outdoor banked-wall bike training and racing course that attracts riders from throughout the region. Those features, Alvarado said, helped the project last May land a crucial $1.2 million in low-income housing tax credits from the Ohio Housing Finance Authority. NRP’s plan received a conceptual approval on Oct. 22 from the city’s East Design Review Committee, which means the project’s backers can proceed with more detailed drawings. The proposal calls for 78 apartments and 10 townhomes, including 23 affordable housing units that will be income-restricted. It will have a mix of one-, twoand three-bedroom suites. Plans call for construction to begin in 2020. Aaron Pechota, NRP Group senior vice president, said in an Oct. 4 news release, “Slavic Village Gateway represents an amazing combination of affordable housing and supportive services that can have a transformational impact on both residents and the surrounding neighborhood.” Earl Pike, executive director of University Settlement, called the project a “beacon of hope” because it will also

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provide an updated, expanded home for the organization. University Settlement will occupy 20,000 square feet of street-level commercial space on the Broadway side of the midrises. That’s double the size of its current home at 4800 Broadway Ave. University Settlement aids more than 12,000 residents annually in the neighborhood, which has a 60% poverty rate. The organization’s services range from assistance for homebound seniors to providing fresh food and other resources. Long-serving Ward 12 Cleveland City Councilman Tony Brancatelli, whose ward includes most of Slavic Village, said the area near the site has long been more troubled than other parts of the neighborhood because its homes were smaller, worker-oriented cottages and once were interspersed with industrial uses. The plan also reuses about two-thirds of the site where St. Michael Hospital, which closed in 2003 after serving the area more than a century, once stood. The project will be funded with a conventional bank loan as well as city and county loans, NRP said, along with proceeds from the sale of the low-income housing tax credits.

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IT TAKES A PARTNERSHIP

New Akron president says ‘trust and goodwill’ must be built after university’s latest change in leadership By Rachel Abbey McCafferty

have already begun. On Oct. 9, Gary Miller announced the university would do away with its split leadership model in the Office of Academic Affairs and begin a search for a new provost. On Oct. 23, he named an interim provost to serve in that role during the search. The unconventional approach to the Office of Academic Affairs was something Gary Miller knew he wanted to change when he interviewed for the role of president, and he said he let the board of trustees know that. Finding a lot of faculty and staff support for the change, he moved quickly to implement it. The challenges the university has been facing aren’t necessarily unique, he said, and many are situations he’s tackled before at other universities. Take, for example, the university’s enrollment decline. Some of that is based on demographics, which can’t be controlled.

At the University of WisconsinGreen Bay, Miller oversaw changes, like a reorganization and an all-university enrollment strategy, that led to enrollment growth. The university also started an engineering school in that time, which Georgia Nix Miller said was based on community needs. That “whole-university enrollment strategy” is something Gary Miller said he’d like to see at the University of Akron. The university can’t focus just on transfers or first-year students; it needs to look at different potential enrollment venues, even those outside of traditional degree programs. And it can’t rely solely on the admissions office to do this work. The university benefits when faculty are involved in recruitment and retention, Gary Miller said. “It’s well known that students stay if they have a close connection with a faculty member,” he noted. The university needs to look at the potential student pools it’s targeting and the ways it’s delivering education, finding nontraditional approaches to expand its offerings, Miller said. For example, he doesn’t think there should be a stigma around taking more than four years to complete a degree, since many students have to work. He added he’s open to “providing the University of Akron experience” in different ways. More changes could come through a new strategic plan for the university, the process for which the board approved in early October. Gary Miller said the university doesn’t need a traditional strategic planning process, as that can take up to two years to complete and isn’t often related to the budget. He’s long been critical of that approach. In Akron, he said he wants to take on a focused approach that identifies themes, priorities and actions. “We need a strategic horizon about three to five years where we really make some hard choices, go with our strengths and move the university through the current proximate difficulties,” he said.

lars RTA previously received from the statewide Medicaid managed care organization provider tax. “It is not just the simple solution of more money will solve the problems,” McGann said. “We are going to have to take our report and the others and spend some time as a community prioritizing what makes sense going forward.” Chris Stocking, communications co-chair for Clevelanders for Public Transit, a grassroots transit rider advocacy group, takes issue with the GCP conclusions. “More funding is key no matter what you do. RTA needs to focus on showing that transit is useful and reversing the decline in ridership,” he said. The idea, according to Stocking, is to boost ridership by improving the product. One problem is that fares have doubled since 2005 while service hours were cut by more than 25%. He cited the Cleveland State University line as a good example, pointing out that after RTA upgraded the route by offering buses in a dedicated lane during rush hour, ridership grew more than 20%. The GCP study found that Cleveland has one of the lowest rates of car ownership and that, in 2016, 23.6% of households in the city did not own a car. That should mean there is a built-

in market for RTA. A problem is that new jobs are increasingly located in the outer reaches of Cuyahoga County, where there is little or no RTA service. Stocking said he understands the “mismatch,” but thinks better local service can help spur an increase in regional transit. “We need to bring back ridership, which is going to decrease the cost per person because you are going to have more people riding it and collecting more fares. More cuts are not going to help anyone,” he said. “It is not going to help people get to work.” The GCP estimated that, in total, RTA could save $21 million in costs and generate $8 million in additional revenues by implementing the WSP study recommendations, although even then it would still have to look for new funding sources to offset expenses. As for RTA’s new boss, Birdsong has heard these ideas and many more at the more than two dozen community engagement sessions that have been held across the city starting the week she came to Cleveland. “Receiving constructive feedback such as this is welcomed as we work to refine our business,” she said. “Above all else, this study is one of many continuous efforts to create the best solutions to community issues.”

rmccafferty@crain.com @ramccafferty

Urban universities like the University of Akron face a broad range of both challenges and opportunities, said UA president Gary Miller. “If you look at a university like Akron and draw a line out through the city and beyond into the suburbs and then on into the rural areas, on that continuum is virtually every major challenge and opportunity in America,” Miller said. The chance to make a wide-reaching difference was exciting to both Miller and his wife, Georgia Nix Miller. Gary Miller started his tenure as the University of Akron’s 18th president on Oct. 1. He took on that role from interim president John C. Green, who was the latest leader in a turbulent few years at the university, following the short tenures of Matthew Wilson and Scott Scarborough. Miller said he hopes he and his wife are in Akron for a “long run.” He has a lot of plans, as well as tactics he’d like to employ to accomplish them, but developing relationships is the first step. “We’ve got to build some trust and goodwill,” he said. “I think this university is so fantastic, and we need to reaffirm that to ourselves.” The Millers have been through this process before. Gary Miller’s entire career has been in higher education. He’s worked as a provost, a dean and a faculty member. Most recently, he served as chancellor at the University of North Carolina Wilmington and then at the University of Wisconsin-Green Bay. He and Georgia met when he was working at the University of Mississippi and she was earning her master’s degree there. The couple has three children and five grandchildren. Georgia Nix Miller has been active in the communities in which they’ve lived, serving on boards but also starting a nonprofit working with un-

University of Akron president Gary Miller meets with Anvay Patil, a graduate student researcher in the Department of Polymer Science. (University of Akron photographs)

derserved women and children in Mississippi and helping found a charter school in North Carolina. The couple has found “common ground” in the issue of access to higher education, Nix Miller said. That’s been a driving force for both of them in the past 15 years. “The networks that we build in support of the university and particularly in support of opportunities for students, we do those together,” Gary Miller said. “So our community efforts are a partnership. I wouldn’t even try to do this job without this kind of partnership.” The Millers are still getting to know Akron with the help of the university’s transition committee. Georgia Nix Miller said she’s planning to learn more about the Akron school system as a start. She’s also passionate about access to the arts in the community and wants to see more collaboration between the school

Gary Miller and his wife, Georgia Nix Miller, both consider access to higher education an important issue in their lives.

district, the university and social service agencies. At the university level, the changes

RTA

CONTINUED FROM PAGE 1

A summary of the report findings claims the cost of maintaining the RTA’s extensive rail lines does not match expected revenues. It stated that “even with increased funding to cover the financial shortfall for this project, investment would only help sustain the system as is, producing relatively modest ridership and revenue gains.” GCP estimates that even an increase in ridership that would follow a railcar upgrade would only result in 20%, or $1.46 million, more in annual revenue. That would not be enough to maintain a rail system that the GCP report determined does not even service areas where employment is growing fastest. “They (RTA) have a substantial capital backlog that has been identified by us and others that requires a substantial investment needed to maintain the rail line. That is a big challenge, and we are going to have to have a discussion as a community around that,” said Marty McGann, GCP senior vice president of government advocacy and strategic initiatives. “How do you reinvest in capital infrastructure that has seen such drastic decline? You really have to

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The RTA Waterfront Line runs through downtown Cleveland, but new jobs are increasingly located in the outer reaches of Cuyahoga County, where there is little or no RTA service. (David Kordalski)

question that investment.” There is no argument that ridership is down and that those declines have outpaced city and county population losses. In the decade after 2007, ridership declined 31%, and the second quarter of 2019 saw one million fewer riders compared to the second quarter of 2018.

This year’s revenues, even with the declines, were propped up by a 1.5% increase in sales tax revenue. However, as the sole outside funding source, this revenue is contingent on often-volatile economic performance. And the $5.6 million tax revenue increase this year does not make up for the loss of tens of millions of dol-

10/25/2019 2:26:30 PM

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STUDENTS WANT MORE CAREER EXPLORATION, EXPERIENCES

By JUDY STRINGER

KEN BLAZE PHOTOGRAPHY

CRAIN’S CONTENT STUDIO

Business, education and economic development leaders across Northeast Ohio have spent hundreds of hours, both behind closed doors and in open forums, troubleshooting the challenge of growing, recruiting and retaining a skilled and reliable workforce. Considerably less time has been focused on listening to students who could – and should – be part of the solution. Three organizations, however, are collaborating to do just that. Last week, Delta Dental of Ohio, one of the largest dental benefits providers in the state, in partnership with Junior Achievement of Greater Cleveland and Team NEO, a nonprofit business organization focused on regional economic development, convened a roundtable discussion with a group of juniors at James Rhodes High School in Cleveland as part of a larger initiative targeting workforce development at the student level. “Delta Dental is committed to building healthy, smart, vibrant communities and that begins with a strong workforce,” said Margaret Trimer, vice president of strategic partnerships at Delta Dental. “It’s on us as employers and educators to showcase the pathways available, offer experiential learning and guide our young people into successful futures here in Northeast Ohio.” During the conversation moderated by Al DiFranco, vice president for development and programs at Junior Achievement of Greater Cleveland, the teens shared their career aspirations and detailed some of the roadblocks they believe could derail those dreams. They also stressed the need for better career and personal development opportunities.

A DESIRE TO HELP, FIND HAPPINESS Many of the eight participants said they wanted jobs in which they can help other people. Several aspired to be nurses, doctors or psychologists, drawing on their own experiences caring for siblings or nieces and nephews. One student, Veronica, said she wanted to

The Oct. 23 roundtable followed a schoolwide survey in which students were asked about their future. Among the key findings: 92% said they planned to attend a two- or four-year college. 30% are contemplating careers in health care; 20% careers in business; 15% careers in IT; 10% careers in skilled labor. Bad influences, time management and finances, respectively, were listed as the top three challenges to meeting career and personal goals. be in the U.S. Army JAG Corps or an ROTC program that would pay for her legal training, which would allow her to help other people get the justice they deserve. The students also zeroed in on possible majors in film editing and IT, and most said an ambition to “do better than their parents did” fueled their desire to graduate from college. “I already want to get to where I want to be, because nobody in my family has ever done it,” said another student, Seqouia. “I feel like basically the first generation.” “Happiness,” buying a house and having a family were among the common life goals. Many described success as being “comfortable,” and the students clearly valued their social and emotional well-being – and that of their future families – over wealth. “Success to me is not having to live check to check,” said another student, Nneka. “Like once I pay my bills, I still have time to be happy.” “I don’t want to have to worry about if I’m able to pay my bills,” echoed Arsenio. “Success doesn’t have to be buying material things. … It depends on if you are truly happy.”

Other students equated success to having “purpose,” whether that purpose is “waking up every morning knowing you want to reach your goals,” according to Demetrius, spreading joy like Aaliyah or using personal wealth to lift up the less fortunate.

CHALLENGES ARE REAL The roundtable participants pointed to the absence of support in the home as a big impediment to their college and life goals. When the people close to you are not motivating you, one student said, “it makes you not want to do it.” There also was discussion about the need for more hands-on learning opportunities – beyond college visits – and a feeling that overall there should be a greater focus on preparing teens for the future outside of school. “We’re so focused always on (Ohio State Tests) and getting our points to graduate …,” said another student, Jose. The students had major concerns about paying for college as well, especially when it came to living expenses not covered by typical scholarships. They need to be educated on financial issues, they said, along with more assistance in identifying possible jobs and the paths to get there. “At our school, we focus mainly on academics,” Aaliyah said. “It would be good if we could explore different fields that we probably wouldn’t see ourselves.”

ABOUT DELTA DENTAL Delta Dental of Michigan, Ohio, and Indiana, and its affiliates in Arkansas, Kentucky, New Mexico, North Carolina, and Tennessee collectively are among the largest dental plan administrators in the nation. In 2018, the enterprise paid out $4 billion for dental care for 14 million members.

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CRAIN’S CLEVELAND BUSINESS

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HTM co-founders form ‘giant booster club’ DistrictWON is aligning schools with major corporate partners, offers subscription service for team apparel By Kevin Kleps

DistrictWON partners with insurance agents and schools for “Safe Decisions Week,” which promotes safe driving. (Contributed)

kkleps@crain.com @KevinKleps

Peter and Regan Fitzpatrick’s newest venture is a lot like the one for which they’re best known. Half of DistrictWON’s 10 employees worked at Home Team Marketing, the now-defunct company the Fitzpatricks had a major role in launching in 2001 and then sold to a group of New York investors in 2013. And DistrictWON, like Home Team Marketing prior to its change in ownership, is trying to establish mutually beneficial partnerships between schools and corporations. But almost two decades after the start of HTM — which at its apex had more than 50 employees and worked with thousands of schools across the country — Peter Fitzpatrick is hoping lessons learned and established relationships will help DistrictWON do even more meaningful work. DistrictWON launched in January, when a noncompete agreement the Fitzpatricks signed after selling about a two-thirds stake in HTM five years earlier expired. Within months, the Rocky River-based company established partnerships with two associa-

tions that are critical to their business: the National Interscholastic Athletic Administrators Association and the National Federation of State High School Associations. DistrictWON already is working with “at least” 200 schools in Ohio, said Peter Fitzpatrick, the company’s CEO. By the end of 2020, the hope is that DistrictWON will have a four-figure reach with schools outside the Buckeye State. Fitzpatrick said the company has “two distinct client groups”: schools, via a subscription-based apparel model, and corporations. “They’re almost looking at us like a giant booster club,” Fitzpatrick said

of the high schools. “We bring them support from sponsors.” The corporate group comprises businesses that DistrictWON believes can benefit from being tied to schools in their communities. “A good category is insurance companies,” Fitzpatrick said. “The big insurers need to be communicating with families with children, families with new drivers. They’re also interested in promoting safe driving. We go to them and say, ‘Look, we have a platform of schools around the country.’ ” An early example of that is “Safe Decisions Week,” a program DistrictWON created that partners with

insurance agents and focuses on the dangers of distracted driving. In 2020, Farmers Insurance will make the program available to all of its agents, Fitzpatrick said. The schools devote a week to safe driving, the agents sponsor it and the festivities are capped by a “color-out” in which the agent provides a special set of uniforms for a team to wear. “We’re really proud of that program,” Fitzpatrick said. “We have State Farm in Ohio and a national partner in Farmers.”

Major players at ‘the table’ About 11 months after HTM’s four co-founders (Jake, Peter and Regan Fitzpatrick, and friend Patrick Spear) sold their majority stake in the business, Peter was fired as CEO. (The new ownership group later squandered millions, and left many clients and former employees wondering where the money went.) Via the Fitzpatrick Media Group,

Peter and Regan then became a supplier of team gear and apparel to schools. DistrictWON, for which Regan is a senior vice president, has taken that a step further, with a subscription service it offers. Schools, Peter Fitzpatrick said, can purchase team apparel “at close to wholesale rates” and get a cut of the profits generated by the program, while paying DistrictWON a fee for the service. A $5,000 annual subscription comes with a 40% profit share, and schools that prefer a $500 subscription receive a 20% slice of the profits. “We show schools the pricing we get from the brands,” Fitzpatrick said. “They know what we’re paying and selling it for, and they share in the profits.” Founders Sports Group is a DistrictWON apparel provider. The Statesville, N.C.-based company has three brands — Garb (for high-end custom uniforms), Alleson (for midtier apparel) and Badger (for off-field gear) — that DistrictWON offers its clients. SEE DISTRICTWON, PAGE 17

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CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

Three titans carried a torch for Cleveland

Editorial

Better futures Washington has a hard time passing meaningful legislation even in a normal political environment, and fall 2019 certainly isn’t that. We’d like to call attention, though, to bipartisan measures being advocated by Ohio’s U.S. senators that we hope can find a way through our current political morass, because they’re both worthy efforts to address economic and social challenges facing lower-income citizens. They have particular resonances in Northeast Ohio, where, as recent Census data show, the poverty rate remains higher today than it was before the start of the Great Recession. Sen. Rob Portman, R-Cincinnati, has been making stops across the state, including one on Oct. 15 at Cleveland metal stamper Talan Products, to talk up the Jumpstart Our Businesses by Supporting Students (JOBS) Act, legislation he has introduced with Sen. Tim Kaine, a Virginia Democrat. The bill would expand Pell Grant eligibility to include certain short-term job training programs at nonprofit institutions, primarily community colleges. Needs-based Pell Grants at present are awarded to low-income students enrolled in programs that take more than 600 hours, or at least 15 weeks, to complete, so they typically go to undergraduate students pursuing a bachelor’s degree. The JOBS Act would make Pell Grant funding available to those enrolled in a program that has at least 150 hours of instruction time over eight weeks — a standard more conducive to skills training. Portman said in an interview that he and Kaine continue to pursue the bill’s passage (they introduced it in 2017) because it offers dual benefits: helping workers adapt to changing personal and macroeconomic circumstances through retraining, and helping employers find qualified applicants for open positions. The National Skills Coalition, which supports the legislation, estimates that nearly half of all open positions through 2022 will be “middle-skill” jobs requiring education beyond high school, but not a four-year degree. A recent Crain’s Personal View by Craig Dorn, president and CEO of Youth Opportunities Unlimited, a nonprofit workforce development organization, pointed out that Ohio has about 160,000 youth (age 16-24) “who are nei-

ther working nor attending school.” It’s surely worthwhile to create a more navigable path to solid employment beyond the four-year college degree. Can this year’s version of the JOBS Act finally make it into law? We hope so. This kind of expansion of training is one of the few issues that has support across the country among Republicans and Democrats. President Donald It’s surely Trump has included the measure in his fiscal 2020 budget reworthwhile to quest, and Portman said he’s create a more working to include it in broader navigable path to legislation to reauthorize the Higher Education Act. solid employment “It’s not everything. There are other things that should be beyond the done,” Portman said of federal four-year higher education policies. He’s college degree. right. They should be more creative in expanding career opportunities. The JOBS Act is a good step in that direction. Meanwhile, Sen. Sherrod Brown, D-Cleveland, last week joined with fellow Democrat Debbie Stabenow of Michigan and Republicans Richard Burr of North Carolina and Joni Ernst of Iowa to introduce legislation to reauthorize for five years the Healthy Start program, which aims to reduce the national infant mortality rate. The program offers home visits and other support services in communities with high infant mortality rates. Companion legislation is being introduced in the House by, among others, Ohio Reps. Tim Ryan (a Democrat) and Anthony Gonzalez and Steve Stivers (both Republicans). These sorts of services should be elemental in a functioning democracy in a rich nation. This program, in particular, serves communities with high rates of poverty, low education and limited access to care — traits all-too-characteristic in parts of Northeast Ohio. We’re encouraged that Ohio is so well-represented in supporting the reauthorization and hope it passes quickly.

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

CLEVELAND BUSINESS P010_CL_20191028.indd 10

Managing Editor:

Scott Suttell (ssuttell@crain.com)

Contact Crain’s

216-522-1383

Read Crain’s online: crainscleveland.com

How can I help? It’s a pretty simple question, but one I’ve kept coming back to recently as I reflected on the passing of three Cleveland titans during the short span of just under a month: Steven Minter, Elaine “Lainie” Hadden and Morton Mandel. As I considered their legacies and what defined their transformative work, I kept returning to the single question that seemed to be a guiding force in their leadership styles: How can I help? Minter, who died on Sept. 19 at age 80, led the Cleveland Foundation for nearly two decades and championed collaboration among our public, private and philanthropic sectors to solve the region’s most vexing problems: Elizabeth poverty, inequality, housing and education. McIntyre “It’s always been my very strong belief that you’ve got to connect ideas and people,” he told us earlier this year when he was one of Crain’s Eight Over 80 honorees, adding, in a considerable understatement, “And that is something I’ve been pretty good at.” Minter’s career and life were devoted to the principle of connection to solving problems. He did that in the 1980s when he helped to bring the first market-rate housing development to the Hough neighborhood, which had been in steady decline since the 1966 riots. And he did it again with his use of creative gap financing to help transform Playhouse Square into a thriving neighborhood. Before Playhouse Square would become the jewel that it is today, the theaters were in danger of demolition. They needed to be saved. And that’s where philanthropist and civic activist Hadden left her mark. As president of the Junior League in 1972, Hadden spearheaded a $25,000 fundraising effort — critical dollars at a crucial time. In 2012, Playhouse Square honored Hadden and four others as key players in the rebirth of the historic theater district. In her remarks, Hadden said her effort to save the theaters and rebuild Playhouse Square was “the best thing I’ve ever done.” That’s saying something, because Hadden did so much. She was the first woman to serve on the board of a major local bank and the first female chair of the Case Western Reserve University board of overseers. She served as a CWRU trustee for nearly 30 years. Name a good cause in Cleveland over the past 60 years in Greater Cleveland and chances are Hadden was involved, always with her bubbly personality and wide smile. Active until the end, Hadden attended a Cleveland Orchestra concert on Sept. 19 and died the next day at age 88. Businessman, entrepreneur and philanthropist Mandel’s devotion to helping others is apparent throughout Northeast Ohio and beyond. Along with his brothers, Jack and Joseph, he started a Depression-era auto parts business and built it into Premier Industrial Corp., which in 1996 was acquired for $2.8 billion. If their names seem familiar to you, it’s because so many buildings and programs have been named in their honor to reflect their generosity and commitment to improving lives in Northeast Ohio. The brothers learned charitable giving at an early age from their mother, and as soon as they found success, they began giving back to the communities and causes that meant the most to them by establishing the Jack, Joseph and Morton Mandel Foundation in 1953. Mandel, who was predeceased by his brothers, died at age 98 on Oct. 16. He and his brothers’ impact can be seen throughout our region, from Case Western Reserve University and the Cleveland Museum of Art to the Jewish Federation of Cleveland and Cleveland Neighborhood Progress. He wrote in, “It’s All About Who,” his 2013 book: “I think of the world as having a huge number of candles and only a small percentage are lit. I know now that I devoted a big part of my life to lighting as many candles as I can. To light a candle is to make the world a better place.” Together, Mandel, Minter and Hadden carried a torch for Northeast Ohio. They made our city brighter and better. They made our world a better place.

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

10/24/2019 4:11:46 PM

CRAIN’S CLEVELAND BUSINESS

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Innovative Legal Counsel for Today’s Business Client PRACTICE AREAS

Personal View

How Ohio can improve its standing when it comes to student debt By Mike Brown

In the United States, student loan debt is a growing concern among borrowers and lawmakers alike. Among more than 45 million college students and graduates, an estimated $1.6 trillion is owed in federal and private student loan debts. Per borrower, students are graduating with an average of Brown $28,565 in total student loans, but some have six-figure balances that likely will take decades to repay. With such high student loan debt figures, college graduates are less capable of tackling other financial goals. Buying a home is put on hold, as is starting a family or relocating to a new city. For these reasons, some states are working toward creating solutions for borrowers and their student loan burden. In Ohio, the student loan debt statistics are on par with the nationwide average. According to a study published by LendEDU, the average debt-per-borrower figure in the state is $28,947, ranking it 25th in the country when ranking the states from lowest to highest debt-per-borrower figures. Some colleges and universities are actively trying to lower these numbers as other measures are designed and implemented throughout Ohio. Wright State University–Lake Campus has an average student loan debt-per-borrower figure of $20,808, down 3.29% from the year prior. Similarly, Mount Vernon Nazarene University experienced a 13.03% decrease year over year, down to $22,778 per borrower; Cedarville University also saw a decrease of 24.18% from 2017 to 2018, with an average of $23,822 per borrower. However, Tiffin University, Marietta College and Cleveland Institute of Art have the highest debt-per-borrower figures for 2018, at $38,036, $40,196, and $41,326, respectively. Fortunately, Ohio state legislators can act on several initiatives to help decrease the average student loan debt per borrower, while effectively giving college students more control over their loans once they are in repayment.

Student loan bill of rights One of the significant issues plaguing student loan borrowers is the complexity of both private and federal student loans as it relates to borrowing and repayment. Many states have created their version of a student loan bill of rights, and federally, a proposal has been made for a similar bill to be made law. A student loan bill of rights would effectively give borrowers clear and easy-to-understand disclosures about their debt, including repayment strategies. Some of these state laws also establish a student loan ombudsman who acts as a liaison between borrowers and loan servicers. Ohio could look at creating a similar bill to pro-

Real Estate Hotel & Hospitality Business & Corporate Banking & Finance General Counsel

vide stronger protections and education surrounding student loan debts.

Licensed student loan servicers Another way to help student loan borrowers is to focus some attention on student loan servicers. For those businesses that want to operate in Ohio and serve Ohio student loan borrowers, the state could require them to be licensed under state rules and regulations. This could be part of the student loan bill of rights, but with a much more intent focus on holding loan servicers accountable. Taking the step to require loan servicers to get licensed in the state may help prevent issues with payment mishandling and misinformation about repayment options provided to borrowers.

Change bankruptcy laws U.S. Sen. Dick Durbin in Illinois recently proposed changes to the bankruptcy laws that would help struggling student loan borrowers. The proposal eliminates the section for the bankruptcy code that makes it virtually impossible for student loan debt to be included in bankruptcy filings. As it currently stands, filing for bankruptcy is not an option for individuals who face serious financial hardship when trying to repay their student debts. This debt cannot be discharged, like credit cards, auto loans and other obligations. Under the proposed law, however, students would have a way to clear their debt load if they face financial hardship when trying to repay what is owed. Ohio legislators could support this bill as a way to help student loan borrowers who need it the most.

Debt-Free College Act Finally, lawmakers in Ohio could get on board with the Debt-Free College Act, recently proposed in Washington, D.C. The proposal intends to create a partnership between individual states and the federal government for the benefit of prospective college students. Through a one-to-one federal match of state funds, students who have unmet needs above and beyond their anticipated family contribution would not be forced to take out student loan debt. The difference would be covered by state and federal funding, particularly aimed at students with few financial means. This bill has the potential to drastically reduce the student loan burden on incoming students. Ohio has many tools in its quiver to help efficiently bring down the total student loan debt owed by past and future college students. A combination of passing state-level laws focused on enhancing the rights of borrowers and providing support to federal bills meant to reduce student loan burdens can be a powerful step in the right direction for Ohio college students.

J.D. | M.B.A.

www.helonlaw.com

216.978.7463

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Web Talk JobsOhio’s broadened investment efforts

This is welcome news and a positive evolution for JobsOhio, especially the realization that there is not a “one-size-fits-all” approach to economic development in Ohio. Some regions need different assistance than others, with smaller projects and younger companies adding up incrementally, oftentimes without assistance from the state. This evolution will allow us to help companies grow based on what they need, and not on a prescribed

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investment formula without any give. I look forward to seeing the outcomes of this needed shift in JobsOhio’s approach. — Genna Petrolla

$4.5 million contract for Hopkins redesign It will take at least two years to complete the master plan for the airport. Then, it will need to be reviewed by one committee after another. Then, the financing details will need to be worked out. Unfortunately, it will be several years before anything happens. — skiwest

10/24/2019 4:11:18 PM

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CRAIN’S CLEVELAND BUSINESS

Focus BUSINESS OF PHILANTHROPY

AIMING HIGHER

Some Northeast Ohio foundations are targeting funds more tightly Illustration by RetroRocket

By Lydia Coutré lcoutre@crain.com @LydiaCoutre

In an effort to deepen their impact, some foundations in Northeast Ohio have narrowed their focus in recent years. This ongoing trend manifests in a number of ways, from shrinking geographic boundaries to reduced funding topic areas to fewer but larger awarded grants, said Teleangé Thomas, director of Candid Midwest, a nonprofit that provides research, tools and training to social sector professionals. “We have seen that trend where (foundations are) choosing to focus their activities a little more narrowly to really address critical issues, community issues that are important to them, and to achieve more substantial impact,” said Deborah Aubert Thomas, president and CEO of Philanthropy Ohio, the state association for foundations and other public charity grantmakers/individuals. While community foundations tend to remain broad in their focus areas and grant guidelines, some private and family foundations in particular are shifting strategies and sharpening their focus, Aubert

P012_013_CL_20191028.indd 12

Aubert Thomas

Garofalo

Thomas noted. While she cautioned against viewing this as a major or broad trend, there are a handful of foundations and grantmakers in Northeast Ohio that have, through strategic shifts, rethought and refocused their work. The Sisters of Charity Foundation of Cleveland a few years back zoomed in on a smaller geographical footprint to target, and has become extra focused in its efforts around homelessness. In its strategy pivot to emphasize work on poverty, the United Way of Greater Cleveland eliminated five of its areas of focus after leadership realized the organization wasn’t having a great enough impact by spreading resources broadly. Earlier this year, the Burton D. Morgan Foundation shifted from addressing entrepreneurship across Northeast Ohio to targeting the city

Goodman

Krey

of Akron for its adult entrepreneurship program. GAR Foundation, too, in its 2017 strategic planning process, decided to focus more heavily in Akron and made several other narrowing shifts, while being careful to not narrow too much.

“(Foundations are) choosing to focus their activities a little more narrowly to really address critical issues, community issues that are important to them, and to achieve more substantial impact.” — Deborah Aubert Thomas, president and CEO of Philanthropy Ohio

The list goes on. Thomas, of Candid, said that as foundations try to understand how their philanthropic endeavors are making a difference, they’re challenged to think differently about their strategies, which has led to these tighter focuses. “I think the other thing, too, that is driving it is just the sense of urgency at a community and a societal level that these issues have been around us for a long time, for generations,” she said. While these shifts leave some nonprofits without grant funding they once relied on, foundation leaders say they have been diligent in working closely with their grantees on transition plans. As the former leader of the Greater Cleveland Food Bank, which lost funding from a donor that rethought its strategy, and the current president and CEO of St. Luke’s Foundation, which two years ago rethought its own strategy, Anne Goodman is acutely aware of these impacts. Before she left the food bank, Goodman said she was “devastated” to learn that a donor was shifting its strategy; however, the organization’s strong individual giving program helped protect it through that change. When nonprofits lose philanthropic dollars, they’re really given

10/24/2019 3:32:25 PM

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CRAIN’S CLEVELAND BUSINESS

O C T O B E R 2 8 - N O V E M B E R 3 , 2 019

PA G E 13

BUSINESS OF PHILANTHROPY

just two choices, she said: Find that more toward where it’s going to have the greatest impact. In doing so, it money elsewhere or cut back. “The foundations — I mean no was no longer realistic for the grantmatter how big — don’t have the re- maker to focus on all 13 topic areas sources to take care of all of the needs it’s historically funded. Today, it foof the nonprofit organizations in cuses on eight. The organization had to take a Cleveland, although a lot of us would love to,” Goodman said. “So there has “real honest look at ourselves,” and to be a broad, a diversification of rev- examine what has been achieved in the years of funding many, many enue sources.” With that perspective in mind, when programs across the health and huSt. Luke’s Foundation shifted its focus, man services world, said Nancy Goodman said she worked closely with Mendez, vice president of communinonprofits to offer steps down from ty impact for the United Way. “One out of two of every child livtheir funding and exit grants. Ultimately, she estimates about 10 nonprofits ing in Cleveland is living in poverty,” the foundation used to fund are no lon- she said. “So what I do know is what we did in the past didn’t work. And so ger grant recipients today. “We care a lot about them — we we must be bold, we must be innovareally, really, really do,” she said. tive and try something new.” Today, the organization is focused “And there’s a natural or inherent tension between that and my job to on collective impact, or aligning varilead us in being strategic investors in ous entities’ agendas and resources. The Burton D. Morgan Foundation places where it will bring our mission has long been incredibly focused on most to life.” Two years ago, St. Luke’s shifted entrepreneurship funding, which its from three buckets of funding president and CEO, Deborah Hoover, (health, family connections and said allows the foundation to be a neighborhood) to focus on health great advocate for the field as a whole. Through its new strategic frameequity. While family connections and neighborhood work are still support- work, dubbed Venture 2021, the ed in some ways, it’s always through a foundation shifted from a regional approach to an Akron focus. health equity lens. “We are still supporting some proBecause health equity is still fairly broad, the foundation focuses more grams in Cleveland, ones that are narrowly on various topic areas within reaching really across the whole region,” Hoover that year to year, said. “But Akron looking in part at “We’ve just become is showing a where there’s mosharper and even more just tremendous mentum. For instance, St. Luke’s targeted in how we try amount of potential and we is currently workthought our ing in lead abate- to be strategic in our funding, our rement and census very specific goal sources, our exparticipation. pertise could “That doesn’t areas that we fund.” lend a good deal mean we aren’t of strength and doing other things — Susanna Krey, Sisters of Charity potential to what right now,” Good- Foundation president man noted, “but it does mean we’re is going on in Akron.” Mindful of the resources the Clevetrying to be pointed in knowing where there is special opportunity within our land community has for its institustrategy that we have a moment to tions, GAR Foundation also has doubled down in supporting make an especially big difference.” The Sisters of Charity Foundation organizations and people in Akron of Cleveland has spent years focused and, in some instances, the Greater on homelessness, but within that it Akron area. The foundation also used to prohas narrowed its focus and goals in an effort to have greater impact. For vide a little bit of funding in senior ininstance, rather than just investing in dependence and housing, but “we felt housing in general, the foundation is the very small amounts we had to working to end chronic homeless- spend in those areas against really ness — a measurable, specific goal huge issues were not having the greatthat toward which it’s been able to est impact,” said GAR president Christine Mayer. So the foundation no londemonstrate progress. “There’s a continuum of being ger awards grants in those areas. GAR Foundation has been intereststrategic,” said Susanna Krey, Sisters of Charity Foundation president, ed in collective impact and delivering “and I think our experience over time promising outcomes by creating — we’ve just become sharper and change at the root-cause level rather even more targeted in how we try to than at a Band-Aid level, Mayer said. She acknowledged that change is be strategic in our very specific goal hard for the nonprofits the foundaareas that we fund.” Several years ago, when consider- tion no longer funds, but she and her ing applying for some federal funds team have tried to keep them inthat required a very small place- formed, awarding phase-out grants based footprint, the Sisters of Charity and offering technical assistance to convened the community to deter- help grantees develop skills for raismine that geographic area, which being funds elsewhere. “There were people who certainly came the western part of the Central neighborhood. Though the founda- were disappointed that their organition ultimately didn’t receive these zation or their subject matter was not federal funds, it kept a focus on that going to receive funding anymore,” area, which allowed it to drive some Mayer observed. “But by and large, they said, ‘We understand what deeper change. While the United Way of Greater you’re doing, and we understand Cleveland has historically taken great why you’re doing it,’ in that our fidupride in giving dollars to more than ciary obligation is to steer the funds 100-200 agencies, said president and in the best way possible, to have the CEO Augie Napoli, it is now shifting greatest community impact.”

P012_013_CL_20191028.indd 13

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PA G E 14

O C T O B E R 2 8 - N O V E M B E R 3 , 2 019 |

CRAIN’S CLEVELAND BUSINESS

BUSINESS OF PHILANTHROPY

Diversity powers Cleveland’s nonprofit sector By Douglas J. Guth

zation, but we want to continue moving forward in that space.”

clbfreelancer@crain.com

The Greater Cleveland Food Bank sees itself as a “heart with a business,” bringing nutritious meals to underserved communities in six Northeast Ohio counties. Serving a varied population means hiring or promoting likeminded leadership at executive-level positions, while simultaneously identifying any obstacles that might prevent diverse talent from rising through the ranks. “Fostering engagement is one of our values, which we define through collaborative communication and embracing different perspectives,” said CEO Kristin Warzocha. “We have to have a diverse team to do that.” The hunger relief organization provides 50 million to 55 million meals annually via its distribution center as well as an array of local food pantries, hot meal programs, shelters and nonprofit agencies. As inner-city churches and large hospital systems are among its clientele, the food bank has prioritized diversity throughout the organization, including in its leadership positions.

Starting at the top Belk

Mackley

Women and racial minorities comprise key staff. Local partners such as Global Cleveland help the nonprofit promote open upper-tier positions, while Cleveland Neighborhood Progress, Cleveland Metropolitan Housing Authority and other groups with wide-ranging constituencies offer further hiring support. Warzocha said the food bank’s top-level employment practices derive, in part, from a board of directors with its own eclectic makeup. As part of a new strategic plan, the organization formed a diversity, inclusion and equity council helmed by staff members representing each department. “The more diverse we are, the stronger we are,” Warzocha said. “We’ve always had a diverse organi-

Nationally, the nonprofit and foundation sectors have not been exempt from the diversity gap evident in the country’s corporations. A 2017 analysis of the largest nonprofits by executive search firm Battalia Winston found that while 42% of surveyed entities were led by female executive directors, 87% of all executive directors or presidents were white. Additionally, African Americans (6%) Asian Americans (3%) and Hispanics (4%) had only minimal representation in those positions. Marilyn Sanders Mobley, former vice president for inclusion, diversity and equal opportunity at Case Western Reserve University, said Cleveland’s nonprofit space has a stronger commitment to diversity than it did a decade ago when she took the CWRU position. More Cleveland nonprofits Mobley

FUND EDUC AT E RE SE A RC H R ESTORE

obtaining the services of the Racial Equity Institute — an alliance of trainers devoted to creating racially equitable systems and organizations — is one sign of that adjustment. “Institutions are talking about diversity when they weren’t in the past,” noted Mobley. “We’re at the point where people want to see more diversity inside of the C-suite.” Organizations serious about change must look to their people, policies and practices, she said. Commitment starts with leadership — board members included — who espouse top-down diversity audits and engaging high-level staff in potentially uncomfortable conversations. “There’s no magic inoculation, because we’re living out the consequences of miseducation,” said Mobley. “We have to sit people down and know their stories. There are multiple points of entry, with leadership being one, a diversity audit another.” JumpStart Inc. recently launched new programming to assist companies headed by minorities and women, championing the type of inclusive focus long supported by those in charge, officials of the Clevelandbased nonprofit maintained. JumpStart president Cathy Belk and chief inclusion officer Lamont Mackley said organizational diversity originates at the governance level, as 48% of board members here are women or people of color, compared to the 30% national average reported by BoardSource’s study “Leading with Intent: 2017 Index of Nonprofit Board Practices.” Among the 35 people comprising JumpStart’s leadership team, 43% are women and 29% are people of color. “We want to be a reflection of the community we serve. It starts with our board and the rest of the organization follows,” said Mackley. “Diversity lets us engage with the challenges of different populations and react with unique solutions.”

Getting creative

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JumpStart puts job listings on the Professional Diversity Network, leveraging partner relationships with the Urban League and other groups to draw diverse talent into its board

or employment ranks. The nonprofit’s concentration on women and minority groups does not preclude it from also reaching out to the LGBTQ community, although hiring from that population is not currently a major priority. “We appreciate diversity of all types, but we’re focused most on racial diversity, as African-American and Hispanic people have been historically disconnected from our work,” said Belk. Meanwhile, nonprofits nationwide are dealing with low turnover and other organizational factors that may keep diverse populations from senior positions. According to a 2017 analysis from the Council on Foundations — an Arlington, Va.-based nonprofit leadership association of grantmaking groups — eight years is the median tenure for CEOs serving all grantmaker types. United Way of Greater Cleveland has a small administrative team, yet strives to identify obstacles for minority applicants, hires and leadership, said Julianne Gozar, vice president of human resources and operations. United Way harnesses data to source diverse candidates, and recently used a search firm to hire CFO Deborah Enty, an African-American woman. United Way also supports a career-lattice model, where title advancement is possible even in an organization with a small staff or low turnover rate. “As leaders, we have to continue to develop our knowledge and experience,” said Gozar. “Our senior staff attended (Racial Equity Institute) training last year. We need to walk the talk and lead by example.” Greater Cleveland Food Bank’s Warzocha joined the organization as director of development in 2000. She said she believes sustaining diversity at the top requires ingenuity, whether hiring from outside the philanthropic realm or providing professional development to ensure a pipeline for future opportunities. “Nonprofits may not have the dollars to invest in diversity and inclusion,” she said, “but any organization deciding to make this a priority can be creative in building their teams. That’s been one of our values for quite some time.”

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10/24/2019 3:31:12 PM

CRAIN’S CLEVELAND BUSINESS

O C T O B E R 2 8 - N O V E M B E R 3 , 2 019

PA G E 15

BUSINESS OF PHILANTHROPY

Donor-advised funds broaden support

Growth of DAFs ‘democratizes’ giving by helping expand nonprofits’ donor base to all income levels By Lydia Coutré lcoutre@crain.com @LydiaCoutre

As the popularity of donor-advised funds grows, community foundations and grantmakers in the area are working to support and engage these donors. Donor-advised funds (DAFs), a philanthropic vehicle administered by a charitable sponsor, allow donors to fund an account and then recommend grants from those funds to other charitable organizations. Community foundations are among the charities that sponsor donor-advised funds, and those in Northeast Ohio have seen growth in DAFs. As a grantmaker, the United Way of Greater Cleveland is just beginning to use DAFs through its principal giving program, launched under a new strategic plan unveiled in 2017. “Rather than go through the rigamarole of setting up a private family foundation, you can work with a nonprofit organization to develop a fund that essentially helps you yourself embrace your philanthropy and engage in a deeper level with a nonprofit organization,” explained Augie Napoli, president and CEO of the United Way of Greater Cleveland. Of the 67 active community foundations in the state, 53 house 5,241 DAFs; those DAFs hold $1.6 billion in assets and gave out $230 million in grants in 2018, according to Philanthropy Ohio, the state association for foundations and other public charity grantmakers/individuals. The first DAFs, opened in the mid1930s, were housed at community foundations and Jewish federations, while national donor-advised fund programs emerged in the 1990s, according to a report from the National Philanthropic Trust, a public charity dedicated to providing philanthropic expertise to donors, foundations and financial institutions. The report from the trust looked at 604 community foundations, which hold 70,215 donor-advised funds and charitable assets totaling $38.61 billion. Grants from DAFs at these community foundations totaled $5.78 billion in 2017, an 18.6% increase from the year prior, according to the report. Because their use and popularity has been growing over the last 10 to 15 years, in many ways the industry doesn’t yet know what the growth in donor-advised funds means for the strategy, business and flexibility of foundations, said Teleangé Thomas, director of Candid Midwest, a nonprofit organization that provides research, tools and training to social-sector professionals around the world. Candid was created in February through the combination of GuideStar and the Foundation Center. “Just from a pure balance-sheet perspective,” Thomas said, “the more donor-advised funds means that there is a more … maybe intentional focus on where those dollars are going because the donors get to say, ‘This is what I care about.’ So that impacts kind of the distribution, the overall distribution of resources and assets into a community, because the fund has to align with the priorities of the donors.” Candid is working to build up a base of resources around DAFs to better understand those implications. “How are they identifying poten-

P015_CL_20191028.indd 15

Thomas

Herrold

tial nonprofits to distribute resources to?” she said. “How do you get the attention of a donor-advised fund? What are their priorities? ... So we’re trying to kind of build that knowledge base to help support the field, as well as help nonprofits understand that, ‘Hey, this seems to be a trend that’s holding and scaling, so there are additional resources out here that can support your mission.’” Claudia Herrold, senior vice president for communications and public policy at Philanthropy Ohio, said she’s heard from community foundations that the ease of setting up and the variation in the amount contributed to DAFs has helped propel their popularity. Donors can set up DAFs at community foundations with as little as $5,000. Because of this low entry point, DAFs somewhat “democratize” charitable giving, she noted, offering a tool that’s widely available in the community and to people of all income levels. “So it has expanded the donor base potential for your small rural community foundations, as well as your large urban ones,” Herrold said. “It’s made it very approachable. The community foundation can now be seen as something for almost everyone to be a donor to and a participant in and also to reach out and rely on the expertise and the services that are offered as part of the community foundation staff.” In the last decade, Akron Community Foundation’s DAF portfolio has roughly doubled, to 300 today. As this has grown, the foundation has also worked to support these donors in their decisions and lend their expertise in the grantmaking process, said Margaret Medzie, vice president and chief development officer at the foundation. For instance, in 2014, the Akron Community Foundation launched a co-investment program, where it shares with all DAF holders all of the grants submitted to the foundation during the four cycles of grantmaking, allowing them to better understand what’s happening in the community and giving them an opportunity to participate by co-investing with the foundation. Since the program’s inception, more than a million dollars from DAFs have been brought to the table for community investment, Medzie said. The growth in DAFs has changed the way that the foundation works in some ways. Staffers spend a lot more time and energy working on stewardship and ensuring that donors understand their options and are educated about the needs of the community. The foundation’s building is currently under construction in part to provide space for family meetings. “We’re looking at and are engaging our donor-advised funds in multigenerational discussion of creating value statements, mission statements, and having the multiple generations understand why the initial donor was philanthropic and to keep

Medzie

Wolf

that legacy in place,” Medzie said. “So that has also opened up an opportunity for many families where they thought, ‘How can I teach my children philanthropy?’ Our center for family philanthropy will be that vehicle that they can access.” At the Cleveland Foundation, DAFs are about 11% of its assets. The foundation has donor relations officers who work one-on-one with DAF holders, whose needs can vary from working fairly independently to requesting the foundation run a family meeting or asking the officers to coordinate a site visit for a new project they’re thinking of funding. “We have consciously worked on continuous improvements of our

events, continuous improvement of our communications, continuous improvement of our donor portal that they work off of their online pieces,” said Kaye Ridolfi, senior vice president of advancement for the Cleveland Foundation. “So I think in a market like this, where you have competition from the financial providers, the Fidelitys and Schwabs, we really need to make sure that we are adding value on the human level.” At the Community Foundation of Lorain County, DAFs have grown such that 77% of the foundation’s grantmaking now is through donor-advised funds, said Cynthia Andrews, president and CEO of the foundation. “As a community foundation, donor intent is our guide, so what is our donor’s intent, how do we continue to meet with our donors to make sure that the grants we’re making align with their intentions?” she said. In the last three weeks of 2017, the Jewish Federation of Cleveland opened as many DAFs as it had in the entire year until then, which Carol F. Wolf, the federation’s assistant vice president of planned giving and endowments,

credits in part to a federal change in the standard deduction. Today, the federation has more than 800 DAFs. More DAFs, Wolf said, has meant more grants coming from the organization, which has helped grow its overall grantmaking total. She added that the growth in DAFs has been helpful in the federation’s annual fundraising as well, via people giving from those funds rather than having to open their wallets again. “We’ve seen that those who open donor-advised funds are more generous because they’ve already donated the money,” Wolf said. The growth in DAFs also requires nonprofits to think about where their philanthropic dollars are coming from, noted Napoli, of United Way of Greater Cleveland. “The more people own their own philanthropy, the more they want to be involved and engaged and understanding the mission vision values, the better. We think that’s terrific,” he said. “But it does create a challenge for nonprofits who are unwilling to adapt the way they spend money to reflect how they’re receiving money coming in.”

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10/24/2019 3:29:42 PM

PA G E 16

O C T O B E R 2 8 - N O V E M B E R 3 , 2 019 |

CRAINâ€™S CLEVELAND BUSINESS

THE LIST

Privately Held Companies Ranked by 2018 revenue

REVENUE (MILLIONS)

LOCAL % CHANGE STAFF

YEAR FOUNDED

TYPE OF BUSINESS

TOP LOCAL EXECUTIVE

2,147

1934

Health insurance company

Rick A. Chiricosta, chairman, president, CEO

21%

162

2004

Aluminum rolled products manufacturer

Sean M. Stack, chairman, CEO

$3,000

689

1958

Packager and manufacturer of natural and processed cheese

Dan Zagzebski, president, CEO

$2,400 (2)

1932

Manufacturer of outdoor power equipment

Robert T. Moll, chairman, president, CEO

$2,110.4

$1,857.2

14%

1,747

1848

Insurance, banking and financial services company

Edward Largent, president, CEO, board chair

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

$2,057 (3)

$1,959.4 (3)

616

1893

Law firm

Heather Lennox, Cleveland partner-in-charge

Swagelok Co., Solon 440-248-4600/swagelok.com

$2,000

4,272

1947

Manufacturer of industrial fluid system components

Arthur F. Anton, chairman, CEO

Ganley Auto Group, Brecksville 440-584-8202/ganleyauto.com

$1,761.4

$1,523.1

16%

1,838

1968

Auto dealership group

Kenneth G. Ganley, president, CEO

The Kenan Advantage Group Inc., North Canton 330-491-0474/thekag.com

$1,730

$1,562

11%

790

1991

Tank truck transporter and logistics provider

Bruce Blaise, president, CEO

$1,700 (4)

$1,600 (5)

2002

Distributor of tires and automotive parts

Scott Mueller, CEO Dean Mueller, president

$1,620

$1,378

18%

865

2003

Private aviation: fractional, JetCard, charter, management, maintenance, pilot training

Kenneth C. Ricci Michael A. Rossi, principals

$1,500 (6)

1906

Creator of paper and digital greeting cards, party supplies and other products

Joe Acuri, CEO

$1,482.4

$1,365

562

1932

Building materials retailer

Neil Sackett, chairman, CEO

COMPANY NAME

2018 (1)

2017 (1)

Medical Mutual of Ohio, Cleveland 216-687-7000/medmutual.com

$3,479

$3,137

11%

Aleris, Beachwood 216-910-3400/aleris.com

$3,446

$2,857

Great Lakes Cheese, Hiram 440-834-2500/greatlakescheese.com

$3,200

MTD Products Inc., Valley City 330-225-2600/mtdproducts.com

Westfield, Westfield Center 330-887-0101/westfieldinsurance.com

RANK

Dealer Tire LLC, Cleveland 216-432-0088/dealertire.com

Directional Aviation, Richmond Heights 216-261-3000/directionalaviation.com

American Greetings, Westlake 216-252-7300/americangreetings.com

The Carter Lumber Co., Kent 330-673-6100/carterlumber.com

Associated Materials Inc., Cuyahoga Falls 330-929-1811/associatedmaterials.com

$1,305

$1,285

1,021

1947

Manufacturer of exterior building products

Brian C. Strauss, president, CEO

Shearer's Foods LLC, Massillon 330-834-4030/shearers.com

$1,234

$1,230.9

1,210

1974

Manufacturer of snack foods

Bill Nictakis, chairman, CEO

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

$1,035

$1,000

306

1890

Law firm

Frederick R. Nance, global managing partner Michele L. Connell, managing partner, Cleveland

The Davey Tree Expert Co., Kent 330-673-9511/davey.com

$1,024

$915

12%

785

1880

Tree services, grounds maintenance and consulting services firm

Patrick M. Covey, president, CEO

Ohio CAT, Broadview Heights 440-526-6200/ohiocat.com

$995

$816

22%

608

1945

Caterpillar engine and equipment distributor

Kenneth E. Taylor, president

BDI Worldwide, Cleveland 216-642-9100/bdiworldwide.com

$782

$729.6

188

1935

Distributor of industrial products and supply chain services

Carl G. James, chairman, CEO

The Garland Co., Cleveland 800-641-7500/garlandco.com

$738.2

$587

26%

171

1895

Manufacturer of roofing, flooring, coatings, sealants and maintenance systems

David M. Sokol, president

Discount Drug Mart Inc., Medina 330-725-2340/discount-drugmart.com

$716

$700

2,382

1968

Regional drug store chain

Don Boodjeh, CEO

Hyland, Westlake 440-788-4988/hyland.com

$696.3

$550

27%

2,020

1991

Content services software developer

Bill Priemer, president, CEO

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

$667

$663.8

388

1916

Law firm

Hewitt B. Shaw, Cleveland office managing partner

The Anderson-DuBose Co., Lordstown 440-248-8800/anderson-dubose.com

$577.7

$543.8

223

1991

Distributor of food, paper and beverage products

Warren E. Anderson, chairman, CEO

Reserve Management Group, Stow 440-519-1768/reserve-group.com

$535

$433

24%

385

1991

Metal recycling, electronics repair, resale and recycling services provider

Steve Joseph, president, CEO

WMK LLC (dba MobilityWorks), Richfield 234-312-2000/mobilityworks.com

$514

$444.4

16%

227

1997

Retailer of wheelchair accessible vehicles

William Koeblitz, CEO

Majestic Steel USA Inc., Pepper Pike 800-321-5590/majesticsteel.com

$507.6

$475

339

1979

National distributor of prime flat rolled steel

Todd M. Leebow, president, CEO

Fred W. Albrecht Grocery Co., Akron 330-733-2263/acmestores.com

$450

1,301

1891

Grocery and pharmacy store operator

F. Nicholas Albrecht, president

Cleveland Browns, Berea 440-891-5000/clevelandbrowns.com

$399 (7)

$365 (7)

1946

Professional football team

Jimmy Haslam Dee Haslam, owners

Valley Truck Centers, Valley View 216-524-2400/valleytruckcenters.net

$392.3

$318.6

23%

245

1964

Dealership management group

Brian E. O'Donnell, CEO

DiGeronimo Companies, Independence 216-446-3500/digeronimocompanies.com

$374.3

$356.7

703

1956

Family of construction service and development companies

Victor DiGeronimo Jr., CEO Anthony DiGeronimo, president, Precision Environmental, Precision ProCut

$340.4 (8)

$177.5

92%

388

2005

Gutter protection and in-home accessibility products

Jeff Beck, CEO Matt Kaulig, executive chairman

31 32

Leaf Home Solutions, Hudson 800-290-6106/leaffilter.com

Famous Enterprises Inc., Akron 330-762-9621/famous-supply.com

$336

$316

1933

Distributor of HVAC, plumbing, industrial/PVF and building products

Marc Blaushild, president, CEO

Millwood Inc., Vienna 330-393-4400/millwoodinc.com

$330

$325

200

1993

Provider of pallets, packaging systems and unit load technology

Steve Miller, president, partner Lionel W. Trebilcock, co-president, partner

Ron Marhofer Auto Family, Stow 330-688-6644/marhofer.com

$316.2

325

1919

Auto dealership group

Ron Marhofer, chairman, CEO

RESEARCHED BY CHUCK SODER: CSODER@CRAIN.COM

Get 117 companies, contact info and more executives in Excel. Become a Data Member: CrainsCleveland.com/data

Staff figures are full-time equivalent as of June 30, 2019. Information is submitted by the companies unless footnoted. Visit bit.ly/33VDxcT to submit your company for this list. Send feedback to Chuck Soder: csoder@crain.com (1) Companies are permitted to submit rounded revenue figures. (2) This is a 2017 revenue figure from an annual report filed by Stanley Black & Decker, which owns a 20% stake in MTD. (3) Gross revenue from The American Lawyer's Am Law 200 (4) From Moody's, for 12 months ending September 2018 (5) From Moody's (6) From Moody's, for 12 months ending Nov. 24, 2017 (7) Estimate from Forbes (8) Leaf Home Solutions opened nine sales and installation offices in 2018, helping drive this increase.

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10/24/2019 3:26:24 PM

CRAIN’S CLEVELAND BUSINESS

LIST ANALYSIS

Private companies list doubles in size By Chuck Soder csoder@crain.com @ChuckSoder

This year’s Privately Held Companies list looks nothing like last year’s, whether you’re looking at the top of the list or the bottom. That’s by design. As it’s the most popular list we publish, we decided to greatly increase its size by contacting more companies, hunting for revenue figures in new places and including more small and midsized businesses. Thus, the full digital list includes 117 companies, up from 53 last year. And that number could go up as we’re still accepting entries for an extended version of the list that will run in our annual Book of Lists (to submit, visit bit.ly/33VDxcT). The influx of new entrants had a big impact on who made it into the top 10. Health insurer Medical Mutual of Ohio is still No. 1, and aluminum product maker Aleris is still No. 2. However, the next two companies — Great Lakes Cheese and outdoor power equipment maker MTD Products — weren’t included last year. The same goes for logistics services firm The Kenan Advantage Group (No. 9) and Dealer Tire, an automotive products distributor (No. 10). That’s four new companies in the

top 10. And that doesn’t even count American Greetings at No. 12 (Note: Revenue figures for both MTD and American Greetings are from 2017, which were the latest figures Crain’s could obtain). All of the new entries on the list pushed other companies down the ranks. For instance, two of the region’s three big-league sports teams, the Cleveland Cavaliers and the Cleveland Indians, fell off the print version of the list, making the Cleveland Browns the only team left in the top 35 (sports team revenue figures are estimates from Forbes). Also, both content services software firm Hyland Software and building envelope products maker The Garland Co. fell in the rankings even though they were the fastest-growing companies in the top 25. Both posted revenue increases exceeding 25% in 2018, each of them continuing long-running growth streaks. The fastest-growing company on the full list is Leaf Home Solutions, which is best known as the distributor of LeafFilter gutter protection systems. Its revenue hit $340.4 million in 2018, up 92% from 2017. The company opened nine sales and installation offices in 2018, helping drive that increase. The largest local employer, other than staffing firms, is Swagelok, with 4,272 full-time-equivalent local employees as of June 30.

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DISTRICTWON CONTINUED FROM PAGE 9

Another of DistrictWON’s major deals is with the National Federation of State High School Associations, which has an office in every state, plus D.C. (The Ohio State Athletic Association is one of its entities.) DistrictWON is an official sales arm of the NFHS Network. The subscription-based network is in its seventh year and livestreamed more than 100,000 high school games and events in 2018. The network expects to up its live broadcasts to 150,000 this year, said CEO Mark Koski, and the “ultimate goal” is to showcase every school event and activity. That would amount to almost 2 million annual broadcasts and leaves a lot of room for growth in advertising inventory. Koski, who has known Peter Fitzpatrick since the first few years of HTM, said DistrictWON’s “connections with major brands across the country bring potential national corporate partners to the table.” Fitzpatrick expects 2019 to be a breakeven year, but added he thinks big things are in store. His team includes vice president of partnerships Randy Domain, who had similar roles with the Browns and Cavaliers, and director of school partnerships Danny Chalhoub, who is one of the five HTM veterans on staff. One of DistrictWON’s “pie-in-thesky” goals is to help schools eliminate or significantly reduce the fees students have to pay to participate in sports. “I might be dreaming to say we could wipe out pay-to-play, but we do believe we could put a massive dent in it so it’s not such an issue,” Fitzpatrick said. “The only way is if corporate partners see it the way we do.”

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We celebrate the life of our friend, mentor and business partner Mort Mandel. His kindness, wisdom and generosity left us better people and made the world a better place.

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

HEALTH CARE

LAW

Apple Growth Partners

The MetroHealth Foundation

McDonald Hopkins

Calfee, Halter & Griswold LLP

Audit & assurance services director Susan Burnoski, CPA, has been promoted to principal. Burnoski joined AGP more than 12 years ago as an audit associate. Burnoski has built her career as an expert in assurance compliance requirements to improve internal processes. Burnoski leads the firm’s auditing team, responsible for scheduling, hiring, onboarding, and management. Burnoski was named a 2019 Crain’s Cleveland Forty Under 40 recipient.

Ana G. Rodriguez also has joined the Board of Directors of The MetroHealth Foundation. Ana is corporate vice president and chief human resources officer for The Lubrizol Corporation, which she joined in 2018. Prior to that, she served as the chief human resources officer at Sotera Health, PolyOne Corporation and Molex Incorporated. She also previously served as the general counsel at Molex Incorporated.

McDonald Hopkins LLC has announced the election of Mark Masterson to the firm’s membership. Masterson is a licensed patent attorney in the firm’s Intellectual Property Department. He counsels market-leading companies on pioneering intellectual property issues domestically and internationally. Masterson has extensive experience in procuring patents and trademarks for clients as well as drafting and negotiating various agreements to monetize intellectual property rights.

Ann Zarick Seger is a Partner in the firm’s Commercial and Public Finance practice. She advises banks and credit funds, as well as private equity clients and corporate borrowers in a variety of commercial credit transactions. Ann has experience in senior and subordinated debt facilities, asset-based financings, syndicated loan transactions, acquisition financing and cross-border and multi-currency transactions. She received her J.D., magna cum laude, from the University of Toledo College of Law.

HEALTH CARE

NOMS Healthcare ACCOUNTING

Apple Growth Partners Apple Growth Partners (AGP), award-winning accounting and business advisory firm, has expanded the Canton leadership team with a new senior tax manager. Leif Erickson, CPA, MTax, joins AGP with an extensive background in public accounting. With 17 years of experience in both public & industry diversified tax experience, Erickson brings to the Canton market expertise in income tax accounting, generally accepted accounting principles (GAAP), income tax return compliance, budgeting, and new business.

NOMS Healthcare welcomes Denise DiVita as director of operations ClevelandEast. She brings 30 years’ experience in practice and operations management, in a variety of settings including three years managing the practice and surgery center of an internationally-recognized plastic surgeon. In her new role she will be part of the team facilitating the expansion of NOMS Healthcare across Northeast Ohio and beyond. Visit: NomsHealthCare.com.

PROFESSIONAL SERVICES LAW

CBIZ, Inc. McDonald Hopkins McDonald Hopkins LLC has announced the election of Adam Smith to the firm’s membership. Smith focuses his practice on complex civil litigation, including areas such as commercial and business litigation, public utility and energy law, data privacy and cybersecurity, real estate, and labor and employment. Prior to joining McDonald Hopkins, Smith served as a Judicial Staff Attorney for the Honorable Dick Ambrose of the Cuyahoga County Court of Common Pleas.

Elizabeth Newman has been named Chief of Staff at CBIZ, Inc. As a member of the leadership team, Elizabeth serves as a strategic advisor working across all lines of business and functional areas to identify opportunities for and ensure alignment with continued efforts for CBIZ’s growth. She previously served as the President and CEO of The Centers for Families and Children, and Circle Health Services.

HEALTH CARE LAW

NOMS Healthcare

The MetroHealth Foundation Jennifer Hurd has joined the Board of Directors of The MetroHealth Foundation, which raises philanthropic support for The MetroHealth System. Jennifer is senior vice president, Ohio market manager at Bank of America. She joined Bank of America in 2003 and has been in her current position since 2015.

P018_019_CL_20191028.indd 18

Roderick Linton Belfance, LLP Attorney Alfred Schrader has joined the law firm of Roderick Linton Belfance, LLP in Akron as an equity partner. Attorney Schrader received his juris doctor from the Ohio State University Moritz College of Law. Attorney Schrader’s primary practice has been representing townships and municipalities on zoning, annexation, land use and township law issues. He currently serves as part-time special counsel and township attorney for numerous townships in the Summit, Medina and Wayne County areas.

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NOMS promotes Chris McLaughlin to director of operationsWest. She brings over 20 years’ healthcare management experience to her new post. She joined NOMS upon founding and has served in a variety of progressively responsible roles as an office manager and area manager. In her new role she will be part of the team facilitating the expansion of NOMS Healthcare across Northwest Ohio and beyond. Visit: NomsHealthCare. com.

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

The Cavs, though, are more encouraged by another stat: More than half of the monthly passes have been purchased by customers who had never bought a Cavs ticket on the club’s primary marketplace. That’s consistent with the results experienced by other teams, said Joel Browning, an NBA vice president of team marketing and business operations. About half of the league’s 30 teams are experimenting with a subscription program this season. The figure has tripled from 2018-19, Browning said. “It’s a different product that appeals to a different consumer,” the NBA VP said. Fans who purchase the monthly passes tend to be younger and have more flexible schedules, the Cavs and other teams have found. “There is a large group out there that wants to know exactly what seat they have. Others just want a seat and want to see the game,” said Eric Clouse, the Cavs’ senior vice president of sales and service. Fans in the latter group are the ideal target for the monthly subscriptions, since the seat locations vary from game to game. Seats purchased via the monthly pass can’t be transferred or resold, which is a significant difference from traditional season tickets. The passes also don’t come with the additional perks the Cavs offer their Wine & Gold United members. Instead, the Cavs and plenty of other clubs are banking on the value of the subscription plans — fans who purchased passes for October and November were guaranteed seats to 10 games at Rocket Mortgage FieldHouse, for instance — outweighing the benefits that many season-ticket holders crave. “This is strictly a ticket opportunity for somebody whose life is flexible,” Clouse said.

‘A huge win’ The Sacramento Kings were among a handful of NBA teams that utilized a subscription program last season, and the club was the first to have the plan automatically renew each month. The option has become the norm for the monthly passes (Cavs fans have to cancel their subscription by the 25th to avoid getting charged for the following month), and it helped the Kings’ renewal rate range from 70% to 80% in 2018-19. The Kings capped their passes, which cost $49 and included an upper-level ticket for up to seven games a month, at 2,100 last season. The passes sold out each month, and 25% of the buyers upgraded or added seats for at least one game. About three-quarters of the purchases were by fans who hadn’t bought a ticket for either of the first two seasons at Golden 1 Center, which debuted in 2016-17. “It absolutely exceeded our expectations,” said Tom Hunt, the Kings’ executive vice president of business operations. On average, fans who purchased a monthly pass were 12 years younger than the Kings’ typical season-ticket holders. “The thought with launching this product was with everyone younger than me being all digital, all the time, there are certain attributes of monthly subscription plans like Amazon and Netflix that we can take a page out of,” Hunt said. “We had the mindset of trying to get younger and target that next generation of fans.”

10/25/2019 2:51:08 PM

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its launch, the club had about 9,000 The Cavs also season-ticket holders, said Chris introduced Giles, the Athletics’ chief operating $39 monthly officer. passes Last August, the A’s transitioned to for the their current program, which has Cleveland 20,000 members who can select fullMonsters, and half-season plans, as well as opDan Gilbert’s tions that are good for 10 and 24 American games. The latter two selections have Hockey League flexibleEnvelope seating ID: locations, and the club. (Icon DocuSign F2EBC377-BC69-440C-9F89-5BD87AB583E6 full- and half-season choices come Sportswire via with perks that are part of traditional Getty Images)

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cation for all teams,” Browning said. “It brings new fans into the arena,” the NBA VP of team marketing and business operations said. “Even the higher-demand teams are going to be offering this type of flexibility to their fans.” The Golden State Warriors, for instance, sell $100 monthly “In The Building” passes that don’t even include a view of the court. Monthly subscriptions are more prevalent in Major “This is strictly a League Baseball, whose 162-game ticket opportunity schedule requires an for somebody whose additional 40 home contests to sell. life is flexible.” More than twothirds of MLB’s 30 — Eric Clouse, Cavs’ senior vice clubs have had president of sales and service monthly ticketing programs. The Indians tested a $49.99 for similar successes. Reaching so many new customers monthly option, which came with is “a huge win” for the franchise, said standing-room-only tickets to weekClouse, the Cavs’ senior VP of sales end home games, in 2017, but the club isn’t likely to try a similar approach in and service. 2020, a team source told Crain’s. The Oakland A’s, the Cavs’ Clouse A ‘better business model’ said, “are kind of the flagship” for the Monthly subscription plans likely monthly options, because of an A’s are a better fit for rebuilding clubs Access program that was so producsuch as the Cavs or a franchise like tive it led the team to do away with the Kings, who haven’t advanced to traditional season tickets. A’s Access, which started at $19.99 the postseason since 2006. But the passes have “a broad appli- a month, kicked off in 2017. Prior to It also led to new season-ticket sales, which resulted in the Kings reducing the cap on their monthly subscription plan to 1,500 this season. The Kings Pass now costs $69, and the monthly game limit was increased to nine. The Cavs, whose season-ticket base dropped from 15,000 during the final two seasons of the LeBron James era to about 10,000 full-season equivalents in 2019-20, are hoping

season-ticket memberships (such as set seats and VIP experiences). “It’s much more flexible, which we find appeals to a younger audience,” Giles said. “Two, it’s a much better business model for us. We’re basically selling access to the ballpark.” In the last three seasons, the average age of the Athletics’ membership program has dropped by 11 years. The team’s attendance is still among the lowest in MLB, but Oakland’s gate numbers increased from 1,475,721 in 2017 to 1,573,616 and 1,662,211 in ’18 and ’19, respectively. “What we’re finding is a lot of the younger folks are not looking for a seat-centric experience,” Giles said. “There’s been a fundamental shift in consumption.” The Cavs and other teams aren’t ready to take the monthly membership model to A’s extremes by doing away with traditional season tickets. But they are on board with finding as many creative ways as possible to bring in more fans — especially younger ones who aren’t looking for the cookie-cutter approaches of the past. The Cavs also introduced $39 monthly passes for the Cleveland Monsters, Dan Gilbert’s American Hockey League club. “It’s a way of developing an initial relationship with a buyer,” said Browning, the NBA VP. “As that buyer becomes more familiar with the brand and the product, we’ve seen it translate to greater member-based programs. They upgrade to maybe a partial plan or a full membership.”

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UNITED STATES BANKRUPTCY COURT, NORTHERN DISTRICT OF OHIO, EASTERN DIVISION ) Chapter 11 ) Case No. 18-50757 (AMK) ) (Jointly Administered) ) Hon. Judge Alan M. Koschik NOTICE OF ENTRY OF ORDER CONFIRMING THE EIGHTH AMENDED JOINT PLAN OF REORGANIZATION FOR FIRSTENERGY SOLUTIONS CORP., ET AL., PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE TO CREDITORS, EQUITY INTEREST HOLDERS AND OTHER PARTIES IN INTEREST: PLEASE TAKE NOTICE that on October 16, 2019, the United States Bankruptcy Court for the Northern District of Ohio, Eastern Division (the “Bankruptcy Court”), entered the Order Confirming the Eighth Amended Joint Plan of Reorganization of FirstEnergy Solutions Corp., et al., Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 3283] (the “Confirmation Order”). Among other things, the Confirmation Order confirmed the Eighth Amended Joint Plan of Reorganization of FirstEnergy Solutions Corp., et al., Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 3278] (as amended, modified, or supplemented from time to time, the “Plan”)2 as satisfying the requirements of the Bankruptcy Code, thereby authorizing FirstEnergy Solutions Corp. and its debtor affiliates (collectively, the “Debtors”) to implement the Plan on the Effective Date. PLEASE TAKE FURTHER NOTICE that copies of the Confirmation Order may be examined by any party in interest during normal business hours at the Clerk of the United States Bankruptcy Court for the Northern District of Ohio, Eastern Division, 455 U.S. Courthouse, 2 South Main Street, Akron, Ohio 44308. You may also obtain copies of the Confirmation Order or of any pleadings filed in these chapter 11 cases for a fee via PACER at: https://ecf.ohnb.uscourts.gov/ or free of charge on the case information website of the Debtors’ Claims and Noticing Agent, Prime Clerk LLC, at https://cases. Janikprimeclerk.com/FES. PLEASE TAKE FURTHER NOTICE that the Plan and its provisions are binding on the Debtors, the Reorganized Debtors, any Holder of a Claim or equity Interest, and such Holder’s respective successors and assigns, whether or not the Claim or equity Interest of such Holder is Impaired under the Plan and whether or not such Holder voted to accept the Plan. Dated: October 17, 2019, SUBMITTED BY: /s/ Bridget A. Franklin , BROUSE MCDOWELL LPA, Marc B. Merklin (0018195), Kate M. Bradley (0074206), Bridget A. Franklin (0083987), 388 South Main Street, Suite 500, Akron, OH 44311-4407, Telephone: (330) 535-5711, Facsimile: (330) 2538601, mmerklin@brouse.com, kbradley@brouse.com, bfranklin@brouse.com -and- AKIN GUMP STRAUSS HAUER & FELD LLP, Ira Dizengoff (admitted pro hac vice), Lisa Beckerman (admitted pro hac vice), Brad Kahn (admitted pro hac vice), One Bryant Park, New York, New York 10036, Telephone: (212) 872-1000, Facsimile: (212) 872-1002, idizengoff@akingump.com,10/15/2019 lbeckerman@ akingump.com, bkahn@akingump.com -and- Scott Alberino (admitted pro hac vice), Kate Doorley (admitted pro hac vice), 2001 K Street, N.W., Washington, D.C. 20006, Telephone: (202) 887-4000, Facsimile: (202) 887-4288, salberino@akingump.com, kdoorley@akingump.com, Counsel for Debtors and Debtors in Possession In re: FIRSTENERGY SOLUTIONS CORP., et al.,1 Debtors.

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1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are: FE Aircraft Leasing Corp. (9245), case no. 18-50759; FirstEnergy Generation, LLC (0561), case no. 18-50762; FirstEnergy Generation Mansfield Unit 1 Corp. (5914), case no. 18-50763; FirstEnergy Nuclear Generation, LLC (6394), case no. 18-50760; FirstEnergy Nuclear Operating Company (1483), case no. 18-50761; FirstEnergy Solutions Corp. (0186); and Norton Energy Storage LLC(6928), case no. 18-50764. The Debtors’ address is: 341 White Pond Dr., Akron, OH 44320. 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Plan or the Confirmation Order, as applicable.

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PE firm sees sweet deal in Main Street Gourmet By Judy Stringer clbfreelancer@crain.com

Not long after Shore Capital Partners closed its inaugural food and beverage fund in April, principals at the Windy City investment firm began looking for an “artisan” baking enterprise to springboard the $148 million financing vehicle, according to partner Richard Boos. “Quite frankly, Main Street Gourmet fit our specifications perfectly,” he said. “We love the custom artisan approach that Steve (Marks) and Harvey (Nelson) have created,” Boos said, adding that Main Street Gourmet is the first investment for Shore’s food and beverage fund. “They are very much a solution provider for their customers, and we think that is a much better way to compete than just on price.” In September, Shore recapitalized Main Street Gourmet, buying 100% of the Cuyahoga Falls bakery for an undisclosed sum, said Marks, who cofounded the company with Nelson, a childhood friend. The founders and Main Street Gourmet’s previous majority equity owner, Clover Capital Partners of Los Angeles, repurchased minority interest in the company from Shore. Marks is retiring as co-CEO, although he will remain on the board. “Harvey will continue as CEO by

himself,” Marks said. Main Street G o u r m e t launched in 1987 as a small muffin shop on Akron’s Main Street, but soon found its calling as a bakMarks ery wholesaler. Cafes, supermarkets and restaurant chains buy its frozen whole-grain and all-natural muffins, brownies and cookies to make and sell in their own stores. In 1995, the company moved into 25,000 square feet of a plant in the Ascot Industrial Park off State Road, expanding to occupy 55,000 square feet at the site in 1999. Clover bought a majority stake in Main Street Gourmet in 2011, and recently another 12,000 square feet was added to the Muffin Lane headquarters, which now employs 160 workers, according to Marks. He declined to disclose revenue figures for the business, but a 2011 Crain’s Cleveland Business article about the Clover investment quotes Marks as saying they are “in the $20 million to $50 million range.” In more recent media reports, company officials have described Main Street Gourmet as a “nearly $40 million enterprise.” Marks attributes much of the company’s success to its approach of customizing the bakery items “we sell to

national and regional chains so that they can have a unique product and something to call their own.” The strategy, he said, helped it compete against larger, more established distributors that peddle prepacked products. Market watcher Douglas Peckenpaugh said consumer demand is also on Main Street’s side. Peckenpaugh, who is group editorial director for the food industry division of BNP Media, said the business falls squarely inside a sweet spot for today’s customers: products that are “all natural” or “artisan” and often perceived to be of better quality than mass-produced consumables. In an in-store bakery, people might select sweet goods — like those made by Main Street Gourmet — out of a display case themselves or the products might have been packaged at the store. Either way, Peckenpaugh said, there is a perception that those items are slightly more upscale and fresher than what shoppers would find in the cookie or bread aisles. “They feel better about their purchase, so we’re seeing growth across all of the different bakery categories,” he said. “Particularly, bakery snacks like muffins have been doing very well.” Marks said the capital and expertise from Shore will allow the company to continue “to expand with a lot more confidence.” Boos, who is now Main Street Gourmet’s chairman, has 32 years of experience in the food indus-

try, working at both Sara Lee and Kraft before joining Arbor Investments, a Chicago-based private equity firm focused entirely on food and beverage. He was at Arbor for 12 years until he left for Shore in 2018. Marks said the company has added “a couple of other” independent board members with “extensive” bakery industry background, and suggested Shore will be looking for internal hires as well, including possible new roles in business development. “If you look at how many companies they’ve bought, they’ve been extremely successful and they have a system that really wowed us as to how they go about doing it,” Marks said. “It was their infrastructure and operations that was very impressive to us. We needed some of that structure, and it allows us to be more aggressive, especially with acquisitions.” Boos called Main Street Gourmet a “platform” acquisition, meaning the Ohio manufacturer has enough scale to “build off of” with the addition of complementary sweet-goods bakers, which could be smaller in size or reach. He declined to pinpoint specific product lines it might look to acquire or new channels it might enter. “It will all be within bakery space,” Boos said. “There is just so much white space for us to grow. … We plan to at least double the size of the business, if not more.” Boos also declined to reflect on

how he might leverage his food industry experience with Arbor, although the firm’s work is likely much of the “success” to which Marks referred. According to its website, Arbor acquired a controlling interest in Fieldbrook Foods in 2010, while Boos was a partner there. During Arbor’s tenure, the ice cream maker gobbled up Mister Cookie Face and Washburn Dairy and grew revenue nearly 70% before Blue Bunny owner Wells Enterprises Inc. bought it last April. In another example, Arbor built out 100-year-old deli meats company Columbus Manufacturing, adding more than 120 new items and 30 blue-chip retailers, including Walmart and Sam’s Club, over a five-year ownership that began with a $215 million investment in 2012. Arbor sold Columbus to Hormel Food in 2017 for $850 million. Closer to home for Main Street Gourmet, Arbor launched Rise Baking, starting with the 2013 acquisition of long-standing Minneapolis bakeshop New French Bakery and building an in-store and retail presence through further integrations including Best Maid Cookie Co., Choice Foods, Hudson Baking Co., Pita Bread Factory and South Coast Baking. According to the company, Arbor invested more than $60 million in equipment and facilities before selling the baking platform to Olympus Partners in 2018 for a sevenfold gross return on their investment.

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Technology clusters accelerate innovation By ANNIE ZALESKI

Economic Impact of IIoT on Northeast Ohio GRP

CRAIN’S CONTENT STUDIO-CLEVELAND

A TEAM EFFORT Efforts in each of these clusters are guided by a commercialization roadmap driven by Team NEO’s patented methodology, which draws in both quantitative and qualitative research. This analysis includes examining existing regional strengths and assets — for example, in which industries Northeast Ohio excels — and future worldwide opportunities for these industries and technology. “The roadmap depicts, ‘Here’s where we are. This is the reason that we believe we can compete in this space. And here’s the size of the prize for our region — and then here are the things that need to happen for us to actually realize that potential,’” Foran said. Team NEO leads these clusters in tandem with regional stakeholders that have unique capabilities and specialized knowledge. For example, the organization shares additive manufacturing cluster leadership with the Youngstown Business Incubator and MAGNET, and it leads the smart manufacturing cluster with the help of numerous other parties, including solution providers and nonproﬁts. In addition to these leadership organizations, these clusters also include a variety of other regional entities — companies of all sizes; academia; service entities such as law and accounting ﬁrms; and investors. Having multiple stakeholders, all of whom are working together strategically as a region, is the key to success. “A good functional cluster will have multiple parties that are working together for the advancement of that industry — or, in this case, that technology,” Foran said. “When you have all of those people that are engaged in the cluster, as a region, you can more effectively accelerate the rate of adoption and improve outcomes from those technologies. You can make things happen faster because you have this network; you’re tapped into this ecosystem.”

INDIVIDUAL IMPACTS In practice, the impact of the clusters looks different for everyone involved. For the Youngstown Business Incubator — which supports high-tech entrepreneurship, provides support

65 B

$62 B

60 B

$49 B

50 B

40 B

$45 B

45 B

$53 B

55 B

US $ Billion

It’s no secret that technology is rapidly transforming how we live and work, and those who don’t stay on top of innovation are at risk of falling behind. However, for companies that may have conducted operations the same way for decades, incorporating cutting-edge approaches can be intimidating, time-consuming and potentially expensive. Luckily, Team NEO has determined that forming innovation-minded clusters is a viable solution to help organizations adapt to (and adopt) technology faster and more effectively. Team NEO leads two technology clusters, one formed in 2016 that’s all about additive manufacturing — which is sometimes colloquially known as 3D printing — and another formed in early 2019 that’s focused on smart manufacturing, an umbrella term for the Industrial Internet of Things (IIoT), artiﬁcial intelligence, blockchain, and augmented reality. These clusters are unique because of their focus, said Jay Foran, senior vice president of Team NEO. “A lot of clusters that exist today are by industry — so think of automotive or aerospace. They’re organized by market vertical. Our clusters are technology clusters, and because of that, they cut across multiple industries.” These include industries in which Northeast Ohio is strong, such as automotive, aerospace, health care, energy, and chemicals, Foran adds.

35 B 30 B 2018 2019 2020 2021 2022 2023 2024 2025 2025 2025 Lower Upper Current

Lower

Upper

Northeast Ohio’s manufacturing GRP is projected to grow from $45 billion in 2018 to $49 billion by 2025. Applying IIoT has the potential to increase 2025 GRP to $52 billion (low) or $62 billion (high). Source: McKinsey Global Institute/Accenture estimates and Moody’s Economy.com data analyzed by Team NEO

THE VIBRANT ECONOMY Innovation is one of the key ways in which regions can grow and prosper. However, recent data from statsamerica.com shows that, relative to many of the peer markets we compete against, Northeast Ohio has much lower levels of innovation taking place. This is why emerging strategies, such as The Cleveland Innovation Project — a collaboration between Team NEO, the Greater Cleveland Partnership, The Fund for Our Economic Future, the Cleveland Foundation, and JumpStart — is working to spur sustainable momentum in fast-growth industries and strengthen enablers of the innovation economy for the future.

services to additive manufacturing companies and works with regional manufacturing companies to encourage technology adoption — co-leading the additive manufacturing cluster has reverberated both inside and outside the region. “The partnership with Team NEO in the building of this cluster has really broadened our ability to impact the region,” said Youngstown Business Incubator CEO Barb Ewing. “We are now able to have serious conversations with companies from around the world about our additive manufacturing cluster and why they should look at Northeast Ohio as a place to launch their businesses in the United States.” The industrial manufacturer Jergens Inc. joined the smart manufacturing cluster as an end-user earlier this year. Not only did the Cleveland-based company want to increase sales and margins and decrease costs, but the company also was internally “trying to understand what smart manufacturing would look like” at the company, said Kurt Schron, a Jergens senior analyst.

“There’s a lot of buzzwords; there’s lots of hype around different aspects of this,” he said. “For us, it’s being able to come together as an internal team and say, ‘Hey, from what we’re hearing from these experts, what do we want out of this?’” Several employees across departments participated in quarterly cluster events and workshops, which helped Jergens make connections and expand its network. Schron notes that the company also was able to tour several other facilities to see how other companies are approaching incorporating smart manufacturing. “In Northeast Ohio, we have a lot of industrial manufacturers and a lot of people that are in similar industries, (and) we can all learn from each other,” he said. What Schron describes — taking in the latest information about smart manufacturing and then assimilating elements that make the most sense for the company’s individual situation — is an ideal byproduct of the cluster, said David Moon, solutions consultant for Hitachi Vantara, the Fairlawn-based company that’s also a member of Team NEO’s smart manufacturing cluster. “We’re in the middle of the fourth industrial revolution here,” he said. “(It’s) all about the blending of the physical world with the cyber — and it’s about how our factories can use that data to give themselves a competitive edge to improve efﬁciency, improve their quality and to drive more revenue and lower their costs and ultimately become more proﬁtable companies.”

THE CLUSTER EFFECT Throughout all this work, Team NEO has been a facilitator and convener of cluster-related events and activities, which has helped everyone involved. “We simply could not have operated the cluster, without Team NEO’s understanding of how to develop one and how to leverage resources and build those networks,” said Youngstown Business Incubator’s Ewing. “Even doing the initial assessment — we would have spent so much of our time and effort just understanding what to do. It would’ve consumed all of our resources. As a rule, everybody in the region is better off when we ﬁnd ways to create meaningful partnerships and truly support each other’s work.” Team NEO also is helping ensure the region’s “short- and long-term economic vitality” via this cluster activity, said Mike Yost, the outreach adviser at CESMII – The Smart Manufacturing Institute. “As the national institute on Smart Manufacturing, we see signiﬁcant value in their regional work — such as developing a roadmap and regularly driving regional support and engagement — that can be examples for others across the nation.” That’s not the only national recognition Team NEO’s received: The International Economic Development Council (IEDC) recently gave the smart manufacturing cluster its highest award, for innovative programs that can impact the economy. But for Team NEO, perhaps most important of all is showing companies that incorporating cutting-edge manufacturing and becoming digitally literate is possible — and they aren’t alone in this journey. “We believe that with the help of a cluster, and the roadmap, that we can encourage companies to start small,” Foran said. “Just put a sensor on one of your machines, not on all your machines, and start there. And if you’re making money on that, then do three machines, then four machines. The cluster’s intended to try to make it easier and take away some of the risk.”

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Elyse Ball Assistant counsel and project manager, University of Akron Research Foundation Elyse Ball does not like being bored. That’s partly why she chose her job with the University of Akron Research Foundation, which supports the commercialization efforts of technology by university researchers. “I’ve always been interested in a lot of things, which probably makes this job perfect for me,” she said. Ball not only deals with transactional and intellectual property law, she gets to flex her entrepreneurial muscles as an officer with some of UARF’s portfolio companies. She also helps run Northeast Ohio’s site for the National Science Foundation I-Corps program, which connects researchers with end users to see if proposed technology is what customers want. If there’s a theme to Ball’s career, it’s one of learning — from understanding new technologies to keeping up with entrepreneurial best practices. And learning is something she loves. “Getting to interact with the inventors, students and faculty members when they’re coming up with crazy new ideas is what really hooked me,” she said. “I say ‘crazy’ with great affection because those are normally my favorites.” — Sue Walton

The Ball file A good read “I always have two books on my nightstand: a nonfiction and a fiction.”

Hitting the trails Ball likes to hike. “Ohio is a really nice place for that in the fall.”

In the kitchen “My mom’s philosophy when I was growing up was you can always order a pizza, so I’m totally willing to try new recipes. Sometimes they turn out, sometimes they don’t.”

Lunch spot Taqueria La Loma 459 Darrow Road, Akron 330-784-9300

The meal One had chicken enchiladas with a Diet Coke; the other had Chori Pollo with water.

The vibe In-the-know Akronites tag this spot as one of the best places for Mexican food in the city. Its casual, order-at-the counter vibe and colorful wall murals make it fun.

The bill $26.15, plus tip

Where did you grow up? I grew up in Green, and I ended up in Akron, in large part, because Akron was home. I still live in Cuyahoga Falls. A lot of my family and friends that I grew up with still live real close by. Where did you go to school? I got a journalism degree from Ohio University. Then I got a law degree from Boston University. How did you land with the University of Akron Research Foundation? I’d interned at the foundation when I was in law school. I knew a family friend who worked in UA’s Office of Technology Transfer, and he talked to me about this field and said that the research foundation is something different every day. UA seems to have a good structure to get this research out for commercialization. Is that collaborative system something unique to Akron? I think it’s a combination of system and culture. We have a system that provides us with flexibility to do things quickly as industry would do it. But then we also have a culture that tolerates us taking some risks, trying some new things. If you have one without the other, you’re not going to have the same results. How is UARF funded? UA actually doesn’t fund us in a traditional sense. UA does not take money out of its general fund and put it in the foundation. That said, there have been different deal

structures over the years that have resulted, for example, in a portion of sponsored research funding from industry to flow through the foundation. We would take a portion of it and the rest would get passed on to UA. We’re actually not even doing a lot of that anymore. Our revenue comes predominantly from proceeds from some special projects. We receive grant funding from the Burton D. Morgan Foundation and from Ohio Third Frontier through a grant to JumpStart. We keep a portion of licensing revenues that come in. Why are you an officer in some of these startups? I think it came about because not every company has everything that they need when they’re first starting out. And on the flip side, for the companies I’m involved with, the UARF is generally a shareholder. So it’s their technology and they have an interest from a shareholder perspective, a board member perspective, that the company is doing the right things and moving in the right direction. About how many UA startups is the foundation working with? At any given time, the university has a portfolio of probably 20 to 25 startup companies. Some of them are so far along that we don’t need to assist them. Some of them are technically formed but still trying to figure out what they want to do. So, I’d say that at any given time, there are more like 10 or 12 that we’re interacting with on a relatively regular basis.

What kind of research is springboarding startups out of UA? It’s a lot of polymers, which is not surprising. We’re getting a lot of stuff, too, from chemical engineering, mechanical engineering and biomedical engineering. Some from computer science and electrical engineering. It’s a pretty across-theboard kind of thing. We are seeing a lot of sensors. What’s new with UA’s I-Corps site? We’ve been running the cohorts three times a year. We’re currently running a fall cohort. There’s one in Akron with 16 or 17 startups, but there’s also one out of Lorain County Community College that’s running an additional four startups as a pilot. What we were hearing was that Elyria and Lorain County were far enough away that it had become an impediment. We’re hoping to get groups from Tri-C, Oberlin and the West Side of Cleveland. We’re driving up there every couple of weeks, running the in-person meetings. What are some of the coolest startups you’ve seen in your job? I’m super excited about Chelsea Monty’s work. Monty founded RooSense (she developed sensors that can detect the ion levels of sweat and look for signs of dehydration). She is a rock star. She’s not only doing her startup, she also has a cool sensor for the utilities industries in a much earlier stage. There’s another startup that’s creating a wipe that has a polymer coating and you can rub it across a surface and tell if there are opioids present. That’s a market — first responders — that has a lot of need in this area.

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

Chairman Keith E. Crain Vice chairman Mary Kay Crain President KC Crain Senior executive VP Chris Crain Secretary Lexie Crain Armstrong CFO Robert Recchia G.D. Crain Jr., Founder (1885-1973) Mrs. G.D. Crain Jr., Chairman (1911-1996) Reprints: Laura Picariello, 732-723-0569 or lpicariello@crain.com Customer service and subscriptions: 877-824-9373 Volume 40, Number 43 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. Copyright © 2019 by Crain Communications Inc. Periodicals postage paid at Cleveland, OH, and at additional mailing offices. Price per copy: $2.00. Postmaster: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. 1-877-824-9373. Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, MI, 48207-9911, or email to customerservice@crainscleveland.com, or call 877824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.

THE WEEK Deal time

Advisors (CDA) amassed about $9 million in new commitments supporting development in the Cleveland neighborhoods of Clark-Fulton, Glenville and Buckeye-Kinsman. The funding includes $5 million from JPMorgan Chase provided over three years to “expand access to opportunity” in the target neighborhoods. Another $3.75 million is from CDA, which will form and oversee a revolving loan fund offering “qualifying developers financing at below-market lending rates.” Cleveland is receiving money from Chase because the city was selected as a winner in the company’s sixth national competition for philanthropic funding.

Companies accused of fueling the opioid epidemic may have moved closer to resolving thousands of lawsuits over the addictive painkillers, after four large companies agreed to pay $260 million to settle a case brought by Cuyahoga and Summit counties. Drug distributors McKesson, Cardinal Health and AmerisourceBergen, plus drugmaker Teva Pharmaceutical Industries, made the deal on Oct. 21, just before the start of a federal trial in Cleveland. The agreement may become a benchmark for a wider industry settlement of sprawling opioid litigation, which involves dozens of companies.

Neighborhood focus Greater Cleveland Partnership affiliate Cleveland Development

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Three drug distributors and a pharmaceutical manufacturer agreed to pay $260 million to settle a case about their involvement in fueling the opioid epidemic brought by Cuyahoga and Summit counties. (John Moore/Getty Images)

Ready for takeoff Architecture, engineering and consulting firm RS&H was awarded a

$4.5 million contract to create a new master plan for Cleveland Hopkins International Airport. The plan, to be completed by 2021, will provide a conceptual design of Hopkins’ airfield, terminal and surrounding property to provide guidance for future growth. This will be the first master plan since 2012, when Hopkins was a hub for United Airlines.

Good call Cleveland Clinic and Boston telehealth company American Well are forming a joint venture digital health company, called The Clinic, to provide access to services via telehealth to reach patients nationally and globally. The new company, to be based in Cleveland, will offer virtual care from Cleveland Clinic’s experts through American Well’s digital platform.

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