Crain's Cleveland Business, November 6, 2023

CRAINSCLEVELAND.COM I NOVEMBER 6, 2023

Local and national groups are interested in reshaping a slice of downtown as part of the Cuyahoga County venture

Club for ultra rich coming to Cleveland Tiger 21 looks to assemble 13 to 15 members here

By Jeremy Nobile

The 25-story courthouse tower is the centerpiece of the Justice Center complex in Cleveland. Developers are vying to replace or remake it. | CBRE GROUP INC.

Justice Center project draws seven suitors

By Michelle Jarboe and Kim Palmer

When Cuyahoga County launched a search for a new or renovated home for its courts, it wasn’t clear how the market would respond.

Now we know. The fishing expedition netted seven suitors, parties who are interested in all or part of an opportunity to remake a slice of downtown Cleveland.

Most of the real estate developers are local or already have a major presence here. But two are national groups, apparently drawn in by a marketing effort led by the CBRE Group Inc. brokerage. Four turned in electronic submissions. Three went with paper proposals.

The county provided a list of company See PROPOSALS on Page 25

“We look forward to evaluating each proposal to find the best solution for the Justice Center property.”

— Kelly Woodard, a Cuyahoga County spokeswoman, in an email

Tiger 21, an exclusive, global network of rich businesspeople — you need to pass a background check and hold at least $20 million in liquid assets to join — is looking to assemble its first group in Northeast Ohio.

The effort to form a Greater Cleveland cohort is being led by local Tiger 21 chair Dan Nitowsky, a native New Yorker but longtime Cleveland East Sider who spent some 30 years of his career in the electrical distribution space in Northeast Ohio.

“The essence of Tiger 21 is to provide members with the opportunity to develop skills and abilities to be disciplined investors, en- Dan Nitowsky hance their wealth and achieve personal goals,” Nitowsky said.

“And as a member of Tiger, members have access to some unique travel opportunities, including the annual global exchange.”

Tiger 21 describes itself as the “premier peer membership organization for ultrahigh-net-worth wealth creators and preservers.”

See CLUB on Page 24

Museums shift to include immersive experiences New designs aim to engage using open-ended approach

By Paige Bennett

A timeline arches along the speckled floor of the Cleveland Museum of Natural History’s new Visitor Hall. As guests venture through the space, they can examine placards marking different milestones in the history of the universe, starting with

the formation of planets 4.6 billion years ago and culminating with the domestication of chickens 8,000 years ago.

The timeline is spread strategically across the 14,650-square-foot Visitor Hall to represent the long history of the universe before the first appearance of humans, said Gavin Svenson, chief science officer at the Cleveland Museum of Natural History.

This is one example of how the museum is looking to make science more accessi-

ble through its ongoing transformation project. In the digital world, an increasing number of Cleveland museums are veering away from the traditional concepts of museums and turning to interactive designs to engage their audiences.

“I’ve been involved with museums for about 30 years,” said Mark Walhimer, a managing partner at Museum Planning LLC, a full-service interactive museum exhibition design firm with offices in San Francisco, New York and Mexico City.

“And when I started getting involved, the big thing was at that point what we called interactives. You push a button, and something happens.”

In recent years, museums have shifted from interactives that answer closed-ended questions to immersive exhibits that ask visitors to consider open-ended questions with multiple outcomes, Walhimer said.

See MUSEUMS on Page 26

VOL. 44, NO. 41 l COPYRIGHT 2023 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

HEALTH CARE Cleveland Clinic plans to launch drone prescription delivery in 2025.

The drones will be able to complete a 10-mile delivery in 10 minutes.

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Cleveland Clinic to launch drone prescription delivery

By Paige Bennett

Cleveland Clinic plans to use drones to deliver prescriptions to patients’ homes beginning in 2025.

The health care system will partner with California-based Zipline for the service. The drones will deliver specialty medications and prescriptions to patients’ houses from more than a dozen Clinic locations across Northeast Ohio, according to a news release issued Tuesday, Oct. 31, by the health care system.

The Clinic eventually intends to expand the program to include drone delivery for lab samples, prescription meals, medical and surgical supplies and items for hospital-at-home services.

Bill Peacock, chief of operations at Cleveland Clinic, told Crain’s the goal is “to take the friction out of delivering certain medications to our patients,” particularly for those in need of chronic medications.

Controlled substances, though, will not be delivered via drone.

The Clinic plans to use Zipline’s Platform 2 system. The company

started using drones to deliver medical products in 2016. It works with health care systems, restaurants and other retailers and has operations across seven countries.

Several Clinic locations in Northeast Ohio will be adding docks and loading portals for the drones.

When a prescription is ready for delivery, a technician will load the drone, which will automatically undock, fly at a height of 300 feet to a patient’s home and deploy a delivery droid that will guide the package to the correct drop-off location, such as the front steps of a home.

The drone then will return to the Clinic and dock itself. The Platform 2 system can complete a 10mile delivery in roughly 10 minutes. Patients also will be able to track deliveries in real-time from their phones.

The system is equipped with several layers of security, including preflight inspections and real-time monitoring by operations teams.

The Clinic plans to start installing docks and loading portals for the drone system in 2024. The health care system will work with

government officials to ensure compliance with safety and technical requirements for drone delivery.

Peacock said the Clinic has been watching as drone delivery services have entered the health care space. The Clinic sees the service as an opportunity to use technology to enhance the patient experience, he said, and offer patients another option for obtaining their medications.

The drones are battery-powered, which means they do not produce any carbon emissions, Peacock said.

Generally, the drones can travel in a 24-to-25-mile radius, Peacock said. They may need to stop at different Clinic locations to recharge during or after drop-offs. The Clinic will be working with Zipline to study and refine the delivery system as the program is rolled out.

“Zipline has been focused on improving access to healthcare for eight years,” Zipline cofounder and CEO Keller Rinaudo Cliffton said in a statement. “We’re thrilled to soon bring fast, sustainable and convenient delivery to Cleveland Clinic patients.”

A mockup of a simulated prescription delivery via drone | CLEVELAND CLINIC

In 2016, Zipline partnered with the Rwandan government to deliver blood to health facilities using drones. The partnership has since expanded to include the delivery of medicine, medical supplies, nutrition and animal health products.

Zipline unveiled the Platform 2 in March 2023. Fierce Healthcare reported at the time that Michigan Medicine, Intermountain Health and MultiCare Health System planned on using Platform 2 to deliver medications and medical devices to patient homes.

On Aug. 2, OhioHealth announced a partnership with Zipline to bring prescriptions to

patients’ homes and move lab samples and supplies. The goal is to create a network capable of reaching approximately two million people in the greater Columbus area, according to a news release from OhioHealth.

Amazon Pharmacy recently started testing drone prescription delivery for patients in College Station, Texas, the Associated Press reported. The program enables patients to get prescriptions delivered by drone within an hour of placing their order.

The Clinic will release more details about the program as it gets closer to becoming operational, the news release stated.

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2 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 6, 2023

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With fewer caregivers, can technology fill the void?

By Paige Bennett

The direct care workforce provides critical services to older adults and individuals with developmental disabilities, but the number of home health aides, direct support providers and nursing assistants has dwindled in recent years across the country—and technology may fill the gap.

More than 1 million new jobs will be added to the direct care workforce between 2021 and 2031, according to the Paraprofessional Healthcare Institute. At the same time, approximately 9.3 million direct care jobs will need to be filled, including new positions and vacancies created by existing workers leaving the field.

As the workforce has shrunk, there has been an increase in the use of assistive or smart technology to provide support services. Experts say technology can provide meaningful assistance, but they also believe humans remain important to the future of care.

Kylie Meyer, an assistant professor at the Case Western Reserve University Frances Payne Bolton School of Nursing, said she sees the future of assistive technology as “a continuation of some of the existing technologies that help people who are living with a disability.”

Meyer’s research focuses on supporting family caregivers who live with anyone with a chronic condition or disability. She said technology is most effective when it increases safety and makes the jobs of home care providers easier, such automatic medication dispensers that release pills at certain times each day to ensure patients take their medication.

“That (technology) can be an extra set of eyes or an extra support to make sure somebody doesn’t wander out of the home and get themselves into an unsafe situation,” Meyer said.

Scott Moore, an assistant professor at the Bolton School of Nursing, said assistive technology has been

As the direct care workforce continues to deal with staffing challenges, some providers have turned to assistive technology to provide services to older adults and people with developmental disabilities. | CUYAHOGA COUNTY BOARD OF DEVELOPMENTAL DISABILITIES

used for self-management of chronic conditions for many years, with tools such as glucose monitors, but that technologies have become more sophisticated over time.

For the disability support industry, the implementation of technology has been a more recent development.

In 2018, then-Gov. John Kasich signed the Technology First Executive Order. That initiative required the Ohio Department of Developmental Disabilities to work with county developmental disabilities boards to see that technology is considered part of the service and support plans for individuals with disabilities. It also required remote support to be considered as the first option before an on-site personal care staff can be authorized.

Karen Knavel, CEO of New Avenues to Independence, said assistive technology not only helps individuals become more independent, but it also helps augment staff.

New Avenues provides residential, community-based and inclusion services to adults with intellectual and developmental disabilities in Cuyahoga, Lake and Ashtabula counties. In 2021, the agency purchased its first six-bed home in Brecksville, which it treated as a pilot for integrating assistive technology. The home is equipped with a

number of assistive features, including a smart washer and dryer and seizure mats that attach to mattresses and sound alarms when they detect seizure-like movements.

“Traditionally, staff would have to, with anyone who has a seizure disorder, do 15-minute bed checks,” Knavel said. “As you can imagine, that’s really disruptive to somebody’s sleep. And so, what these seizure mats do is alert staff if an individual is having a seizure.

It reduces the amount of staff we need to check on them.”

She said the adoption of technology has been a challenging process as it requires additional training and infrastructure for both clients and staff, but that it can be beneficial, especially in light of staffing shortages.

“There is a slower adoption of technology in our industry, and it’s becoming more and more, I believe, more important because we are struggling with staffing,” she said.

“So, we’re finding some early success with technology.”

Knavel said New Avenues plans to open a second home with assistive technology in Walton Hills by the end of the year.

In 2022, the Cuyahoga County Board of Developmental Disabilities and North Coast Community Homes opened TryTech at the Cranford Apartments in Lakewood.

The unique program affords individuals with developmental disabilities an opportunity to live for about three weeks in an apartment equipped with smart technology.

Lori Mago, division manager of assistive technology and children’s services for Cuyahoga DD, said the program offers a controlled, time-limited opportunity for individuals to gain confidence and see what technology works best for them as they work to become more independent.

The TryTech units contain a number of smart appliances, as well as access to two-way remote services. Technology can be customized to the specific needs of the individual during their stay, said Candice Markle, housing coordinator at the Cuyahoga County Board of Developmental Disabilities. She noted that the remote support services can help supplement for a physical staff member.

“We really look at the areas of safety, sensory and then items that just help with your day-to-day living,” she said.

Markle said the county board continues to update items in the apartments and look for new and emerging trends in technology.

After their stay at TryTech, individuals are asked to complete a survey about their experience,

and Cuyahoga DD uses that information to figure out what is and isn’t working, Markle said.

Twenty-eight individuals have stayed in the apartments so far, Markle said, and eight have since moved out on their own.

Mago said she anticipates that technology’s role will continue to grow within the disability services sphere.

“We use technology more and more on a daily basis,” she said.

“So, I think that’s going to continue to occur for the DD community as well. Technology is getting bigger, better, smarter. And I think as the (direct support provider) crisis continues, we need to find different ways to help support the people who we serve.”

Moore and Meyer said that technology can help supplement staff in direct care, but that it doesn’t erase the need for providers, and it raises different questions and challenges. For example, home blood pressure monitors and other self-management tools cannot provide accurate data if a patient doesn’t understand how to use them properly, Moore said.

“There’s very little way to know this if you’re not able to get some sort of continued knowledge about the data that those people are producing through self-monitoring,” he said. “While it’s great to know that their (blood pressure) isn’t high at home, are they taking right? Are they actually taking it at all?”

Meyer said technology can also lead to questions about privacy and consent, especially when it involves patients with dementia. Some individuals might be uncomfortable with technology, she said, and it’s important to respect their wishes.

Meyer said she sees remote monitoring becoming a larger part of the caregiver space, but that it won’t eliminate the need for the human workforce.

“It could be an extra layer of support to enhance safety, but we never want to replace human beings,” she said.

Ohio’s business climate is among country’s best, a new ranking finds

By Scott Suttell

Ohio has the fifth-best business climate in the country, and the best in the Midwest, according to a new ranking from a prominent trade publication.

Site Selection magazine on Nov. 1 revealed its annual ranking of state business climates, a list led

by Texas. Ohio was No. 5, following Georgia (at No. 2), Virginia and North Carolina among what Site Selection characterized as “perennial top-shelf competitors.”

For Ohio, the top-5 finish represents a slight improvement from 2022, when Site Selection put the state at No. 6. Texas was No. 3 a year ago.

Rounding out this year’s top 10, in order: Tennessee, Illinois, Florida, California and New York.

Site Selection says the ranking is based on an index that includes a survey of corporate real estate executives and site selectors who are asked to rank the states based on their recent experience of locating facilities in them; corporate facility investment data in the Conway Data Projects Database; and several “external sources” that affect state business climates, such as taxation, infrastructure, tech employment and the startup ecosystem.

The index created by those criteria put Texas on top with a score of 410 points. The rest of the top five were bunched closely together: Georgia (361), Virginia (344), North Carolina (343) and Ohio (330).

On the Conway data of investment in corporate facilities, Ohio nearly matches Texas. The Buck-

eye State falls a little shorter, though, in tax climate and in the survey of corporate site selectors, where Ohio was No. 9. Asked to prioritize the location factors most important to them, the site selectors topped their list with ease of permitting, availability of needed workforce skills, land, utilities and quality of life.

Ohio typically does well in Site Selection rankings.

This summer, for instance, the publication ranked Ohio as the top-performing state for economic development, based on a blend of investments in corporate facilities and public infrastructure. Ohio beat Indiana, Texas and others to lead Site Selection’s 2023 Global Groundwork Index, which is based on five years of activity.

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A few years ago, when TK Herman served as co-owner of three Sky Zone franchises, he considered them the “Mercedes-Benz of trampoline parks.”

“There was Sky Zone and there were a bunch of knockoffs,” he said.

Herman has since traded springs for backswings, becoming a franchise owner for the Atlanta-based Ace Pickleball Club.

But as he prepares to open Cleveland’s largest indoor pickleball facility, his business philosophy remains the same.

“I want Ace to be the Mercedes-Benz of pickleball clubs,” he said Herman and his business partners recently signed a lease to open a 40,000-square-foot indoor facility at the former Bed, Bath and Beyond in the Uptown Solon shopping center located at 6025 Kruse Drive, just off U.S. 422 and SOM Center Road. The deal was handled by CBRE first vice president Kevin Moss.

The facility will feature 13 indoor courts and is expected to open in late winter or early spring, Herman said.

“In Northeast Ohio for the past year, we have seen an explosive growth in new pickleball players,” said Rick Warsinskey, who serves as an ambassador for ClevelandPickleball.com. “Fortunately, a number of outdoor courts have opened this past season. But the number of new indoor courts has lagged compared to the number of new players. The new site in Solon will really help meet the demand for more indoor courts.”

Ace, which opened its first location this summer in Roswell, Georgia, was developed by longtime members of the Sky Zone team. There are more than 60 Ace franchise locations under development nationwide, and Herman expects to eventually open 10 clubs around the Midwest, beginning with a facility in his hometown of Fort Wayne, Indiana.

The Solon location will offer monthly memberships as well as non-member access, but the

pricing has not been finalized, Herman said.

Monthly memberships at the Roswell facility cost $129 and include unlimited play, as well as perks such as court reservations, access to leagues and tournaments and discounted rates for public tournaments and events.

Non-members pay $25 per visit.

Solon’s Ace location will host corporate and private events as well as camps and clinics. While some national pickleball franchises offer a restaurant or bar concept — “Chicken ‘N’ Pickle” is a good example — Ace does not.

“I think there are definitely pluses to those (restaurant/bar) facilities, and we view them as complementary to us,” Herman said. “It’s a great way to be introduced to the sport, but that’s not our focus.”

Herman expects the Solon location to be one of five Ace facilities that will open by the end of the first quarter of 2024. He said his team considered 70 buildings in 14 different markets across the Midwest, with between 10 and 12 buildings meeting the five criteria: a good demographic area, the right square footage, the right column spacing, the right ceiling height (18 feet minimum) and a reasonable price for rent.

“Cleveland was a no-brainer as far as market size and population, along with the fact that it has long winters,” said Herman, who is looking to hire a general manager for the Solon location.

“When we whittled down which buildings and locations were best, we also wanted ones that we could open fast. The building in Solon was one of those.”

One of the other locations Ace considered was the former Stein Mart building in Beachwood, which was set to become the second location for Columbus-based Pickle and Chill.

But that deal — which would have included 12 indoor courts, six outdoor courts, a bar and lounge and multiple event spaces — fell apart in the final stages.

“There’s a lot of noise in the pickleball space,” said Diego Pacheco, Ace’s chief growth officer.

“A lot of people are announcing that they’re coming before they

even get a lease, which is something we went through in the trampoline days.

“When you see an announcement with us, it’s very measured.

We don’t put that news out there unless we’re certain we’re coming to a market.”

While Herman’s team has no other plans for Northeast Ohio, it has considered other Ohio cities such as Cincinnati, Columbus and Toledo. In fact, one of Herman’s three Sky Zone locations was located in Toledo, along with Fort Wayne and South Bend, Indiana.

Regardless of how many Ace locations he opens, Herman said he’ll follow the same philosophy that guides all his businesses.

“My success in business has always been predicated around two things,” he said. “One was delivering an outstanding experience to customers. And two, we believe that every player should feel like our favorite member and every person that comes to play will be a reference when we’re done.”

Canton pickleball club planned Two Canton-area restaurateurs are planning to open Stark County’s first dedicated indoor pickleball facility in mid-February or early March.

Prime Pickleball Club, a 20,000-square-foot indoor pickleball facility, will be located on Dressler Road in Jackson Township, near Belden Village Mall.

Demolition and construction has already begun on the facility, which will eventually house eight courts, including three championship courts sized for tournament play allowing TV and internet streaming.

The club will also feature locker rooms and a snack bar, according to director Steve Pustay. The club will offer league play, individual and group lessons, pickleball camps, tournaments, shootouts and drop-in play for members and non-members.

The club owners and developers are Eddie and Linda Zhang, owners of nearby A1 Japan Steakhouse.

4 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 6, 2023

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September is Ohio’s third-biggest month for sports betting

By Joe Scalzo

◗ Online: $668,023,234 receipts;

Ohio is known as the “Mother of Presidents.” When it comes to sports gambling, it’s also the spender of dead ones.

Buckeye staters bet nearly $700 million on sports in September, marking the state’s third-biggest month since sports gambling became legal on New Year’s Day. The $691 million figure is well below the record $1.09 billion Ohioans bet on sports in January and just behind the $738 million from March, but it’s nearly double what they gambled in August ($380 million).

The difference?

The NFL kicked off its regular season in September, an acronym that either stands for “National Football League” or “No Funds Left,” depending on how much you bet on the Browns against the Steelers on Monday Night Football on Sept. 18.

“We should continue to see increases into October with the addition of NHL and NBA games to the betting slate, and the ability to sustain these numbers will be indicative of how big the Ohio market can be,” PlayOhio managing editor Steve Shult said.

September’s sports gambling receipts and revenue broke down this way:

◗ Retail: $22,355,679 receipts;

$79,381,163 revenue. $2,152,238 revenue.

◗ Lottery-style kiosks:

$1,282,062 receipts; $104,594 revenue.

Ohio’s sports gaming revenue is taxed at 20%.

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As for Northeast Ohio’s retail sportsbooks, here’s the September breakdown by total gross receipts and revenue: ◗ Downtown JACK: $3,120,874 total gross receipts; $303,891 revenue. ◗ JACK Thistledown: $2,395,949 total gross receipts; $322,702 revenue. ◗ Cavaliers’ Caesars: $471,178 total gross receipts; $18,357 revenue. ◗ MGM Northfield: $1,641,491 total gross receipts; $230,983 revenue. ◗ Guardians’ Fanatics: $65,215 total gross receipts; -$15,428 revenue.

Of Ohio’s 15 retail sportsbooks, only two lost money in September and both were affiliated with Fanatics. Besides the Guardians location losing over $15,000, the Columbus Blue Jackets’ Fanatics sportsbook lost $205,243 in September.

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Sports gambling in Ohio Ohio’s total gross receipts on a month-by-month basis. $1B $800M $600M $400M $200M

January

March

May

July

September

Total gross receipts for Northeast Ohio’s five retail sportsbooks on a month-by-month basis.

Downtown JACK MGM Northfield

JACK Thistledown Cavaliers' Caesars Sportsbook Guardians’ Fanatics Sportsbook

$4M $3M $2M $1M

January

March

May

July

September

The Guardians’ sportsbook opened on Aug. 18.

NOVEMBER 6, 2023 | CRAIN’S CLEVELAND BUSINESS | 5

Downtown retail plan emphasizes pop-ups, public spaces

By Michelle Jarboe

Instead of courting national retailers, Downtown Cleveland needs to focus on creating a more inviting city center and populating it with local and regional businesses, pop-up shops and creative programming that will encourage people to explore.

That’s the thrust of a new retail plan unveiled Nov. 2 during the annual “State of Downtown” event at the City Club of Cleveland. The plan, a strategic framework crafted by a consulting firm called Streetsense, includes 15 recommendations for improving the landscape.

The analysis also outlines serious hurdles: Too many indoor retail spaces, which need different purposes. A 20% to 25% vacancy rate for street-facing storefronts.

And the lingering effects of COVID-19, which cut into the downtown workforce and, in turn, demand for goods and services.

“Retail was challenging in urban environments before the pandemic,” said Michael Deemer, president and CEO of nonprofit Downtown Cleveland Inc., during an interview. “We were competing with online retail and virtual environments. And that’s even more so the case coming out of the pandemic. But with the right mix of businesses, the right type of business owners and entrepreneurs, we know that downtown retail can be very successful.”

Restaurants line East Fourth Street in downtown Cleveland, which has a heavy concentration of food-and-beverage tenants. A new analysis notes that visitors account for 70% of downtown retail spending. | PHOTOS BY MICHELLE JARBOE

and recreational facilities, such as pickleball courts; and better wayfinding signs along well-traveled corridors including Euclid and East Ninth Street.

“When someone’s going to the Rock Hall, they’re parking there.

They leave. Once they hop in their car, it’s harder for them to remain downtown,” said Larisa Ortiz, managing director of public and nonprofit solutions at Streetsense.

“We effectively have to create a better mousetrap to keep them downtown, because I — Craig Hassall, president and CEO of Playhouse Square think we are losing spending that we Downtown Cleveland Inc. joint- should not be losing.”

Ortiz and her colleagues found ly commissioned the plan with Destination Cleveland, the con- that visitors fuel 70% of downtown vention and visitors bureau. They retail spending. That figure surtapped Streetsense, a strategy and prised Deemer and some Downdesign collective based in Wash- town Cleveland Inc. board memington, D.C., to evaluate the mar- bers, who expected to see heftier ket and come up with a range of spending from downtown residents. More than 20,000 people solutions.

The analysis differs significantly now live downtown, and there’s a from past downtown retail plans. steady push to transform obsolete It’s more nuanced, and tightly fo- or underused office buildings into cused. Instead of dictating uses for housing.

Meanwhile, worker-generated private properties — such as furniture stores, galleries or discount retail demand is down by 113,180 outlet shopping — the strategy square feet from pre-pandemic emphasizes laying the ground- levels, according to Streetsense’s analysis. Prior to 2020, there were work for retail to succeed.

That foundation includes tar- five workers for every downtown geting small and minority-owned resident. Now, there are three businesses to fill gaps in basic workers for every apartment-, neighborhood services, like sa- townhome- or condo-dweller.

Streetsense urged civic leaders lons, pet-supply stores and places to buy toiletries, tools and house- to serve all of those constituencies wares. It includes hiring someone better, as the central business disat Downtown Cleveland Inc. to trict increasingly morphs into a give technical assistance to those mixed-use neighborhood.

“It’s a sophisticated challenge,” businesses, which often need help accessing funding and navigating Ortiz said. “It’s a very complicated challenge. We need to do two city processes.

And it requires selective invest- things. We need to walk and chew ments in public spaces, including gum at the same time.”

The firm suggested a pilot proupdated landscaping on Euclid Avenue; playgrounds, dog parks gram to install pop-up shops in

“The challenge, always — and this is not just a challenge for Playhouse Square — is how do you extend the visit beyond the show?”

empty storefronts in the Warehouse District, where bars and restaurants are the dominant retail uses. Near Cleveland State University, the report says, it might make sense to explore small-business incubators and spaces for extracurricular student activities.

And the consultants proposed temporarily closing part of Huron Road, near Playhouse Square, to make room for a night market.

That’s an evening street market designed for leisurely strolling, shopping and dining. Before the pandemic halted large gatherings, night markets were becoming a monthly summer happening in the old Chinatown area just east of downtown.

Craig Hassall, the president and CEO of Playhouse Square, loves the idea.

“The challenge, always — and this is not just a challenge for Playhouse Square — is how do you extend the visit beyond the show?” he said. “And it should be easy. But you know what? It’s very difficult.

Especially in a place like Cleve-

land where people drive everywhere.”

He believes that night markets would make downtown’s theater district more dynamic. And he stressed that they don’t have to be summer-only events. Cold-weather cities in Europe hold Christmas markets and other wintertime activities outdoors.

As for blocking off a span of Huron between Euclid Avenue and East 12th Place, near the Crowne Plaza Cleveland hotel? “I say close it down forever,” said Hassall, who sits on Downtown Cleveland Inc.’s board and would love to see a larger plaza for gatherings and outdoor dining.

Streetsense zeroed in on Huron as a link between two event hubs: Playhouse Square and the Gateway District. The road is near thousands of apartments and “has the bones of a great street — an intimate scale, wide brick sidewalks, mature trees, adjacent public space and lighter traffic flows,” the consultants noted in their report.

Like many of the team’s recom-

Patrons exit the Arcade in downtown Cleveland. The historic building is one of many tricky retail properties in the center city.

mendations, a temporary or longterm street closure will require collaboration among many partners, including officials at Cleveland City Hall.

Karen Fanger, the chairwoman of Downtown Cleveland Inc.’s board, said the plan comes at an ideal moment, with new publicand private-sector leaders and heightened collaboration.

“It’s not like us against them anymore,” said Fanger, the president of the K&D Group, a major owner and manager of downtown apartment buildings and commercial properties.

Downtown Cleveland Inc. recently changed its name and tweaked its internal structure to represent a broader group of stakeholders — not just property owners. And in early June, city officials and community leaders released a road map for helping downtown rebound more swiftly from the pandemic. That to-do list puts a heavy emphasis on the pedestrian experience.

Some of Streetsense’s suggestions, like expanded trolley service and safer pathways for bicycles and scooters, complement the ideas in that sweeping downtown recovery plan.

“It helps businesses,” Ortiz said of investments in micro-mobility and other initiatives to make downtown feel more compact and easier to get around. “It’s strange to say that’s a retail strategy. But it’s a retail strategy.”

The report encourages ongoing investments in and near the downtown lakefront, which is the subject of a master-planning effort led by City Hall and Field Operations, a New York-based landscape architecture and urban design firm. In the next few years, Streetsense said, new landscaping could be a low-cost solution to making a two-block area between Willard Park and North Coast Harbor feel more welcoming.

The city and its partners are pursuing a plan to build a land bridge from the grassy downtown Malls to the area between the Great Lakes Science Center and Cleveland Browns Stadium. But that’s a much longer-term, and much costlier, endeavor.

Hassall views the lakefront and Euclid Avenue as two critical areas for winning over visitors, residents and businesses. A newcomer to the city, he wants to hear people talk about Cleveland like they do about Nashville or New Orleans — as attractive places to go, where there’s always something happening.

“I’m really pleased there’s a strategy, because retail seems to be the missing piece of the puzzle in downtown,” said Hassall, who recently moved here from London.

Fanger agreed, describing many of the recommendations as achievable and pragmatic.

“Our job as Downtown Cleveland Inc. is to prioritize those and bring in the right partners to actually, as we say in downtown Cleveland, GSD — to get shit done,” she said.

6 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 6, 2023

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R. Shea Brewing launches $2.3M crowdfunding campaign Akron brewery faces dire financial position

By Jeremy Nobile

Akron’s R. Shea Brewing has launched a $2.3 million GoFundMe crowdfunding campaign to effectively save the craft brewery amid an increasingly dire financial position brought on by flat-to-down sales, rising interest rates and generally higher costs of doing business.

All those factors combined are creating an untenable situation for the eight-year-old craft brand.

“We’ve really only got a couple of quarters of working capital left, and that’s it,” said R. Shea owner and CEO Ron Shea.

Without current conditions improving, and absent an injection of capital, Shea projects his business may close sometime in the first quarter of 2024.

Shea announced the GoFundMe during a meeting—or a “sobering conversation,” as the brewery framed it—with patrons and stakeholders on Sunday, Oct. 29, at its Canal Place location.

That meeting was an opportunity to share the business’ situation with the public as it looks to garner some financial support and chart a path to viability.

If R. Shea reaches its crowdfunding goal, the capital will be primarily used to pay off a Small Business Administration loan that helped finance its large, Canal Place facility.

Additional money left over will be used as working capital to help sustain the company as it maps out the future, which includes plans for making better use of Canal Place as an event space. Funds also will cover some additional sales positions intended to help boost off-premise sales.

R. Shea’s flagship brewpub in Merriman Valley opened in 2015, a point in time when the craft industry was enjoying steady growth.

Construction

Real Estate

Facility & Property Management

A Small Business Administration variable-interest loan used to finance R. Shea Brewing’s Canal Place facility is becoming more expensive for the business amid rising interest rates. It’s one of several challenges affecting the craft brewery. | R. SHEA BREWING PHOTOS

Although competing with other more established brands in the local area—including outfits like Thirsty Dog and Hoppin’ Frog—R. Shea quickly made a name for itself in what was becoming an increasingly crowded industry.

This inspired an expansion at Canal Place in a 60,000-square-foot space located in a former B.F. Goodrich factory. Installing a production brewery, taproom and restaurant there represented a roughly $2 million project, Shea said. The buildout began in 2018, and that location opened the next year.

Shea took out a $2 million variable-interest-rate loan from the SBA

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to finance that expansion. Amid rising interest rates, however, that loan is coming back to haunt him.

craft beer sector were flat in 2022.

But as of midyear 2023, sales are down 2% industrywide.

The BA points to a variety of reasons this might be. For one, younger imbibers are turning to craft beer less frequently, which erodes the craft sector’s customer base.

Meanwhile, market share for drinks such as hard seltzers, readyto-drink mixed beverages and non-alcoholic beers has continued to grow.

Shea said he believes all these trends are impacting his company.

On top of all this, Shea notes that costs of doing business are up across the board from labor—R. Shea has about 55 employees—to materials.

It’s ultimately pretty simple math. Debt is more expensive.

“We’ve really only got a couple of quarters of working capital left, and that’s it.”

— Ron Shea, owner and CEO Shea said his interest rate on that loan has grown from 7% to 11%. With that, the monthly payment on that debt has increased from approximately $22,000 to $30,000.

Shea said his lender, United Community Bank, was accepting interest-only payments on that loan for many months. While that arrangement was in place during the COVID outbreak, it ended this past spring.

This is placing additional pressure on the business, but it’s just one of several challenging factors at play.

Shea said that while taproom sales have recovered to preCOVID levels, they’re ultimately flat. The business generates approximately $2 million in revenue from its taprooms annually.

Meanwhile, Shea said off-premise sales—those made via distribution—have dipped by 30%.

While about 70% to 80% of the business’s total revenue comes from on-premise sales, that’s a sizable chunk of income that the brewery is struggling to make up.

Shea said he’s down about $300,000 to $400,000 in off-premise sales over the past 12 months.

This is challenge is not unique to R. Shea.

According to the Brewers Association (BA), total sales in the

Costs are significantly higher.

And overall sales are not keeping up.

It’s simply not a sustainable situation.

“I’ve got to find about $21,000 in extra sales (per month) to make up for all this,” Shea said.

“And that’s hard to do if distribution is going down. You can only get so much out of your taprooms at the end of the day.”

R. Shea’s GoFundMe is live through the end of the year.

If the brewery reaches its fundraising goal, Shea will be able to pay off his SBA loan—he still owes about $1.6 million on that— plus some other high-interest debt. He also plans to hire salespeople and use the rest for working capital, which buys time for the business to plot out its path forward.

Shea said those future plans tentatively include making better use of their Canal Place space for events as well as pursuing more contract brewing for other independent breweries looking to increase their output for distribution.

If the brewery gets about halfway to its goal, Shea will determine the best use of funds. One option is to pay down a big chunk of the SBA loan, which would reduce the interest rate and monthly payments, and apply some of its leftover funds to working capital.

In a worst-case scenario where R. Shea comes up significantly short of its fundraising target, the business could, indeed, fold.

The only other option would be to find a private investor, which Shea is open to, or have someone take over Canal Place.

“If we raise nothing, and nothing changes as far as the business outlook, we will close sometime in Q1,” Shea said. “The only other possible way to do this is if somebody wants to take over the SBA loan and rent for the Canal Place location. That is an option. I could still run (the Merriman Valley location), and there would be no closing doors. But it would be finding the person or company to do that.”

8 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 6, 2023

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haritable giving. Business succession. Impending

Estate planning strategies to consider before Dec. 31, 2025. S2.

tax law changes.

Growing wealth with intention.

Ohio’s happily ever after: postnuptial agreements. S3.

Cultivating a meaningful legacy requires a systematic and

Donor-advised funds an appealing vehicle for charitable giving. S4.

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Key considerations before exiting your business. S6.

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401(k) planning when you own company stock. S11.

Impending generational wealth transfer a harbinger for uncertainty and opportunity. S12.

Why exit planning is effective business planning. S13.

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Estate planning strategies to consider before Dec. 31, 2025

By Jaclyn M. Vary and Maureen T. Pavicic

T

his article features a few estate tax planning strategies to consider taking now or before Dec. 31, 2025.

Current state of the law The Tax Cuts and Jobs Act (TCJA) of 2017 doubled the 2018 basic exclusion amount from $5.6 million per person to $11.18 million per person. In 2023, an individual’s basic exclusion amount is $12.92 million and $25.84 million for a married couple. This high basic exclusion amount means that many individuals will not need to pay an estate tax at death if they die in 2023.

However, on Jan. 1, 2026, the basic exclusion amount is legislatively scheduled to be reduced to $5 million per person, adjusted for inflation to an estimated $7 million per person, or $14 million for a married couple.

This is almost $6 million less per person than today.

Now is the time for individuals with a net worth of $7 million or more and married couples with a net worth of

$14 million or more to minimize their estate tax exposure.

Are estate taxes optional?

Each year, an individual may gift up to $17,000 per recipient. Additionally, an individual may make unlimited direct gifts to educational or medical institutions on behalf of the gift recipient.

An individual interested in making lifetime gifts may also take advantage of a charitable income tax deduction that depends upon several factors, including the value and type of property given, the transfer mechanism for the property given and the individual donor’s adjusted gross income in the year of the gift.

An individual may also make gifts at death to charitable entities, which may qualify for the unlimited charitable deduction that may reduce an individual’s estate tax liability to zero.

Estate planning strategies Lifetime gifts. One way to minimize potential estate taxes would be to increase what an individual gives away during their lifetime. A few

popular gift strategies include outright gifts of cash ($17,000 per individual), gifts to 529 plans and creating irrevocable gift trusts and irrevocable insurance trusts.

Many individuals enjoy seeing their loved ones benefitting from their lifetime gift. Others regret giving away too much to their loved ones as they did not keep enough to live on.

They also do not like how their loved ones spend “unearned” funds differently than the benefactor would.

Using your federal estate and gift tax exemption during your lifetime will decrease your future taxable estate by removing the gifted assets from your net worth. The major advantage of lifetime gifts is that after the date of the gift, any appreciation of the assets given will not be part of your taxable estate.

Charitable gifts. Maximizing charitable contributions is a great way to reduce your taxable estate while obtaining income tax deductions and helping the community. Charitable giving can be simplified by creating a donor-advised fund (DAF) or by creating charitable trusts. Donor-advised funds allow an

immediate tax deduction, and the funds invested in the DAF can grow tax-free while you decide which qualified public charities you would like to support through your account. A popular charitable trust is a charitable remainder trust (CRT), which is established when an owner transfers property to the trust and retains an annuity interest for a specific term.

CRTs qualify for income and gift tax deductions and remove appreciated property from the owner’s taxable estate.

Spousal Lifetime Access Trust. A spousal lifetime access trust (SLAT) involves the creation of an irrevocable trust from Spouse No. 1 for the benefit of Spouse No. 2 during Spouse No. 2’s lifetime.

During Spouse No. 2’s lifetime, the trustee of the SLAT (often Spouse No. 2) may make distributions to Spouse No. 2 pursuant to the SLAT terms. This SLAT structure, with

Spouse No. 2 as the trustee and a beneficiary, allows the SLAT funds to be indirectly used by Spouse No. 1 (the donor-spouse). Before implementing a SLAT, you should reflect carefully on the stability of the spouses’ relationship, each spouse’s net worth after the SLAT creation and the recipients at each spouse’s death.

Portability election. Individuals may still file a federal estate tax return for their deceased spouse’s estate if the U.S. citizen spouse died within the last five years and the deceased spouse’s executor was not required to and did not file an estate tax return.

Helping Clients Solve Complex Estate and Succession Planning Needs The attorneys with Calfee, Halter & Griswold’s Estate and Succession Planning and Administration group can help you make some of the most important decisions of your life. With deep knowledge and experience in finance and the law, our professionals provide exceptional value to clients seeking: • • • • •

Sophisticated estate, gift and generation-skipping planning Comprehensive estate and trust administration Business succession planning Asset protection planning Complex probate and trust litigation

Calfee’s Estate and Succession Planning and Administration Attorneys Joseph M. Mentrek, Practice Group Chair Jaclyn M. Vary, Practice Group Vice Chair Amy K. Friedmann Stephanie M. Glavinos Katherine R. Karkoska Maureen T. Pavicic Zachary J. Stackhouse

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The reason to go through the additional cost of filing an estate tax return when there is no requirement is to transfer the deceased spouse’s unused exemption (DSUE) to the surviving spouse. This type of federal estate tax return for a nontaxable deceased spouse’s estate is called a “portability election.”

Time is of the essence Estate planning practitioners are gearing up for a busy 2024 and 2025. Beginning the estate tax planning process now ensures your legal and financial advisory teams have the time to create or revisit your estate plan and determine if one of the above strategies could apply to your estate plan.

DISCOVER A WAY TO GIVE AND RECEIVE

Jaclyn M. Vary is partner and vice chair of the Estate and Succession Planning and Administration Practice Group at Calfee, Halter & Griswold LLP. Contact her at 216-622-8338 or jvary@calfee.com.

Maureen T. Pavicic is an associate attorney of the Estate and Succession Planning and Administration Practice Group at Calfee, Halter & Griswold LLP. Contact her at 216-622-8485 or mpavicic@calfee.com.

n Make a gift of cash, appreciated assets, or retirement assets to fund a charitable gift annuity at The University of Akron Foundation, and secure fixed income payments for life with the remainder used to help UA students rise to their highest potential. n Contact us today to find out just how high your payments could be and how you can create a lasting legacy at The University of Akron with your charitable gift annuity.

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Ohio’s happily ever after: postnuptial agreements

Kimberly Zebedis, J.D. Executive Director Center for Gift & Estate Planning

n Visit uakron.edu/giving

By Dana Marie DeCapite

n uakron.legacygift.com

O

n March 23, Ohio Senate Bill 210 was signed into law. Ohio joined 48 other states in allowing married individuals to enter into postnuptial agreements, leaving Iowa as the lone holdout jurisdiction.

Prenuptial agreements (the popular older sibling of postnuptial agreements) have been a long-standing planning tool in Ohio, allowing soon-to-be-wed couples to predetermine each spouse’s financial rights and responsibilities in the event of divorce or death. Postnuptial agreements, conversely, are executed following marriage and can be implemented where no prenuptial agreement exists or to amend, modify and/or terminate an existing prenuptial agreement. Ohio Revised Code Section 3103.061 requires the following components for a valid postnuptial agreement: (1) In writing and signed by both spouses; (2) Entered into freely without fraud, duress, coercion or overreaching; (3) Entered into with full disclosure, or full knowledge, and understanding of the nature, value and extent of the property of both spouses; and (4) Must not promote or encourage divorce or profiteering by divorce.

For many married couples, life’s milestones and curveballs are mostly unknown before marriage — the birth of child(ren), sale of a business, death of a close family member and resulting inheritance, liquidity events, health concerns and countless others.

Postnuptial agreements facilitate flexibility in estate planning and financial planning, which are especially important when certain terms of a decades-old prenuptial agreement are impracticable, inapplicable or overly burdensome.

This newfound ability to modify a previously irrevocable legal

arrangement between spouses allows for more precise planning that can grow and morph with a family.

Though the relevance of prenuptial and postnuptial agreements in the divorce context is commonly understood, the use of postnuptial agreements in estate planning is often overlooked or misunderstood. To name a few applications, postnuptial agreements can be used by married couples to (1) address family business succession planning where timely planning was overlooked or a business was created following marriage, (2) provide concrete planning for blended families with both joint children and prior children, (3) manage an unexpected inheritance and create assurances that certain property will remain in one spouse’s family, (4) rework or implement planning for special needs family members unascertained at the time of marriage and (5) ensure federal estate tax optimization in requiring the deceased spouse’s executor to make an appropriate portability election to preserve any unused estate tax exemption amount for the surviving spouse.

n 330-972-2819 n kzebedis@uakron.edu

n Text UA to 41444 n Scan this QR code with your smartphone:

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Ultimately, implementing a postnuptial agreement as part of an estate plan can aid in mitigating post-death family conflict and potential litigation emanating from outdated decision-making. Hardly romantic, yet undeniably pragmatic for certain families.

Dana Marie DeCapite is a partner in the Trusts & Estates/ Business Practice Area at Hahn Loeser & Parks LLP. Contact her at 216-274-2465 or ddecapite@hahnlaw.com.

The ZooFutures Planned Giving program ensures the Zoo will thrive for generations to come.

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Donor-advised funds an appealing vehicle for charitable giving

By Andrea Ponikvar

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n the world of charitable giving, donor-advised funds (DAFs) have risen to prominence as versatile and effective tools for individuals and families to amplify their impact on causes dear to their hearts. A donor-advised fund is a philanthropic vehicle that allows donors to contribute assets, receive an immediate tax deduction and then recommend grants to their preferred charitable organizations. This innovative approach merges the benefits of smart financial planning with the ability to make a lasting difference in the world.

The advantages of donoradvised funds

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1. Tax benefits: One of the primary attractions of DAFs is the immediate tax deduction donors receive when they contribute to the fund. This deduction can be particularly advantageous for high-net-worth individuals seeking to optimize their tax planning.

2. Ease of use: Managing a DAF is straightforward. Donors can make grant recommendations online or through their DAF sponsor, streamlining the process and eliminating the administrative hassles of managing numerous charitable donations.

3. Flexibility: DAFs provide unparalleled flexibility. Donors can choose when and how much to grant to their chosen nonprofits, allowing them to adapt their giving to match their financial situation and evolving philanthropic interests.

Consider a DAF to ensure your family’s philanthropic legacy Donor-advised funds are dynamic charitable tools that empower donors to significantly impact causes they are passionate about while optimizing their tax planning. They provide a structured platform for involving multiple generations in philanthropy by allowing families to collaborate on grant recommendations and fostering open discussions about charitable priorities and values. This encourages a sense of unity and can be a powerful way to instill a culture of giving within the family. By naming successors to the DAF account, families can ensure their charitable values and priorities continue to be honored for generations to come.

The Cleveland Zoological Society, for example, serves as the nonprofit partner of the Cleveland Metroparks Zoo, raising millions of dollars each year for critical philanthropic support. By choosing the Cleveland Zoological Society as a recipient of your DAF grants, you directly contribute to the well-being of animals, the conservation of endangered species and the education of future generations. Your support helps ensure that the Cleveland Metroparks Zoo remains a cherished community institution and a beacon of wildlife conservation.

Andrea Ponikvar is director of advancement for the Cleveland Zoological Society.

Contact her at ponikvar@ clevelandzoosociety. org.

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Key considerations before exiting your business

By Dina Anzevino

O

ne hundred percent of business owners will exit their business.

This can happen as part of a strategic plan or as an unexpected event. Early strategic planning typically results in a more successful outcome for the business owner and their family, and it is never too soon for an owner to begin planning for this eventual exit.

For example, some tax planning strategies may have a reduced benefit or even be unavailable if not implemented well before the sale.

Missing out on these opportunities can mean less money in the business owner’s pocket and a smaller transfer of wealth to children or other intended beneficiaries in the future. Regardless of where you’re at in the business transition process, below are key considerations for your strategic plan.

Our most recent “Owner Transitions in the Middle Market” research report conducted in partnership with the National Center for the Middle Market found that a majority of the surveyed business owners spent one to two years preparing for a transition. And, while most of the surveyed owners (76%) had positive feelings heading into the transition planning process, many (71%) also entered the process with negative emotions, such as

anxiety, worry, frustration and sadness. These feelings are understandable and common.

Business owners often devote their lives to creating and growing their businesses, and a sale or other exit event is a major life change that conjures mixed emotions.

“Creating an action plan can help you mentally transition from your current endeavor to the next stage.”

Developing a realistic timeline for your exit, with the assistance of your team of professional advisers, can help to reduce stress and ensure you have sufficient time not only to prepare the company for sale but also to accomplish desired tax and wealth transfer planning goals.

It is extremely helpful to have a realistic assessment of the value of your business early in the process.

Investment bankers and valuation experts, especially those with experience in your industry, can be particularly helpful with this step.

Before beginning the sale process in

earnest, it may be beneficial to allow extra time to improve one or more aspects of the company’s performance, to make the company more attractive to buyers and to increase the future sale price. Areas of focus may include: Performance • Sustainable and verifiable earnings and cash flow.

• Realistic growth strategy.

• Unique market position, product and technology.

• Established and diverse customer base.

People • Stable, motivated management team.

• Non-reliance on the owner for future growth of the business.

• Salaries and bonuses aligned with industry standards.

Processes • Up-to-date accounting and financial records that are ready to deliver to buyer.

• Non-operational expenses cleaned up.

• Financial controls in place.

What will your life look like after the sale? Are you headed into retirement, or will you put the sale proceeds into a new business venture? Or perhaps, like 87% of the owners surveyed in

our recent “Owner Transitions in the Middle Market” research report, you’d like to retain some role in your company post-sale.

Creating an action plan can help you mentally transition from your current endeavor to the next stage. Additionally, comprehensive presale planning can give you a better understanding of your future spending needs and how much you will need to realize from the business sale to support your desired lifestyle after exit. For instance, you may have expenses handled through the business but serve both business and personal purposes (like a cellular plan, life insurance premiums or vehicle expenses).

Once you sell your company, those expenses will become your responsibility. Tackling this topic early on can help to reduce potential stress during the sale and avoid surprises later. A well-crafted business transition plan takes some time and careful consideration and is most successful when a business owner assembles a team of experienced professional advisers early in the process. What can seem like an overwhelming undertaking up front can become a manageable series of tasks when the right advisers are at your side.

Fifth Third Bank does not provide tax, accounting or legal advice. Please contact your tax adviser, accountant or attorney for advice pertinent to your personal situation. This commentary is intended for educational purposes only and does not constitute the rendering of investment advice or a specific recommendation on investment activities or trading. Fifth Third Private Bank is a division of Fifth Third Bank, National Association, which is an indirect subsidiary of Fifth Third Bancorp. Banking, investment and insurance products and services are offered through or made available by one or more of Fifth Third Bancorp’s indirect subsidiaries. Investments, investment services, and insurance: Are Not FDIC Insured | Offer No Bank Guarantee | May Lose Value | Are Not Insured By Any Federal Government Agency | Are Not A Deposit Insurance products made available through Fifth Third Insurance Agency.

Dina Anzevino is senior vice president and director at Fifth Third Private Bank (Northern Ohio).

Contact her at 216-274-5401 or Dina.Anzevino@53. com.

Y

ou have a passion to follow. You have a world to explore. You have a desire to get more out of life. And at Fifth Third Private Bank, we’re here to help write your story.

When you partner with us, we’ll provide you with a dedicated, local advisor, backed by a team of financial professionals and digital solutions.

Together, we can achieve even more.

Let’s write your story.

53.com/privatebank Contact Dina Anzevino, Private Bank Director, at 216-274-5401 or dina.anzevino@53.com.

Fifth Third Private Bank is a division of Fifth Third Bank, National Association.

Deposit and credit products provided by Fifth Third Bank, National Association. Member FDIC.

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Proactive planning can prepare next generation for wealth inheritance

By Marla Petti and Mark Van Drunen

M

oney, more specifically wealth, is often an uncomfortable topic for anyone to discuss. If you add in family dynamics, the subject can burn more bridges than it builds. While challenging, there are steps that you can take to preserve wealth for future generations.

The first step is to recognize the conventional truth of the “shirtsleeves to shirtsleeves in three generations” adage. Often, the third generation of a family is unsuccessful in stewarding the wealth accumulated by their grandparents and parents, but there are ways to prevent this all-too-common occurrence. For example, parents can instill a strong work ethic in their children to help them understand the privilege of using their gifts and abilities to be active participants in society. Wealth can create opportunities or cause isolation, but you can prevent serious issues by opening lines of

Automating legacy: AI’s nuanced impacts on estate planning

By Brittany M. Payne and Veronica T. Garofoli

O

ver the last decade, the use of Artificial Intelligence has enhanced our lives in many ways. From Siri and Alexa to Chat-GPT, AI has made tasks easier and more efficient. With AI’s ever-increasing presence, it’s no surprise that we often receive questions from curious clients and professionals on the impact of AI on estate planning.

Generally speaking, AI is already used in the estate planning process.

Financial professionals may use AI to manage assets, recommend asset allocation, reduce taxes and model a client’s current estate flow. Estate planners can use this information to help clients develop or modify a plan to meet the client’s objectives. Some planners even use AI to automate initial document production and create efficiencies in their practice.

Estate planning is often a deeply personal process that involves understanding a client, their assets and their intended beneficiaries. The key to the effective use of the AI information produced is the analysis that accompanies it by a trained professional. Without a trained eye, there may be hidden dangers to the reliance on AI for a task as important as this. One hidden danger is the risk of data breaches and cyberattacks compromising a client’s sensitive and confidential personal information, which is inherent in estate planning.

To test AI, we asked everyone’s favorite chatbot, Chat-GPT, to draft a will based upon Ohio law. The result?

A decent structure but an overall flawed will to a trained eye and lack of explanation to the user, which could lead to various pitfalls. For example, the will calls for the signature of two witnesses but doesn’t inform the user who can serve as a witness and the formalities required by Ohio law to execute the will. Without meeting these formalities, this draft will may be invalid. To its credit, the chatbot did get one thing right. It informed the user that the draft produced should only be used as a starting point and should be reviewed by a trained legal professional to ensure appropriate compliance with the law.

Overall, while we have come quite a long way with AI, estate planning is a deeply personal, nuanced and legally technical process, so individuals should be cautious about using AI without the expertise of a trained professional.

Brittany M. Payne is an associate at Schneider Smeltz Spieth Bell LLP. Contact her at 216-696-4200 or bpayne@ sssb-law.com.

Without some foundational skills and concepts, an unexpected monetary gift can lead to an imbalance of power, disjointed priorities and loss of perspective. By teaching your children the value and responsibility of money, highlighting the importance of having purpose and providing financial education, you can start to encourage them to develop clear roles and responsibilities with a shared vision for the future. This shared vision invites all generations into the decision-making process, from holding financial partners accountable and managing shortterm financial needs or long-term growth to building a habit of active, generous involvement in charity.

your legacy but also flourish because of it.

Disclosure: MAI Capital Management is an SEC registered investment advisor.

Marla Petti, CPA/ PFS, AEP, CFP, is a senior wealth adviser and team leader at MAI Capital Management.

Contact her at marla.petti@mai. capital.

Mark Van Drunen, CFP, is a regional president at MAI Capital Management.

Contact him at mark.vandrunen@ mai.capital.

While money can be a difficult topic, leaving your family an unexpected gift should not become burdensome. With proper planning and open lines of communication, you can prepare the next generation to not only preserve

HELPING CLIENTS PROTECT THEIR LEGACY Protecting what you have built for the next generation takes careful planning and an experienced partner who understands your goals and objectives and can tailor a plan to help you achieve them. At Hahn Loeser, we work with our clients to navigate the evolving tax laws, minimize tax exposure and create a strategy that will help them preserve their legacy.

LET US KNOW HOW OUR ESTATE PLANNING TEAM CAN HELP

Stephen H. Gariepy Partner National Chair

216.274.2224

Veronica T. Garofoli is an associate at Schneider Smeltz Spieth Bell LLP. Contact her at 216-696-4200 or vgarofoli@ sssb-law.com.

communication as a family.

Dana M. DeCapite Partner 216.274.2465

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Cleveland Chair

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Douglas C. Carlson Partner 216.274.2313

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Joan M. Gross Frank C. Krasovec, Jr. Senior Of Counsel Of Counsel 216.274.2277 216.274.2373

M. Patricia Culler Partner 216.274.2534

Cynthia K. Port Of Counsel 216.274.2307

Erica K. Williams Partner 216.274.2290

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Definitions and rationale for creating a trust

By Cindy L. Steeb

A

trust is an important document in a comprehensive estate plan and allows someone to hold assets for the benefit of someone else.

There are many kinds of trusts serving different planning functions.

As such, there are several considerations to account for when creating a trust.

Let’s start with definitions of the various parties involved: The grantor, also known as the settlor or trustor, creates the trust and transfers ownership of assets into the trust. They define the trust’s terms, including how the assets will be managed and when they will be distributed.

A beneficiary is an individual(s) designated to receive the benefits or assets from a trust. They may receive distributions and potentially have a say in certain decisions, depending on the terms of the trust. They have “beneficial ownership” of assets in a trust but not direct ownership.

The trustee is a person or entity responsible for managing the assets held in the trust for the benefit of

beneficiaries. They have a fiduciary duty to act in the best interests of the beneficiaries and follow the grantor’s intention per the trust’s terms.

Given the role of the trustee, determining the trustee is an important decision when creating a trust. There are various types of trustees:

Why create a trust?

There are many reasons to create a trust, including the following:

• A corporate trustee is a bank or trust company. They have experience in trust administration, investments and financial management.

• Probate avoidance: Assets held in trusts avoid probate, a public record, court process that can take time and money for legal and court fees. Assets in a revocable trust maintain privacy and cost savings for the family.

• An individual trustee is a person designated to oversee the trust. This could be a family member, trusted friend or adviser.

• A family trust company (“FTC”) is a family-owned and familycontrolled entity that acts as a corporate trustee for trusts of a particular family lineage. FTCs are authorized by state statute, but not all states have created these laws. Ohio has statutes authorizing FTCs, and they are frequently utilized by families owning a family business, doing multigenerational wealth planning or setting up a large number of trusts.

PRESERVING MULTIGENERATIONAL

WEALTH

2. An irrevocable trust is frequently set up to move assets out of the grantor’s estate and beneficiaries’ estates if specifically drafted. Assets held in an irrevocable trust can be a life insurance policy, family business ownership or legacy assets not needed to fund the grantor’s lifestyle. Irrevocable trusts can also offer protection from creditors, including in divorce proceedings.

Grantors can frequently identify who they want to serve as the current trustee, but thinking about who will assist future generations when doing long-term planning requires thoughtful consideration.

Types of trusts you can create Selecting the type of trust most beneficial to an individual’s or family’s situation depends on their tax and estate needs. Below are

definitions of the two types of trusts.

1. A revocable trust is also sometimes called a living trust, as the grantor retains control over the assets in the trust until disability or death occurs. The trust can be changed or amended during the grantor’s lifetime.

Upon the death of the grantor, a revocable trust becomes irrevocable.

However, assets held in a revocable trust upon the grantor’s passing are included in the grantor’s estate.

• Control of your legacy: Trust terms dictate when assets are distributed to beneficiaries. Assets passing in a will are distributed to beneficiaries when they reach the age of majority, which is 18 in Ohio. A trust allows the grantor to specify ages over time for distributions or hold the assets in trust for the beneficiary’s lifetime.

• Minimizing estate taxes: Assets held in irrevocable trusts are designed to pass wealth through succeeding

BUILDING A FUTURE FOR YOUR FAMILY WEALTH Cindy L. Steeb — Senior Managing Director of Trust Administration Services at Clearstead — shares extensive knowledge on Private Family Trust Companies and their potential wealth management benefits in her forthcoming book, Preserving Multigenerational Wealth.

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WEALTH MANAGEMENT

“A trust is an important document in a comprehensive estate plan and allows someone to hold assets for the benefit of someone else.” generations without incurring estate taxes. Currently, a grantor can pass $12.92 million of assets to future generations using an irrevocable trust without paying gift taxes. However, this amount is set to be significantly reduced at the end of 2025 based on current law.

Information provided in this article is general in nature, is provided for informational purposes only and should not be construed as financial, tax or legal advice. These materials do not constitute an offer or recommendation to buy or sell securities. The views expressed by the author are based upon the data available at the time the article was written. Any such views are subject to change at any time.

Clearstead disclaims any liability for any direct or incidental loss incurred by applying any of the information in this article. All financial decisions must be evaluated as to whether it is consistent with your objectives, risk tolerance and financial situation. You should consult with a professional before making any financial decision.

Cindy L. Steeb, JD, MBA, is senior managing director of Trust Administration Services at Clearstead.

Contact her at 216-621-1090 or csteeb@clearstead.com

Consider these options for making charitable giving a rewarding part of retirement

By Kimberly M. Zebedis

M

aking the decision to retire involves a complex balance of professional aspirations and personal fulfillment. Charitable organizations, such as The University of Akron Foundation, offer strategic giving options that help create a pathway to confident retirement by providing financial security and an opportunity to create a lasting personal legacy.

Life income gifts, including charitable remainder trusts (CRTs) and charitable gift annuities (CGAs), provide individuals with a reliable source of income throughout retirement.

Charitable remainder trusts provide regular distributions, either as a fixed trust percentage or a set monetary amount, to beneficiaries throughout their lifetimes or for a designated time period.

Charitable gift annuities offer a retiree or loved one fixed payments for life based on the annuitant’s age and the gift’s value at the time of donation, regardless of market fluctuations. As a result of increased payout rates suggested by the American Council on Gift Annuities in 2023, CGAs have become increasingly attractive to seniors looking to diversify their portfolios, reduce the risks of an unpredictable market and satisfy their philanthropic goals.

Upon the termination of a CRT or the passing of a CGA annuitant, the remaining balance of those vehicles will transfer to a charitable beneficiary, creating a lasting legacy of philanthropy. With the reliability of lifetime payments from these planned

giving tools, retirees can confidently plan for retirement and be assured that their financial needs will be met while supporting worthwhile philanthropic missions.

Legal strategies to avoid disputes in family-owned businesses

By David M. Cuppage

D

espite their best intentions, family business owners frequently develop differences of opinion about compensation, day-to-day operations, leadership, financing, disposition of equity and more. Shareholder agreements, which include close corporation agreements, operating agreements and buy-sell agreements, are an important part of any business strategy, providing a framework for sound governance and preventing misunderstandings that may result in litigation.

A close corporation agreement, often referred to as a “shareholders’ agreement,” is a legal document that outlines the business’ ownership structure, management and day-today operations. An operating agreement for limited liability companies functions in the same way.

A well-crafted close corporation agreement or operating agreement will include mechanisms for decision-making, capital calls, voting rights, winding up and dissolving the entity and dispute resolution.

A buy-sell agreement, or “buyout agreement,” outlines the terms and conditions for the sale or transfer of shareholder or member equity.

Buy-sell agreements may include an agreed-upon formula or a certificate

of valuation for a buyout of one shareholder or member’s interest.

Regardless of the buyout mechanism, it should be understood by all parties, with input from business valuation experts, accountants and legal counsel. The buyout mechanism should also be reviewed yearly to ensure it is up to date. Buy-sell agreements may also include rights of first refusal, call options, put options and drag-along rights.

“Beyond having these contractual arrangements in place, shareholder or member agreements should be reviewed and updated frequently, especially as your company grows.”

A close corporation agreement and a buy-sell agreement provide numerous benefits to the company and its shareholders or members. They create a framework for sound governance and dispute resolution, facilitate transparent business practices and common understandings, and prepare for the smooth transfer of ownership interest. While incorporating these agreements into the family business

plan would seem like a no-brainer, many closely-held businesses operate without them or with outdated agreements, which risks feuding, financial losses and lawsuits.

Beyond having these contractual arrangements in place, shareholder or member agreements should be reviewed and updated frequently, especially as your company grows.

Purchase price mechanisms should be assessed periodically to ensure that compensation paid upon the death, disability or departure of a shareholder or member is understood and fair to all parties. Life insurance should be maintained to fund a buyout of another shareholder or member’s interest and ongoing business operations.

These legal tools and best practices are critical to ensuring the success of your family business, both now and in the future.

David M. Cuppage is a litigation principal at McCarthy, Lebit, Crystal, & Liffman.

Contact him at 216-696-1422 or dmc@mccarthylebit.com.

Qualified charitable distributions (QCDs) present yet another avenue for retirees to protect their financial stability through charitable giving by reducing a retiree’s taxable income. A QCD enables a retiree to distribute directly from their IRA to a qualified charity, satisfying part or all of their required minimum distribution (RMD) for the year. With the guidance of legal, tax, financial and planned giving professionals, retirees can use these distributions to reduce their tax bill, preserving those funds for other uses.

For individuals who have dedicated their lives to professional growth and excellence, philanthropy presents a unique opportunity to use one’s time, expertise and financial resources to create a positive impact outside of one’s career and to fulfill one’s personal aspirations. By incorporating thoughtful charitable giving into their retirement journey, retirees can safeguard their financial well-being and establish a legacy of philanthropy, securing the future of worthwhile organizations, such as The University of Akron.

Kimberly M. Zebedis, J.D., is executive director of the Center for Gift & Estate Planning at The University of Akron. Contact her at 330-972-2819 or kmr137@ uakron.edu.

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Developing a workable retirement plan is a dynamic process

By Mitchell Berman

I

n my nearly forty years in the business, I’ve met people in various stages of their career.

While seeing clients attain their goals is gratifying, it’s more so knowing they’re comfortable with their plan.

I’m reminded of the great quote from Jesse Owens: “We all have dreams.

But in order to make dreams come into reality, it takes an awful lot of determination, dedication, selfdiscipline and effort.” I take this as, “We can have a plan, but we have to work at it.”

Start with your employer when saving for retirement. If your employer offers some sort of match, at minimum you should pursue the full match. It’s free money. But after that, try to divert at least 15% of your income into savings. That may not be doable for many people starting out.

Remember that many plans have automatic increases, and you should try and take advantage.

There are a number of strategies for saving and budgeting. Some people might use the 50/30/20 method, where you budget 50% to cover your basic needs, 30% for your

wants and 20% for savings. Needs are things you can’t live without and generally represent half your budget. Needs include housing, groceries, utilities, insurances, transportation, and loan and credit card payments.

Life without some diversion would get pretty old pretty quickly. So, plan to set aside a portion of your income for wants or nonessential spending to pursue your many interests. These may comprise going out to eat, vacations, film, theater, museum admissions, gym dues, etc.

I would call it the 20/50/30 plan because you should pay yourself first.

Part of the 20% of income savings can be allocated to retirement. Any additional savings can be used to buy a home, a new car or any other desirable purchase.

You benefit by consistently reviewing your financial picture just as you should get an annual physical. You should certainly be doing periodic life stage checkups, especially early on in your accumulative stage. You should monitor your quarterly statements when you’re first starting out. You also should evaluate your financial

picture during any kind of annual enrollment.

If you have changed jobs, part of the checkup process includes reviewing previous plans through former employers. It makes sense to consider consolidating them just for ease of tracking. To ensure you’re on track, ask yourself: Do I have enough savings to replace X percent of your pre-retirement income?

“Start with your employer when saving for retirement. If your employer offers some sort of match, at minimum you should pursue the full match.”

To me, that’s like a moving target.

Some people need to replace 100% of their income in retirement. Other people can live comfortably on perhaps 50% or 60% of their income.

It gets down to an individualized number. Working with a professional can help you identify the optimal figure.

pocket health care expenses. Their number is pretty accurate regarding lifetime expenses for health care during retirement. When we create a plan, we consider the costs associated with Medicare parts A, B and D, which include the premiums, deductibles and coinsurance and are adjusted for inflation. A Medicare Advantage plan has similar estimates.

Social Security is a big part of anyone’s retirement plans. Everyone should go to ssa.gov to see their statements and where they stand.

When should I take it? At 62? Or should I wait until my full retirement age? That becomes part of the planning process.

For most people, Social Security alone will not cover their expenses.

There are definite questions that need answers regarding Social Security, such as:

Research is just the start. It’s important to sit down with a professional who can help you identify what’s important to you and, depending on where you are in your investor life cycle, help you construct a plan. It simply gives you peace of mind.

• What type of investments can generate income for me?

• Are they dividend-producing stocks or funds?

• Do annuities fit into the equation to replace an “income gap” if my fixed expenses are greater than my income?

• How do we construct a portfolio for the short-term, mid-term and long-term aspects of retirement?’

Mitchell Berman is a senior investment executive at Farmers National Bank. Contact him at 330-5742020.

Fidelity Investments research has shown that if you are a typical 65-year-old couple set to retire in 2023, you should anticipate shelling out more than $300,000 for out-of-

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401(k) planning when you own company stock Deliberative approach can yield tax savings, value

By Adam Douberly

W

hat happens to assets in defined contribution retirement plans when you decide to retire or change jobs? By simply rolling over your 401(k) balance into a traditional IRA, you could forego the opportunity to minimize your income tax burden if you own company stock. Assuming that company stock has grown over time, the growth in stock value is commonly referred to as net unrealized appreciation (NUA).

20% rate) for a total tax bill of $117,000, creating a tax savings of $68,000.

To mitigate ordinary income tax, one option is to make a charitable contribution with some or all of the shares that constitute the cost basis amount to receive a corresponding deduction. There is a charitable contribution deduction limit of 30% of adjusted gross income for long-term capital gain property.

Some benefits of NUA strategy Beyond avoiding immediate taxation, this strategy allows for the conversion of the NUA from ordinary income to capital gain. For example, if the employer stock were rolled over into your IRA and then immediately distributed, the tax on a $500,000 distribution at the current top marginal rate of 37% would be $185,000.

The day the employer stock is distributed, both the cost basis and current market value are important in calculating future income taxes on a subsequent sale. Future appreciation will be treated as a short-term or long-term capital gain depending on the holding period. The net investment income tax of 3.8% would apply only to any appreciation post-distribution from the 401(k), not the NUA amount that accrued in the employer plan.

With the NUA election, the tax on the cost basis of $100,000 would be $37,000, but the NUA portion would be subject to tax at the long-term capital gain rate (assume the top

Lastly, all employer stock at the time of distribution will be treated as long-term capital gain irrespective of the holding period in the qualified plan.

NUA stock held in a brokerage account will not be subject to required minimum distributions. This is particularly beneficial since the enactment of the SECURE Act significantly shortened the distribution period for IRAs and qualified plans for designated beneficiaries.

Concerns Lack of diversification or overconcentration of a single stock in a portfolio is a common concern.

Holding the stock outside an IRA or qualified plan may open the door to

diversification strategies typically not available to tax-sheltered vehicles, including exchange funds, equity collars and other option strategies and derivatives.

The NUA must be part of a lump sum distribution. Further, the entire 401(k) balance must be distributed in one taxable year in the event of the employee’s death, attaining the age of 59½, separation from service or becoming disabled. The most common catalyst for NUA planning is separation from service.

This article is provided solely for informational purposes and is not intended to provide financial, investment, tax, legal or other advice.

It contains information and opinions which may change after the date of publication. The author takes sole responsibility for the views expressed herein, and these views do not necessarily reflect the views of the author’s employer or any other organization, group or individual.

Information obtained from third-party sources is assumed to be reliable but may not be independently verified, and the accuracy thereof is not guaranteed. No outcome, including performance or tax consequences, is guaranteed, due to various risks and uncertainties. Readers should consult with their own financial, tax, legal or other advisers to seek advice on their individual circumstances.

Adam Douberly is a regional director in Glenmede’s Private Wealth Group. Contact him at 215-4196007 or at adam. douberly@ glenmede.com.

We align with your goals Our proprietary Goals-Based Wealth Management approach will help you understand your options to make informed decisions, helping you to achieve

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Impending generational wealth transfer a harbinger for uncertainty, opportunity

By Stephen Forlani, JD

A

s the baby boomer generation ages into and out of retirement, the “Great Wealth Transfer” has become a hot button topic in the world of finance and economics. Baby boomers, or those born between 1946 to 1964, are estimated to hold about half the nation’s household wealth and are expected to hand down the vast majority of that wealth to their primarily millennial children over the next two decades. This transfer will represent a significant change in circumstance for many in that millennial cohort, a group that has been troubled by two recessions, burdensome student debt and increasingly unaffordable home prices.

What steps should be taken to prepare the next generation for such an adjustment?

Keep it in perspective Though the sum total expected to be handed down is undeniably vast, many experts are skeptical about how much accumulated wealth will actually be inherited by the younger generations. The transfer has already begun in some cases through the use of inter vivos gifting, as retirees make

gifts to their children while they are still living. High-net-worth individuals can make use of the annual gifting exclusion to avoid estate and gift tax on such gifts, while most others can give freely during life without jeopardizing their lifetime exemption from estate taxes.

However, many baby boomers are entering retirement with debt of their own while facing longer life expectancy and the associated health care costs that come with it. Growing talk of an impending crisis of Medicare and Social Security only exacerbate concerns over giving away too much.

Inheritors must also consider the tax ramifications associated with an inheritance. An obvious example is a child inheriting an IRA from a parent.

The SECURE Act eliminated the stretch IRA option for most child inheritors, instead requiring that the entire account value be liquidated within 10 years following the death of the decedent. Withdrawals are treated as ordinary income to the IRA beneficiary in the year of withdrawal.

Children inheriting an IRA from a parent are frequently at or near the peak of their earning capacity and therefore subject to taxation in the highest brackets during this 10-year

liquidation period. The problem is worsened if the account being passed down has accumulated a particularly large tax-deferred balance. The after-tax value of an inherited IRA may therefore be quite a bit less than what it appears.

In light of this, advisers should consider several action items when helping potential inheritors plan for their financial futures.

Encourage the asking of questions and better financial education There is perhaps no better advice for families seeking to plan for wealth transfer than to establish clear and open lines of communication. Assets may be inherited in a variety of ways, whether via will, trust distribution, beneficiary designation or other. The questions of asset titling and how assets will pass down are of particular importance. Inheritors should be encouraged to ask questions and better educate themselves on these topics.

Furthermore, each situation is unique and requires its own special evaluation of the circumstances involved. The trust beneficiary of a

large estate may need education on how and when they will receive distributions, how trust principal will be invested or how the trust will evolve over time. A beneficiary inheriting an IRA from a parent will need to devise a plan for distributing the money within the 10-year liquidation period in the most tax-efficient manner possible. Open discussion can lead to greater implementation of wealth preservation strategies, including annual lifetime gifting, income tax planning or estate tax planning through the use of irrevocable trusts or life insurance. The more an inheritor knows about what to expect, the better they can incorporate that expectation into their own financial planning.

Develop a plan and help to establish good financial habits Arguably most important for the next generation is to have a financial plan of their own, develop good habits as it relates to saving and spending and to understand how a future inheritance might impact their own planning.

Take the example of those millennials who have been burdened by inconsistent market performance,

student debt and rising costs.

Advisers should help structure a plan for how to prioritize efficient savings and pay off high-interest debt, in the context of trying to allow for aspirational goals such as travel. In most cases, relying on a future inheritance is a dangerous concept in financial planning, and proper counsel from the adviser should steer a potential inheritor toward the best use of such a windfall, if it does come into play.

Conclusion A great shift is set to take place within the financial landscape of our country and is indeed already underway for many. With this shift, advisers should be taking steps to prepare the younger generations for a carefully measured approach to a potentially life-altering change in economic condition.

Stephen Forlani, JD, is vice president of financial planning at Ancora. Contact him at sforlani@ ancora.net.

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Why exit planning is effective business planning

By Frank Fantozzi

A

s a business owner, the day-to-day decisions and challenges inherent in managing a business can leave little time for long-term planning — let alone thinking about when and how you will exit the business. However, for most owners, the business is their largest asset. Therefore, it is critical to have a plan so that when it’s time to leave your business, you exit on your terms while increasing the chances of maximizing business value. Achieving that goal requires making exit planning essential to your ongoing business strategy.

Starting early is key Your exit strategy is part of a continuous cycle of making improvements and reassessing the business to determine if you want to continue to grow or sell. Waiting until the last minute to start planning may not provide enough time to fix issues driving your industry’s value.

That could prevent you from obtaining the highest value, possibly leaving millions of dollars on the table. Starting early is also critical to avoid the risks associated with the

“5Ds” (death, disability, divorce, disagreement and distress) that could dictate unforeseen outcomes.

How exit planning can enhance business value Treating exit planning as an ongoing business strategy will show you where you and the business are now and where you need to go. This allows time to make any necessary changes to help increase your company’s value as you prepare to exit on your terms with the highest degree of personal and financial success.

We believe a successful exit relies on three key factors: Owner readiness, business readiness and state of the capital markets.

1. Owner readiness requires a plan to step away that addresses your post-business life. First, you have to be mentally prepared. Will you walk away after a lifetime relationship with your business or remain in a less-prominent role? Are you ready to give up the spotlight and the authority for life outside your business?

Next, you have to be financially

prepared. Owners often underestimate how much the business contributes to their personal lifestyle. An analysis based on your personal and projected assets from the sale helps determine if you will have enough to maintain your lifestyle and accomplish other goals.

That begins with understanding your cost of living without your business.

Suppose you need $25 million in investable assets to live the life you want but you’ve only accumulated $9 million in non-business investments.

In that case, your business has to sell for a net of $16 million to avoid a wealth gap. If you haven’t taken steps over the years to maximize business value and sell the business for $12 million, you won’t meet your goal.

Focusing on your personal planning needs well in advance is necessary for optimizing business value to meet your number.

2. Business readiness is not just about your company’s size but about being the best in class. If you achieve Best in Class (BIC) status and sell at the right time, even if you’re not fully ready to retire, you’ll have a better chance of receiving the highest value.

The common language for valuing a

business is EBITDA (earnings before interest, taxes, dividends and amortization). Often, you’ll see the business value reflected as an “X” times EBITDA multiple. BIC businesses lead competitors within their industry and likely will be offered more. Finding out if your company is performing BIC will help indicate if it will receive its best offer by a higher multiple than a non-BIC competitor.

In addition, each industry maintains key performance indicators (KPIs) that help determine if a business is performing well compared to its peers.

3. The state of the capital markets is the third component and one you can’t control. Economic conditions, access to cash and merger and acquisition activity can all influence multiples. However, by ensuring owner and business readiness, you can increase the odds of taking advantage of favorable capital market conditions, so you don’t leave money on the table.

Ideally, you’ll exit on your terms when the business is at its peak and the markets are paying higher-thannormal multiples.

Finally, who you choose to work with matters when preparing for a smooth transition. You want to ensure your

professional partners have the credentials and experience needed to not only help you maximize business value, but help you accomplish the goals that are most meaningful to you at every stage of your life. A certified exit planning adviser (CEPA) can help you assess owner readiness and complete a detailed business valuation, which will help provide answers to improve your business.

Remember, if the business is your key financial asset, it’s also the linchpin in your personal financial plan. Your exit strategy connects the dots between business success and a life well lived.

Investment advice is offered through Planned Financial Services, a registered investment adviser.

Frank Fantozzi, a certified exit planning adviser, is owner and founder of Return on Life Wealth Partners. Contact him at 440-7400130, ext. 222, or Frank@ReturnOnLifeWealth.com.

They look at your money.

We look at your LIFE. Financial advisors for business owners shouldn’t think that everything you’ve earned in your whole life happens to be their own personal playground.

Return on Life® Wealth Partners is different. Very different — on purpose.

Experience wealth management the way it should be, not the way they want it.

Let’s talk. / 8 7 7.74 0. 4 8 75

ReturnOnLifeWealth.com FRANK FANTOZZI President and Founder

The Forbes Best-In-State Wealth Advisor ranking, developed by SHOOK Research, is based on in-person and telephone due diligence meetings and a ranking algorithm that includes: client retention, industry experience, review of compliance records, firm nominations; and quantitative criteria, including: assets under management and revenue generated for their firms. Portfolio performance is not a criterion due to varying client objectives and lack of audited data. Neither Forbes nor SHOOK Research receives a fee in exchange for rankings.

CPA, MST, PFS, CDFA, AIF ®, CEPA

Investment advice offered through Planned Financial Services, a Registered Investment Advisor.

© 2023 Planned Financial Services

CRAIN’S CONTENT STUDIO P009_P0XX_CL_20231106.indd 21

10/25/23 10:33 AM

CRAIN'S LIST | FOUNDATIONS Ranked by value of grants awarded in 2022

RANK

FOUNDATION

ENDOWMENT FOUNDATION, Hudson 1 AMERICAN 330-655-7552/aefonline.org FOUNDATION, Cleveland 2 CLEVELAND 216-861-3810/clevelandfoundation.org JOSEPH AND MORTON MANDEL FOUNDATION, Cleveland 3 JACK, 216-875-6550/mandelfoundation.org GUND FOUNDATION, Cleveland 4 GEORGE 216-241-3114/gundfoundation.org FOUNDATION, Cleveland 5 KEYBANK 216-689-7394/key.com/foundation COMMUNITY FOUNDATION, Canton 6 STARK 330-454-3426/starkcf.org FOUNDATION OF CANTON, Canton 7 TIMKEN 330-452-1144 COMMUNITY FOUNDATION, Akron 8 AKRON 330-376-8522/akroncf.org CORPORATION FOUNDATION, Westlake 9 NORDSON 440-892-1580/nordson.com FAMILY FOUNDATION, Amherst 10 NORD 440-984-3939/nordff.org WEST FOUNDATION, Westlake 11 COMMUNITY 440-360-7370/communitywestfoundation.org FOUNDATION, Akron 12 FIRSTENERGY 330-384-5752/www.firstenergycorp.com/community HIS STEPS FOUNDATION, Independence 13 IN330-528-1785/ihsfound.org D. MORGAN FOUNDATION, Hudson 14 BURTON 330-655-1660/bdmorganfdn.org COUNTY COMMUNITY FOUNDATION, Wooster 15 WAYNE 330-262-3877/waynecountycommunityfoundation.org SINAI HEALTH FOUNDATION, Cleveland 16 MT. 216-421-5500/mtsinaifoundation.org

GRANTS AWARDED ASSETS (MILLIONS) (MILLIONS) 2022/ 2022 2021

LARGEST 2022 GRANT (RECIPIENT)

GIVING FOCUS AREAS

TOP LOCAL EXECUTIVE(S)

National

Ron Ransom, CEO

$993.9 $775.5

$6,246.8

$101,954,493

$138.5 $124.4

$2,777.0

$3,700,000; Cleveland Neighborhood Enhance lives of Greater Cleveland Progress residents

Lillian Kuri, president, CEO

$51.1 1 $51.1 1

$2,170.5 1

—

Leadership development, nonprofit management, humanities, Jewish life

Jehuda Reinharz, president, CEO

$42.5 $55.5

$493.4

$2,500,000; Cleveland Neighborhood Education, arts, human services, Progress environment, economic development

Tina Kimbrough, president

$28.3 $26.8

—

$2,000,000; Cuyahoga Community College Foundation

Neighbors, education and workforce

Eric Fiala, chairman, CEO, KeyBank Foundation

$19.5 $12.3

$349.4

$1,586,678; Boys & Girls Club of Massillon

Wide array of charitable causes

Mark Samolczyk, president, CEO

$16.0 2 $13.0 2

$296.5 2

—

—

Mark Scheffler, executive director

$13.4 $13.8

$259.6

$92,500; Building for Tomorrow

Arts, culture, education, health, civic affairs

John Petures Jr., president, CEO

$13.0 $9.9

$32.4

$500,000; Towards Employment

Education, human welfare

Cecilia Render, executive director

$10.2 $9.3

$187.0

—

Art and culture, civic affairs, education, health and social services

Tina Kimbrough, executive director

$9.9 $6.6

$135.1

$250,000; Building Hope in the City

Homeless, hungry, sick, clothing, stranger, prisoner

Martin Uhle, president, CEO

$9.4 —

$118.0

$500,000; Girl Scouts of Northeast Ohio - STEM Center of Excellence

Community needs, workforce, education, economic development

Lorna Wisham, president

$8.5 $7.0

$55.0

$205,000; Youth for Christ Greater Cleveland

Faith-based

Ben Lee, president

$7.8 $6.7

$173.5

$1,000,000; JumpStart Inc.

Free enterprise, entrepreneurship, and entrepreneurship education

Daniel Hampu, CEO

$7.7 $11.2

$96.1

—

Arts, education, environment, health, human services

Melanie Reusser Garcia, executive director

$7.4 $7.0

$179.4

$2,000,000; Menorah Park Center for Senior Living

Academic medicine/bioscience, urban health, Jewish community, health policy

Mitchell Balk, president

FOUNDATION, Akron 17 GAR 330-576-2926/garfoundation.org LUKE'S FOUNDATION OF CLEVELAND, OH, Cleveland 18 SAINT 216-431-8010/saintlukesfoundation.org CHARITABLE FUND, Beachwood 19 EATON 440-523-5000/eaton.com

$7.2 $7.3

$168.7

$500,000; Fund for Our Economic Future

Helping Akron become smarter, stronger and more vibrant

Christine Mayer, president

$7.2 $6.8

$195.3

$1,000,000; Legal Aid Society

Health equity; social determinants of health

Timothy Tramble Sr., president, CEO

$6.8 $7.0

-- 3

$7,000,000; United Way of Greater Cleveland

Local interests of Eaton sites

Amy Pausche, director, community affairs; Taras Szmagala Jr., senior VP, public and community affairs

FOUNDATION OF LORAIN COUNTY, Elyria 20 COMMUNITY 440-984-7390/peoplewhocare.org

$6.8 $6.8

$140.1

$1,000,000; Mental Health Addiction and Recovery Services Board of Lorain County

Lorain County community needs

Cynthia Andrews, president, CEO

VEALE FOUNDATION, Pepper Pike 21 THE 216-255-3205/vealeentrepreneurs.org KELVIN & ELEANOR SMITH FOUNDATION, Pepper Pike 22 THE 216-591-9111/kesmithfoundation.org FOUNDATION, Mayfield Heights 23 PARKER-HANNIFIN 216-896-3000/parker.com YOUNGSTOWN FOUNDATION, Youngstown 24 THE 330-744-0320/youngstownfoundation.org SEVERANCE PRENTISS FOUNDATION, Cleveland 25 ELISABETH 216-222-2760/esprentissfoundation.org CLARK MORGAN FOUNDATION, Hudson 26 MARGARET 330-655-1366/pegsfoundation.org FOUNDATION OF THE MAHONING VALLEY, 27 COMMUNITY Youngstown

$6.4 $4.9

$149.8

$2,000,000; University Hospitals

Arts, education, entrepreneurship, health/human services

Daniel Harrington, chairman

$6.3 $7.7

$174.9

$2,000,000; Greater Cleveland Food Bank

Arts, culture, education, economic development, environment, health

Ellen Stirn Mavec, chairman, president

$5.5 $5.1

$12.0

$1,000,000; Cleveland State University

STEM education, community needs, sustainability

Jennifer Parmentier, CEO

$4.7 $5.1

$124.5

$1,000,000; Canfield Fair

Unrestricted

Lynnette Forde, president

$4.5 4 $4.4 4

$91.9 5

—

Health care

Pamela Alexander, president

$4.3 $5.6

$97.7

$585,000; Treatment Advocacy Center

Mental health, arts, education

Rick Kellar, president, CEO

$4.0 $3.5

$77.0

$172,241; Second Harvest Foodbank of the Mahoning Valley

All community needs

Casey Krell, incoming president; Shari Harrell, president

HOLDEN JENNINGS FOUNDATION, Cleveland 28 MARTHA 216-589-5700/mhjf.org ALUMNI FOUNDATION, Cleveland 29 CASE 216-231-4567/casealumni.org

$3.7 $3.2

$68.7

$104,109; Akron Public Schools

Support for PK-12 public schools

Anne Juster, president, chairwoman

$3.3 $14.0

$81.9

$1,200,000; Case School of Engineering - undergraduate scholarships

Scholarships, laboratories, faculty support, students

Stephen Zinram, executive director

L. AND JOSEPH M. BRUENING FOUNDATION, Cleveland 30 EVA 216-621-2632/brueningfoundation.org FOUNDATION, Cleveland 31 KULAS 216-623-4770/murphykulas.org

$3.3 $3.1

—

$300,000; Cleveland Public Library

Learning and safety net services

Cristin Slesh, consultant

$3.3 $1.1

$39.2

$2,050,000; Cleveland Institute of Music

Arts, community and higher education

Nancy McCann, president, treasurer

330-743-5555/cfmv.org

Information is supplied by the foundations unless otherwise noted. Numbers that appear tied have been rounded. NOTES: 1. 2021 figure from Form 990. 2. From Form 990. 3. This foundation is funded primarily on a pass-through basis. 4. Represents grant payments, not new grants awarded; from online meeting minutes. 5. As of March 31, 2023.

Get 41 foundations and more than 90 executives in Excel format. Become a Data Member: CrainsCleveland.com/data 22 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 6, 2023

P022_CL_20231106.indd 22

11/3/23 10:06 AM

SPONSORED CONTENT

MetroHealth advances spinal cord injury research Neuroprosthetic research enables people with spinal cord injuries to be more independent in their daily lives

By Laura Hennigan, Crain’s Content Studio

Institute on Disability, Independent Living, and Rehabilitation Research; the State of Ohio, and private philanthropic funds.

A pioneer in the field of rehabilitation, the MetroHealth Rehabilitation Institute helps patients regain as much physical and cognitive function as possible so that they can get back to the things that matter to them. And, as one of only 18 federally designated Spinal Cord Injury Model System Centers in the nation, the MetroHealth Rehabilitation Institute is leading the way to restore function, social participation, and quality of life for people with significant spinal cord injuries.

And, true to MetroHealth’s focus on health equity, a portion of the funds is devoted to creating resources to make the NNP open source so that any health researcher can build upon it.

“We’re giving away the knowledge to any researcher who wants it,” Dr. Wilson says. “The goal is to expand what this sort of technology can do in order to get more minds working on it.”

Founded in 1953, the MetroHealth Rehabilitation Institute has yet again been ranked by U.S. News & World Report as one of the best in the nation for the care of patients recovering from complex conditions such as stroke, traumatic brain injury and traumatic spinal cord injury.

One of the rehabilitation research topics MetroHealth focuses on is called functional electrical stimulation, or FES. FES applies small electrical pulses to paralyzed muscles to restore or improve function. Electrical impulses stimulate the muscle to produce its usual movement, helping to assist with breathing, grasping, transferring, standing and walking. FES devices can be implanted to permanently replace lost functions, which means movement is restored in ways that were previously impossible.

MetroHealth continues to use FES research to find new ways to use the technology.

Research funds also allow MetroHealth to gather a larger team of junior investigators and engineers to collaborate on the continued advancement of the technology. Consistent with MetroHealth’s standing as an academic medical center, training this next generation of researchers will support the growing momentum of projects and help ensure that MetroHealth continues to move forward as a leader in rehabilitation technology.

The FES treatment Adam Gorlitsky received at MetroHealth allows him to empty his bladder more quickly—helping him achieve a Guinness World Record for the fastest marathon completed in a robotic walking device. | MetroHealth

moving fast. While Gorlitsky holds the Guinness World Record for the fastest marathon completed in a robotic walking device, he competed in the 2023 Cleveland Marathon to highlight the groundbreaking research that allowed him to empty his bladder more quickly. After developing a severe kidney infection as the result of his spasming bladder, MetroHealth enrolled him in a clinical trial to implant an FES device.

From research to real life At the forefront of FES technology is the Networked Neuroprosthesis (NNP) device, developed by Kevin Kilgore, PhD, and Hunter Peckham, PhD. First implanted at MetroHealth in 1986, Kilgore and Peckham have evolved the NNP to coordinate stimulation of multiple muscle groups to produce complex movement and even restore organ function.

Through Kilgore and Peckham’s work, the device has gone through several iterations, with the newest version being implanted beginning in 2016. The pair is continuing to build and improve upon their life-changing design to restore function for people who experience paralysis.

“Someone who has had a spinal cord injury at the level of their neck is essentially paralyzed from the neck or shoulders down,” says Dr. Kilgore.

“Systems in the past would provide only one

The implantable Networked Neuroprothesis device can help restore function in individuals experiencing paralysis.

somebody hand capability, enable them to stand, and allow them to cough, and so forth all simultaneously--that’s what drove us.”

Richard Wilson, MD, a physiatrist and the Interim Chair, Physical Medicine and Rehabilitation, says MetroHealth takes pride in the researchers who are working on improving the lives of those with disabilities.

“The real innovation here is the ability to change multiple aspects of somebody’s life after “The real innovation here is the ability to they have experienced a change multiple aspects of somebody’s life after spinal cord injury,” says they have experienced a spinal cord injury.”

Dr. Wilson. “We try to get as much of their — Richard Wilson, body working back to MD, Interim Chair, Physical Medicine and Rehabilitation as close to normal as possible and restore function — like hand grasp — at a time, while multiple aspects of the functions that have been the current NNP device provides multiple lost.” functions at the same time.”

Developments like these move research on how to restore function in specific areas to real life, where multiple functions are necessary to thrive.

“We always wanted to develop a system that could provide as much function as possible,” says Dr. Kilgore. “That’s what led to us trying to design this… creating something that could give

P023_CL_20231106.indd 23

Research that goes the extra mile Functional Electrical Stimulation—the technology that drives the NNP—has promising applications beyond the device itself, and research on FES applications is already showing results at MetroHealth.

Adam Gorlitsky is a para-athlete who is used to

“It completely changed my life,” says Gorlitsky, explaining that prior to receiving the implant, he had to empty his bladder manually using a catheter in a time-consuming process that made him prone to urinary tract infections and incontinence. With his FES device, he is able to empty his bladder in three to five minutes.

“Our goal is to get FDA approval and make the NNP more accessible,” says Dr. Kilgore. “Right now anyone can get it, but they have to come to Cleveland. Ultimately, we want to have this system available throughout the world so that people who have spinal cord injury can benefit from it. We’re trying to do whatever we can to help people become more independent.”

For more information about the MetroHealth Rehabilitation Institute’s research, visit www. metrohealth.org/rehabilitation/research.

If you are interested in learning more about the clinical study for people with spinal cord injuries, visit ClinicalTrials.gov and search for study NCT05863754, or email UE.FES.ClinicalTrials@ gmail.com.

For more information about the open source NNP implant, visit cosmiic.org.

That device is part of an ongoing study that seeks to determine whether the participant’s existing implanted device is more effective when different frequencies are applied using an external controller. The aim is to determine if the FES device could help to empty the bladder more quickly and without a catheter if the frequency of the electrical stimulation were increased, showing the technology’s promise beyond the Networked Neuroprothesis device.

While being able to walk in his robotic walking device is exciting, Dr. Kilgore knows through his work with people with paralysis that improved bladder function is a higher priority among patients.

“One of the things MetroHealth prides itself on is focusing on what matters most to people with spinal cord injuries,” says Dr. Kilgore.

Research dollars increase access The potential within the development of the NNP has brought external research dollars, including a $12.5 million grant from the National Institutes of Health, as well as support from the Department of Defense; the National

The NNP device can stimulate 24 muscles, 12 in the hand/arm and 12 in the trunk. It is part of the research led by MetroHealth.

10/31/23 10:15 AM

CLUB From Page 1

The organization is based in New York, where it was founded in 1999 by chairman Michael Sonnenfeldt, a real estate investor and executive who played a key role in the redevelopment and 1986 sale of the Harborside Financial Center in Jersey City, New Jersey.

Among other endeavors, he also established in 1992 what was then known as Emmes & Co., a private real estate investment group.

The Tiger 21 name is an acronym that stands for “The Investment Group for Enhanced Results in the 21st Century.”

But since its founding, the organization has grown into much more than a network for discussing strategies and concerns for investment portfolios among wellto-do business moguls.

Other topics that Tiger peers connect to discuss span a variety of subjects ranging from business and philanthropy to family dynamics and, really, advice or guidance on just about any challenge, opportunity or other hot topic of interest that may pop up among its network of rich businesspeople.

“Tiger 21’s dedication to building tight-knit, valuable communities of ultra-high-net-worth individuals and Dan’s unique connection to the city will allow members to intimately discuss the topics that matter most,” said Tim-

Tiger 21 chairs collaborate on topics of importance to members at the North American Tiger 21 chair retreat on Aug. 21 in Park City, Utah. | TIGER 21

othy Daniels, president and CEO of Tiger 21, in a prepared statement. “We look forward to witnessing the growth, collaboration and collective wisdom that will undoubtedly flourish in this dynamic group and bringing them into our global community of over 1,300 extraordinary members.”

Those 1,300 global members are across more than 100 geographically based groups that collectively represent more than $150 billion in personal assets, according to the organization.

The Cleveland cohort that Nitowsky is building joins a group in Cincinnati as the two Tiger outfits in Ohio.

So what prompted this expansion to Cleveland?

That ties back to Nitowsky.

Nitowsky retired in 2018 as president of Leff Electric, but he couldn’t completely stay away from work for too long. Since 2019, he’s been an executive coach and peer advisory group chair for Vistage Worldwide Inc. Anyone interested and motivated enough to launch a new Tiger group can apply to do so. So when a colleague at Vistage suggested that Nitowsky might be a good fit to convene such a group here, he jumped at the chance.

“I realized shortly after I retired that I wasn’t really ready for retirement mentally,” he said. “I still wanted to be relevant and active. I like the business world, and I enjoy working with people.”

Gift Planning Ignites the Cures of Tomorrow

As an executive coach, Nitowsky is certainly familiar with the myriad peer and affinity groups out there for all sorts of professional types. Tiger, he said, plays what might be thought of as a more complementary role to those.

“Tiger is often considered a graduate school for some of those peer groups because now, the member has achieved such significant success—maybe they had an exit or a significant liquidity event—and now their challenges are not so much with running a business but really dealing with wealth,” Nitowsky said.

While programming can vary, typically, members of a given Tiger group meet in person about once a month to exchange thoughts and ideas about challenges and opportunities on their minds. Locations are kept confidential.

Speakers occasionally are brought in to discuss a contemporary topic of interest.

And besides the annual convening of Tiger groups, Tiger members are often invited to attend meetings in other locations that they may be visiting when traveling.

But make no mistake: this is an exclusive club.

While organizers say their aim is to build as diverse of cohorts as possible in terms of backgrounds, groups typically max out in size with between just 13 to 15 members—so that’s about how many

people Nitowsky aims to collect in and around Northeast Ohio.

And besides having at least $20 million in assets, a prospective member must be prepared to share referrals, pass a background check and sign a non-disclosure agreement. The annual dues are $33,000.

Furthermore, one must be actually invited to join.

Anyone interested in learning more about joining the Tiger network is directed to consult the “inquire about membership” option on the Tiger 21 website.

As an application moves forward, information will eventually be forwarded to the chair of the related market group. Details on anyone pursuing membership in Cleveland will eventually come to Nitowsky.

“A good fit for a member is someone who’d be a good fit for the group,” Nitowsky said. “We want to check the egos at the door and have someone willing to share and learn from others.”

“I think the point is that, just because you have success in the business world and had a significant liquidity event, many people assume you are on easy street,” he added. “The reality is there are many challenges inherent with wealth, especially first-generation wealth, that you can’t learn in school. And the value of having a group of people around who are experiencing similar challenges is priceless.”

“Through volunteerism and philanthropy, the community has an opportunity to be part of Cleveland Clinic’s mission of medical excellence and part of the healing process, whether it’s through a legacy gift, a smile or giving directions in the concourse. It’s giving that grows our hearts.”

—JAN JONES ARTZ CLEVELAND CLINIC LEGACY DONOR 2023 RECIPIENT OF THE GEORGE W. CRILE, SR. AWARD

Scan to learn more

Together, we can help achieve your client’s financial and charitable goals.

Call our Gift Planning experts at 216.444.1245 or email giftplanning@ccf.org.

24 23-PHI-3703298-Gift-Planning-Ad-Crains-11-6-final.indd | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 6, 2023 1

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10/20/23 3:07 PM

11/3/23 2:03 PM

PROPOSALS From Page 1

names to Crain’s in response to a public records request. The document is short on details. It doesn’t include all of the team members or identify which portions of the county’s project — a consolidated courthouse, a reimagined Justice Center or acquisition of the nearby Courthouse Square office building — the companies are pursuing.

But the list still is illuminating, combined with interviews and market chatter.

Two developers offered up historic buildings as potential sites for the courts and offices.

The Millennia Cos. of Cleveland put the historic Union Trust Building, at 925 Euclid Ave., in play as a potential government complex. And Bedrock, the Detroit-based real estate arm of Dan Gilbert’s Rock family of companies, submitted a proposal through Sapphire Acquisitions LLC, the entity that recently acquired the enormous Landmark Office Towers on Prospect Avenue.

A Bedrock spokeswoman confirmed that the company responded to the county. Beyond that, she declined to comment.

The 22-story Landmark Office Towers complex is currently home to the Sherwin-Williams Co., which is building a new headquarters tower west of Public Square. That project is slated for completion in late 2024. Then Bedrock will have a roughly 1.2 million-square-foot hole to fill on the eastern flank of Tower City, where the developer controls other major assets.

The Union Trust Building, meanwhile, is already vacant. It spans more than 1.3 million square feet at East Ninth Street and Euclid Avenue. Millennia bought the tricky property in 2018 and has been pursuing an apartment-heavy redevelopment called the Centennial, which also would include a hotel, a restaurant and grand event and exhibition spaces.

Millennia CEO Frank Sinito told Crain’s in late September that he was pivoting to proffer the space to the county. On Tuesday, Oct. 31, Millennia vice president Tom Mignogna confirmed that the company is “dual-tracking” the project, keeping the Centennial plan alive while seeking to house the county courts, Cleve-

land Municipal Court and other, related uses.

“We evaluated and examined the Centennial building based on the parameters that the RFP listed, and we felt like we hit every mark very easily, and probably more cost-effectively, for the county than what we think any other site can offer,” Mignogna said, adding that there would be enough space left in the building for retail and dining, if the county was open to those uses.

TurnDev, a fast-growing real estate development group based in Beachwood, submitted a proposal to build a ground-up courts complex on parking lots slung between West Third and West Ninth streets, north of the Cleveland Memorial Shoreway. That site, at roughly 8 acres, is owned by companies tied to the Kassouf and Coyne families, both longtime parking investors.

The TurnDev-led team also offered to buy Courthouse Square, a historic building at 310 W. Lakeside Ave., but is not trying to purchase the existing Justice Center site.

Jon Pinney, TurnDev’s managing partner, confirmed those details in response to an email from Crain’s but declined to comment further. TurnDev also is renovating the Artcraft Building in the Superior Arts District, just east of downtown, as Cleveland’s new police headquarters.

Another bidder, DBL Development LLC, has some notable names behind it. The company is a collaboration between real estate broker Rico Pietro; construction company executive Erik Loomis; developers Ari and Jori Maron of MRN Ltd.; and Michael Bowen, a partner at the Calfee law firm. MRN developed the East Fourth Street district downtown and has a sizable portfolio.

Pietro confirmed the composition of the team but wouldn’t say what parts of the county opportunity they’re pursuing — new construction, renovations, or a mix of the two. He described the county’s request for proposals as “very, very broad,” leaving the direction open-ended.

“We were interested because we think it’s a tough project,” said Pietro, a principal with Cushman & Wakefield-Cresco Real Estate.

“And we think it’s just going to take somebody that’s patient and that’s willing to be a strategic partner to go after this type of real estate.”

Detroit-based Bedrock is pitching the Landmark Office Towers (center) as a potential consolidated courthouse site. | COSTAR

The last local proposal came from DMD Development Group, a company that shares an address with DiBenedetto Real Estate Group of North Olmsted. The development company is a partnership comprised of Tony DiBenedetto, preservation consultant Steve McQuillin and Walid Dardir, a contractor who previously held jobs with both the city of Cleveland and the county.

They’re proposing to demolish the entire Justice Center complex and replace it with eight lower-slung buildings, each of them evoking or replicating a historic structure that once stood in downtown Cleveland. The buildings could include ground-floor retail and restaurants.

“We’re thinking of a campus-like plan with beautiful green spaces, quadrangles, all underground parking and underground connections . . . so that these could be something that would really add to the downtown,” said McQuillin, adding that the layout and heights of the buildings would integrate well with nearby Cleveland City Hall and Public Auditorium.

“We have no intention of building a big, tall, glass building,” he added.

DiBenedetto said the proposal involves 1.2 million square feet of new construction, phased so that the courts and offices could continually operate and gradually move into new buildings.

Two large, institutional players rounded out the list.

U.S. Realty Advisors, a New York-based company focused on sale-leaseback and build-to-suit projects, submitted a proposal.

The company targets properties occupied by single tenants, including government users. Ryan Fitzgerald, the company’s vice president of acquisitions and head of credit, declined to comment in response to an email from Crain’s.

Lincoln Property Company, a major developer based in Dallas, also turned in a proposal. The company, which has roots in the apartment business, now manages, leases and develops all types of real estate and offers advisory services for property owners and tenants.

The county’s response list includes the address for the regional headquarters of Lincoln Property Company Midwest in Chicago. Peter Kelly, an executive vice president in that office, did not respond to an inquiry from Crain’s.

County officials and representatives from CBRE, the real estate consultant shepherding the process, have said it could take six months to consider the proposals, negotiate with various parties and reach a decision. Initial, private presentations on the submissions are set for Nov. 8 and 9, according to an email sent to prospective participants before the Oct. 26 filing deadline.

“Cuyahoga County and CBRE are pleased with the responses to the RFP,” Kelly Woodard, a county spokeswoman, wrote in an email late Monday, Oct. 30. “We look forward to evaluating each proposal to find the best solution for

the Justice Center property.”

She declined to comment on the individual proposals.

Through CBRE, the county released its request for proposals in late July. The solicitation covered two initiatives: A new or renovated home for the courtrooms, offices and other related spaces, with an estimated footprint of almost 900,000 square feet; and the potential sale of the aging Justice Center complex and Courthouse Square.

The Justice Center occupies a nearly 7-acre city block, a site that also includes the county jail and

Cleveland’s current police headquarters. It bisects the north-south path between Public Square and the lakefront and cuts off east-west links between the city’s convention district and the Warehouse District.

Separately, county officials aim to build a new jail in Garfield Heights.

Cuyahoga County Council voted in September to pay $38.7 million for the project site, approximately 72 acres at Interstate 480 and Transportation Boulevard. The jail could cost up to $750 million, a price tag that might be paid for through a 40year sales-tax extension.

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MUSEUMS From Page 1

“A lot of this has grown out of science centers,” he said. “Science museums, science centers tend to lead in that area.”

Scott Vollmer, vice president of STEM education and exhibits at the Great Lakes Science Center, said having a hands-on approach has always been vital to the success of science centers. It gives visitors a chance to experiment and think critically, leading to “aha” moments as they make discoveries about broader scientific concepts.

Vollmer said immersive projections are becoming a popular trend among museums and that these experiences can help young visitors engage with concepts and artifacts.

The science center’s NASA Glenn Visitor Center is home to the Skylab 3 Command Module, which traveled to space in 1973.

Visitors may not be able to explore the interior physically, but they can use the Mission to STEM app to see inside the module through immersive 360-degree panoramas.

The science center also aims to offer experiences with multiple outcomes, Vollmer said. One example is Derby Dash, which is part of the Science Phenomena gallery.

It allows visitors to build their own vehicles and race them on ramps.

Guests can focus on different outcomes, such as creating the fastest or slowest vehicle or getting their vehicle to stop at the top of the track hill. Creating experiences that don’t focus on one specific objective can increase engagement time and help visitors learn bigger concepts instead of stepby-step processes, Vollmer said.

The Cleveland Museum of Natural History is putting an emphasis on questions with its ongoing transformation efforts. In 2021, the museum broke ground on a $150-million project that included an expansion, the reinstallation of its exhibitions and the development of new public spaces. The museum unveiled its new Visitor Hall in October. The project is slated for completion in late 2024.

Visitors explore “Revealing Krishna: Journey to Cambodia’s Sacred Mountain,” an immersive exhibit that appeared at the Cleveland Museum of Art in 2021 and 2022. | CLEVELAND MUSEUM OF ART

ments and learning labs that allow visitors to learn about the cycles that support life. Svenson said the museum’s new model focuses on reducing museum fatigue and encouraging visitors to come back in the future. “(Young people) spend all their money now, as studies have shown, on experiences,” said Jane Alexander, chief digital information officer at the Cleveland Museum of Art (CMA). “People want to be doing things. We’re not competing with other museums. We’re competing with people staying home and everyone on their own streaming device.”

The museum was at the forefront of using technology to create interactive experiences for visitors when the museum launched Gallery One in 2013. The space offered visitors an opportunity to explore works of art from the museum’s collection through handson and technology-based activities.

Relaunched as the ARTLENS

“The intention behind the design was that the galleries could change, walls could go up, walls could come down, and we can make it immersive and the experience different for every type of exhibition.”

— Tom Poole, creative director at the Museum of Contemporary Art Cleveland Svenson said the museum’s transformation aims to place humans at the center of the story and show them the relevance of science in their daily lives. The reimagined museum will be organized by questions and processes rather than time periods. The Dynamic Earth Wing will focus on the origins of the planet from the beginning of the universe to the present day, and the Evolving Life Wing will look at life on Earth and how living things change and adapt.

They will feature interactive ele-

Gallery in 2017, the experience lets visitors create their own digital artwork and engage with world-famous works through interactives.

Alexander said immersive experiences can remove the intimidation of art museums and show visitors there is something for everyone. The museum views technology as a tool to engage visitors and help them deepen their understanding of artwork, she said.

ARTLENS has been successful in this effort, according to a survey conducted by the museum. Sev-

Visitors test vehicles at the Great Lakes Science Center’s Derby Dash exhibition. | KEN BLAZE

enty-six percent of visitors said their ARTLENS experience enhanced their overall museum experience and 74% said it encouraged them to look closely at art and notice new things.

In 2021 and 2022, CMA offered a mixed-reality experience called “Revealing Krishna: Journey to Cambodia’s Sacred Mountain.”

The exhibition consisted of six galleries, including four interactive galleries that offered context to help tell the story of “Krishna Lifting Mount Govardhan,” a 1,500-year-old sculpture from Cambodia, which is housed in the museum’s collection. The exhibit included an immersive HoloLens tour that showed a hologram of the sculpture in the cave where it originally stood.

Alexander said the museum uses immersive technology to bring visitors into the art and engage them in meaningful ways.

Over the summer, CMA took ownership of the Transformer Station, a visual and performing arts center in Cleveland’s Hingetown neighborhood. It currently has on display a time-based exhibition called “Blow” by artist Tabaimo.

This is the first time it’s been displayed since the exhibition was acquired by the museum in 2012.

Alexander said the Transformer Station can serve as a space for the museum to experiment with different immersive experiences.

“Museums are getting past the institutional view that they are the authority of how somebody should receive art,” said Tom Poole, creative director at the Museum of Contemporary Art Cleveland.

Poole said moCa has always been interested in the presentation and way that visitors interact with art. The museum designed its building on Euclid Avenue to be adaptable to allow for continued change.

“We don’t have a permanent collection,” he said. “That was part of the building’s design. The intention behind the design was that the galleries could change, walls could go up, walls could come down, and we can make it immersive and the experience different for every type of exhibition.”

Poole said moCa’s current lineup aims to use immersive experiences to challenge visitors’ expectations for art museums and how they engage with art. In July, the museum opened “Don’t mind if I do” in collaboration with artist Finnegan Shannon. The experimental exhibition centers around

a conveyor belt that delivers art directly to visitors. The exhibition space is filled with couches and soft chairs, where visitors can sit and engage with artwork. “(The art) is all meant to be tactile,” Poole said. “Take them off the conveyor belt. Touch. Play. Then put them back on for the next person to use.”

The exhibition looks to deter from the traditional idea of a gallery filled with untouchable artworks, dense wall labels and cold, hard seating.

Walhimer, whose company has been involved in opening or expanding more than 40 museums worldwide, said technology is rapidly changing the landscape of museum design, which makes it difficult for museum planners.

“If (a museum) calls me today and says ‘OK, we want to do something new’ the best-case scenario is two years out,” he said. “So, we have to be thinking about what will the technology be like two years from now. And that’s really difficult right now. So, museums are thinking about do we push forward? Do we stay with where we are?”

Walhimer said he expects technology to lead to more cocreation within gallery spaces and for museums to increase their virtual offerings.

“You have a center point, where you can visit the physical objects, and the museum beyond the walls of the museum,” he said.

Alexander said she believes more museums will continue to incorporate technology and use it as a tool to highlight their exhibits or areas of focus. She also said it’s important for museums to start to think about developing ethical guidelines, policies and procedures regarding technology. “(Technology) is a tool,” she said. “It’s an opportunity. And I think with this opportunity, as we’ve learned from the internet, that we should think about policies and procedures and ways to go forward.”

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