Crain's Cleveland Business

BUILD BACK BETTER Northeast Ohio groups pursue millions in pandemic recovery funds. PAGE 9

EDUCATION: Enrollment dips at many Northeast Ohio colleges, universities. PAGE 2

CRAINSCLEVELAND.COM I NOVEMBER 15, 2021

CHURCH AND STATE

MICHELLE JARBOE/CRAIN’S CLEVELAND BUSINESS

Filling skills gap even more difficult for manufacturers

Tight labor market hits industry already struggling

BY RACHEL ABBEY MCCAFFERTY

MOVIN’ ON UP

Manufacturers have spent years thinking about the labor gap, working to attract people to the industry.

The difference is that now, they’re not alone.

“The labor market is just really squeezed present day. So you’ve got industries that weren’t as dramatically impacted in the past that now are feeling the pain of what manufacturing companies have felt for years,” said Allison Grealis, founder and president of the Women in

Manufacturing Association, a national trade association based in Northeast Ohio.

Companies have been waiting — and waiting, and waiting — for employees to come streaming back into the workforce as the COVID-19 pandemic wanes. But that hasn’t been happening. Instead, employees have been quitting and switching jobs in high numbers, and employers in all fields are faced with labor shortages.

See LABOR on Page 21

Lending in traditional SBA programs rebounds

BY JEREMY NOBILE

Lending in traditional Small Business Administration programs, namely 7(a) and 504, rebounded in the Cleveland district this past fiscal year after sliding amid the flare-up of COVID-19 in 2020.

In 2020, the small-business ecosystem was largely in survival mode.

Bankers’ priorities shifted accordingly, as they focused more on providing support through the SBA’s Paycheck Protection Program and

Economic Injury and Disaster Loans — applications for the latter remain open through the end of the year.

Improved lending activity this past year points to a blossoming economic recovery for the small-business segment.

“We are seeing small businesses starting to lean into growth, looking at deferred maintenance and inventory, buying real estate, placing that new pizza oven in the kitchen or just See SBA on Page 20

New philanthropy-backed newsroom aims to fill gaps

BY LYDIA COUTRÉ

As new apartments rise in Cleveland, a city that saw little to no ground-up construction for decades, developers strive to stand out. Eye-catching amenities include a climbing wall, CBD cocktails and distinctive designs. PAGE 10

NEWSPAPER

VOL. 42, NO. 42 l COPYRIGHT 2021 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

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The nonprofit newsroom slated to launch in Cleveland next year is part of a national trend of nonprofit startups striving to fill gaps left by shrinking staffs of legacy news organizations.

One-third of the nonprofit news outlets currently publishing didn’t exist five years ago, according to the Institute for Nonprofit News’ June 2021 report, “The State of Nonprofit

LAND SCAPE

News.”

“We’ve seen a startup a month, every month for the past five years,” said Jonathan Kealing, chief network officer at the Institute for Nonprofit News (INN). “It’s really pretty remarkable how many people — even in a time when news is under such incredible threat — are deciding that they want to take a chance and start a community-centered, See NEWSROOM on Page 20

A CRAIN’S CLEVELAND PODCAST

11/12/2021 3:31:04 PM

EDUCATION

Fall enrollment drops for majority of local colleges

BY AMY MORONA

cording to Jonathan Wehner. He’s the university’s vice president and The pandemic-era enrollment dean of admissions, enrollment drops are continuing for many of management and student success.

The number of new first-time stuNortheast Ohio’s colleges and unidents at CSU increased this fall. versities.

An analysis of the 26 higher-edu- There was a significant uptick in incation institutions in the Crain’s col- ternational graduate students, too, leges and universities full digital list as travel opened up around the saw about a 3.8% decrease in com- world.

“It was really that group that startbined undergraduate and graduate full-time equivalent enrollment since ed in fall 2020, they did not come the same period in 2020. Only a few back at the rate that we had hoped,” nonprofit higher-education institu- Wehner said. “So we’re looking at, tions, including Case Western Re- particularly for those students that serve University and Ursuline Col- we know didn’t enroll at another institution, what are our opportunities lege, saw increases.

It’s a similar story across the coun- to see if we can reconnect with those try. Early data shows undergraduate students and bring them back into enrollment fell 3.2%, meaning enroll- the mix?”

About half did go to another colment has dropped 6.5% from where it was two years ago at this time. Con- lege. Wehner estimates there may tinuing a trend from 2020, graduate have been some students who chose enrollment saw a 2% increase this to stay closer to home during the pandemic year and then chose to semester.

The National Student Clearing- enroll elsewhere as more places inhouse Research Center found under- creased face-to-face opportunities. graduate enrollment of male and fe- He said the others left for a variety of male students both fell at a rate of reasons: economic, mental health about 3.5%. Black, Native American issues amplified by the pandemic, and white undergrads had bigger de- general COVID-19 anxiety.

The story is similar at the Univerclines than other racial and ethnic sity of Akron, where the freshmen groups this semester.

Community colleges continued and sophomore classes “did not reto be the most affected nationwide, turn at a rate as high as they typically though not as severely as last year. have,” said John Wiencek, UA’s execEnrollment at two-year publics fell utive vice president and provost.

The university initially forecast a 9% in fall 2020, compared with nearly 6% this semester. Northeast 4% decline in total enrollment. OffiOhio’s community colleges saw de- cials later revised it to about 6%. But clines, too, as Crain’s reported last the final number came in much higher: 11%. UA’s full-time equivamonth. lent combined enrollment this semester comes in at “IT’S BUILDING COMMUNITY around 12,400, down from roughly 23,000 a decade AND POSITIVE ENERGY ON ago.

CAMPUS THAT’S IMPORTANT.” Wiencek said this drop only caused a net impact of — John Wiencek, University of Akron executive vice president and provost about 2% to UA’s bottom line. Fewer students means Things fared better for private fewer dollars needed for things like nonprofit colleges compared with scholarships.

The university, like some other loother types of institutions. In Berea, Baldwin Wallace University received cal colleges, unveiled several incentives ahead of this semester to ata surge of applications for this fall.

The campus wasn’t alone, accord- tract students. An on-campus living ing to Scott Schulz, BW’s vice presi- requirement for first-year students dent for enrollment management. was waived. Tuition was frozen for He said most of the college’s peers in this academic year. Room and board the Ohio Athletic Conference — a fees were cut by 30%.

UA also introduced its Zips Aflist of 10 that includes the University of Mount Union and John Carroll fordability scholarship. After federal and state grants are applied, it covUniversity — reported the same.

Schulz suspects it could be be- ers tuition and fees for new students cause students put in more applica- within a six-county area who are elitions in lieu of making in-person gible for Pell Grants. Wiencek called campus visits to narrow down their that initiative a success as enrolltop picks amid lockdowns. Yet BW ment of students who fit that criteria saw about a 2% loss in full-time total almost doubled.

But Wiencek said some of the unienrollment this semester.

“We knew that being up so much versity’s other scholarship programs in the pool meant that more likely were “somewhat confusing in the than not, yield would be suppressed, marketplace.” Confusion, in fact, and that was exactly what hap- seemed to be a theme. The public seemed puzzled over which propened,” Schulz said.

Retention of those who started in grams were eliminated in a recent fall 2020 fell slightly at BW. That reorganization of program offerings. group stopped out at a higher rate at The university’s faculty cuts last Cleveland State University, too, ac- summer made headlines, adding

Enrollment dipped at many of Northeast Ohio’s colleges and universities, including Baldwin Wallace University.

another installment to UA’s well-documented woes.

There’s more collaboration now among faculty, students and the administration, according to Wiencek.

The university is now turning to boosting its marketing efforts.

“We’re putting a renewed emphasis on that, looking at the way we’re approaching students and making sure the messages are relevant to those students,” he said. “We’re also trying to do a better job about bragging about what we do well.”

Yet turning around a years-long trend of declining enrollment isn’t done overnight.

“It’s building community and positive energy on campus that’s important,” Wiencek said. “The leadership turnover over the last five or six years prior to (UA president) Gary Miller getting here certainly didn’t help to build that cohesive community.”

Enrollment leaders at Akron and elsewhere across the region are staring down another issue that existed before the pandemic: The number of

high school graduates in Ohio continues to fall.

“The demographic trends that we’ve anticipated are proving true as our enrollment declined significantly this year and is projected to continue into future years,” John Jakubek, board chair at Youngstown State University, said in a recent release.

It’s putting more emphasis on officials finding different pools of people to recruit and retain. There’s a renewed push for transfer students.

Many are also figuring out how to

2 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 15, 2021

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lure back those who may have completed some coursework but don’t have a degree or credential, a reported 1.5 million people in Ohio.

Cleveland State has an ambitious goal to get to 20,000 total students by 2025. Enrolling international students through its “CSU Global” program will play a key role in that.

But so will going into other markets here in the United States. Wehner, the dean of admissions, said they’ve been “putting feelers out” over the

past several years, including in western New York, western Pennsylvania and southeastern Michigan.

Wehner said the university’s mission is to serve the students of Northeast Ohio. But, he added, there’s also an understanding that base must be broadened and expanded in the future.

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Amy Morona: amy.morona@crain.com, (216) 771-5229, @AmyMorona NOVEMBER 15, 2021 | CRAIN’S CLEVELAND BUSINESS | 3

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Ohio’s Building Demolition and Site Revitalization Program provided $150 million for commercial and residential buildings demolition. | GREATER OHIO POLICY CENTER

New brownfield program to provide transformative remediation funding

BY KIM PALMER

Ohio was once a national leader in brownfield redevelopment, but with the sunsetting of the Clean Ohio Revitalization Fund in 2014, the state’s communities were left without much of the crucial funding used to redevelop swaths of abandoned, blighted properties.

But in the most recent state operating budget, $500 million is dedicated for the redevelopment of brownfield sites and the demolition of blighted commercial and residential properties, putting Ohio back on the forefront of remediation efforts.

“I don’t think there is another state doing anything like this,” said Craig Kasper, executive vice president at Bedford’s Hull & Associates, a project development and engineering consulting firm. “We have one of the best funding programs in the country once again.”

Kasper was one of the speakers at a webinar, “Preparing and Prioritizing: Assembling a Plan of Action for Brownfield Remediation Projects,” held last Wednesday, Nov. 10, and sponsored by the Greater Ohio Policy Center. It was the first in a series of webinars the organization is hosting on the subject.

Greater Ohio, a nonpartisan state policy advocacy group, estimates there are more than 9,000 former industrial or commercial sites, in all 88 Ohio counties, where redevelopment is hindered by properties or land with environmental contamination.

Remediation can cost from $15,000 to $35,000 per acre, leaving many legacy properties to sit undeveloped, discouraging surrounding investment and hindering economic growth.

“There have been studies done that say brownfields reduce property values by 20%, even a mile out from the site,” Kasper said. “No matter what you do on that site, if you clean it up, it builds value.”

The state’s Brownfield Remediation Fund guarantees each of the 88 counties $1 million for brownfield remediation, and $500,000 from the Building Demolition and Site Revitalization Program is dedicated to commercial and residential buildings demolition. The remaining $262 million for brownfields and

A new state program dedicates $350 million for brownfield remediation including $1 million dedicated to each of Ohio’s 88 counties. | KIM PALMER/CRAIN’S CLEVELAND BUSINESS

$106 million for demolitions will be awarded statewide on a first-come, first-served basis until the end of fiscal year 2023.

The Ohio Department of Development is tasked with managing the funds and is in the process of structuring the rules and regulations for the programs, which expected to begin accepting applications at the end of calendar year 2021.

“It is a massive amount of cash appropriated by the General Assembly, and it is absolutely catalytic because every county in Ohio will have access to it,” said Jeffry Harris, public finance attorney with Columbus-based Bricker & Eckler.

Harris said the investment is the first significant, dedicated grant program for brownfield remediation since the end of the Clean Ohio Revitalization Fund, known as CORF. The CORF program distributed nearly $800 million for brownfield revitalization and contributed to the redevelopment of more than 7,600 acres of contaminated land over a 13-year period ending in 2014, according to Greater Ohio.

There are a handful of programs through economic development nonprofit JobsOhio, the Ohio Environmental Protection Agency and other state development agencies that fund brownfield remediation.

However, those programs are limited to specific site types or offer loans, rather than grants. None match the levels of investment that were available under the CORF program, Harris said.

While CORF still exists in Ohio law, it has not been funded since bonds for the program were last ap-

proved by voters in 2008.

The state budget’s $500 million in one-time funds dedicated to tackling both demolition and remediation are catalytic, Harris said.

“It addresses something that every community struggles with,” Harris said. “There is a white elephant in every county. There is always some manufacturing hub that at one time supported jobs and industry that is now abandoned and collecting dust.”

Ohio legislators are considering two bills — Senate Bill 84 and the corresponding House Bill 142 — that would reinstate CORF’s Clean Ohio bonds using excess liquor profits remitted back to the state by JobsOhio and currently added to the state’s general fund. The bills, if passed, also would expand the funding eligibility to include county land banks. Harris said Senate Bill 83, which passed in the Senate unanimously and is now under consideration in the House, would provide money for the Ohio EPA to inventory all brownfields in Ohio.

Beyond the economic development opportunities of repurposing otherwise unusable land for commercial use, brownfield cleanup is a necessary part of a community’s overall “portfolio,” as more cleanup sites are transformed into public greenspaces, Harris said.

“It is also about aesthetics,” he said. “It is a terrible welcome mat to drive by these abandoned properties with a site selector or a CEO visiting a city. It makes it hard for a city to look like it has its act together.”

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

4 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 15, 2021

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6/29/21 2:59 PM

PERSONAL VIEW

How to restore Ohio’s leadership in technology, innovation

RICH WILLIAMS FOR CRAIN’S CLEVELAND BUSINESS

BY LOGAN KOLAS

EDITORIAL

Build on this

U

.S. Sen. Rob Portman isn’t running for re-election next year, so if the just-passed Infrastructure Investment & Jobs Act is his final big legislative accomplishment — not that we’re hurrying him out the door — it’s a heck of a parting gift.

The Cincinnati Republican was one of the key figures in crafting the $1 trillion bill and, ultimately, securing its passage when it passed Nov. 5 in the U.S. House of Representatives by a vote of 228-206. (It passed the Senate in August.)

We’re in agreement generally with Republicans that the Biden administration and its allies in Congress are being too aggressive in setting spending priorities, but this bill — intended as a long-term solution to decades of neglect — is targeted and necessary in providing funding increases for rail, roads, ports, water systems, broadband and the power grid.

Infrastructure legislation was a stated priority of the Trump administration — remember “Infrastructure Week”? — that didn’t materialize over four years. The fight over the new bill, and its tortured path to passage, shouldn’t obscure the real benefits that will accrue as the country makes what Portman characterized as “a long overdue investment in our nation’s core infrastructure.”

In Ohio, Portman noted, the infrastructure package will provide $10 billion in highway funding, plus more than $33 billion in competitive grant funding for highway and multi-modal projects. The state has nearly 45,000 bridges, many in poor condition, and it will receive nearly $500 million to assist with repairs of those structures. Ohio’s air terminals, runways and air traffic control system will receive needed upgrades. The bill also provides $42.5 billion in funding to states to deploy high-speed networks to unserved and underserved communities — a huge problem in Ohio, the solution to which is critical to the next stage of economic growth.

Many of the projects will not be selected, much less completed, for years. Our infrastructure deficiencies didn’t develop overnight, and they will take some time to be addressed. But the tenacity of Portman and nine other senators who worked across party lines to deliver the bill is commendable. Some of those senators — Portman, along with Democrats Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, and Republicans Lisa Murkowski of Alaska and Mitt Romney of Utah — aren’t al-

ways that popular with members of their own party in this tribal political era. The infrastructure bill reminds us that it’s still possible for Washington to accomplish substantive things, but that our political system continues to make it harder by forcing out many of the people who try to make them happen.

Voice of experience This is a time of big changes in the leadership of Northeast Ohio government and institutions, and last week an important player entered the evolving lineup.

Anthony Richardson, executive director of the Nord Family Foundation in Amherst since 2019, was named to lead the George Gund Foundation. He’ll start the job in January, succeeding David Abbott, who’s retiring after 19 years at the helm.

Richardson, 38, is a Lorain native who will bring a fresh perspective to the job leading the foundation, which ended 2020 with assets of nearly $600 million. He was a member of the Lorain City Council, chaired the Lorain Academic Distress Commission and, as Gund Foundation board chair Catherine Gund noted, has “lived experience (that) will deepen our understanding of the issues we confront” — namely, having lived in poverty and experiencing homelessness as a child before earning degrees from Oberlin College and the Moritz College of Law at Ohio State University.

The Gund Foundation focuses its grants in the areas of climate and environmental justice; culture and arts; public education; families and social justice; and neighborhoods and inclusive economy. During an event last week honoring Abbott’s tenure, it made another big announcement: a $5 million gift to cover room and board for Cleveland Metropolitan School District graduates who attend Cleveland State University as part of the Say Yes to Education college tuition guarantee. (That program covers tuition for CMSD grads but not living expenses.)

Richardson said he’s “extremely proud to be joining a foundation that is committed to tackling climate change, understanding and unraveling systemic racism, and supporting those who are fighting to fulfill the promise of democracy.” It’s a big job with a vital community resource. We look forward to the energy and ideas he provides.

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

From the Wright brothers and John Glenn to the “Rubber Capital of the World,” Ohio has a proud history of innovation and leadership in developing new technology. More recently, however, Ohio has followed more than it has led, losing its competitive edge to states that have attracted innovators and technology firms with bold, tech-friendly policies. But the Kolas is an race is not over, and state policymak- economic policy ers can take several significant strides analyst with The to regain lost ground.

Buckeye Prioritizing internet connectivity, Institute’s for example, building “regulatory Economic sandboxes,” helping the drone indus- Research Center try take flight, and welcoming emi- and the author grating entrepreneurs and innovators, of “Policy would all help Ohio retake the lead in Solutions for More technology innovation.

Nearly 1 million Ohio residents still Innovation: A lack reliable broadband internet ser- Policy Primer vice. That needs to change. Internet for Emerging access opens doors to the modern Technology in age, connecting employers with work- Ohio.” ers, buyers with sellers, doctors with patients, teachers with students, and people with better opportunities. Ohio trails states like Virginia in connecting citizens to life-changing internet access. But if state policymakers will reject government takeovers of broadband networks, wisely spend free-flowing federal aid, and revive a competitive free market in broadband deployment, Ohio can reposition itself as an internet leader.

In regulation, like technology, if you aren’t moving forward, you’re moving backward.

And Ohio’s bureaucratic red tape continues to keep innovation, technology and the state from moving forward. Building “regulatory sandboxes” can help. A regulatory sandbox offers businesses a place to experiment with and test new technologies and services under regulatory supervision without the full regulatory weight on their shoulders. Once again, however, other states have taken the lead.

North Carolina — an economically vibrant state — recently built a regulatory sandbox for financial and insurance products and services. Arizona, Utah and Florida, among others, have built similar sandboxes offering regulatory relief to diverse industries, including financial technology, insurance, legal services, agriculture, health care and energy. To catch up, Ohio should start building a financial technology sandbox like the one proposed by state Sen. Steve Wilson , immediately expand it to include autonomous and electric vehicles and emerging drone technology, and move quickly to extend the sandbox’s regulatory relief to all businesses and industries.

The birthplace of aviation, Ohio embarrassingly ranks 30th nationally — closer to last than to first — in drone readiness. Military drones, of course, have already revolutionized 21st century combat, and commercial drones may soon do the same for travel, agriculture, and package and medical delivery. But despite drone companies already partnering with Ohio’s own Kroger to transform grocery shopping, Ohio finds itself trailing most of the pack in drone innovation.

See LEADERSHIP, on Page 19

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

Sound off: Send a Personal View for the opinion page to emcintyre@crain.com. Please include a telephone number for verification purposes.

6 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 15, 2021

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OPINION

Providing expertise to find solutions for tenants and landlords during crisis.

Full Circle of Services

PERSONAL VIEW

Future depends on preserving Ohio’s early childhood system

BY NANCY MENDEZ

We are at a crossroads in Ohio in terms of early childhood education. COVID caused a perfect storm of dips in enrollment, a shortage of early childhood teachers and high costs of providing care during a pandemic.

Child care centers are at risk of closing their doors or have already done so.

My agency, Starting Point, is Northeast Ohio’s child care, early education and out-of-school time resource and referral agency. We help parents locate high-quality child care, and we provide training to child care providers to keep them at the top of their games.

The federal government recognized the importance of child care when it passed the American Rescue Plan Act, which provided $24 billion in Child Care Stabilization Grants to states. These funds are required to be distributed to child care providers to cover their operating expenses as they face less revenue and higher expenses during the pandemic. They can’t be used for any other purpose. Ohio received $800 million in Child Care Stabilization Grants in the spring of 2021 to be used over two years.

Ohio still has $638 million non-discretionary ARPA federal funding to appropriate to child care providers.

As of today, only $161 million has been appropriated to be released. If at least 50% of the Stabilization Grant funding is not allocated by the end of 2021, those funds must be returned and will be re-allocated to another state for their child care providers.

EARLY CHILD CARE AND EDUCATION ARE PROVEN TO BE SOME OF THE BEST THINGS WE CAN DO FOR OUR CHILDREN. I have hundreds of conversations a month with providers who fear they will go out of business because providing quality education is expensive, especially when enrollment is down. A provider, who operates one of the last centers in Cleveland’s Latino community with Spanish speaking staff, may be moving to the suburbs to save on rent, but she doesn’t want to move her center away from the neighborhood. She told me: “I am not in this work for the mon-

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The situation is untenable. And yet the stakes couldn’t be higher.

We have two choices: We can decide to prioritize early childhood, or we can keep the status quo of underfunding the system, undervaluing the importance of early childhood education, and Mendez is CEO underpaying teachers, who give of Starting our children a solid foundation for Point, a child www.naipvc.com learning and success. care, early I argue it’s not really a choice at education and all — and it doesn’t have to be. out-of-school Our child care providers need time resource the funds now. The funds will keep and referral their doors open and will even the agency for Cuyahoga, Lake, playing field by helping to keep early childhood education accessiGeauga and ble for all families, regardless of Ashtabula zip code or income bracket. counties.

Let’s not lose sight of doing what’s right for the babies and the children. Let’s work together to fix the early child care system and help our providers stay open.

Early child care and education are proven to be some of the best things we can do for our children.

Decades of research show us that students who attend high-quality preschool are four times more likely to have graduated from a four-year college, and 50% more likely to have consistent employment in their late 20s.

If we miss the mark on educating children from birth to age 5, those children will be playing catch up for the rest of their lives. Thousands of Northeast Ohio’s toddlers are already behind because they haven’t been in an early childhood classroom in the past two years. Children learn to read by third grade, and then they read to learn. Imagine, if they’re already behind, the work they need to do to catch up. If our high-quality centers close, we are setting up Ohio’s children to constantly be running to catch up with society.

We know too much about how a child’s brain develops to go backward. And we owe it to our children to give them the strongest start in life.

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NOVEMBER 15, 2021 | CRAIN’S CLEVELAND BUSINESS | 7

REAL ESTATE

DiGeronimo Cos. looks to be seeking a new site for potential headquarters

BY STAN BULLARD

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A new headquarters may be in the works for DiGeronimo Cos., the umbrella name for the DiGeronimo family-owned Independence Excavating and other ventures. The city of Independence is making a bid to retain the company’s upper-level management and corporate functions within its borders.

The company occupies four buildings on a sprawling site on Schaaf Road, where it has expanded repeatedly over decades. Independence City Council has adopted legislation offering to sell DiGeronimo Cos. a site on Brecksville Road near where the Independence Middle School once stood, for construction of a potential five-floor, 60,000-square-foot headquarters building, as well as an option to buy 86 sites for a single-family residential development.

The city would sell the headquarters site and a total of 5 acres of associated land for about $1.3 million.

The 9-acre residential site would be available for an option costing $90,000.

The property is near Stone Road in an area referred to as the suburb’s downtown, where Independence has tried to jump-start substantial realty investment for years.

Independence also offered DiGeronimo a proposed tax increment financing agreement that would allow non-school taxes to be used for installing roads and associated infrastructure to serve the commercial and residential development.

Also on the table is a proposed income tax incentive that would return 37% of the municipal income tax paid by employees to the company for 10 years. The company has an annual payroll of $22.5 million, according to the legislation.

Minutes of a special morning council meeting held Oct. 29 indicate Independence officials offered the package because they believe DiGeronimo may move its administrative offices to Brecksville.

The neighboring suburb is where the company is developing Valor Acres, and the city has sold a large site to the Sherwin-Williams Co., where the Cleveland-based paint and coatings concern recently started building a new global research center of about 600,000 square feet.

The proposed Valor Acres site plan also includes a mixed-use center that would house at least two office properties that would accommodate the DiGeronimo Cos. administrative property, according to site plans DiGeronimo has shared with the suburb. However, Brecksville public records do not indicate discussions about the DiGeronimo headquarters.

It’s clear Independence wants to keep quiet its quest to retain a major employer.

A request for an interview with Jessica Hyser, Independence economic development director, was answered by an email from her stating, “On October 29, 2021, City Council established a framework of terms and conditions for the sale of city-owned property for a potentially transformational redevelopment of the downtown area. The legisla-

DiGeronimo Cos. is based in unassuming headquarters that have long served the family-run concern and its high-profile Independence Excavating and other construction-related concerns. | COSTAR

A truck with the Independence logo was on the scene at the Forward Innovation Center, a new business park in Brook Park that DiGeronimo Cos. is developing with Weston Inc. and Scannell Properties. Independence Excavating and Independence Demolition are well-known construction units of DiGeronimo, which has long been based in Independence. | MICHELLE JARBOE/CRAIN’S CLEVELAND BUSINESS

tion signals the City’s ardent desire to jump start the development of the downtown area. There is still a considerable amount of sensitive strategic work to be done.”

The response does not identify DiGeronimo Cos. by name, although the legislation and minutes of the session indicate retaining the company’s main office spurred the offer.

From its start in 1967 as Independence Excavating, a name reflecting a demolition and land-clearing company’s suburban identity, the company has expanded beyond its Northeast Ohio roots to a national concern with satellite locations in Pittsburgh and Denver.

Today, DiGeronimo incorporates a construction unit with eight companies, among them the familiar Independence Excavating, as well as the Precision Environmental Co., which handles asbestos and lead remediation, and Independence Construction, a general construction contractor acquired last year from the Donley’s concrete construction firm.

The company also serves as a real estate development concern, reflecting its role in projects ranging from participating in the joint ventures that developed Cornerstone Business Park in Twinsburg to the Forward Innovation Center on a site shed by Ford Motor Co. in Brook

Park. DiGeronimo’s website also indicates the company provides capital to invest in projects through direct investments to internally managed funds.

The website noted the company has “recently” invested $50 million into commercial projects ranging from massive new warehouses and shopping centers to apartment buildings and student housing.

Although the company might locate some of its office and executive functions in a potential headquarters, the nature of its businesses means it would retain substantial operations in Independence, including equipment yards and its equipment rental business, and others.

Kevin DiGeronimo, one of the three DiGeronimo principals, declined comment on what the company is considering and on the Independence measures.

The company notes it was founded by Don DiGeronimo and his father, Sam DiGeronimo, in 1956 with a “backhoe, bulldozer, truck and only a few employees.”

Brecksville Mayor Jerry Hruby did not return an email and three phone calls from Crain’s Cleveland Business by 5 p.m. last Thursday, Nov. 11.

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

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GOVERNMENT

Northeast Ohio groups pursue millions in Build Back Better funds

BY KIM PALMER

As Ethan Karp, president and CEO of MAGNET, sees things, “It’s very hard to tell the story of our region.”

That’s because, as Karp puts it, “When it comes to manufacturing, other regions are known for one thing, but because we are the supply chain of America, we make pieces of things. It is harder for us to tell that story.”

The nonprofit manufacturing consulting group and Northeast Ohio’s business, educational and civic leaders are trying to sharpen the telling of that story so the region can take advantage of grants potentially as large as $75 million — part of the U.S. Department of Commerce’s Economic Development Administration’s Build Back Better Regional Challenge.

The BBB program allocates a total of $1 billion in American Rescue Plan funding “to assist communities nationwide in their efforts to build back better by accelerating the economic recovery from the coronavirus pandemic and building local economies that will be resilient to future economic shocks.”

At the Oct. 19 deadline, 529 applications were submitted nationwide, including 16 from Ohio, with four of those from this region. One of them is MAGNET’s “Northeast Ohio’s Advanced Manufacturing Cluster: Smart Manufacturing and Advanced Materials,” a plan to strengthen, modernize and grow the region’s manufacturing supply chain.

“There is definitely some serendip-

Karp

Shah

ity that the government is offering this now,” Karp said.

Of the 529 applications nationwide, between 50 and 60 of those proposals will be awarded $500,000 in grants and given about four months to further hone each program for final consideration. Then about 30 of those proposals will be selected to receive $25 million to $75 million in BBB funding.

In addition to MAGNET, Northeast Ohio organizations that applied for grants are the Northeast Ohio Areawide Coordinating Agency (NOACA), the Ohio Aerospace Institute and the Youngstown-area Eastgate Regional Council of Governments.

The BBB challenge initiative announced in mid-July gave MAGNET and its regional partners limited time to put together a plan that would, in the words of the program description, “transform the regional economy and supercharge business through a collection of collaborative, aligned projects designed to grow new industries and scale existing ones.”

“We hadn’t anticipated (this program), but after the catalytic impact of bringing so many groups together during COVID to create emergency

Gallucci

personal protection equipment and then launching a blueprint for our industry strategic vision, we were well positioned to take advantage of this opportunity in a really short time

frame,” Karp said.

The “we” includes members of the region’s chambers of commerce and the Greater Cleveland Partnership; economic development agencies Team NEO and JobsOhio; higher education institutions; and other industry stakeholders.

“Historically, partners come together to sort of say: ‘How do we tie (this proposal) together so that we can all take our slices and go home?’” Karp said. “But this was a coordinated strategy with the idea that we’re stronger together, and that fundamentally our supply chains and future in manufacturing are truly linked.”

The need to react to the disruptions brought on by the pandemic set in motion a new wave of community collaboration and a sense of urgency around technology adoption, Karp said.

The proposal would leverage the federal dollars with a one-to-one matching funds for high-impact projects aimed at strengthening the region’s interconnected supply chain by investing in talent development, technology adoption and innovation.

Those investments span the region and diverse industries, including polymers

and materials, water technologies, batteries and sensors, and the adoption of the internet of things, while also addressing issues of equity and sustainability.

“This plan is very aligned with where we are heading as a region and with our mission,” said Baiju Shah, president and CEO of the Greater Cleveland Partnership.

As part of the collaborative process, GCP’s equity and inclusion staff helped make sure the plan “threaded equity and inclusion throughout” so that things like equitable workforce development and supplier diversity measures are not just an add-on in the proposal, Shah said.

director and CEO. “There are thousands of jobs that are open because we don’t have workers, and colleges need more capacity to train those workers,” Gallucci said.

She said the “eds and meds plan” would build a pipeline for those pursing health care careers to the places where they are needed within NOACA’s five-county footprint, removing transportation barriers to create a sustainable and equitable transportation network.

With the BBB dollars, the region would increase the number of health care workers, which helps the region’s largest industry while also improving the health outcomes for residents.

“It works together,” Gallucci said. “There is “THERE IS ECONOMIC OPPORTUNITY opportunity TO MAKE AN INVESTMENT IN PUBLIC economic to make an investment in public infrastructure, INFRASTRUCTURE, BOTH THE both the physical and PHYSICAL AND EDUCATIONAL, THAT educational, that improves access and moIMPROVES ACCESS AND MOBILITY.” bility.”

— Grace Gallucci, NOACA executive director and CEO Although the proposals are not public, NOACA, which provides transporta- the Ohio Aerospace Institute plan fotion and environmental planning for cuses on financing to support a multithe Cleveland area, submitted its BBB state, advanced mobility hyperloop application for a plan called “Greater project. The Youngstown group’s reCleveland CARES,” which stands for covery plan seeks funding for adCareers, Accessibility for the Realiza- vanced manufacturing, electric vehition of Equity and Sustainability. NO- cles and battery storage, smart logistics, ACA hopes to strengthen the region’s and information technology, including transit connections between schools a national energy storage workforce that train workers for health care ca- training and innovation center. reers and the hospitals and facilities that need those employees, said Grace Kim Palmer: kpalmer@crain.com, Gallucci, the organization’s executive (216) 771-5384, @kimfouroffive

TAX TIPS

Understanding the tax implications of investing in cryptocurrencies

BY JONATHAN CICCOTELLI

Bitcoin, the world’s first cryptocurrency, was introduced a little over a decade ago and has become a household name. Today, taxpayers from all walks of life with a wide range of investment experience trade in virtual currencies. Because cryptoassets are still considered a fringe investment, some individuals invest before considering how it will affect their taxes.

This poses a problem. Not reporting cryptoasset transactions is a violation of U.S. tax law. Reporting cryptoasset transactions to the IRS can be difficult unless you understand how those transactions are taxed.

First things first: what are cryptoassets?

Cryptoassets are digital representations of value that are stored using data encryption technology known as cryptography. Cryptoassets include non-fungible tokens (NFTs), utility coins and security tokens, but the most common is cryptocurrencies.

Cryptocurrencies are digital currencies that operate independently of a central bank. Transactions in cryptocurrencies (and most other cryptoassets) are recorded and managed through an open-source, peer-to-peer network that relies on blockchain technology. Because blockchain technology makes a permanent record of each transaction, cryptoasset ownership is verifiable even without a central authority.

How are cryptoassets taxed?

The first few years cryptocurrencies were on the market, it felt like the Wild West Ciccotelli is — taxpayers had partner-inno formal tax charge of guidance to folMeaden & Moore's Tax low. But in 2014, Services Group. the IRS released Notice 2014-21, which detailed how to report the sale and exchange of virtual currency and other cryptoassets. Since then, the IRS has expanded its guidance with Revenue Ruling 2019-24 and in the agency website’s FAQ section.

In these releases, the IRS makes it clear cryptoassets are treated as capital property for federal tax purposes, even when they are used as currency.

Sale or exchange of cryptocurrencies Gains or losses recognized from a cryptoasset transaction will be taxable as a long-term capital gain if held greater than 12 months, or as short-term capital gain if held less than 12 months. Because cryptoasset earnings are investment income, many individuals will also be subject to a 3.8% net investment income tax.

To calculate the gain or loss from a cryptoasset transaction, you must

first determine your investment’s tax basis. Tax basis is generally what you initially paid to acquire the asset. If you received a cryptoasset as payment for goods or services, your cost basis would be the fair market value of the crypto the day you acquired it.

A transaction’s gain or loss is then determined by subtracting the cost basis from the sales price. The treatment would be the same when using a cryptocurrency to pay for goods or services as part of one’s daily life.

Mining cryptocurrency Mining is the process of creating and validating cryptocurrency transactions on a blockchain by solving complex mathematics problems. The “miner” solving the equations is paid in cryptocurrency.

Mining cryptocurrency is considered ordinary income, earned at the fair market value of the cryptocurrency at the time it was mined. Net profits from mining may be subject to self-employment tax if the mining activity constitutes a trade or business.

Airdrops and staking An airdrop is a means of distributing units of a cryptocurrency. Staking is locking crypto out of circulation and not withdrawing it for a set period of time in which the investor earns rewards or interest. In both instances, a taxpayer would have ordinary income on the distributed units and interest received.

MOE ZOYARI/BLOOMBERG

What crypto roadblocks should we avoid?

As cryptoasset transactions become more common, there are a few important things to remember.

The IRS can find you even if you trade anonymously: Blockchain technology encrypts cryptoasset transactions, keeping the identities of traders anonymous, but the IRS has ways of finding out who you are.

A few years ago, the IRS filed a lawsuit to obtain the identities of Coinbase’s customers who sold or traded assets over a specific period. The IRS cross-checked Coinbase transac-

tions with the traders’ tax returns, and those who failed to report their activity were required to pay back taxes, penalties and interest on those unreported gains.

Know which units you’re selling: If you own multiple units of the same cryptocurrency that were acquired at different times, you must identify which units you’re selling or trading.

Most digital assets have unique identifiers for just this purpose. You can select the unit with the cost basis that produces the smallest gain, which can be helpful when tax planning.

Various accounting methods can be used to determine cost basis such as FIFO, LIFO and HIFO (highest in, first out).

Payments to employees in cryptoassets are considered payroll: If you pay your employees in cryptocurrency, the fair market value of those assets is subject to payroll taxes and federal income tax withholding.

If you pay a nonemployee in cryptoassets valued at $600 or more, you will not owe payroll taxes, but you will need to report those earnings on Form 1099-NEC, Nonemployee Compensation. The recipient will be responsible for paying self-employment taxes on those earnings.

As with any investment, there are tax implications to cryptoassets.

However, if you keep accurate records, track your transactions and understand how to utilize cryptoassets during your daily life, tax reporting come April 15 will be much easier.

NOVEMBER 15, 2021 | CRAIN’S CLEVELAND BUSINESS | 9

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HOUSING NEEDS OF ELDERLY A CHALLENGE Efforts are ongoing to provide livability-focused homes for an aging population. PAGE 12

REAL ESTATE

LIVING LARGE

Cleveland apartment developers get creative with a climbing wall, CBD cocktails and distinctive designs BY MICHELLE JARBOE At Electric Gardens in Tremont, tenants mingle

with co-working users at Tiger Lily Café, a first-floor coffee shop and wine bar that also serves cocktails made with CBD. The 130 apartments upstairs, each named after a distinct flower or plant, quickly leased up after the building opened in early 2021. And bookings are steady at two cozy Airbnb suites that serve as on-demand guest rooms for residents and a hotel alternative for travelers.

“We think that people are willing to pay for design,” said Jesse Grant, the owner of J Roc Development, which teamed up on the project with the DiGeronimo Cos. “And as developers, we have a responsibility to build something that’s going to last.”

See APARTMENTS on Page 14

The Church and State apartment complex, on Detroit Avenue in Cleveland’s Ohio City neighborhood, is part of a new wave of rental projects that emphasize creativity and design. | CHURCH AND STATE

A red slide corkscrews down from the second floor of the parking garage at Church and State in Ohio City. | CHURCH AND STATE

The Electric Gardens building in Tremont is clad in matte black aluminum and blackened steel. | MICHELLE JARBOE/CRAIN’S CLEVELAND BUSINESS

Patrons sit at Tiger Lily Café in the lobby of the Electric Gardens apartment building in Tremont. | MICHELLE JARBOE/CRAIN’S CLEVELAND BUSINESS

10 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 15, 2021

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1O Y EARS Countless reasons to say thank you

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Thank you for helping us make a decade of difference.

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FOCUS | REAL ESTATE

Northeast Ohio strains to meet housing needs of aging-in-place population

BY DOUGLAS J. GUTH

Baby boomers have changed the face of America, with the post-World War II generation turning 65 at a clip of 10,000 each day, according to the U.S. Census. By 2030, all boomers will have passed that age threshold.

This demographic will need somewhere to live, even if they must downsize or relocate to more age-friendly, single-floor spaces. In Cuyahoga County — where seniors now outnumber children, according to figures from the United Way of Greater Cleveland — efforts are ongoing to provide livability-focused housing options to older and elderly adults.

While area cities and suburbs continue to encourage aging-in-place solutions, it’s a matter of optimizing available opportunities, said officials and industry onlookers interviewed

by Crain’s. In a sector marked by slow housing starts and rising construction costs, older residents wanting to

remain independent will need some help.

“Demand and high construction prices means you’re selling houses in some of these inner-city neighborhoods at plus or minus $300,000,” said David Sharkey, president of Progressive Urban Real Estate, a firm specializing in Cleveland’s urban residential market.

“Unless there’s a subsidy, that person might instead want a ranch in Old Brooklyn, Parma or Garfield.”

Sally Martin, housing director for the city of South Euclid, said “livability” is key when defining age-friendly housing. For Charek Martin, this means accommodating all life phases, from growing families to empty nesters to the recently retired. With 16% of its population age 65 and older — according to 2020 U.S. Census figures — the inner-ring suburb constantly is fielding calls from older citizens concerned

about safely aging in place.

As a segue from the federally and locally funded Green Neighborhoods Initiative, South Euclid’s community development corporation sold vacant land to private developers, leading to 29 new homes in the city, some featuring first-floor bathrooms and bedrooms as well as easy-access laundry spaces fitted with a stacked washer and dryer.

Although these “Idea Homes” attract first-time home buyers, empty nesters and retirees alike, Martin knows livability is of particular importance to people coping with chronic conditions or infirmities — or at least folks who worry about visiting parents having to climb stairs to the bathroom.

The Green Neighborhoods Initiative was launched at the height of the late-aughts housing crisis to rehabilitate and resell distressed homes. A

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decade later, a low tide of housing starts is rebuffing empty nesters and those craving continued independence via age-accessible detached housing. At the same time, South Euclid continues to advocate with private developers on age-friendly construction.

“The price point needs to be low enough that it’s affordable to seniors,” Martin said. “People want to pay cash and not have a mortgage, but they’re not ready for a retirement community. They don’t want to be on top of someone else or have HOA fees.”

Meeting a growing need The Spencer Court Apartments in North Ridgeville will meet some of this need when the complex begins welcoming residents in May 2022.

The project, spearheaded by Palmieri Partners and full-service builder Welty Development, features 48 single-story units renting at $1,400 to $1,800 each.

Following a groundbreaking on Oct. 7, construction is moving ahead on a no-maintenance complex ideal for couples looking to downsize after their children graduate from high school. As detached structures, the apartments provide the feeling of a home without the attendant upkeep, noted Tom Charek, president of Welty Development.

“It’s not just the older generation, though — some younger people don’t want to buy a home or do maintenance,” Charek said. “At our apartments, we expect the age range to be 40-60.”

Education is Charek’s watchword when it comes to giving older demographics options on where to spend their golden years. Retirees desiring a maintenance-free lifestyle may not know they can sell their homes while staying in the same neighborhood.

Suburbs looking to grow their population and tax base are wise to reach soon-to-be sellers through senior-focused housing events.

“People who lived in the suburbs might want to be in a denser area and see what they like,” Charek said. “The aging population is tech-savvy — they will go out and find you, because they’re craving good ideas and op-

tions.”

Progressive Urban broker Sharkey’s experience in popular communities including Ohio City and Detroit-Shoreway revealed a need for age-friendly accommodations, even as price remains a barrier and most construction going up in Cleveland consists of mid- or high-rise apartments.

“You have aging boomers looking to buy into condo clusters in Westlake or Avon because they don’t want to shovel snow,” Sharkey said. “If they’re coming back to Cleveland, they don’t want to be in a high-rise.

But there are only so many of those aging-in-place developments out there, and they sell quickly.”

Additionally, older buyers are not keen on fixing up outdated Cleveland housing stock. With building prices currently “through the roof,” inner-city residents require subsidies to defray those costs. In June, the Cuyahoga County Land Bank began construction on two aging-in-place homes on West 75th Street in Cleveland’s Detroit-Shoreway neighborhood. Anticipated sale prices are in the low- to mid-$300,000 range, complete with 15-year tax abatements.

However, Sharkey is still unsure how active the market for such a project will be.

“The county has programs where they can subsidize builds up to $35,000 or $40,000,” Sharkey said.

“That’s getting you down to a $260,000 price point, but again, how much of the population can afford that?”

An improved living situation The city of Cleveland’s Age-Friendly Initiative seeks, in part, to find or refurbish housing for older citizens.

About two-thirds of Cleveland seniors live in owner-occupied apartments and similar structures, while 94% of residents surveyed by the Department of Aging reported a desire to age in place.

With an average housing stock that dates back to 1920, Cleveland provides citizens with information about loans, grants and agencies offering home repair resources. The Hebrew Free Loan Association of Northeast

12 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 15, 2021

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Top: This Lambert Road bungalow was in bad shape when it was purchased by the city of South Euclid and renovated using green-building standards. Above: “All homes created under the South Euclid Green Neighborhoods Initiative, like this Idea Home at 4088 Linnell Road, featured first-floor laundries to allow for first-floor living,” said Sally Martin, housing director for the city of South Euclid.

Ohio, for example, gives interest-free home-repair loans to citizens working with insured and bonded contractors. Cleveland homeowner assistance and age-friendly investment programs, meanwhile, provide grants to income-qualified residents 60 years or older who require ramp installations or general repairs.

Cleveland offers $10,000 grants for home repairs, a benefit for lower-income residents to stave off blight and property deterioration.

The city is challenged to improve the living situation for seniors who can’t afford their home or want to downsize. What’s more, age-centric upgrades are too often crisis-related rather than preparatory, added Mary McNamara, head of Cleveland’s Department of Aging.

“People don’t think about their need to age in place, or they don’t

anticipate mobility issues,” McNamara said. “We can meet them in crisis, like if they need a ramp to get into their home, or need a bedroom modification after having a fall.”

McNamara’s department points residents-in-need to various housing-based city services, nonprofit programs or community development corporations. As about 22% of Cleveland citizens 60 and over live in poverty, these programs are crucial to keeping them housed, McNamara said.

Martin of South Euclid’s housing department said any future regional development must put livability at the top of the priority list.

“Everyone wants a beautiful house, but there’s a way to do it that honors the needs of older populations,” she said.

Contact Douglas J. Guth: clbfreelancer@crain.com

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NOVEMBER 15, 2021 | CRAIN’S CLEVELAND BUSINESS | 13

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FOCUS | REAL ESTATE

APARTMENTS

From Page 10

As new apartments rise in Cleveland, a city that saw little to no ground-up construction for decades, developers are striving to stand out through eye-catching amenities and creative design. Electric Gardens, clad in blackened steel and matte aluminum, strikes a bold presence along the Towpath Trail, in a quiet patch where the historic neighborhood slopes down toward the industrial valley.

At the Church and State apartments in Ohio City, the publicly accessible walkway between two buildings features a splash pad, a six-story climbing wall set to open this summer and a bright red corkscrew slide, which links the second floor of a parking garage to the ground.

And on the other side of town, in the heart of Shaker Heights, designs for a planned 18-story apartment building at the Van Aken District include a dozen homes that will sit inside a pair of glassy bridges slung between two towers. That 228-unit project, aimed at empty nesters and downsizing homeowners, is scheduled to kick off early next year.

The Limelight co-working space at Electric Gardens opens up to a rooftop deck on sunny days. | MICHELLE JARBOE/CRAIN’S CLEVELAND BUSINESS

“It’s just a different market,” marveled Ralph McGreevy, the longtime executive vice president of the Northern Ohio Apartment Association, which represents owners, managers

and vendors. “People are choosing apartments. Not only are they choosing apartments, but you’ve got several generations vying for the same units.”

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An event space called the Lantern Room occupies the top floor of the Church building at the Church and State project in Ohio City. | CHURCH AND STATE

Although the pandemic dampened urban leasing in 2020, the multifamily market bounced back fast — and is staying strong. Demand for apartments in the Cleveland area hit record levels this year, according to real estate data provider CoStar Group Inc. Veronica Miniello, a CoStar senior market analyst who tracks Cleveland, calculates the net gain at close to 3,400 occupied units. That’s up 29% from 2015, the last banner year for leasing.

Higher rents, coupled with property-tax abatement and other incentives, are enabling developers to explore different methods of construction, including light-gauge steel framing and, at the 297-unit Intro project in Ohio City, mass timber — a new material for this market.

“Developers are taking a little bit more risk — and being able to build things that are a little bit more creative — because our rents are finally supporting construction types that aren’t just wood-frame,” said Mackenzie Makepeace, the project developer for the Van Aken towers.

Imbued with personality, in many cases, by a growing crop of millennial developers, these apartment buildings are capitalizing on promises of quality and charm to drive rents even higher. New units are asking anywhere from $2.25 to almost $3 per square foot, on average — pricing that seemed like a distant dream in Cleveland less than a decade ago.

Inventiveness isn’t exclusive to new construction, of course.

Dalad Group, an Independence-based developer well-versed in historic preservation, has been making local art a focal point of its projects since 2017.

That's when the first units opened at Worthington Yards, a four-building redevelopment in downtown’s Warehouse District. The complex includes close to 100 pieces of artwork, some commissioned specifically for the property and others rotating through a lobby gallery.

Paintings and sculptures abound at Tinnerman Lofts, Dalad's 51-unit apartment conversion of a former stove factory in Ohio City. The centerpiece of the lobby is a repurposed Tinnerman stove, topped by a stack of oversized wood blocks that spell out “home on the range.”

The company approaches artwork as an amenity, part of a package that

also includes fitness centers, dog-washing stations, roof terraces and carefully landscaped courtyards.

“People have given us a lot of feedback about that. They appreciate the quality of the space,” said Andrew Iarussi, a senior vice president of development at Dalad and president of the company’s construction arm.

Open for less than a year, Tinnerman Lofts is close to full. Iarussi said renters snapped up two-bedroom apartments first, in a pandemic-induced shift away from smaller units.

Residential construction finished in September 2020 at Church and State, a 158-unit project with roughly 20,000 square feet of ground-floor retail. The apartments are upward of 90% leased. Many of the storefronts are spoken for, though developers Graham Veysey, Marika Shioiri-Clark and Michael Panzica haven’t announced their full slate of tenants.

The complex, in the busy Hingetown pocket of Ohio City, includes a rooftop event space called the Lantern Room and a deck with a soaking pool and fire pit. Advertised rents for studios start at $1,540, while three-bedroom units are listed for $3,750 to $3,810 a month.

“I think people just want a sense of place — and not to feel like they’re in a place that was rinsed and repeated,” said Veysey, who lives in Hingetown with his wife, Shioiri-Clark, and their young daughter.

He contrasted locally driven projects like Church and State and Electric Gardens with the ubiquitous, midrise rental housing that has been climbing in cities across the nation over the last few years. Developers who set out to sell their projects to institutional investors tend to be less focused on aesthetics and more prone to putting up blocky, repetitive buildings.

“With the amount of money that’s come into real estate over the past 20 years, private equity money that really wasn’t there before, it’s driven an attitude towards real estate as a short-term, return-driven business versus a long-term, value-creation business. And when you change that focus … it logically manifests itself in a different physical asset,” said Jon Ratner, a third-generation real estate developer and a leader of the team behind the Van Aken District.

He applauded the cascade of Cleveland apartment buildings that buck that trend.

14 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 15, 2021

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The touc

“T ner, high part velo of p sive proj and E 2-ac road

FOCUS | REAL ESTATE

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The lobby of the State building at Church and State is filled with plants and personal touches. | CHURCH AND STATE

ters, aces rds. eedthe rew dent of

“They’re avant-garde,” said Ratner, who sees the planned Van Aken high-rise as a suburban counterpart to those distinctive urban developments. “They are not the sort of projects that are driven exclusively by the bottom line. They’re projects that are driven by the heart and soul of the sponsor.”

Electric Gardens rose from a 2-acre site that sat idle, railroad-owned but never developed,

nersaid oom -inits. hed and ghly r red of onts pers lark ans. ngees a Lanking s for hile for

for more than a century. A J Roc affiliate acquired the property from CSX Transportation and put together a complicated deal involving public incentives and funding from civic lenders.

The apartment building teems with plants, artwork and visual flourishes. The café sits just inside the entrance, adding to a living-room vibe meant to evoke a boutique hotel lobby.

A rendering offers an aerial view of a planned high-rise apartment complex at the Van Aken District, where a dozen units will sit inside two bridges slung between the towers. | SCB

“We wanted it to be like this little hidden space that you kind of have to find,” Grant said of the café, which is open to the public but has no obvious presence from the street.

A small residential lounge flows into Limelight, the co-working facility that spans more than 8,000 square feet. On sunny days, that flexible office space spills out onto one of two rooftop decks, offering

views of cyclists on the Towpath and the not-so-distant downtown skyline.

Grant, who lives in the city, believes this market has more room to play catch-up after years of anemic construction. J Roc is working on early designs for a second Tremont apartment project, near the core of the neighborhood at West 11th Street and Fairfield Avenue.

“The good news is that people

have choices,” he said. “So I think that you’re seeing an increase in attention to detail and quality. …

That’s going to just continue to accelerate. There are going to be more choices, more options. And my sense is that projects that recognize that are likely going to do better than the ones that don’t.”

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

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Learn more at kent.edu/crawford NOVEMBER 15, 2021 | CRAIN’S CLEVELAND BUSINESS | 15

P014_P015_CL_20211115.indd 15

11/11/2021 12:58:08 PM

FOCUS | REAL ESTATE

COVID-related dislocation continues to fuel self-storage boom

BY JUDY STRINGER

When COVID pushed college kids out of dorms in the spring of 2020 and forced millions of Americans to clean out basements and spare rooms for remote office space or to move altogether, it sent a flare through the already hot $40 billion self-storage market.

More than 20 months into the pandemic, self-storage continues to be strong.

“In our world, activity is good,” said Todd Amsdell, president and CEO of Cleveland-based Compass Self Storage. “When things are moving around, that benefits storage — and with this pandemic, there has been a lot of moving around.”

Compass operates 98 self-storage stores in 15 states, including two in the Cleveland area.

Sterling McGregor, president of DealPoint Merrill, echoed Amsdell’s sentiments. The California-based developer is currently building out a 1,100-unit, 117,200-square-foot climate-controlled facility in Parma Heights at the beleaguered Shops at Pearl & 130th plaza. Over the last two years, it has converted the former Macy’s at Richmond Town Square in Richmond Heights and a vacant West Side Giant Eagle on Lorain Avenue into Life Storage locations.

A fourth Cleveland-area self-storage development is “under contract,” McGregor said.

“COVID-19 has been the best piece of news for storage in decades.

The reason is there’s a lot of dislocation, people getting downsized and evicted or leaving their jobs and moving. We’ve all heard talk about

The COVID-19 pandemic sent a flare through the already hot $40 billion self-storage market. | ANDREW HARRER/BLOOMBERG NEWS

the Great Resignation. When people are dislocated for whatever reason, they need a place to put their personal effects,” he said.

Indeed, per capita storage demand, historically hovering around 7 to 8 square feet nationally, is shifting upward, according to industry watcher Max Straus. Straus said demand is hitting closer to 9 square feet

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per person in some fast-growing markets such as Miami; San Jose, California; Austin, Texas; and Charleston, South Carolina.

That increased demand, in turn, has driven up occupancy rates and rent prices.

“Institutional owners who have facilities across the country and REITs like Extra Space (Storage), they’re pushing rents as frequently as possible, and they are tracking those numbers,” said Straus, who is with Akron’s SVN Summit Commercial Real Estate Advisors.

Data compiled by Yardi Matrix shows that rental rates for 10-by-10foot, non-climate-controlled units across the U.S. reached an average of $127 in July, a 10.4% increase over July 2020 and the highest recorded price since Yardi started tracking rates in 2016. The national average rate for similar-size climate-controlled units hit $145 that same month, a 12.4% year-over-year jump and just short of the record high rate of $147 experienced in August 2016.

However, it’s the sustained high occupancy rates, Straus contends, that has the big players “buying or building more storage almost nonstop.”

“I work with a regional operator who built storage Amsdell facilities 15-20 years ago, and people were saying then not to build because there was too much storage. Here we are, nearly two decades later, and he’s still staying around 90% occupancy,” Straus said.

“We’ve got around 90%92% occupancy for most facilities in the Midwest.”

Straus And second-tier markets such as Cleveland and Akron are especially attractive, with many larger metro areas already considered “overbuilt,” according to Straus.

“As long as there’s either some population growth or a very slight

“COVID-19 HAS BEEN THE BEST PIECE OF NEWS FOR STORAGE IN DECADES. THE REASON IS THERE’S A LOT OF DISLOCATION, PEOPLE GETTING DOWNSIZED AND EVICTED OR LEAVING THEIR JOBS AND MOVING.” — Sterling McGregor, president of DealPoint Merrill

population decrease, there's going to be real estate investment trusts or regional operators that will take a look at that (area),” he said.

Storage wars Doug Ressler, business intelligence manager for Yardi, says that seven self-storage properties in the Cleveland market have been completed in the last two years, totaling 536,000 square feet and representing about 4% of the local market stock.

There are 18 developments in the pipeline plus another seven under construction, including DealPoint’s Parma Heights development.

Other planned or prospective projects include a 131,000-square-foot CubeSmart Self Storage on Golden Gate Boulevard in Mayfield Heights, a 104,000-square-foot Lincoln Way Self Storage at the site of the former Massillon Kmart, and a 92,000-square-foot storage property on Nottingham Road in Cleveland, Ressler said.

There is some question about how more much storage local markets can absorb. Amsdell argues that unlike Cleveland, highgrowth markets such as Dallas, Nashville and Orlando, Florida, consist of a large fraction of new households that tend not to have basements and/or “deep local family trees,” where they can stash their stuff should the need arise.

“With markets like Cleveland, people have their grandmother's garage

or their brother’s attic, things like that,” he said.

Market saturation, Amsdell said, is “why we have two stores here out of our 100.”

“We are seeing utilization rates in Dallas that are 12-square-feet per person,” he said. “In Cleveland, it’s more like 5.”

Still Amsdell believes there are pockets of opportunity locally, and he and McGregor both are careful to note, in McGregor’s words, that “not all storage is created equally.”

Cleveland, McGregor suggests, is actually “under-supplied” when it comes to “class A” climate-controlled storage, which keeps home and business goods from being exposed to moisture and temperature extremes and is often situated in prominent retail areas rather than isolated industrial parks.

“So, you’d feel better about putting your stuff in our building, because it’s not exposed to the elements and there’s 24-hour security, cameras, surveillance — all that type of stuff,” he said.

Straus said that finding a vacant commercial building in a high-traffic area to convert into storage is the easy part. Getting it properly zoned and approved is a whole other matter.

“A lot of cities, they don’t like storage at all,” he said. “There’s not a lot of money coming in from income tax; there’s not a lot of money coming in from higher property valuations.

They’d rather see it on the outskirts, maybe as a buffer between industrial and residential, where you don’t typically have the same traffic counts.”

Contact Judy Stringer: clbfreelancer@crain.com

16 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 15, 2021

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11/11/2021 1:38:55 PM

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10/20/21 10:44 AM

CRAIN'S LIST | COLLEGES AND UNIVERSITIES Ranked by full-time equivalent enrollment on Northeast Ohio campuses LOCAL FTE ENROLLMENT RANK

COLLEGE/UNIVERSITY

FALL 2021/ 2020

% CHANGE

STUDENT: TEACHER RATIO

TUITION/ ROOM AND BOARD

% ENROLLMENT UNDERGRAD/ GRADUATE

TYPE OF INSTITUTION/ OPERATING BUDGET (MILLIONS)

ENDOWMENT (MILLIONS) 6-30-2021

TOP LOCAL EXECUTIVE

1

KENT STATE UNIVERSITY 800 E. Summit St., Kent 44242 330-672-3000/kent.edu

26,211 27,332

-4.1%

20:1

$11,923 $12,412

83% 17%

4 year $646.9

$187.8

Todd Diacon president

2

UNIVERSITY OF AKRON 302 Buchtel Common, Akron 44325 330-972-7111/uakron.edu

12,402 13,988

-11.3%

17:1

$9,600 $11,000

86.2% 13.8%

4 year $336.5

$298.9

Gary L. Miller president

3

CLEVELAND STATE UNIVERSITY 2121 Euclid Ave., Cleveland 44115 216-687-2000/csuohio.edu

11,873 12,084

-1.7%

17:1

$11,610 $11,306

68.7% 28.1%

4 year $311.5

—

Harlan M. Sands president

4

CASE WESTERN RESERVE UNIVERSITY 10900 Euclid Ave., Cleveland 44106 216-368-2000/case.edu

11,397 10,792

5.6%

11:1

$54,532 $16,482

50.1% 49.9%

4 year $1,203.2

$2,354.2

Eric W. Kaler president

5

CUYAHOGA COMMUNITY COLLEGE 700 Carnegie Ave., Cleveland 44115 216-987-6000/tri-c.edu

9,063 9,868

-8.2%

13:1

$3,586 —

100% 0%

2 year $205.8

$101

Alex Johnson president 1

6

YOUNGSTOWN STATE UNIVERSITY One University Plaza, Youngstown 44555 330-941-3000/ysu.edu

9,031 9,739

-7.3%

14:1

$8,582 $10,016

84% 16%

4 year $172.6

—

James Tressel president

7

STARK STATE COLLEGE 6200 Frank Ave. N.W., Canton 44720 330-494-6170/starkstate.edu

5,631 5,706

-1.3%

21:1

$4,310 $5,356

100% 0%

2 year $65.4

$10.3

Para M. Jones president

8

LORAIN COUNTY COMMUNITY COLLEGE 1005 N. Abbe Road, Elyria 44035 800-995-5222/lorainccc.edu

4,844 5,302

-8.6%

15:1

$3,746 —

100% 0%

2 year $70.4

$63.9

Marcia J. Ballinger president

9

ASHLAND UNIVERSITY 401 College Ave., Ashland 44805 419-289-4142/ashland.edu

3,267 3,325

-1.7%

13:1

$22,000 $10,940

65% 35%

4 year $108.1

$61.3

Carlos Campo president

10

BALDWIN WALLACE UNIVERSITY 275 Eastland Road, Berea 44017 440-826-2900/bw.edu

3,069 3,137

-2.2%

11:1

$35,366 $12,424

85% 15%

4 year $125.7

$215

Robert C. Helmer president

11

JOHN CARROLL UNIVERSITY 1 John Carroll Blvd., University Heights 44118 216-397-1886/jcu.edu

3,040 3,199

-5%

13:1

$45,514 $12,876

84% 16%

4 year $83

$289.4

Alan R. Miciak president

12

OBERLIN COLLEGE 38 E. College St., Oberlin 44074 440-775-8460/oberlin.edu

2,930 2,195 2

33.5%

9:1

$59,384 $17,854

99% 1%

4 year $153.3

$1,283.4

Carmen Ambar president

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13

LAKELAND COMMUNITY COLLEGE 7700 Clocktower Drive, Kirtland 44094 440-525-7000/lakelandcc.edu

2,729 3,081

-11.4%

12:1

$3,033 —

100% 0%

2 year —

—

Morris W. Beverage Jr. president

14

THE COLLEGE OF WOOSTER 1189 Beall Ave., Wooster 44691 330-263-2000/wooster.edu

1,960 2,008

-2.4%

10:1

$55,550 $13,100

100% 0%

4 year $84.6

$431.2

Sarah Bolton president

15

UNIVERSITY OF MOUNT UNION 1972 Clark Ave., Alliance 44601 800-992-6682/mountunion.edu

1,873 1,936

-3.3%

12:1

$33,000 $10,900

89% 11%

4 year —

—

Thomas J. Botzman president

16

WALSH UNIVERSITY 2020 E. Maple St. N.W., North Canton 44720 330-490-7090/walsh.edu

1,823 2,024

-9.9%

12:1

$30,500 $11,390

67% 33%

4 year $74.4

$39.2

Timothy J. Collins president

17

MALONE UNIVERSITY 2600 Cleveland Ave. N.W., Canton 44709 330-471-8100/malone.edu

1,183 1,216

-2.7%

13:1

$32,044 $9,900

78% 22%

4 year $27.4

$22.1

David A. King president

18

NOTRE DAME COLLEGE 4545 College Road, South Euclid 44121 216-381-1680/notredamecollege.edu

1,142 1,215

-6%

12:1

$30,650 $10,458

91% 9%

4 year $22.9

$13.6

Mike Pressimone president

19

NORTHEAST OHIO MEDICAL UNIVERSITY 4209 State Route 44, Rootstown 44272 330-325-2511/neomed.edu

1,030 983

4.8%

10.6

$40,180 —

0% 100%

4 year —

—

John T. Langell president

20

LAKE ERIE COLLEGE 391 W. Washington St., Painesville 44077 440-296-1856/lec.edu

1,008 1,051

-4.1%

13:1

$32,610 $10,714

76% 24%

4 year $21.7

$40.7

Brian D. Posler president

21

HIRAM COLLEGE 11715 Garfield Road, Hiram 44234 330-569-3211/hiram.edu

984 910 3

8.1%

13:1

$25,000 $10,500

98.5% 1.5%

4 year $29.5

$88

David P. Haney president

22

URSULINE COLLEGE 2550 Lander Road, Pepper Pike 44124 440-449-4200/ursuline.edu

875 866

1%

8:1

$35,310 $11,580

61.5% 38.5%

4 year $30.7

$58.8

Christine De Vinne president

23

CLEVELAND INSTITUTE OF ART 11610 Euclid Ave., Cleveland 44106 216-421-7000/cia.edu

561 593

-5.4%

10:1

$42,530 $11,860

100% 0%

4 year $20

$31

Grafton J. Nunes president, CEO 4

Research by Chuck Soder (csoder@crain.com) | Information is supplied by the schools. NOTES: 1. Johnson is scheduled to retire on June 30, 2022. 2. Oberlin's fall 2020 enrollment was impacted by the college's switch from two semesters to

three. The switch was made to limit the spread of COVID-19 by reducing the number of students on campus. Oberlin switched back to two semesters in fall 2021. 3. This figure excludes many dual enrollment high school students who did not start classes until after Hiram calculated its official enrollment figure due to the coronavirus pandemic. With those students, Hiram’s 2020 enrollment would have been roughly flat from fall 2019, when FTE enrollment stood at 967. 4. Nunes is scheduled to retire on June 30, 2022; Kathryn Heidemann will then become president.

Get +160 school officials and historical data in Excel format. Become a Data Member: CrainsCleveland.com/data 18 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 15, 2021

P018_CL_20211115.indd 18

11/12/2021 12:20:00 PM

DATA SCOOP

College endowments see massive leap in value

BY CHUCK SODER

College enrollment may be down, but endowment values sure as heck aren’t.

Eighteen of the 28 Northeast Ohio schools on the full digital version of our Colleges and Universities list told Crain’s what their endowments were worth on June 30 in both 2020 and 2021.

Add up the 2021 figures and you get $5.61 billion — a 29.3% increase over 12 months. The median increase was 27.1%.

Granted, universities in other regions have done just as well if not better: An October Financial Times article cites preliminary estimates from Cambridge Associates saying U.S. colleges so far had reported median endowment value increases of 34.6% for the previous fiscal year, the highest percentage since the early 1980s.

Still, a 29.3% increase sure beats last year’s meager 0.3% bump for those same 18 local schools. The latest jump may take some sting out of the fact that full-time equivalent fall 2021 enrollment fell 3.8% for schools on the list (you can read more about the reasons for that drop on page 2).

Why are endowments up so much? For one thing, the stock market saw huge increases during that period: The S&P 500 index rose 38.6% during the 12 months

Vaccine requirements Crain’s asked schools if they require employees or students to be vaccinated against COVID-19.

Students

Employees

Vaccine mandates

No requirement 12

comparison, Stark State College is above Oberlin on the list at No. 7 but has a $10.3 million endowment — more than 124 times smaller than Oberlin’s.

14

School is considering it 0 considering student requirement 1 Vaccine is required 7 6 *CRAIN’S ALSO ASKED SCHOOLS IF THEY HAD A VACCINE REQUIREMENT LIMITED TO STUDENTS LIVING ON CAMPUS. ONE SCHOOL SELECTED THAT OPTION. SOURCE: CRAIN’S SURVEY

ending June 30, 2021. Some universities nationally also attribute increases to successful private investments, according to the Financial Times article.

Some schools benefit more from this trend than others. For instance, Case Western Reserve University, No. 4 on the list by enrollment, has easily the largest endowment, worth $2.35 billion on June 30. That accounts for 42% of the combined value of all 18 endowments in this analysis. Oberlin College, No. 12 on the list, has the second-largest at $1.28 billion. By

We also asked schools on the list whether they were requiring employees and students to get vaccinated against COVID-19. Of the 21 colleges that answered those questions, six, or 28.6%, are making all employees get vaccinated. Compare that to results from a similar question on our recent Privately Held Companies list: Just 8.7% of companies on the list that answered the question are requiring at least some employees to get vaccinated.

Seven of those same 21 schools, 35%, require students to get vaccinated, with few if any exceptions.

One additional school said it mandates vaccines for students on campus, and another said singers and musicians who breathe into their instruments need to get vaccinated.

However, none of the top 10 schools said they require all students or all employees to get vaccinated. Four of the top five didn’t answer the vaccine questions.

Chuck Soder: csoder@crain.com, (216) 771-5374, @ChuckSoder

LEADERSHIP

From Page 6

One reason for the state’s poor showing: imposing new rules instead of tailoring old ones to fit the nuances of drone flight. Ohio already has “Peeping Tom” rules in place to protect residential privacy, for instance. And existing airspace lease regulations can and should be modified so that drones can travel safely fly over local roads and other properties. Drafting new and redundant regulations will discourage innovators and delay drone development from taking off in Ohio.

Finally, immigrants appear twice as likely as the native-born to work in the technology sector, start new businesses and hold patents. To re-

take the lead in innovation and technology, Ohio lawmakers should attract the world’s best and brightest by working with federal officials to secure state-based visas for high-skilled immigrants. Taking such a savvy step would help reverse Ohio’s worrisome population decline and signal to the international technology sector that Ohio is serious about growth and innovation.

Once a cutting-edge innovator and technology trendsetter, Ohio regrettably lags behind peers that have embraced technological change and innovation by reforming their rules and rewriting regulations to keep up with the times.

Now, Ohio must do the same if it wants to reclaim its distinguished, trailblazing glory.

Ohio’s bureaucratic red tape continues to keep innovation, technology, and the state from moving forward, Logan Kolas writes. | JOE DEPTOWICZ/UNSPLASH

Join Ohio’s business leadership community at the 2021 Weatherhead 100 virtual awards ceremony, the annual celebration of the fastest-growing businesses in Northeast Ohio.

The Weatherhead 100 was established to celebrate the spirit of entrepreneurship and to recognize the elite companies in our region.

This year’s winners were evaluated on revenue growth from 2016 to 2020.

The winners will be announced during a virtual event on December 9 and will be listed in a special issue of Crain’s Cleveland Business.

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NOVEMBER 15, 2021 | CRAIN’S CLEVELAND BUSINESS | 19

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SBA

Small Business Administration Cleveland District Office top five lenders for fiscal year 2021

From Page 1

trying to find ways to say, we didn’t just survive, but we are going to thrive, and here is what we do next,” said Maggie Ference, SBA director for Huntington Bank, which is by far the largest lender in traditional SBA products in the Cleveland district and the largest SBA lender by total loans in the country.

In the Cleveland district, $554.4 million was disbursed across 1,687 SBA 7(a) and 504 loans in the 2021 fiscal year, which ended Sept. 30.

By volume, 94% of all loans were 7(a) products, which can be used for short- and long-term working capital, to refinance debt and for purchases of furniture, fixtures and supplies.

Total dollars loaned increased by 35% year-over-year, while total loans were up 25%.

In talks with lenders, Gil Goldberg, director for the Cleveland SBA district, said he’s hearing that loan demand is generally strong and businesses are having good cash flow — trends Ference echoes — all of which are good signs for the economy of Northern Ohio.

Nationally, there was $44.8 billion loaned to small businesses through more than 61,000 traditional SBA loans in the past fiscal year. Countrywide, total loans spiked 60%, while dollars lent out increased by about 20%.

Top lenders The top lender in signature SBA products in the Cleveland district in 2021 is Huntington Bank, which funded 1,123 loans totaling nearly $188.8 million. That means Huntington provided nearly 67% of all loans by volume in the region.

Huntington funded 4,366 signature SBA loans across the country — the most of any bank — totaling $927.7 million.

This district’s second-largest lender is Cleveland’s KeyBank, which funded 79 loans totaling $31.6 million. Key funded 947 loans across the country, totaling nearly $434.8 million.

It’s possible traditional SBA lending picks up further this new fiscal year as the SBA in September said it would ex-

Lender

Dollar amount

1,123 79 49 31 24

$188,792,000 $31,617,000 $20,707.000 $24,491,000 $6,209,000

Percentage of loans given to minority business owners 15.6%

15%

10% 6.5%

5% ’10

’11

’12

’13

’14

’15

’16

’17

’18

’19

’20

’21

Percentage of loans given to women business owners 20%

19.5%

15% 13.8%

Huntington Bank’s offices in downtown Cleveland. | DAVID KORDALSKI/CRAIN’S CLEVELAND BUSINESS

tend a policy waiving certain borrower fees on 7(a) loans of $350,000 or less and reducing fees on 504 loans.

While small businesses may be recovering from the gut punch of COVID-19, these policies were put in place to reduce some borrower costs in light of the challenges many of them are still facing.

Other trends Increasing lending to women- and minority-owned businesses has been a goal of the SBA, and loans to both segments increased in the Cleveland district this past year to what Goldberg said are all-time highs.

Nearly 20% of SBA loans in this region went to women-owned busi-

NEWSROOM

From Page 1

community-powered news organization to fulfill the need that their community has.”

Slated to launch in 2022, the initiative in Cleveland is spearheaded by a coalition of Cleveland-based organizations and the American Journalism Project (AJP), a venture philanthropy dedicated to local news. To date, the philanthropies have raised more than $5.8 million for the nonprofit newsroom.

Funders have been trying for years to figure out where they can successfully support the media landscape, said Susan Zake, professor in the School of Media and Journalism at Kent State University.

“I think this is the culmination of a lot of exploration on the part of the foundations, and this is happening across the country,” she said.

Funding journalism is a recent development for the Cleveland Foundation, one of the coalition members, said Karen R. Long, manager of the Anisfield-Wolf Book Awards for the foundation. The “modern era” of the 107-year-old foundation’s journalism engagement began in 2015 with fund-

Number of loans

Huntington National Bank KeyBank Consumers National Bank Premier Bank US Bank

Long

Tramble

ing that supported establishing community radio station WOVU 95.9 FM within Burten, Bell, Carr Development Inc., the nonprofit community development corporation serving Cleveland’s Central and Kinsman neighborhoods, Long said.

Over the last few years, the foundation has supported a slew of initiatives, including investing in a journalism series at the City Club of Cleveland, partnering with the Knight Foundation on research and supporting Cleveland Documenters, which, based at Neighborhood Connections, recruits, trains and pays Greater Clevelanders to document government meetings in partnership with Chicago-based civic journalism lab City Bureau.

The foundation’s support of other initiatives has ended or will end, like its support for the Northeast Ohio Solutions Journalism Network Collabora-

nesses.

And nearly 16% of SBA loans were provided to minority-owned businesses.

“Addressing the systemic gap in access to capital for the smallest and underserved businesses has been (SBA Administrator Isabella Casillas Guzman’s) north star and will continue to be a top SBA priority in FY 22 and beyond,” the SBA says.

About 23% of SBA loans in the Cleveland district also went to new businesses, which is about level with the prior year.

And 63% of all loans in the district were less than or equal to $150,000.

Jeremy Nobile: jnobile@crain.com, (216) 771-5362, @JeremyNobile tive, which concludes next June.

Long, a veteran Cleveland journalist, said that, loosely, the new initiative doesn’t determine the conclusion of other funded efforts, but the foundation has its own limits. The chits are moving to this local news initiative because after years of experimentation, she said, it’s time to “do something that’s not incremental, that is big. So this is it.”

Some nonprofit newsrooms in the region have not withstood the test of time. Notably, the Devil Strip in Akron ceased all operations in October, citing a lack of funding.

“Philosophically, the foundation exists to place bets and it does so knowing not all bets work, but failure is an OK outcome some of the time,” Long said. “I certainly hope not for this because this is a big, big bet, but that’s why we’ve done some experimenting before making the big bet here. And we’re not doing it alone.”

With an anticipated staff of 25, the new organization in Cleveland will be one of the largest local nonprofit news startups in the country and is envisioned to be the first in a larger network of independent, local newsrooms across Ohio.

The survival rate of nonprofit news organizations is between 94% and

10% ’10

’11

’12

’13

’14

’15

’16

’17

’18

’19

’20

’21

Percentage of loan dollars given by industry Services

Food services

Manufacturing

Wholesale

Retail

Construction

$76.4M

Transportation

$35.8M

$60.6M

$62.2M

$26.4M

2020 $409.9M total

$161M

$22.9M

2021 $554.4M total

$13.8M $32.9M

$38.8M

SOURCE: SMALL BUSINESS ADMINISTRATION

$172.5M

$30.1M

$40.8M $27.7M CRAIN’S CLEVELAND BUSINESS GRAPHIC

95%, according to INN’s tracking, Schneck, who has also taught journalwhich is specific to its own members, ism, said that nonprofit newsroom enbut Kealing said there are “very few” ables three core things: transparency nonprofit, nonpartisan, public service (in the various filings and financial disjournalism organizations in the coun- closures that come with being a nonprofit); accountability (to the readers try that are not members.

Kealing said INN has been encour- who challenge the publication to stay aged by an increasing portion of local relevant); and different revenue individual donor support, which is du- streams (from grants to member pitchrable funding because one donor es that legacy or traditional newsdoesn’t make up a giant portion of the rooms aren’t able to do).

This January, The Buckeye Flame overall budget. When the nonprofit news resurgence started in the late will be able to hire a full-time writer 2000s and early 2010s, it was driven by thanks to a two-year grant from the a lot of national foundation funding, Cleveland Foundation, which Schneck credits to the publication’s proof of he said.

According to the INN June 2021 in- concept over the past year. Schneck dex, nearly two-thirds of sites with also is in the process of securing fundcomparable data reported growth in ing and support to hire a queer, nonbiindividual giving in 2020. Nearly half nary writer displaced from the Devil with individual donation growth saw it Strip who is seeking an affirming and increase by more than 50%.

Ken Schneck, a “THAT’S THE TRICK: HOW DO YOU BE BIG professor of educaAND STILL BE RELEVANT DOWN AT THAT tion at Baldwin Wallace University, COMMUNITY LEVEL?” launched The Buck- — Susan Zake, Kent State University professor eye Flame to fill the gap left when the previous statewide safe newsroom.

“This is an extension of our mission, LGBTQ publication ceased operations early in the pandemic. He said there this is an extension of being a nonprofwas never any doubt in his mind that it newsroom, that we want to spring he would take the nonprofit route. into action to see what we can do to

20 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 15, 2021

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From Page 1

Manufacturers had been focusing on the long-term as college became a more common post-secondary choice. Companies realized that, without a pipeline of employees, challenges would come “10, 20 years down the road,” said Andrew McCartney, president and owner at Bowden Manufacturing in Willoughby. That’s what led to all the work in recent years around re-branding the industry to keep manufacturing in mind as an attractive career choice.

This immediate, widespread labor shortage, at a time when manufacturers have been trying to catch up after the disruptions of the early pandemic, poses challenges separate from that long-term image problem.

But having a culture of constant hiring has given Bowden Manufacturing a solid foundation for tough times like these.

“Obviously, everybody’s hiring now, and few people have a solid process for what that looks like other than putting a sign out front and saying, hey, fill out an application and we’ll have somebody talk to you,” McCartney said. “Whereas, we built a process and we’re doing it on a regular basis. The applicants can feel that.”

At Bowden Manufacturing, McCartney said the contract manufacturer started putting a stronger focus on hiring young employees in more temporary roles about five years ago.

That includes interns and co-op students, but also recent mechanical engineering graduates who McCartney expects to only stay for a short while. Right now, about one-third of Bowden Manufacturing’s FTE equivalent employees are degreed engineers who have been out of school for less than five years, he said. If interns and co-ops are included in that figure, it rises to about 45%. The company employs about 60.

McCartney’s background in the Navy makes him comfortable with short-term commitments over long ones, and it means that Bowden Manufacturing is used to constantly being in a hiring cycle, meeting with and talking to potential employees.

Gent Machine lost two highly skilled employees this year, including a production manager. | CONTRIBUTED

Every three to six months, the company aims to add three to six new engineers, he said. It’s built into the company culture.

Still, Bowden Manufacturing isn’t immune to the current labor market.

McCartney said he could use another employee or two on the shop floor immediately, but he’s committed to the company’s hiring approach. He said he’s not interested in “shortcutting” the process to find someone right away, but he’d rather wait to find someone who’s the right fit for the company.

Recruiting employees in a tight market like today’s is a challenge, Grealis said. Women in Manufacturing has worked to help members share best practices, and Grealis said she’s heard a lot about companies getting “creative” in terms of recruiting. Some companies have created programs to help quickly train people who left the labor force — many for child care purposes, she said, and not necessarily from manufacturing — and others are putting a stronger focus on apprenticeship programs to build a long-term pipeline.

In the past, manufacturers tended to “tap into the same markets over and over again,” hoping for better results, but the current labor shortage has led to new approaches, said

ournalom enparency cial disa nonreaders to stay evenue r pitchnews-

GROWTH OF NONPROFIT NEWSROOMS

Flame e writer om the chneck roof of chneck g fundnonbie Devil ng and

20

E BIG HAT

mission, onprofspring n do to

The pace of nonprofit news startups has been accelerating, according to data from the Institute for Nonprofit News (INN), whose membership grew by 27% between 2019 and 2020. Nonprofit newsrooms have also worked to build more stable bases of revenue. More than 70% have three or more revenue streams, and only 10% rely on a single revenue stream. Growth in individual giving in 2020 offers nonprofit newsrooms more durable funding.

Revenue streams

Outlets launched each year 25 20

47% Foundations

15 10 5 0

‘08 ‘10 ‘12 ‘14 ‘16 ‘18 ‘20

3% Other charitable

14% Earned revenue

36% Individual giving

SOURCE: INSTITUTE FOR NONPROFIT NEWS

support one of our sibling writers,” he said.

For Tim Tramble, president and CEO of the Saint Luke’s Foundation, representative storytelling — and culturally competent news coverage centered on the community and individuals most impacted by the issues — is the crux of why he got involved in the coalition. It’s the same inspiration that

led him to found WOVU. “For me, it’s really important as someone who lives in the city, as someone who lives in the inner city, and someone who has his ears to the ground and to the people within the community that news is reflective,” he said. “And that news captures their perspectives; that news captures their interests; that news speaks from their

Adam Artman, vice president of could quickly get up to speed upon workforce development at economic hiring. Now? “It’s a double-whammy,” Gent said. development organization Manufacturing Works in Cleveland. Today, “Not only can you not find skilled peocompanies are putting a stronger fo- ple, it’s like we’re struggling to just get cus on reaching out to underrepre- people in the door.”

Gent Machine lost two highly skilled sented populations in the industry, like immigrants or women, and look- employees this year, including a proing for ways to attract and retain new duction manager, who moved from the area for personal reasons. The compaentrants to the field.

“Necessity creates the impetus for ny hasn’t been able to replace them, Gent said. And that’s on top of the emchange,” Artman said.

Artman said manufacturers are in- ployees Gent Machine has lost to other terested in both upskilling their in- companies locally. Ultimately, the cumbent workers as more seasoned company has lost about five employemployees retire, and in backfilling ees this year, which is significant to a about the new employee pipeline with pro- C Rworkforce A I N ’ S C Lof EV E L A 50.

ND BUSINESS | Gent Machine has been able to grams like pre-apprenticeships.

That speaks to a particular chal- make some hires, Gent said, but it’s not lenge in manufacturing. The industry a one-to-one filling of jobs. Instead, the faces two big challenges in terms of company has been working to train labor: attracting new employees to some of its existing employees in unthe industry and making sure they skilled positions for skilled ones. That have the skills they need. There’s a la- began in September, and the company bor gap and there’s a skills gap, and has already moved two employees they’re not necessarily the same from unskilled roles to skilled ones.

Gent said this is something the thing.

That skills gap is what Rich Gent, company has wanted to do for a vice president of screw machine while, but it needed the right person company Gent Machine Co. in Cleve- to run it. When the company hired an land, has been noticing most in re- employee who had teaching expericent months. Before this current la- ence, they realized the opportunity bor shortage, if someone left, he was there.

And Gent Machine needs those could find an employee with at least some manufacturing skills that he skilled employees. It isn’t a company voice. And we recognize that we are a diverse city.”

As newsrooms have shrunk over the years, the connection to neighborhoods is often lost, Zake said.

“That’s the trick: how do you be big and still be relevant down at that community level?” she said, noting that newsrooms often skew more affluent and college-educated than the communities they cover. “There’s a community disconnect.”

Nonprofit newsrooms aren’t a guaranteed solution for that, but by nature of being a startup, they aren’t tied to legacy systems and have a chance to build new practices to be more representative, Kealing said.

The Cleveland newsroom plans to build a model to allow residents to help set the newsroom’s priorities and agenda. And as it begins the process of hiring an editor-in-chief, one of the most important criteria will be a leader who can build a newsroom that looks like the community they’re going to serve.

“It’s about undergirding the system to have, again, culturally sensitive, culturally relevant news for everyone in the city,” Tramble said.

Lydia Coutré: lcoutre@crain.com, (216) 771-5479, @LydiaCoutre

that can easily automate its way out of the labor crisis. Their machines already make the parts, but it’s a contract manufacturer that sees a lot of product change.

Despite an increased reliance on robotics and technology in manufacturing, that’s the case for many companies. For Willoughby-based Interlake Industries Inc., people are the “bottleneck,” said president and owner Lisa Habe.

“Everything we do is hand-fed or otherwise put in,” she said. “Someone has to be there to run it. It can’t just run automatically.”

Interlake Stamping is a short- to medium-run metal stamper, so the nature of the work lends itself to using a lot of temporary talent, Habe said. She has found recently that it’s been helpful to offer those temp employees more direct engagement, rather than leaving that up to the staffing agency.

The company scaled back during the early parts of the pandemic, but took some creative approaches when it was time to ramp back up. The company hired summer interns, which it hadn’t often done in the past, Habe said, and used alternative scheduling options such as a swing shift that started at noon. The company even took on employees who could only work shorter hours than a typical shift.

“We had to think, how are people living? What’s going to work for them to bring them in?” Habe said.

Grealis of Women in Manufacturing said the competitive labor market Shas E P T “accelerated” E M B E R 3 - 9 , 2many 018 companies’ | PA G E 2 9 plans around new hiring efforts. And manufacturers have been working to become more flexible, having realized during the pandemic that flexible scheduling approaches can work without hurting profitability, she said. In a production role, that might look like using job-sharing or alternate schedules to allow a working parent a later start time than normal so they could get a child on the school bus.

“So companies are getting creative, because there are so many talented people out there,” she said.

Rachel Abbey McCafferty: (216) 771-5379, rmccafferty@crain.com

Advertising Section

CLASSIFIEDS To place your listing in Crain’s Cleveland Classifieds, contact Ainsley Burgess at 313-446-0455 or email ainsley.burgess@crain.com

CLASSIFIED SERVICES ENVIRONMENTAL CONSULTING

BUSINESS OPPORTUNITY Installer of Overhead Cranes For Sale Sales $6.9M Very profitable mike@empirebusinesses.com www.empirebusinesses.com 440-461-2202 NOVEMBER 15, 2021 | CRAIN’S CLEVELAND BUSINESS | 21

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PEOPLE ON THE MOVE

Advertising Section To place your listing, visit www.crainscleveland.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

BANKING

ENGINEERING / CONSULTING

INVESTMENT FIRM

REAL ESTATE

CIBC

Karpinski Engineering

Shaker Investments LLC

Paran Management Company

Ted Kalo joins CIBC’s commercial real estate team, which provides property-level financing for construction, acquisition or refinancing across asset classes, subscription lines of credit to bridge private equity capital calls, and structured debt targeted to debt funds, as a managing director and commercial relationship manager in Cleveland, Ohio. He brings nearly seven years of industry experience to CIBC. Ted earned a BA in Public Administration and Political Science from Capital University.

Natasa Cekic and Katie Lee, PE, have been named associates at Karpinski Engineering, an award-winning, multidisciplinary firm. Cekic Cekic is an electrical engineer specializing in healthcare, with projects ranging from new outpatient facilities to major hospital renovations.

She was the lead electrical engineer for the firm’s first Integrated Project Delivery project.

Lee Lee is a mechanical engineer also specializing in healthcare. She has contributed to hundreds of healthcare projects, with a focus on designing new systems for legacy buildings. She is an expert in ventilation for healthcare facilities, a topic she has presented on nationally and locally. Both Lee and Cekic are based in the firm’s Cleveland office. Learn more at karpinskieng.com

Shaker Investments is pleased to announce the promotion of Kacie Wick to Controller/Compliance Officer. Wick recently completed her Master of Accountancy degree from Case Western Reserve University, graduating magna cum laude.

She has over 25 years of operational and financial management experience at CWRU, Breakthrough Charter Schools and the Northeast Ohio Council on Higher Education.

She also holds a BS in Management from Babson College in Wellesley, MA.

Paran Management is pleased to announce that Shauna Foley, CAM has joined the company as director of residential operations.

Shauna will focus on increasing profitability, leading capital projects and directing management teams for Paran’s five multifamily properties in Ohio. She will also serve as asset manager to the company’s Glidden House boutique hotel.

Shauna is a 19-year industry veteran and carries a Certified Apartment Management designation from the National Apartment Association.

BANKING

Civista Bank Jeff Rolfsen has joined Civista Bank as SVP, Loan Operations Officer. He is based out of Civista’s Operations Center located in Sandusky, Ohio.

Rolfsen brings over 16 years of banking experience to the Civista team. He received an MBA from Indiana Wesleyan University. As Civista’s SVP, Loan Operations Officer, he will focus on delivering exceptional customer experiences by supporting Civista’s operations team through training, development and mentorship.

TECHNOLOGY LAW

Sutter O’Connell Sutter O’Connell is pleased to welcome Tanjeet Dhillon and Austin M. Richards as Associates to the firm.

Both will concentrate Dhillon their practices in the areas of commercial litigation, premises liability defense, products liability, and warranty defense. Tanjeet received her J.D. from the University of Akron School of Law and her B.A. from Ryerson University.

Austin received his J.D. from the University of Richards Akron School of Law and his B.A. from The Ohio State University.

ENGINEERING / CONSULTING

USA Firmware

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

USA Firmware is pleased to announce the hiring of Carl Dister to the role of Director of Engineering. His position will help the growing organization leverage their expertise in Firmware and IoT to turn smart ideas into smart products. He combines over 35 years of experience in engineering, global sourcing, innovation, and product development to create a stellar combination of skills for the company. Carl’s vision and experience will help him guide the company’s engineering initiatives.

LAW

Ulmer & Berne LLP Emma Tomsick joins Ulmer as an associate in the firm’s Business Litigation Practice Group where she will focus on the resolution of complex business disputes.

She initially will draft pleadings, review and analyze discovery documents, assess cases and prepare preliminary evaluations of client exposure and potential liability, as well as conduct legal research and draft memoranda on a broad range of legal issues.

She earned her J.D. from the Cleveland-Marshall College of Law.

Premise Solutions Andrew Middelberg has been appointed Executive Vice President of Premise Solutions. Andrew’s 24 years of industry Middelberg experience, careerlong client relationships, and leadership in the healthcare sector add to his unparalleled market position.

He is also a pioneer in the Physical Security arena and is responsible for many innovations in this field.

Ryan King has been King promoted to Senior Vice President of Premise Solutions. Ryan brings 25 years of experience in the construction field to this leadership role. His resumé includes the management of the largest Technology deployments in the Greater Cleveland area over the past quarter century.

Premise Solutions is a premier Technology integrator and consulting firm with a national footprint.

PEOPLE ON THE MOVE Industry Achievers Advancing Their Careers

THE WEEK MARKET FORCES: The Cleveland-Cuyahoga County Port Authority plans to issue up to $37 million in bonds to help finance a deal that will bring a small-format Meijer store to the city. The agency’s board approved the transaction Wednesday, Nov. 10, during a meeting at the port’s offices downtown. Developer Fairmount Properties expects to close on financing by the end of the year for the $59 million project, an apartment-and-retail development just south of the Cleveland Clinic’s main campus, at the eastern end of the Opportunity Corridor. Meijer’s neighborhood market and 190 apartments above it are set to open in June 2023, said Rebecca Molyneaux, vice president and general counsel for the local developer.

The port will be a conduit in the transaction, issuing bonds that will be sold to Huntington Bank and repaid through lease revenues.

That structure will give the developer a sales-tax break on construction materials. The agency anticipates a closing fee of roughly $305,000 from the deal.

TRANSMISSION STATUS: FirstEnergy Corp. agreed to sell a stake in its transmission businesses to Brookfield Asset Management Inc. for $2.4 billion. The Akron-based utility will sell a 19.9% stake in FirstEnergy Transmission to Brookfield’s infrastructure group, according to a statement issued Sunday, Nov. 7. Separately, FirstEnergy will issue $1 billion in common stock to Blackstone Inc. at $39.08 per share.

Blackstone will get a seat on FirstEnergy’s board as part of the transaction. The “transformative strategic equity financings” will “be key catalysts to fulfill our long-term strategy and drive smart grid and clean energy initiatives,” Steve Strah, FirstEnergy’s president and CEO, said in the statement.

TAKING ACCOUNT: JobsOhio, the nonprofit economic development corporation providing seed money for the Cleveland Innovation District, offered the first accounting of how its $110 million will flow to three health care systems and two universities. The Cleveland district, unveiled in January, brings together the Cleveland Clinic, University Hospitals, the MetroHealth System, Cleveland State University and Case Western Reserve University. Early on, officials described the initiative as a $565 million project, drawing on $300 million from the Clinic, $110 million from JobsOhio, and $155 million from the state. The state money consists of a job-creation tax credit for the Clinic, worth an estimated $55 million based on hiring and payroll over a seven-year period; and a $100 million forgivable loan for construction of research facilities as part of the Clinic’s new Global Center for Pathogen Research & Human Health. The Cleveland Clinic will receive up to $45 million — just over 40% of the total. In exchange, the health care giant committed to creating 8,500 jobs over a decade. The Clinic also pledged to make $1 billion in research-related investments; to spend $300 million on buildings, land, equipment and associated infrastructure; and to generate 2,000 certifications through internal or affiliated training programs during the 10-year period.

22 | CRAIN’S CLEVELAND BUSINESS | NOVEMBER 15, 2021

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e t a r b e Cel

THE 2021 FORTY UNDER 40 CLASS! These young professionals are scaling businesses to new heights, making decisions that put their organizations on the map and producing a seemingly infinite stream of impactful work all over Northeast Ohio.

Crain’s Cleveland Business congratulates this year’s 40 under 40 class!

crainscleveland.com

Executive editor Elizabeth McIntyre (216) 771-5358 or emcintyre@crain.com Group publisher Jim Kirk (312) 397-5503 or jkirk@crain.com Associate publisher Amy Ann Stoessel (216) 771-5155 or astoessel@crain.com Managing editor Scott Suttell (216) 771-5227 or ssuttell@crain.com Assistant managing editor John Kappes (216) 771-5359 or john.kappes@crain.com Web editor Damon Sims (216) 771-5279 or dpsims@crain.com Assistant editor Rachel Abbey McCafferty (216) 771-5379 or rmccafferty@crain.com Art director Kayla Byler (614) 312-7635 or kayla.byler@crain.com Senior data editor Chuck Soder (216) 771-5374 or csoder@crain.com Cartoonist Rich Williams REPORTERS

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

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

(216) 771-5437 or michelle.jarboe@crain.com Amy Morona, Higher education.

(216) 771-5229 or amy.morona@crain.com Jay Miller, Government.

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

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

(216) 771-5384 or kpalmer@crain.com Joe Scalzo, Sports business.

(216) 771-5256 or joe.scalzo@crain.com Dan Shingler, Energy/steel/auto/Akron.

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