Crain's Cleveland Business

MITIGATING RISKS FOR A COMPANY Is your business prepared with an option-based contingency plan to mitigate risks to your company’s assets including physical property?

Please join us for this 90 minute CLE which will focus on situational awareness, including active shooter response preparation and training.

For more information, please contact MEGAN THOMAS at mthomas@beneschlaw.com.

www.beneschlaw.com

This course is pending approval by the Supreme Court of Ohio Commission on Continuing Legal Education for 1.5 CLE hours.

VOL. 39, NO. 45

NOVEMBER 5 - 11, 2018

CLEVELAND BUSINESS

LEADERSHIP TRANSFORMED PITTSBURGH FROM THE STEEL CITY

INTO A TECH MECCA CAN CLEVELAND DO THE SAME? STORIES BEGIN ON PAGE 12

Entire contents © 2018 by Crain Communications Inc.

Photograph courtesy of Allegheny Conference on Community Development

P001_CL_20181105.indd 1

11/2/18 10:56 AM

PA G E 2

|

N O V E M B E R 5 - 11, 2 018 |

CRAIN’S CLEVELAND BUSINESS

Reducing Real Property Tax Assessments Throughout Ohio And Across The United States Sleggs, Danzinger & Gill, Co., LPA

When you hire Sleggs, Danzinger & Gill, you work directly with Sleggs, Danzinger and Gill.

Each client is directly represented at all levels by a principal of the firm with a combined 75 years of experience. No pyramid, no associates, no on-the-job training.

Our clients deserve the very best representation, so we structured our firm to allow each client, throughout the entire process, to work directly with Messrs. SLEGGS, DANZINGER and/or GILL. Our philosophy is to work cooperatively with school district and County officials to ensure that our clients pay the lowest possible real property tax obligations. If a fair resolution requires litigation, SLEGGS, DANZINGER & GILL have the depth of trial and appellate experience to handle the most complex valuation issues.

Whether the valuation relates to large industrial plants, apartments, shopping centers, warehouses, office buildings, vacant land or any other type of commercial property, the faces above will ensure that you receive the best counsel, legal advice and litigation expertise.

Todd W. Sleggs, Esq.

Robert K. Danzinger, Esq.

Steven R. Gill, Esq.

tsleggs@sdglegal.net

rdanzinger@sdglegal.net

sgill@sdglegal.net

(216) 771-8990 sdglegal.net

Member Firm

P002_CL_20181105.indd 2

Sleggs, Danzinger & Gill 820 West Superior Ave. Seventh Floor Cleveland, OH 44113

Cryptocurrency mining data center elevates NEO tech firm to new heights

By JEREMY NOBILE

Ethode milestones

jnobile@crain.com @JeremyNobile

Ethode originally formed in 2010, but its sister company, LightSpeed Hosting, didn’t open until several years later. The addition of the data center business, which offers a warehouse used exclusively by cryptocurrency miners, helped spur further growth for the combined enterprise. Here’s a look at how those businesses have developed through the years.

With its slew of techie buzzwords, a cryptocurrency mining facility may sound like something that belongs in Silicon Valley or other coastal tech hubs — or possibly even the closet of that computer whiz you wrote off years ago when she told you to buy Bitcoin because it could eventually replace the dollar — rather than Northeast Ohio.

Couple with that a Rust Belt image the region has struggled to shake off, and even crypto miners are surprised that a local data center has the ability to host crypto mining rigs at an unassuming warehouse in Medina.

“I can’t tell you how many times I hear someone say, ‘I can’t believe you’re in Medina County in the middle of a cornfield,’ ” said Joshua Holmes, CEO of Ethode and managing partner of LightSpeed Hosting.

LightSpeed, a data center business (the fourth-largest in this market, according to Crain’s research), is the sister company to Ethode, a Medina-based web design and app development firm that formed in 2010 but has seen significant growth in the last two years with the launching of its data center operation.

The combined business now counts about 50 employees and has expansions lined up for both its software and data center enterprises — including a massive project in Georgia at Pinewood Atlanta Studios.

After a muted year in 2016 because of investments for the data center, the business saw revenues of $1.8 million in 2017. Holmes said he’s projecting about $3 million to $4 million between both businesses this year and about $6 million to $7 million next year — and that’s without factoring in any new big clients or projects that will almost certainly come.

“Ten years ago, I could’ve never guessed we’d be this big with multiple data centers doing the projects we could do,” Holmes said. “It was nowhere in the realm of what I thought was possible.”

Holmes started running Holmes-Media as a one-man operation in the early 2000s, changing the name to Ethode in 2010. Ethode remained a skeleton crew until chief operating officer Jason Ables joined Holmes as a partner a couple years later to grow the company. It was around 2013 that the duo felt like they were working toward the kind of software company they envisioned.

As word spread and connections grew, they began hiring staff — coders to handle more work and marketers to get even more projects in the pipeline.

Ethode has since built a niche in mobile development and has a client base heavy in the higher education and health care sectors, among other industries. They have some work with large companies but predominantly look for clients with tight budgets who don’t have their own IT staff. They’re trying to connect with more manufacturers today, Holmes said.

While working on software projects, Holmes and company realized

June 2010: Joshua Holmes transforms Holmes-Media into Ethode LLC. September 2012: Ethode opens its first public office space in Medina.

September 2013: Initial discussions begin for a Medina County data center that eventually operates under LightSpeed Hosting.

September 2015: Work begins on infrastructure for LightSpeed.

January 2015: Ethode 2.0 launches with a new logo and branding. It wins a Sears-sponsored hackathon in Atlanta.

May 2017: LightSpeed, which has a data center dedicated to cryptocurrency mining in Medina County’s Valley City, officially opens for business.

November 2017: Ethode wins a Weatherhead 100 award for fastest-growing startup, coming in at No. 7.

there was an untapped revenue stream in managing operations. They decided they needed a data center, which would be a supply of recurring revenue versus one-off projects.

Holmes bought a rack server of eBay and stuffed it into a closet that quickly became a hotbox. Ethode was expanding at this point, and the data center operation needed a true home. So Holmes began weighing where to build that business.

Tool kit Bethany Dentler, executive director for the Medina County Economic Development Corp., learned of those plans and pitched Holmes on building on the 150-mile fiber network there that’s been live for about seven years. Because of the tremendous amount of bandwidth required for the crypto mining operation, that enterprise simply couldn’t exist in this region without the fiber network.

“They’re using tools we put in place to be on the cutting edge of some of these technologies out there,” Dentler said.

David Corrado, CEO of the Medina County Fiber Network, described the fiber system as essentially the railroad, and the LightSpeed data centers are train stations along the track.

With Ethode headquarters now off Medina Road, where there’s also a small data center (the Medina facility cost about $500,000 to start up), the company invested about $400,000 into prepping 30,000 square feet of space in Valley City, at 5656 Innovation Drive, that would be used exclusively for crypto mining under LightSpeed. That project began around September 2015, with LightSpeed officially opening for business May 2017.

SEE ETHODE, PAGE 21

11/2/18 2:50 PM

CRAIN’S CLEVELAND BUSINESS

|

N O V E M B E R 5 - 11, 2 018

|

PA G E 3

Downtown hotel market ‘coming together’

By STAN BULLARD

Hotel occupancy, revenue up

sbullard@crain.com @CrainRltyWriter

Cleveland hotels, including downtown and University Circle, are benefiting from more business and leisure travel, events and conventions. Occupancy is inching up, and because of climbing demand, revenue is also climbing, increasing 10% through September compared to the same period last year.

Downtown Cleveland and University Circle hotels crossed a threshold last July that once might have been thought unreachable: The number of rooms sold surpassed July 2016 during the Republican National Convention, according to data from lodging data and analytics provider STR. “It’s all starting to come together,” said Teri Agosta, general manager of the Hilton Cleveland Downtown, 100 E. Lakeside Ave. The panoply of conventions, events, the debut of the blockbuster musical “Hamilton” at Playhouse Square, the FRONT International: Cleveland Triennial for Contemporary Art festival, and many more helped sell 140,457 room nights in the city, up 9.5% from 139,147 during the same month in 2017. In the 2016 convention year, the city sold 131,146 in July, STR says.

Of course, the convention that crowned President Donald Trump as the Republican nominee lasted just four days. But it provides an indelible marker in the region’s hospitality history. The number of rooms sold — termed “demand” by the industry — shows the city’s hotel market is growing after the big run-up in 2016 with the 600-room Hilton and five other new hotels.

There are still plenty of empty hotel rooms in town, but the city is trending toward a strong year in 2018. Through the end of September, occupancy was

P003_CL_20181105.indd 3

Occupancy percentage, September YTD ’12

70.2%

’13

72.6%

’14

69.6%

’15

72.5%

’16

70.3%

’17

68.4% 71.3%

’18 0

50%

75%

Revenue, September YTD and total year $250M

$210.2M

$200M $150M

Total year $131.1M

$178.4M

$100M

September YTD

$98.8M $50M

2012

2013

2014

2015

2016

2017

2018

SOURCE: STR

at 71%, compared to 68% in last year’s like period, according to STR. It helped that no new hotels opened downtown or in University Circle.

Meantime, the average daily rate in that area rose 6% to $153 for the same period from $144.78 in 2017.

Those numbers are nothing to crow over, but do mean hotels should be covering their overhead, according to industry standards.

“Many people would not have thought we would be at this point,” Agosta said. “The city is at a tipping

point. More people have been here, they’ve seen (the city and convention center) and they’re ready to buy.

Many (group planners) won’t buy until they see it.” She added that within the industry, “People in Cleveland are getting very confident with rates. Next year looks as strong as this one.”

David Sangree, president of the Lakewood consultancy Hotel & Leisure Advisors, said, “These are very good numbers. The convention center is being used a bit more. There really is more group demand downtown and special events.”

However, Sangree noted, business growth in the suburban hotels is more limited, in part due to the addition of new hotels this year from the AC Hotel in Orange Village to the Aloft in North Olmsted.

For Cleveland and suburbs from Madison to Lorain in the Cleveland Metropolitan Statistical Area, occupancy through the end of September is at 65%, compared to 61% in 2017.

The average daily rate in the region climbed to $107.72 through September this year, up 2% from $105.72 in the same 2017 period.

Overall, demand in the Cleveland region climbed 5.6% to 4.27 million rooms sold through September of this year from 4 million in 2017’s similar period.

The turn of events will deal a big blow to the market next year, the first since LeBron James left Cleveland for the Los Angeles Lakers. One hotel insider said hotels benefited from James as people came to Cleveland just to

see him play. His departure, and the likelihood that the Cavaliers will not return to the playoffs, will sap sales.

Yael Ron, general manager of the Ritz-Carlton Cleveland, 1515 W. Third St., said, “It’s not far-fetched to think that the loss of a personality such as LeBron will have an impact.

However, as business people, you have to not only see today and tomorrow but see how we will build ourselves to be strong.”

She said cultural tourism will remain strong, because a weekend in Cleveland to see a show may cost less than the cost of admission in New York City. At the Ritz-Carlton, the recent renovation included adding a kosher kitchen. That means the city will have an alternative for the Jewish community to going to New York City for a Ritz-tier kosher Passover or wedding.

The city needs to work to extend typical visitor stays to more than two days, but she said the growth in the hotel business in Cleveland is “magical.”

David Johnson, spokesman for the Huntington Cleveland Convention Center, estimates the convention center alone helped sell 92,000 nights so far this year. And things look better next year for the 5-year-old center.

However, the other tipping point the region faces may be beyond its control as the likelihood of a recession grows, which will cut business travel and trim leisure travel.

“The forecast is that the economy may stay strong another 18 months,” Agosta said. “We’ll ride the wave now and see what’s dealt.”

11/2/18 2:00 PM

PA G E 4

|

N O V E M B E R 5 - 11, 2 018 |

CRAIN’S CLEVELAND BUSINESS

NEO hospitals are seeing benefits of CMS program

FALL IN WITH YOUR LOCAL LENDER Support your local credit union.

Commercial Real Estate Loans up to $10 million No Prepayment Penalties As Little as 10% Down

Contact Jonathan A. Mokri 440.526.8700 • jmokri@cbscuso.com www.cbscuso.com Your Business Lending Partner SM

If you bought your racking somewhere else, you probably paid too much.

By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

Hospitals in Northeast Ohio are seeing improvements through a federal program they’re participating in that’s aimed at providing higher-quality, more highly coordinated care to Medicare cancer patients.

Under the Oncology Care Model — a payment and delivery model from the Center for Medicare & Medicaid Innovation — physician practices work under payment arrangements that include financial and performance accountability for chemotherapy treatment and the care surrounding those patients. It’s one of the many programs that the Centers for Medicare & Medicaid Services are promoting to help shift payment models from a fee-for-service arrangement to a value-based approach.

“I think the OCM program is really a commitment to continuous learning and cycles of improvement,” said Matthew Kemmann, director of strategic planning and analytics for University Hospitals Seidman Cancer Center.

“It’s really sort of re-engineering everything we do in a very thoughtful way in trying to continuously improve and again move toward this model of care which is increasingly more personalized for patients.”

There are 178 practices across the country participating in the model, according to CMS. In Northeast Ohio, UH, Cleveland Clinic and Summa Health all joined the model in July 2016. Lake Health also is participating in partnership with UH, and SummaCare — Summa Health’s insurance arm — is one of 13 payers also participating.

About halfway through the five-year program, systems in the region are seeing cost savings, reduced emergency department visits and more.

While the program focuses on Medicare beneficiaries, the health systems have extended enhanced services — such as care coordination, navigation, financial counselors and national treatment guidelines for care — to all of their patients.

“Everything that we have done for the OCM project or that had to be recorded for the OCM project, we extended to all of our patients,” said Kimberly Bell, administrator for cancer services at Cleveland Clinic. “We don’t treat anybody any differently, so everybody has access now to multiple social workers, multiple care coordinators, pharmacists.”

Practices participating in the model are given a per-member per-month stipend to help them create programs and offer resources to get to that higher-quality, more highly coordinated, cost effective care. CMS sets some guidelines, but it doesn’t specify exactly how to achieve that, Kemmann said.

At UH, the system used that per-member per-month money to add about two dozen full-time equivalents in the areas of patient access, financial counseling and mostly, nurses and care coordinators. Kemmann said the single biggest intervention the system has implemented is an oncology RN specialized call center that operates based on evidence-based protocols for how to manage urgent clinical concerns for cancer patients.

“UH is known for compassionate care, personalized care, but it’s really hard to get to that for every single patient on a consistent basis sometimes, so what these resources have done is

sort of provide that bridge,” he said.

“What the OCM has done is allow us to invest in these resources to deploy a model that is a step further toward patient-centered care while we wait for reimbursement policy to catch up.”

Similarly, Cleveland Clinic added between 20 and 30 full-time equivalent positions. Nurse coordinators, social workers, pharmacists and finance navigators now are employed at the Clinic’s regional sites. Previously, many of those services were central to main campus.

Summa, too, focused on making sure that patients had access to behavioral health services, palliative care, social work and good triage plans to keep patients out of the hospital, said Dr. Sameer Mahesh, program director for Summa’s Oncology Care Model.

Summa has also implemented stringent protocols around how often patients are imaged and tested; initiated efficient triage for patients calling into the office; and began using infusion centers as urgent care centers, taking care of immediate needs instead of having the patient wind up in an emergency room.

Summa has seen its cost of care go down, Mahesh said, noting that its beneficiary per month was lower than the national average. The system also has seen ED visits go down and is reporting a 4% mortality rate, lower than the national 5% average, he said.

UH has seen a significant reduction in ED utilization and a modest reduction in inpatient admissions, Kemmann said, noting that other measures, such as end-of-life metrics, have been favorable as well.

Cleveland Clinic has also seen its ED visits drop, as well as its readmission rates.

NEW CUSTOMERS RECEIVE

5% OFF FIRST PURCHASE! (Contact for details) SINCE 1961

(216) 229 - 9300 www.cbfindustries.com GREAT PRODUCTS, GREAT PEOPLE, GREAT PRICES!

P004_CL_20181105.indd 4

11/2/18 2:02 PM

CRAIN’S CLEVELAND BUSINESS

|

N O V E M B E R 5 - 11, 2 018

|

PA G E 5

Team NEO mapping out industrial IoT plan “We’re not chasing something everyone else is doing because it’s a fad. It’s taking what our core assets are and trying to build on them.”

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Team NEO’s newest technology “roadmap” is focused on the industrial Internet of Things, and it could support companies that make those products, as well as those that buy and use them.

In recent years, Team NEO has put a focus on creating defined strategies to support and grow technologies in which Northeast Ohio can really make its mark. The group has three technology clusters it has been focused on: additive manufacturing, energy storage and the industrial Internet of Things or smart manufacturing, said Jay Foran, senior vice president of Team NEO. Jacob Duritsky, vice president of strategy and research for Team NEO, shared an anecdote from a site selector conference he attended. A presenter had shown a map of each state’s economic development strategies. Almost every state had included biomedical and advanced energy as priorities, he said.

But he thinks smart manufacturing could be a differentiator for Ohio.

“We’re not chasing something everyone else is doing because it’s a fad,” Duritsky said. “It’s taking what our core assets are and trying to build on them.”

Although manufacturing employment is less than it was in its heyday, the sector is still a strong force in Northeast Ohio. Today, productivity is the lens through which manufacturing is viewed, Duritsky said, and the question is how to make local manufacturers even more competitive and productive.

All three of Team NEO’s clusters are areas of technology that include a lot of the region’s long-standing industries of strength, like automotive or chemicals. And they’re areas with opportunities for growth.

The goal of the smart manufacturing roadmap is to speed up the adoption of the industrial Internet of Things, Foran said. That would help the makers of this technology, obviously, but it could also help the customers by increasing their productivity.

Team NEO has found that the roadmap approach gives structure to an industry cluster, Foran said. The group took a similar approach in 2016 with its additive manufacturing cluster, releasing a roadmap outlining the region’s strengths in that area and defining opportunities for growth. A roadmap is under development for the energy storage cluster, Foran said, and Team NEO is looking into possibly creating a roadmap for smart health care, as well.

The group held an official event last Friday, Nov. 2, to introduce the smart manufacturing roadmap and, officials hope, to increase participation in the cluster, Foran said.

To create the roadmap, which was supported by the Burton D. Morgan Foundation, Team NEO put together a small group of industry representatives with whom it has been working closely for the past six months. It also conducted about 50 in-depth “voice of customer” interviews with local companies of all sizes to get a better sense of where the industry is today and what will be necessary for implementation.

Duritsky said that’s “core” to the efforts, as industry is going to need to be the driving force in the adoption of smart manufacturing.

In addition to growing the cluster,

P005_CL_20181105.indd 5

— Jacob Duritsky, vice president of strategy and research for Team NEO

the roadmap includes 10 initiatives that the cluster will focus on in the coming years in terms of implementation, innovation and skills-building. That includes creating a portal of smart manufacturing case studies, assessing the credentials needed in an industrial Internet of Things work-

place and distributing a new industrial Internet of Things readiness assessment.

David Knowles, an account manager at Rockwell Automation in Twinsburg and a working group member, said digital strategy is a top concern of the manufacturers he

talks to in Northeast Ohio. The roadmap will help give them direction, and the cluster will allow them to share best practices.

“They know they need to do something, but they need to know where they start,” he said.

Analyzing data can help manufac-

turers operate more efficiently, and, ultimately, make them more profitable, said David Moon, solutions consultant for Hitachi Vantara in Fairlawn and a member of the roadmap working group. And the Internet of Things is a way to bring information together.

Take GPS apps. Moon said he doesn’t use them because he doesn’t know how to get somewhere; he uses them because of the information they give him on potential issues like construction or weather.

“Correlating all that data is the value,” Moon said. “And that’s really the industrial IoT story, to connect those devices with the back-end ERP systems with business systems with miscellaneous spreadsheets that are spread throughout the company.”

COUNTDOWN

TO THE BOOK OF LISTS

DAYS LEFT The Book of Lists is an annual data resource which culminates Crain’s year-round efforts to gather business intelligence and data in Northeast Ohio.

It is a staple resource used all year long.

AD CLOSE DATE:

VOL. 39, NO. 51

DECEMBER 24-31, 2018

CLEVELAND BUSINESS

BOOK OF LISTS FAST FACTS

• Crain’s Book of Lists features 50 Privately Held Companies with more than $50 million in annual revenue • There are more than 50 Northeast Ohio Public Companies featured

FINANCE COMPANY DATA PAYROLL DATA HEALTHCARE CIVIC ENGAGEMENT REAL ESTATE PROFESSIONAL SERVICES AND MORE

• The book features 50 Manufacturing Companies – and 33 are at least 50 years old!

• Five Commercial Property Sales in the book are worth more than $50 million

Illustration for Crain’s by Daniel Zakroczemski

• Crain’s Book of Lists features more than 50 Downtown Cleveland Apartment Buildings

PUBLISH DATE:

Don’t miss your opportunity to extend your brand reach in this must-read and highly-valued issue.

For more information and to reserve your ad space contact advertising director Lisa Rudy at lrudy@crain.com

11/1/18 4:56 PM

PA G E 6

|

N O V E M B E R 5 - 11, 2 018 |

CRAIN’S CLEVELAND BUSINESS

Excellent Condition Office / Warehouse Facility 26381 Cannon Rd., Bedford Heights, OH 44146

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

For La Campagna owner, g

By JOE CREA clbfreelancer@crain.com

PROPERTY OVERVIEW • 14,630 SF Total Area on 1.15 Acres • 5,630 SF Office / 9,000 SF Warehouse • 18’-20’ Clear Ceiling Heights • Two Docks & One Drive-In Door • Convenient Access to I-271 & I-480 • 240 Volt/200 Amp/3 Phase Power www.hannacre.com

David Stover, SIOR Kevin Callahan 216.861.5592 216.839.2012 DavidStover@HannaCRE.com

KevinCallahan@HannaCRE.com

fi“Ifififiufifififidfifififififififififififi fififitfiHfifififiNfifififiHigfifiSfifififififi”

DREWfiKRAEMER CEO Marketplace Strategy Holy Name High School Class of 2002

Celebrating over 100 years of tradition

Mind | body | spirit fifififififififififififififi RfifidfiDfifiw’fififififififififififififififififififififififififififififififi

Carmella Fragassi is strictly “old school” and competing in a New Age world.

Her tiny Italian restaurant, La Campagna, is hidden away in a Westlake strip center. No more than 50 guests at a time fill her dining room, which doubles as a no-nonsense wine cellar, a retail display for gift baskets and an occasional stage for live performances.

If that’s not unique enough, there’s Fragassi’s approach to cooking. Rather than rely on purveyors who deliver to the kitchen, Fragassi does her own grocery shopping. Every day or two she walks the aisles, seeing what’s in season and searching what looks freshest.

That’s when the creativity kicks in.

Fragassi’s menu changes from day to day. She cooks what strikes her fancy, based on the seasons, using ingredients at their peak and her own intuition and ingenuity.

Her eggplant Parmesan is practically legendary, paper-thin slices bathed in luscious house-made tomato sauce, stacked with cheese and baked to melting tenderness. If beef looks good, it might be transformed into tender roulades stuffed and glazed with whatever combinations appeal to her. A good find on seafood might result in a heavenly melange in a variety of garbs — red or white sauce, lemon butter, something involving wine — to toss with homemade pasta.

That macaroni is typically an unusual, hard-to-find variety, true to traditional Italian recipes. In other words, it’s “nonna cooking.”

About this series: Joe Crea looks at the challenges that female chefs and restaurant owners face in a male-dominated industry, and he profiles some of the area’s top women restaurateurs.

For her part, this 66-year-old selftaught chef is proud of the niche she’s carved for herself and her family. But the challenges only seem to grow, threatening to overwhelm the business

she runs alongside her brother, Mike Fragassi, and her niece, Keely Bruner.

“It’s just so tough anymore. You hear about places closing all the time, but places just keep opening everywhere around us,” Carmella Fragassi said. La Campagna sits near the massive Crocker Park shopping and lifestyle complex and a slew of popular eateries, from Buca di Beppo, Panini’s Bar and Grill, to the luxurious Luca West.

“It’s tough not just for me, but for a lot of restaurants,” she said. “We’re on overload. There are so many

ideas ideals impact For results that resonate, change the equation.

216-392-8946 mbizjak@cicognasign.com

Contact Mike Bizjak Project Development, Sales & Management

Partner with Glenmede, an independent, privately owned trust company offering investment and wealth management services. Founded in 1956 by the Pew family to manage their charitable assets, we provide customized solutions for individuals, families, endowments and foundations. To learn how our culture of innovation and experienced thinking can help you make your unique imprint on the future, contact Linda M. Olejko at 216-514-7876 or linda.olejko@glenmede.com.

glenmede.com

P006_007_CL_20181105.indd 6

@glenmede

/company/glenmede

11/1/18 3:01 PM

Che dini Cap (Tim

cho alwa plac you men mea min C tor i the year affe ly, a hea “W reer wan wan cou So I resta W in 19 men cati the sma A said soci that have part thor “Ce “H gion nich F fam “Th ple. was that gran mea cau thin they tabl “Th food And here T one

CRAIN’S CLEVELAND BUSINESS

|

N O V E M B E R 5 - 11, 2 018

|

PA G E 7

er, good food is the key business element

Mike ner.

You the ning mella near ping w of Bepuxu-

or a e’re any

“They had a love affair with their food. They celebrated their food. And I thought, ‘Why can’t this work here?’ ” —Carmella Fragassi

can receive is when people walk in her restaurant and say, “My gosh, it smells like my grandma’s.”

“That you’ve made somebody’s day — those feelings are precious,” Fragassi said.

That explains her approach to restaurateuring.

“Because it tastes better. That’s really it. You know, I don’t want to serve somebody something I wouldn’t eat

Chef Carmella Fragassi in the dining room of her restaurant, La Capagna, in Westlake.

(Tim Harrison for Crain’s)

choices today, and people seem to always want to go out to the next new place. And I’ll have people say, ‘Well, you’re so expensive.’ Yet I see other menus and I think, ‘Well, come on!’ I mean, how does a small place like mine compete with Applebee’s?”

Competition is a familiar motivator in her life. Fragassi spent years on the Elyria police force, closing her years as a parole officer. She speaks affectionately, if occasionally ruefully, about making her way up on a heavily male-dominated force.

“Well, I was at the tail end of my career, and it ended faster than what I wanted,” Fragassi said. “At first, I wanted to open a gelato shop but couldn’t find the equipment I wanted.

So I thought, ‘Maybe I’ll open a small restaurant like they have in Italy.’ ” When she launched La Campagna in 1991, the dining room offered a full menu. When a fire wiped out the location two years later, she moved to the Detroit Road spot and opted for a smaller menu, working it seasonally.

A lover of food history, Fragassi said she’s inspired by the geographic, social, cultural and religious forces that have influenced the way people have eaten for centuries. She was particularly driven by cookbook author Carol Field’s acclaimed volume “Celebrating Italy,” “Her history of the food, the regional specialties — each has its own niche,” Fragassi added.

Fragassi also thought about how her family ate when she was growing up.

“The meals we had were very simple. It was ‘clean’ food. Everything was so homemade,” she said. “I love that history. Plus growing up, my grandmother only put raisins in the meatballs during the holidays. Because back in the old days, something like raisins was a rarity, plus they didn’t always have meat on the table.

“They had a love affair with their food. They celebrated their food.

And I thought, ‘Why can’t this work here?’ ” Turned out, it does. Fragassi said one of the finest compliments she

P006_007_CL_20181105.indd 7

myself,” she said. “I don’t need a microwave in this kitchen, and I don’t need a deep fryer. Most everything is sautéed or slow-roasted. And I think the true flavor of the food comes out, and I don’t have to think, ‘What did they pump up that steak with? What’s in the chicken?’ ” Fragassi said she put a lot of her own money into the original La Campagna, “and I’ve never gotten it back

from this place” she said, glancing around.

There are dozens of things she’d change, like the dining room that’s cozy but tight, and the kitchen that’s a fraction of the size of many in the homes nearby. (A kitchen through which guests must walk in order to use La Campagna’s one tiny washroom.)

“If I owned this place, it would be a total makeover. And that’s OK. This is a small place — not huge, and not fancy. I know the criticisms and I’m not offended by them,” she said. “This place, they either love it or hate it. It’s not for everybody. There are people who look forward to it, and others who can’t get out fast enough. And

you’ll see people who come in only because somebody brought them in.

“And I ask myself, ‘Well, do you really want that customer?’ ” Her business philosophy is as down to earth and old as time, she admitted.

“I won’t get rich at this: I’m not turning tables every couple of hours.

If someone wants to sit all evening at a table, well, that’s what we do at home, during the holidays.

“I say stay true to yourself. Do what you want to do, and do it with all your heart. Because when you have your heart and soul in it, it shows in your food and your customers will see it. And they’ll usually come back for more.”

FIFTH THIRD PAYMENTS AND COMMERCE SOLUTIONS

WHERE EXPERIENCE AND INNOVATION INTERSECT. Bridgit Chayt SVP, Director of Commercial Payments and Treasury Management at Fifth Third Bank

Bridgit and the Treasury Management experts at Fifth Third Commercial Bank combine innovative technology and investments to help craft effective ways to manage the complexity of your company’s capital. ®

This is banking a Fifth Third better.

53.com/Experience

Fifth Third Bank, Member FDIC

11/1/18 3:00 PM

PA G E 8

|

N O V E M B E R 5 - 11, 2 018 |

CRAIN’S CLEVELAND BUSINESS

Diebold gives investors good, bad news “Our year-over-year revenue performance was the strongest since the business combination (with Germany’s Wincor Nixdorf) in 2016, supported by solid software and product growth.”

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

Diebold Nixdorf Inc. (NYSE: DBD), which has had a rough 2018 punctuated by the evaporation of nearly 80% of its stock value, had both good and bad news for investors in its third-quarter earnings.

There was enough good news, though, for a slight uptick in the share price.

On one hand, the North Canton-based provider of ATMs and fintech services reported in-quarter losses worse than analysts expected: $212.6 million, or $2.79 per share.

That’s significantly more than the loss of $36 million posted in the like

— Gerrard Schmid, Diebold Nixdorf president and CEO

quarter last year. The company has lost a total of $423.2 million this year through Sept. 30, or $5.57 per share.

On the flip side, Diebold also posted stable quarterly revenue of $1.1 billion comparable with the like period of 2017. That performance topped expectations and positioned the firm

to uphold its projections for $4.5 billion in total revenue in 2018.

“Solid gains from our Americas Banking and Retail segments supported constant currency revenue growth in the quarter,” said Diebold president and CEO Gerrard Schmid in its earnings report. “Our year-over-

year revenue performance was the strongest since the business combination (with Germany’s Wincor Nixdorf ) in 2016, supported by solid software and product growth.”

The theme here is a mixed bag.

For example, while revenue was bolstered by software and products,

THE STORY YOU KNOW AND LOVE!

11TH YEAR!

NOV 23 – DEC 23 • ALLEN THEATRE written by PHILIP GRECIAN | directed by JOHN McCLUGGAGE based on the motion picture written by JEAN SHEPHERD, LEIGH BROWN & BOB CLARK

AND DON’T FORGET...

Come early or stay after to enjoy the FREE Festival of Trees, with dozens of beautiful holiday trees decorating the Allen Theatre lobbies!

Presenting Sponsor

216.241.6000 clevelandplayhouse.com P008_CL_20181105.indd 8

that was offset by a decline in services — which is where analysts tend to feel the business is most vulnerable to competitors.

Meanwhile, the company said it’s trending ahead of cost savings laid out in its DN Now restructuring initiative that began this summer. A piece of that plan includes cutting its global staff of about 23,000 by about 1,600 positions. The bulk of those, Schmid said, are middle-management roles, and 85% of those affected people have departure dates set. A spokesperson for the company said Diebold doesn’t specify cuts by region, so it’s unclear how many of those positions could be in Ohio.

Through DN Now, the company plans to realize savings of $250 million by 2021, or 25% more than it originally projected.

That plan also involves divesting some less-profitable business lines.

Schmid told Crain’s during a September interview an example of that could include service in the European market where the company provides IT outsourcing to some customers. He said Diebold would be better off investing in more core business lines than that operation. In that interview, Schmid discussed how the firm is continuing to focus on the business of ATMs while transitioning to more work in software and services as part of his strategy for the business.

While seemingly necessary moves to improve the company overall, analysts such as JPMorgan Chase & Co.’s Paul Coster worry moves like that could result in the loss of some good business along with the bad, something that could be influenced by the need to impose more stringent payment terms on customers.

In an Oct. 31 note, Coster also pointed to Diebold’s heavy reliance on cash — and its possibly overly optimistic expectations for cash flow in the fourth quarter.

“The company looks to generate $245 million of free cash flow in 4Q, ahead of expectations, largely by drawing down on working capital,” Coster wrote. “This feels like a stretch to us, unless the company gets a strong renewal rate on one-year service contracts that typically add to deferred revenue in 4Q. Our concern is that the firm might lose some of this business (or see roll-over to more pay-as-you-go contracts) to competitors given inability to extend favorable payment terms.”

Nonetheless, there was still enough positive sentiment among investors with the quarterly earnings that Diebold’s stock price was up about 20% on the afternoon of Thursday, Nov. 1, compared to its value before earnings were announced on Oct. 31.

Analysts including Coster said they were impressed by the new leadership — which includes Schmid, who joined the firm in February, and Jeffrey Rutherford, who joined as interim chief financial officer in October — as well as the proactive commentary around DN Now and daily execution.

Despite that, JPMorgan Chase & Co. still retains an underweight rating of Diebold as it expects the stock to underperform the mean of its coverage in the ATM industry over the next 12 to 18 months.

So while Diebold has struggled in the wake of its Wincor Nixdorf deal, it has a strategy to improve, and its executives are positive about the future.

That's not lost on investors. But they're taking it all with a grain of salt.

11/1/18 4:08 PM

T:10.875” S:10.25”

At CIBC, our handshake is the first step to a one-of-a-kind partnership. With an experienced commercial banking team and 150 years of putting clients first, we deliver on your financial goals by developing a business partnership that’s built for you.

Member FDIC. The CIBC Logo is a registered trademark of CIBC, used under license. ©2018 CIBC Bank USA. Products and services offered by CIBC Bank USA.

Full Page Template.indd 1

cibc.com/US

10/30/18 11:05 AM

T:14.5”

S:14”

Our auto clients get a banking partnership that’s always in top gear.

PA G E 10

|

N O V E M B E R 5 - 11, 2 018 |

CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

Wise to tap brakes on e-scooters

Editorial

Start with STOP Finally, the contours of an effective strategy to combat the opioid crisis are emerging, and Ohio — one of the states hit hardest by the epidemic — is playing a key role.

Late last month, President Donald Trump signed into law the Synthetics Trafficking and Overdose Prevention (STOP) Act, authored by Sen. Rob Portman, R-Cincinnati, who led an 18-month study of the illicit imports as chairman of the Senate Permanent Subcommittee on Investigations.

The law, sensibly, requires the U.S. Postal Service to collect electronic information on merchandise arriving in this country, so customs inspectors can screen parcels for fentanyl and other contraband. STOP is part of the broad and ambitious Support for Patients and Community Act, which represents a significant victory from a policy standpoint.

Among its features: The Department of Health and Human Services will oversee a grant program to expand the use of “comprehensive recovery centers,” which include job training, mental health services and housing alongside addiction treatment; the National Institutes of Health will be freed up to more quickly pursue research projects related to nonaddictive drugs for pain; and Medicare coverage will be expanded for opioid treatment.

Also part of the new law is a measure from Sen. Sherrod Brown, D-Cleveland, called the Caring Recovery for Infants and Babies (CRIB) Act, which allows Medicaid to pay for residential pediatric recovery services provided to babies born addicted to opioids. It also provides for babies to continue to be treated in residential pediatric recovery centers after one year of age.

These aren’t great times, obviously, for our political system, but passage of the STOP Act and related provisions shows that Congress can, in some cases, come together when needed.

Whatever the makeup of the next Congress, we’d like to think members can follow this template — on health care, pension reform and other issues — to make a difference in people’s lives.

Reforms in combating opioid abuse won’t succeed without dedication and innovation on the local level. In Cleveland, such leadership is being provided most prominently by MetroHealth.

As reporter Lydia Coutré pointed out in an Oct. 30 story, the health system “is taking a multifaceted approach to combat the opioid crisis, from prevention to education to treatment to legal remedies.” The system “has joined various task forces, supported awareness campaigns and worked to train providers and law enforcement.”

And, most importantly, it has “helped push for state legislation to increase access to the overdose-reversing drug naloxone, pursued litigation against opioid drug manufacturers and marketers and curbed opioid prescribing among its providers, slashing prescriptions by 3 million opioid pills over an 18-month period.”

This is a long-term problem. It’s encouraging to see new energy in the fight.

At the top

Our focus section this week is about civic leadership in Cleveland — where it has been, where (at times) it has fallen short, and where it’s going, refracted through a comparative lens with Pittsburgh, a somewhat more economically successful peer city. We’ll have more to say here next week about those issues. But metaphorically speaking, it was striking that a couple high-profile leadership changes took place in Cleveland last week, and neither went all that smoothly.

The Cavaliers, after an 0-6 start, fired head coach Tyronn Lue and replaced him (sort of ) with Larry Drew, though the team and the new interim coach/“voice” weren’t immediately on the same page as to exactly how his role was described. A day after Lue’s dismissal, the Browns fired head coach Hue Jackson and offensive coordinator Todd Haley, as both lost a power struggle (imagine that: a tie!) that was engulfing the team in conflict. Defensive coordinator Gregg Williams, himself a longtime lightning rod for criticism, has the interim head coach title.

The teams are more important symbolically than economically to Cleveland, but we hope the chaos in both franchises ends soon so they can get on with productive rebuilds.

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

CLEVELAND BUSINESS

CLEVELAND BUSINESS P010_CL_20181105.indd 10

Managing Editor:

Scott Suttell (ssuttell@crain.com)

Contact Crain’s

216-522-1383

Read Crain’s online: crainscleveland.com

The battle over the Birds is coming to roost nationwide.

A class-action lawsuit was recently filed in California by nine people injured by electric scooters, like those owned by scooter companies Bird Rides, Inc., Lime and others. As Bloomberg reported, the suit accuses the technology startups of gross negligence because the companies were aware of the harm the devices could cause.

E-scooters landed in cities and campuses nationwide about a year ago, and with them has come an increase in severe injuries related to the devices, according to The Washington Post, including three deaths.

In Cleveland, a scooter rider was killed when a driver high on heroin hit her. That isn’t the scooter’s fault, but it does argue for a plan to keep riders of all vehicles, and peElizabeth McIntyre destrians, safe.

Cleveland first encountered the scooters this August. I remember rounding the corner onto West Sixth Street on a Friday morning and wondering what the cluster of black metal in the distant was all about. I soon found out.

Stacked on the corner in front of the Blue Point Grille were three scooters against a makeshift post. The Birds had landed.

Hours later, as I dodged a rider zipping along the sidewalk in the Warehouse District, I realized a new mode of transportation had dawned.

Not for long, however. Eleven days after the flock of 100 or so Bird scooters appeared in downtown Cleveland, they were gone. Some complained that cities that ban scooters aren’t willing to keep up with the times. But a lot of the fault here rests on Bird itself. It and other e-scooter companies have a practice of dumping the devices on city sidewalks, without getting permission from cities or following existing rules. You wake up one morning, like I did, and they are there, littering sidewalks as they are disposed of haphazardly, and annoying pedestrians as riders zoom by at 15 miles per hour or so.

The problem with these startups is they don’t give cities like Cleveland the chance to respond, to create rules that ensure the safety of citizens. Their guerilla methods just don’t work.

So Cleveland, like many other cities, put the brakes on for now. Cleveland State University banned the scooters, too.

The scooters aren’t a bad thing. They are a convenient, affordable way to travel short distances more quickly, and they cut back on our automobile dependence, which is good for the environment. But there are rules you must follow for the safety of yourself and other citizens.

As urban areas seek to attract young professionals, we must consider the transit needs of younger generations and disenfranchised people. Transit in all forms is important and we must embrace new, smarter forms of it. Like scooters.

We must, though, create rules that keep all of us safe, and it makes sense that Cleveland is taking the time to get it right.

Bird’s user agreement compels users to obey local laws, to treat others with courtesy or respect, to use a helmet and to park the devices upright in approved spaces. But a boilerplate user agreement doesn’t solve the problems that occur when users don’t obey and neither they nor the company face consequences.

Councilman Kerry McCormack has the right idea. He wants Cleveland to be ready to accommodate all new modes of transportations in a way that’s safe and beneficial for residents. Let’s make our transportation environment conducive to bicyclists and pedestrians, cars and e-scooters and whatever comes next.

Hoverboards, maybe?

Let’s get this right.

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.

11/1/18 4:57 PM

CRAIN’S CLEVELAND BUSINESS

|

N O V E M B E R 5 - 11, 2 018

|

PA G E 11

CELEBRATE THE HOLIDAYS AT Personal View

Brett who? Will we even remember a year from now?

By DENNIS TEREZ

Brett Kavanaugh is now officially the 114th justice of the Supreme Court of the United States. You might have wagered a dollar on the success or failure of his confirmation through www.predictit.org, or spent time supporting or protesting his nomination. In any event, it was hard to miss all the stories about the nominee, his accusers, and how our political process confirms Supreme Court justices.

Crain’s Cleveland Business has periodically allowed me to use this space to warn about our debt crisis. Our federal debt (now over $21.2 trillion), our federal deficit (approaching $1 trillion) and global economic growth (recently downgraded by the International Monetary Fund) will adversely affect us all for a very long time. Institutional memories about economic crises are short, however. A decade ago, the world suffered the Great Recession, but ask people on the street whether they remember any details about it, and you will likely get a long pause or a blank stare.

A similarly short institutional memory applies to our knowledge of the three branches of government, especially the Supreme Court. The dust-up over Kavanaugh’s confirmation may have come as a welcome event for those concerned about our knowledge gap when it comes to government institutions.

If nothing else, the hearings taught the nation that our Supreme Court justices are nominated by the president, require a majority vote of the Senate to get the job, can stay in the job for life regardless of age or health, and share the power to decide what is right or wrong under our Constitution with eight colleagues. That’s a good start.

We also learned that politics play a role in who gets selected. Some commentators identified Kavanaugh’s future political allies on the Supreme Court as Chief Justice John Roberts Jr. and associate justices Clarence Thomas, Samuel Alito Jr. and Neil Gorsuch. If you paid attention, you learned that Republican presidents nominated these men. A couple articles reported on how associate justices Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor were unhappy with this nomination and confirmation process. Given their position, you might have correctly guessed that Democratic presidents nominated these women. We didn’t hear much about the ninth member of the Court, Stephen Breyer. You might have correctly guessed a Democratic presi-

dent also nominated him, because he is typically not mentioned as part of the group that gives the Court an ideological tilt to the right.

The confirmation process provided an important civics lesson, but odds are we will quickly forget what we learned. President Ronald Reagan nominated the first female justice, Sandra Day O’Connor.

When she retired, she spearheaded a website project at www.icivics.org, which is a compilation of online games to teach important civics lessons, including how the Supreme Court functions. She undertook the project because of our knowledge gap.

For example, a survey done in 2015 by the Annenberg Public Policy Center of the University of Pennsylvania showed that only one in three Americans can name all three branches of government, and one in three cannot name even one. A similar survey done by Pew Research showed only one in three Americans knew that three women currently sit on the Supreme Court, and similarly only about one in three Americans could identify the chief justice — who, by the way, carries the official title of the chief justice of the United States. He’s our country’s chief justice, in other words. Title or not, most of us still cannot identify him. When Justice Antonin Scalia died, Gallup surveyed what we thought of him. Of those polled, 29% held a favorable opinion, 27% held an unfavorable opinion, and 32% did not know who he was.

In her recent announcement about her diagnosis of dementia, O’Connor mentioned www.icivics.org and why the project must continue in her absence.

She knows knowledge matters in a democracy like ours.

So, were you able to name all nine justices before you read this article? The presidents who nominated them? Did you know how many justices are women?

How many are African-American? How many are Hispanic? Could you name the chief justice? Or the most junior justice? If so, you get an A. If not, start learning by checking out www.icivics.org and have fun in the process. And make sure you get all the answers correct the next time a president picks a new Supreme Court justice.

• Award-Winning Cuisine

• Innovative Event Décor

• Stunning Floral Design

• Audiovisual Services

• Unsurpassed Hospitality

• Complimentary Valet Parking

440.449.0700 • info@landerhaven.com • landerhaven.com

America’s Largest Exterior Remodeler

HOUSE OF WINDOWS AS LOW AS $

70/MO

NEW!

REMODELED AKRON SHOWROOM NOW OPEN!

888-932-4137

Call for a FREE in-home estimate!

•

5350 Transportation Blvd., Garfield Hts. • 2424 Gilchrist Road, Akron WindowWorld.com

This Window World® Franchise is independently owned and operated by Window World® Cleveland, DBA Window World® Mich-Ohio under license from Window World, Inc. Exceptional Quality

Made in USA

Terez, a former federal defender for the Northern District of Ohio, recently returned to Case Western Reserve University’s Weatherhead School of Management as a student to earn an MBA in May 2017 and a master’s degree in finance in May 2018.

Letter to the Editor

Another step forward in legalized sports betting and mobile gaming My organization, iDevelopment and Economic Association (iDEA Growth), recently met with state Sens.

John Eklund and Sean O’Brien and other interested parties during a roundtable discussion organized by Eklund to discuss the advantages of legalized sports betting in Ohio. There’s now legislative momentum to pass a sports betting bill this year, and that could mean an economic windfall for the state.

Sports betting and online gaming already are taking place online and on smartphones in Ohio, but it’s being done offshore, unregulated and in the shadows.

Legalizing online gaming will allow lawmakers to efficiently regulate the activity.

Many states have already passed laws and dozens of other states across the country are considering legislation to bring legal sports betting to its residents. And for good reason. Take New Jersey for example: Sports

P011_CL_20181105.indd 11

betting went live there in June 2018. As of September 2018, the state has received $40.5 million in revenue to date from sports betting.

As Ohio lawmakers consider the legalization of sports betting and online gaming, we call on them to follow in Sen. Eklund’s footsteps to understand the multifaceted value it will bring the state under a smart business model and regulatory framework.

Regulated mobile gaming offers consumers anytime, anywhere games and bets at their fingertips, and provides the consumer protection needed to have a safe and secure form of entertainment.

What’s at stake is the opportunity for increased revenue, job creation and an overall boost to Ohio’s economy. It’s time to legalize sports betting and online gaming.

Jeff Ifrah iDEA Growth founder

11/1/18 10:22 AM

PA G E 12

|

N O V E M B E R 5 - 11, 2 018 |

CRAIN’S CLEVELAND BUSINESS

Focus

LEADERSHIP

STEEL CITY HAS BIG EDGE IN TECH, PHILANTHROPY That was then, this is now: Two views of the current Pittsburgh Tech Center, one from 1937 (below) and one from the present day. (Allegheny Conference on Community Development)

As Pittsburgh has rebounded from shutdown of steel mills, Cleveland has had stops and starts

How the metro areas are faring The Cleveland and Pittsburgh metropolitan areas have both lagged the nation as a whole in economic growth, labor force growth and population growth, but Pittsburgh has consistently outperformed Cleveland in all three key growth indicators.

2.5M

Population, in millions

Pittsburgh

2.333 M

By JAY MILLER jmiller@crain.com @millerjh

Let’s not begin a comparison of the civic efforts in Cleveland and Pittsburgh to lead their respective economies into the 21st century with mention of the Browns and Steelers. But it’s hard not to notice how much further along the Pennsylvania city is in both efforts.

To its credit, Cleveland’s civic community was successful in accepting the challenge of bringing home the Rock and Roll Hall of Fame to Cleveland. It was vying to host the Rock Hall against cities like Cincinnati, Detroit, Memphis, New York City and Philadelphia in the 1980s.

Pittsburgh has nothing that matches the impact of the Rock Hall for attracting economy-boosting tourists.

But Pittsburgh does have the Robot Hall of Fame. The institution, on the campus of Carnegie Mellon University, is not among the city’s top tourist attractions, so it isn’t a significant economy-booster by itself. But it is a symbol of an economic transformation, nurtured by the city’s civic leadership, that Rust Belt cities like Cleveland are striving to emulate.

Winning the Rock Hall included successfully raising the first $20 million from public and foundation sources needed to build the iconic museum on the lakefront. It’s one of several successful short-term economic shots in the arm — who can forget the Republican National Convention? — engineered by city leaders.

The civic community, a number of

P012_CL_20181105.indd 12

2M

1.5M $150M

Cleveland

1980

1990

2000

2010

2.059 M

2017 (est)

Real domestic product (millions) $131M

Pittsburgh $120M $120M

local leaders and observers say, can come together for those kinds of short-term wins. Following through over the longer term has not been as successful, they add.

Pittsburgh’s Rust Belt recovery, though, is the result of a decades-long effort to create new high-tech industry in the city. It has succeeded because of the confluence of an economy-minded philanthropic community, engaged public officials and a well-organized business community who stayed committed over the long haul to keeping their hometown economically afloat.

Together they set a course for future economic growth after the steel industry — for a century the city’s economic backbone — quickly collapsed in the early 1980s. More than 150,000 people lost their jobs, unemployment in the region topped

17% and before too long, the steel mills were gone.

Cleveland’s economic decline in that same era was not as abrupt but, eventually, nearly as painful. The metropolitan area lost 98,000 jobs between 1979 and 1982. And where Pittsburgh’s losses were so heavily focused on its steel mills, Cleveland’s losses came more slowly across a broad swath of manufacturing sectors.

A key vehicle for leading and investing in the Pittsburgh area’s economic rebuilding were the community’s major philanthropies, led by the Richard King Mellon Foundation, the Heinz Endowments, the Claude Worthington Benedum Foundation and the Pittsburgh Foundation. They made early and ongoing commitments to the rebuilding of the region’s economy.

SEE PITTSBURGH, PAGE 14

Cleveland $90M 1.5M

’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17

Civilian labor force (in January of each year)

Pittsburgh

1,206,087

1.2M Cleveland

900K

1,026,114

’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

SOURCES: U.S. Census Bureau; Federal Reserve Bank of St. Louis; Bureau of Labor Statistics

11/1/18 3:30 PM

CRAIN’S CLEVELAND BUSINESS

LEADERSHIP

Pittsburgh gets lift from its relationship with state

By JAY MILLER jmiller@crain.com @millerjh

In July, British Airways announced that beginning in April of next year, it would begin direct flights between Pittsburgh International Airport and London’s Heathrow Airport. The four-day-a week flights are a coup for the Steel City, which has not had nonstop service to London since 2004, when US Airways dropped its service to Gatwick Airport.

It’s an air connection business leaders in Cleveland covet.

How Pittsburgh won the direct-to-Europe service was in part the result of a relationship the city has with state government that Cleveland has not always been able to match in Ohio. In Pennsylvania, state government has often looked more kindly on its major cities — Philadelphia as well as Pittsburgh — than Ohio does on its cities outside Columbus, the seat of state government.

Cleveland Hopkins International Airport has not had air service to a major European city since 2009, when Continental Airlines offered service to Heathrow from April through September. The service was abruptly curtailed. The airline wasn’t specific about why the service was ended, attributing its decision to “the inability to secure economically viable seasonal slots at Heathrow and the impact of the global recession on the performance of the route.”

Since then, Cleveland Hopkins has weathered the merger of Continental Airlines into United Airlines in 2014, which resulted in a decline in passen-

ger traffic and the loss of direct service to many U.S. cities. Passenger volume has rebounded and direct service to many U.S. cities has been restored.

But winning direct service to Europe, save for the recent service by two airlines to Iceland, has been elusive.

To land the Pittsburgh-to-Heathrow service, the Pennsylvania Legislature has approved the use of casino revenue to provide air service incentives to its major airports, including Pittsburgh International. A state economic development fund committed to subsidize the route to the tune of as much as $3 million — $1.5 million a year for two years. The money will be used to guarantee that British Airways will take in enough revenue to justify committing expensive aircraft and hard-to-get airport landing slots to the route.

Ron Francis, a partner in Pittsburgh’s Reed Smith law firm, told the Pittsburgh Post-Gazette when the flights were announced that the service, was important for his firm and for other local businesses, who have clients, customers and partners on the other side of the Atlantic Ocean.

“So this service is really important and I think it will be a real boon to the business community here in Pittsburgh,” he told the newspaper.

Stefani Pashman CEO of the Allegheny Conference on Community Development, a 75-year-old civic organization that includes the region’s chamber of commerce, its business attraction and retention organization and a public policy research affiliate, said the region has a “pretty strong voice” in the state capital.

“We’re pretty good at focusing on issues; we don’t come in with a 30-point plan,” she said, not referring specifical-

ly to the airport subsidy. “We really try and see what are the core problems that we see to make the region thrive.”

Cleveland can’t expect that kind of support from state government in Columbus. As far as incentives for air service go, the Ohio Aviation Association is seeking — so far, unsuccessfully — the creation of a statewide air service development board to allocate incentives from an air service development fund of $15 million annually.

More broadly, though, despite Northeast Ohio generating an outsized share of the state’s economy, the Legislature has not consistently looked favorably on this region.

In 1999, longtime Medina legislator William Batchelder, often a Cleveland supporter, put it succinctly in a comment to The Plain Dealer that many locally believe still holds true today.

“To some degree, there’s a natural antipathy toward (what was then) the largest city in the state,” he said when Clevelander George Voinovich was stepping down as the state’s governor. “And there will be some who will want to get back at Cleveland for all they got in the past.”

Joe Roman, CEO of the Greater Cleveland Partnership, the regional chamber of commerce that advocates for the region in Columbus, disagrees with that characterization, noting that while the Legislature certainly favors Columbus, the Cleveland region usually gets its fair share of state capital spending.

“It’s up to Cleveland to sell our case,” he said. “I think some of the frustration is the natural proximity (of Columbus, home of state government), but for me, I’ve never found we can’t sell ourselves to Columbus.

It just sometimes takes extra energy.”

|

N O V E M B E R 5 - 11, 2 018

|

PA G E 13

SALT • SALT • SALT Water Softener • Industrial • Food Ice Melt • Sea Salt

Call For Pricing!!

Minimum Delivery: 1 Pallet

MEDINA, OH

1-800-547-1538 Salt Distributors Since 1966 www.saltdistributormedinaoh.com

LEARN MORE TODAY ABOUT HOW CRAIN’S CAN HELP YOU AND YOUR CONTENT MARKETING PROGRAM. Contact Amy Stoessel at 216.771.5155 or astoessel@crain.com.

BANNER DISPLAYS THAT GET RESULTS!

Leave the competition behind with custom banner displays from Post Up Stand.

Attract more attention, build strong relationships and increase sales with our high-quality portable displays. All orders are ready for local pickup or shipping in 48 hours after proof approval.

Visit our showroom at 14300 N. Industrial Avenue in Maple Heights or online at postupstand.com to see our complete line of trade show and marketing displays.

800.935.3534

P013_CL_20181105.indd 13

Order by November 30, 2018 and use promo code CC18 to receive15% off your next order!

11/1/18 2:34 PM

PA G E 14

|

N O V E M B E R 5 - 11, 2 018 |

CRAIN’S CLEVELAND BUSINESS

LEADERSHIP

PITTSBURGH CONTINUED FROM PAGE 12

In 2002, the Benedum, Heinz Endowments and Mellon foundations came together to purchase a former Jones & Laughlin Steel Co. coke works for $10 million. Now, after holding it for more than 15 years, they are embarking on what could be a $1 billion redevelopment, Hazelwood Green, home for what could be more than 2.5 million square feet of mixed-use development, including more than 1,000 housing units.

Uber Technologies Inc., the ride-sharing and taxi company, already operates its autonomous vehicle test track at Hazelwood Green, and among the early prospective tenants are Advanced Robotics for Manufacturing and the Manufacturing Futures Initiative, two nonprofits affiliated with Carnegie Mellon that assist the development of robotic technologies.

The city also benefited from an innovative corporate research and development community at companies like Alcoa Corp., PPG Industries Inc. and Westinghouse Electric Co., though not all of its corporate research continues to thrive.

In a 2017 book, “Coping with Adversity: Regional Economic Resilience and Public Policy,” co-author Edward Hill, who taught economic development for 30 years at the Maxine Goodman Levin College of Urban Affairs at Cleveland State University before moving in 2015 to teach at Ohio State University, ticked off a handful of Northeast Ohio companies that failed

or lost their independence for lack of innovation — Firestone Tire and Rubber Co., Republic Steel Corp., Royal Appliance Mfg. Co., Warner & Swasey Co. and White Motor Corp.

In the book, an unnamed local business executive in a recent academic study described Northeast Ohio as home to a “Mount Rushmore of dead manufacturing companies.

People here don’t think in terms of entrepreneurship.”

David Bergholz, the retired executive director of Cleveland’s Gund Foundation, credits some of the success of Pittsburgh’s economic recovery to the Allegheny Conference on Community Development. Bergholz served as assistant executive director there from 1977 to 1988, before coming to Cleveland.

Formed in 1946, the Allegheny Conference eventually absorbed the regional chamber of commerce and the Pittsburgh Regional Alliance, the region’s business attraction and retention nonprofit.

Bergholz said the leaders of major corporations, the banks and the presidents of Carnegie Mellon and the University of Pittsburgh came together in the Allegheny Conference, meeting personally to plan their civic endeavors.

“They met monthly at the Duquesne Club and they worked a lot of things out,” he said recently. “It was corporate power at its most persuasive, a remarkable organization.

Cleveland never had the equivalent.”

With the 1980s collapse, the place Pittsburgh’s civic leaders and institutions invested money and energy was the city’s major universities — Carne-

gie Mellon and Pitt. The research at both of those institutions has spawned hundreds of new companies.

Carnegie Mellon was home in the 1970s to one of the first computer science departments in the country and, in 1984, with support from the civic community, landed a $103 million federal grant to build the Software Engineering Institute and, eventually, the Robotics Institute, both key research centers.

“(The Allegheny Conference) was corporate power at its most persuasive, a remarkable organization.

Cleveland never had the equivalent.”

— David Bergholz, retired executive director of the Gund Foundation

According to the Allegheny Conference and its Pittsburgh Regional Alliance (PRA) affiliate, the Pittsburgh area now has 28,000 information technology workers at 1,500 tech companies.

At the same time, with the support of the wealthy Mellon family and the Allegheny Conference, the city’s hospitals and medical community began to consolidate into a life sciences cluster that became the University of Pittsburgh Medical Center (UPMC).

In addition to operating 30 hospitals, its UPMC Enterprises has invested

more than $700 million in about 80 different ventures in the last 20 years.

Beyond that operation, the PRA reports, the region has 130,000 life sciences workers at 5,400 firms.

“Pittsburgh and Cleveland share some commonalities, but at the same time, the University of Pittsburgh and Carnegie Mellon have benefited over the years from a much stronger (civic) engagement and much more generous traditional philanthropic support,” said Robert Gleeson, associate dean of the Maxine Goodman Levin College of Urban Affairs. “And there has been a long history of Pittsburgh’s wealthiest families and foundations being fundamentally involved (in economic development) and using their philanthropy to build the strength of Pitt and Carnegie Mellon, and that has accumulated over the years.”

Gleeson served as director of the Pittsburgh Robotics Initiative and executive director of Carnegie Mellon’s Center for Economic Development before coming to Cleveland.

Various major technology companies, including Uber, Facebook and Apple Inc., have opened technical or research offices in Pittsburgh in recent years.

A report earlier this year by Ernst & Young’s Pittsburgh office for Innovation Works, a 20-year-old Pittsburgh tech incubator, found that, “The trends emerging from the past 10 years paint a compelling portrait of regional growth.”

The report said the region saw $687 million in tech investments in 2017, double the amount from 2016. Last year’s total was fortified by two large

investments: Ford Motor Co. announced in early 2017 that it would invest in the Pittsburgh-based autonomous vehicle startup Argo AI LLC, and Petuum Inc., an artificial intelligence startup, raised $93 million.

As a result of the growth of these and other sectors, the regional domestic product of the Pittsburgh region has surpassed that of Cleveland (see graph, Page 12).

Bruce Katz, director of the Nowak Metro Finance Lab at Drexel University, calls Pittsburgh a new model for economic growth.

“The city’s current position is the result of quiet leadership from across the public, private and civic sectors, by people who understood the need to move away from a sole reliance on heavy industry, and developed the robust innovation ecosystem powering today’s growth,” he wrote in a 2017 report, “Why the Future Looks Like Pittsburgh,” for the Brookings Institution think tank. “Up to this point, focusing on developing technological strengths has put Pittsburgh among the 30 or so global cities that are positioned as leaders in next-generation technologies.”

The Cleveland area did not have the cadre of wealthy, philanthropic families or corporate philanthropies with names like Alcoa, Heinz, Mellon and Westinghouse, who were willing to place big bets on the entrepreneurial research that would eventually bring companies like Google and Uber to town.

In addition, public officials have been either too risk-averse or tied to their bureaucracies to commit to and follow through on entrepreneurial

NOVEMBER 29, 2018

5:00–8:30 PM

Hilton Cleveland Downtown 100 Lakeside Ave. East Cleveland, Ohio 44114 To register, please visit weatherhead100.org.

Questions? Interested in sponsorship opportunities?

The honor you’ve earned. The recognition you deserve.

Contact Brigid Schaefer at 216.368.3247 or weatherhead100@case.edu.

Hosted by

Presented by

P014_015_CL_20181105.indd 14

Publishing Partner

Sapphire Sponsor

11/1/18 3:32 PM

econ serv “G Whi may he w his o terv help soon wer who

“(M go As th we

—E

prob cies In velo cou bus said rese com bus H with late M thro facil Stev pres the in 1 why plac R rate er sa “Th low-

hese doreand

wak verl for

the ross ors, eed e on the wern a ooks ings this echittscits in

the ilies mes ingbig arch nies

have d to and urial

N O V E M B E R 5 - 11, 2 018

|

|

PA G E 15

LEADERSHIP economic development, several observers said.

“Go back to Mike White (Michael White, who served as Cleveland’s mayor from 1990 to 2002), who said he was going to do development on his own,” Hill said in a telephone interview. “He said he didn’t need any help, he was going to sell the city. As soon as you heard that, you knew you were sunk, because big-city mayors who don’t delegate and don’t fix

“(Mike White) was going to sell the city.

As soon as you heard that, you knew you were sunk.”

— Edward Hill, Ohio State University

problems with their own bureaucracies are going to lose.”

In addition, the research and development at Cleveland corporations could not be a springboard to new businesses. It has turned out, Hill said, that Northeast Ohio corporate research has not had significant commercial applications outside the businesses that created it.

Hill recalled a conversation he had with a local venture capitalist, the late David Morgenthaler, years ago.

Morgenthaler told Hill about going through British Petroleum’s research facility in Warrensville Heights with Steven Percy, the last BP America president based in Cleveland, before the headquarters moved to Chicago in 1998. Percy asked Morgenthaler why he invested all of his money in places like California and Boston.

Recalling visits to other local corporate research operations, Morgenthaler said he found nothing to invest in.

“There is great science here in follow-on work to make current products

better,” Morgenthaler told Hill he told Percy. “But there is no science here to blow up the current slate of products.”

“Morgenthaler was looking for companies that would establish new industries or knock off old industries,” Hill said.

But Cleveland also has not had the civic leadership that could commit money to big bets that might bring the economy along. It has tried, though the commitment didn’t begin as early as Pittsburgh’s.

In 1981, Cleveland’s civic leadership, led by a group of 50 CEOs in a group called Cleveland Tomorrow, began to develop organizations to help boost technology and entrepreneurship. The organizations included BioEnterprise, JumpStart, Magnet and NorTech. But that organization merged into what is now the Greater Cleveland Partnership, the regional chamber of commerce, in 2004.

That same year, though, a group of two dozen philanthropies, universities and other nonprofits joined together to form the Fund for Our Economic Future. With $22 million pledged initially, the philanthropies said their goal was to seed new business investment and create jobs.

But, Hill said, such investments take 20 years to have an impact on a region’s economy.

Others have harsher assessments of civic Cleveland’s efforts.

“You still don’t have an infrastructure that knows how to take advantage of (the power of the universities) or even the health care systems, which are wonderful to have,” Bergholz said. “The difference (between Pittsburgh and Cleveland) is primarily the quality of leadership, particularly on the private sector side. But of the chamber of commerce, Cleveland Tomorrow, Magnet and others, some are pretty good, but it’s a mishmosh, to be brutally frank.”

Always thinking of new ways to improve operations?

We have customized solutions just for you!

It’s your personal mission to ensure that your company succeeds. We take the same approach to customizing your business financing. It’s our mission to provide you with the nimble, individualized financing you need.

Your company succeeds - mission accomplished.

Call your local lender today.

Tom Poe, Market President 216.496.2530 | TPoe@homesavings.com HomeSavings.com

PROMOTE. Why not?

35th Anniversary

35th Anniversary

CLEVELAND BUSINESS VOL. 36, NO. 47

NOVEMBER 23 - NOVEMBER 29, 2015

ALLYSON O’KEEFE, 37 Partner; Porter Wright

35th Anniversary

CLEVELAND BUSINESS

VOL. 36, NO. 47

NOVEMBER 23 - NOVEMBER 29, 2015 Allyson O’Keefe started her legal career at Porter Wright in 2004 after completing a summer internship there as a Case Western Reserve University law student. Since then, she has worked on many significant deals across Cleveland, including Flats East Bank, The Metropolitan at the 9, Uptown in University Circle and Steelyard Commons, and has been promoted to real estateALLYSON partner.

O’KEEFE, 37 “Young professionals who live downtown are so excited about the city,” said O’Keefe, a Partner; Porter Columbus native who lived downtown forWright 10 years before moving to Rocky River. “The ones who aren’t from here are often more excited about it. When you move here from somewhere else, you don’t for granted.”

VOL. 36, NO. take 47 it Allyson NOVEMBER 23 - NOVEMBER NOVE EMBER 29, 29, 2015 201 O’Keefe started her legal career at Porter Wright in 2004 after completing a sumWhen O’Keefe is not working or spending time with her husband and two children, she can mer internship there as a Case Western Reserve University law student. Since then, she has be found volunteering on the boards of nonprofit organizations and watching college football. worked on many significant deals across Cleveland, including Flats East Bank, The Metropolitan at the 9, Uptown in University Circle and Steelyard Commons, and has been proWHAT INSPIRES YOU ABOUT YOUR WORK? moted to real estateALLYSON partner.

O’KEEFE, Just seeing what Cleveland has gone through in the time that I’ve 37 been here, there’s obvious“Young professionals who live downtown are so excited about the city,” said O’Keefe, a ly a lot of excitement around real estatePartner; development.

I started in 2004 when we were crazy Porter Columbus native who lived downtown for Wright 10 years before moving to Rocky River. “The ones busy with development. That was sort of the boom from ’04 through ’08. I saw it go through who aren’t from here are often more excited about it. When you move here from somewhere the downturn, then I saw it rise again, even stronger than before locally. else, you don’t take it for granted.”

Allyson O’Keefe started her legal career eer at Porter Wright in 2004 after completing comple etin ng a sumsumWhen O’Keefe is not working or spending time with her husband and two children, she can Reserve University law student. Since tthen, hen, she sh he has has mer internship as a Case Western WORKED ON there ARE MIXED-USE URBANnPROJECTS. IS MANY OF THE PROJECTS YOU be found volunteering on the boards of nonprofit organizations and watching college football. ss Cleveland, including Flats East Bank, The The worked on many significant deals across THAT AN AREA OF EXPERTISE? rsity d has has ha s been be een proproro Metropolitan at the 9, Uptown in every University and Steelyard Commons, and Yes, definitely. Real estate is extremely interesting because deal Circle is differWHAT INSPIRES YOU ABOUT YOUR WORK? moted to real estate ent. You can never get bored because there’s so partner. much variety there, from tax Just seeing what Cleveland has gone through in the time that I’ve been here, there’s obviousown are ’Keefe e, a “Young who live downtown so excited about the city,” said O O’Keefe, credits to historic renovations, from professionals ground-up development to rehab, from ly a lot of excitement around real estate development. I started in 2004 when we were crazy Rive er. “The ““T The ones ones mixed-use to residential. Columbus native who lived downtown for 10 years before moving to Rocky River. busy with development. That was sort of the boom from ’04 through ’08. I saw it go through xcited about it. When you move here from m somewhere som somew ewhere ere who aren’t from here are often more excited the downturn, then I saw it rise again, even stronger than before locally. else, you LEADERSHIP don’t take it for granted.”

YOUR STYLE? HOW WOULD YOU DESCRIBE

CLEVELAND BUSINESS USINESS

Let the Custom Reprint Department help you leverage this great press.

For more information contact Laura Picariello, Reprints Sales Manager Tel (732) 723-0569 • Fax (888) 299-2205 • lpicariello@crain.com

timeI work, with her husband and two child dre en, sh he c he an O’KeefeI expect is not working or spending children, she can I definitely believe in leadingWhen by example. the people withding whom MANY OF THE PROJECTS YOU WORKED ON ARE MIXED-USE URBAN PROJECTS. IS collle eg ge football. foo fo ottball. be found volunteering on the very boards off nonprofit and watching college my associates, to work hard, and they see me working hard.

For me, it’sorganizations all THAT AN AREA OF EXPERTISE? about working hard and doing good work.

Yes, definitely. Real estate is extremely interesting because every deal is differRK? WHAT INSPIRES YOU ABOUT YOUR WORK? ent. You can never get bored because there’s so much variety there, from tax Just WHAT seeingWAS whatITCleveland has gone the time that I’ve been here, th there’s hrough here e’s obviousobviousus LIKE TO WORK WITHthrough O’KEEFEinON WHAT OTHERS ARE SAYING: credits to historic renovations, from ground-up development to rehab, from ly a lot of excitement around real estate te development. I started in 2004 when we we were were e crazy crazy THE FLATS EAST BANK PROJECT? mixed-use to residential. busy with development. of the boom from ’04 through ’08. I saw itt go go through th hrough “Allyson is extremely bright and quick witted, butThat whatwas trulysort distinguishes her the downturn, then I saw itpeople rise again, even from most successful attorneys is her exceptional skills.

Shestronger has an than before locally.

HOW WOULD YOU DESCRIBE YOUR LEADERSHIP STYLE? uncanny ability to encourage the ‘adversaries’ in her negotiations to work in I definitely believe in leading by example. I expect the people with whom I work, OF THE PROJECTS YOU YOU WORKED Wsaid ORKED ON ON ARE ARE MIXED-USE MIXED-USE URBAN URBAN PROJECTS. PROJECTS. IS IS concert with her to achieve win/win MANY solutions to difficult problems,” my associates, to work hard, and they see me working very hard. For me, it’s all THAT AN AREA EXPERTISE? TISE?of the Scott Wolstein, CEO of Starwood Retail Partners andOF co-developer about working hard and doing good work.

Yes, definitely. Real estate e is extremely interesting because every deal deal is differdifferrFlats East Bank project. ent. You can never get bored there, red because there’s so much variety the ere, ffrom rom m ttax ax — Lee Chilcote WHAT OTHERS ARE SAYING: WHAT WAS IT LIKE TO WORK WITH O’KEEFE ON credits to historic renovations, tions, from ground-up development to rehab, re ehab, from fro om THE FLATS EAST BANK PROJECT? mixed-use to residential.

“Allyson is extremely bright and quick witted, but what truly distinguishes her

successfulInc. attorneys is reserved. her exceptional people skills. She has an Reprinted with permission from the Crain's Cleveland Business. © 2015from Crainmost Communications All Rights YOU DESCRIBE RIBE YOUR YOUR LEADERSHIP LEADERSHIP STYLE? STYLE? HOW WOULD ability to encourage the ‘adversaries’ in her negotiations to work in Further duplication without permission is prohibited. Visituncanny www.crainscleveland.com. #CC15040

I definitely believe in leading ding by example. I expect the people with h whom whom m I work, rk concert with her to achieve win/win solutions to difficult problems,” said my associates, to work hard, and they see me working very hard hard. d. For For me, me e, it’s all a Scott Wolstein, CEO of Starwood Retail Partners and co-developer of the about working hard and doing good work.

Flats East Bank project.

— Lee Chilcote YING: WHAT WHAT WAS WAS IT IT LIKE LIKE TO TO WORK WORK WITH WITH O’KEEFE O’KEEFE ON ON WHAT OTHERS ARE SAYING: THE FLATS EAST BANK PROJECT? PROJECT? “Allyson is extremely bright right and quick witted, but what truly distinguishes dis stin nguish hes her hes

skills s. She She has has an ha successfulInc. attorneys her exceptional people skills.

Reprinted with permission from the Crain's Cleveland Business. © 2015from Crainmost Communications All Rightsisreserved. ourage negotiatio ons to to work w wo orrk k in n ability to encourage the ‘adversaries’ in her negotiations Further duplication without permission is prohibited. Visituncanny www.crainscleveland.com. #CC15040

hieve win/win solutions to difficult probl bllem ms,” s,” said concert with her to achieve problems,” co-deve evel velo ve elo el ope pe er off the the e Scott Wolstein, CEO off Starwood Retail Partners and co-developer ct.

Flats East Bank project.

— Lee Le Ch Chilcote C

Reprinted with permission from the Crain's Cleveland Business. © 2015 Crain rain Communications nss IInc Inc. nc. nccc. All n Al Rig Rights rese reserved. rved d. ww.crainscleveland. and.c nd d.ccom. o om. m #CC15040 Further duplication without permission is prohibited. Visit www.crainscleveland.com.

Discover over 300 miles of trails to hike, bike or run.

Play Manakiki or Sleepy Hollow, two of Golfweek’s top courses.

Experience nature hands-on with hundreds of free education programs.

Prepare for ASQ Certification Exams

Get nose to nose with an Amur tiger at Cleveland Metroparks Zoo.

Exceptional Results

18-0719

anould tonLLC, elli-

CRAIN’S CLEVELAND BUSINESS

P014_015_CL_20181105.indd 15

• Reinforce Your Understanding of ASQ Body of Knowledge • Become Familiar with Exam Style Questions • Validate Professional Value and Expertise • Demonstrate Knowledge of Quality

corporatecollege.com 216-987-2800

11/1/18 3:33 PM

PA G E 16

|

N O V E M B E R 5 - 11, 2 018 |

CRAIN’S CLEVELAND BUSINESS

LEADERSHIP

Young leaders weigh in on what they think the region needs

“Our representatives are quick to respond to our needs with people who show up. That is critical to us. The people supplied tend to stay better than other agencies’ placements.”

— Katheryn Robinson Director of Human Resources, Impact Products

With some of the highest customer satisfaction ratings in our industry Nesco Resource isn’t just another choice in staffing...it’s the smart choice.

Nesco Resource: Smart recruiting. nescoresource.com Nesco Resource is a wholly owned subsidiary of Nesco Inc., a privately held diversified holding company focused on sectors including manufacturing, human resource services, and real estate.

COMMUNITY ROWING & SAILING CENTER

T

o get a grasp on what leadership means, Crain’s invited a small group of younger local leaders to a roundtable to talk about what kind of leadership the region needs. ¶ The members of the group were David Akers, founder of the Sourcing Alliance, a national group purchasing alliance, and a founder of Bridge Builders, a leadership nonprofit for mid-career professionals that prepares them for a greater role in the community; Colette Jones, vice president of marketing and communications at Destination Cleveland, the travel and tourism marketing nonprofit; Baiju Shah, CEO of BioMotiv, an accelerator company that focuses on breakthrough discoveries in novel therapeutics, and former CEO of BioEnterprise, a nonprofit catalyst for the biotech sector; and Jason Therrien, founder and president of thunder::tech, an integrated marketing firm. ¶ Moderating the discussion were Crain’s reporter Jay Miller and Stuart Mendel, executive director of the National Center on Nonprofit Enterprise, and the former assistant dean of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University. This transcript has been edited for length and clarity.

Shah

Miller: I think we all recall how attorney Jon Pinney opened up a discussion about leadership with a speech at the City Club of Cleveland in June that he titled, “Dead Last: Northeast Ohio’s Economy is Lagging and It’s Time to Do Something About It.”

my reporting that Pittsburgh has done a better job responding to its loss of its steel industry, which was its economic tent pole for 100 years. So I’ve asked you four here to listen to how you think the region, its organizations that work to improve the economy and

Picking up on that then, as part of this section, I’ve written a story comparing the response of civic leadership in Pittsburgh and Cleveland to the drastic decline in manufacturing that has hit those two cities and the Rust Belt. And I think it was clear from

Akers

Jones

Consider the Foundry for your next corporate retreat!

To make the Foundry the site of your next business meeting, email Michael Ferry, Director of Corporate & Community Partnerships, at mferry@clevelandfoundry.org, or call him at: 440.862.0247.

Visit our website: clevelandfoundry.org

Therrien

OCCUPATIONAL

FRAUD:

What You Don’t Know, Can Hurt You

REGISTER NOW: CRAINSCLEVELAND.COM/WEBINARS

fitness According to the Business Fraud Prevention LLC, private companies and small businesses are 42% more likely to have fraudulent activity compared to large corporations, government, and non-profits.

If fraudulent activity hit your business, would you know how to handle it? In 1-hour, we will walk you through the prevention, detection, and solutions associated with occupational fraud.

FITNESS CENTER 24/7 ACCESS FREE PARKING

vedasfitness.com Located on the 3rd Floor of the Marriott at Key Tower

PRESENTED BY:

HOSTED BY:

Laurie A. Gatten, CPA, CFE

PRESENTED BY:

with mention of this ad Timothy D. Mayles, CPA, CFF, CFE

216.298.5115

P016_017_CL_20181105.indd 16

The leng eno But, too the

Men mea

Ake

The

Mill lead 2014 mar grow mar deve the ness that

Jon Baij sues have regi align thre ach the orga al m B loss year pop lose che wha

FIRST MONTH

FREE

The terb the you a lo thos gan for, don stay hitti

Sha disa ly, “ The ana of tw —I was bit b was ing we We lead man wou that leas suri brin es? ners agai out, whe Th Tha year beca big,

FREE WEBINAR • NOV. 13 • NOON – 1 PM

CLEVELAND’S PREMIER

Men supe

Ake shou they

Every crew strives to “row as one.”

Otherwise, you stop. Rowing takes teamwork.

Make the Foundry the site of your next corporate retreat. Use our indoor tanks and expert coaches for team-building exercise and our state-of-art conference rooms for your business meeting. Relax in our interior courtyard with what may be the oldest living tree in Cleveland!

thei bett

11/1/18 5:13 PM

t

one of its omsked you that and

CRAIN’S CLEVELAND BUSINESS

|

N O V E M B E R 5 - 11, 2 018

|

PA G E 17

LEADERSHIP their leaders should be working to better its economic outlook.

Mendel: And we need to get past the superficial, “Oh, we need new leaders.”

Therrien: That’s the armchair quarterback response, and I think that’s the problem. By what measure are you judging them? And I don’t think a lot of that is transparent. What are those specific numbers that their organizations should be responsible for, and what happens when they don’t hit them? Because they can stay in place for 100 years if they’re hitting their numbers.

Akers: If they’re effective, they should keep their jobs for as long as they can.

Therrien: Now, certainly some length of time you’ve given them enough shots to hit their numbers.

But, again, there’s some that just have too many numbers, so they can pull the ones they want.

“What this town excels at is responding to that psychology when the opportunity’s imposed by somebody else. What this town does not excel at is establishing its own desired outcome, creating the competition to succeed at it and establishing the deadline to force action.”

the disruption, or what’s the conversation, or what needs to happen to get people to see that holding tighter to what you have and fighting with each other is just shifting the pieces of the pie around. So how do we get to a broader conversation? I think we’re getting close to that tipping point right now with all the conversations and, you know, this story that you’re trying to write. I believe that we’re right there. But how are we going to start to shift our mindset and our psyche to being more collaborative and really understanding there has to be a regional goal, and who and what are the organizations that can force that?

— David Akers, founder of the Sourcing Alliance

Akers: There’s a very interesting psychology that I see in the public

Shah: It’s based on trust.

sector regularly, the public sector and the civic sector. In the absence of a motivating goal that is self-created, what are the times when people come together, create partnerships, whether they have trust or not, they create partnerships, and they have urgency, and they take action. And the great example is (competing to bring the Republican National Convention to Cleveland).

Shah: Where there’s a deadline?

Akers: Right. It could be getting the Browns back in 1999. What this town excels at is responding to that psychology when the opportunity’s imposed by somebody else. What this town does not excel at is establishing its own desired outcome, creating the competition to succeed at it and establishing

Therrien: There’s not an obvious outside leader for a lot of these situations.

We don’t have a Dan Gilbert here (who, through his network of businesses, has led the rebuilding of downtown Detroit). He’s a go-do to guy (in Detroit) when you want to get something done.

SEE LEADERS, PAGE 21

1 in

Akers: No. Not at all.

Ohio

Therrien: Not at all.

Miller: One thing a group of local leaders did a couple years ago, in 2014, was to try to set some benchmarks for the region’s economic growth that could be used to benchmark the results of local economic development programs. It was called the Regional Economic Competitiveness Strategy, or, simply, RECS. Was that any help?

FINANCIAL PL ANNERS

Now named by InvestmentNews

Shah: The RECS study was deeply disappointing, frankly. It was basically, “We can do incrementally better.”

There was some sort of statistical analysis that says, “OK, if we just kind of tweak it a little bit, we’ll go from” ­— I forget the exact numbers, but it was from a small percentage to a little bit bigger of a small percentage. But it wasn’t aspirational. There was nothing that rallied people to respond. So we don’t study regional aspiration.

We don’t know what to measure leaders against. And there’s probably many different individuals that would have to contribute to whatever that regional aspiration is. But we at least should know what we’re measuring against in determining, Are we bringing the right skills and resources? Are we bringing in the right partnerships? Are we making traction against the aspiration that’s five years out, 10 years out, so that we know where we want to get to?

That’s a problem for us right now.

That’s been a problem for the last 15 years, but people won’t agree to that, because no one wants to sign up for a big, hairy, audacious goal.

2018 Best Places to Work for Financial Advisors - #1 in Ohio “Customers will never love a company until the employees love it first.”

-

SIMON

SINEK

Also recently honored

1

of only

12

Advisors nationwide listed for 10 consecutive years

by Barron’s Top 100 Independent Advisors.

www.ncafinancial.com 6095 Parkland Blvd., Suite 210, Cleveland, OH 44124 | 440-473-1115 Securities offered through Royal Alliance Associates, Inc., Member FINRA/SIPC. Investment advisory services and Fixed and Traditional Insurance Services offered through NCA Financial Planners, a registered investment advisor not affiliated with Royal Alliance Associates Inc. Royal Alliance does not offer tax or accounting services. For additional information, visit www.ncafinancial.com/awards

Untitled-1 1 P016_017_CL_20181105.indd 17

Shah: Those are great examples of when we’ve actually come together and done things that we as a region never thought possible. They were catalyzing events. There’s always a small group of individuals that basically pushed us towards, whether it was, you know, making sure the Browns came back, or the RNC. It wasn’t a big civic dialogue that led to, you know, “Let’s declare this is the goal.”

#

Mendel: So length of time is not the measure of effective leadership?

Jones: Right. So building on what Baiju is saying, I think one of the issues is that all these organizations have their own metrics. There are no regional metrics that everyone has aligned to, to say, “These are the top three things that we’re going to achieve as a region and then what are the roles and responsibilities of each organization to achieve those regional metrics?”

But I think that there’s this fear of loss. If you look back over the past 20 years, we’ve had recessions, we’ve had population loss, and we’ve had teams lose, right? So when you have this psyche of loss and fear, you hold tighter to what you already have. So then what’s

the deadline to force action.

8/8/18 12:39 PM 11/1/18 5:12 PM

PA G E 18

|

N O V E M B E R 5 - 11, 2 018 |

CRAIN’S CLEVELAND BUSINESS

ANALYSIS

T

College enrollment drops, grad schools shrink faster

By CHUCK SODER csoder@crain.com @ChuckSoder

Enrollment at local colleges just keeps declining — especially enrollment of graduate students.

The 27 schools on the full digital version of our Colleges and Universities list saw a combined 2.9% decline in enrollment for their Northeast Ohio campuses. Last year, those schools saw enrollment fall by 1.7%.

This shouldn’t surprise regular Crain’s readers. We reported in early October that several local colleges had posted declines in total enrollment (this list relies on full-time equivalent enrollment).

And after publishing last year’s list we noted that enrollment figures had been declining since 2010. Local colleges attracted a huge influx of students between 2007 and 2010 — which is what typically happens when unemployment is high.

Even after this year’s decline, enrollment still remains above 2007 levels, according to data submitted for the list.

But enrollment isn’t dropping equally for all types of students.

For instance, graduate students these days make up a slightly smaller portion of the student body at most GSB_LoanAd_Craines_4x6.indd 1

of the 18 schools on the full digital list that offer both undergraduate and graduate degrees and submitted data for at least three years.

Each school reports the percentage of enrollment comprised by graduate students.

When you average out those percentages, you get 20.1%, down from 21.4% in 2017 and 23.4% in 2016.

Only three of the 18 schools posted increases in that percentage over the past two years, and they are smaller schools: University of Mount Union, Malone University and Lake Erie College.

But it’s not like students are shunning graduate schools across the board.

Consider this: Case Western Reserve University’s graduate student percentage is still 56% — exactly where it was in 2008. And its overall enrollment has climbed almost every single year since then. It’s at No. 5 on the list.

The graduate school percentages listed above also don’t include Northeast Ohio Medical University, No. 22 on the list. We didn’t include it because it exclusively enrolls graduate students — so its figure remains at 100% every year.

Like Case Western, Northeast Ohio Medical University also has grown almost every single year over the past decade. It posted 1.4% enrollment

L

R

growth this year, as did Case Western.

Another school that has been growing steadily in recent years is the Cleveland Institute of Art. It had 655 full-time equivalent students this fall, up 5% from 624 last year — good enough for No. 24 on the list.

But most schools posted declines.

Notre Dame College posted a 9.8% decline, the biggest percentage decrease on the list. Chief communications officer Brian Johnston previously told Crain’s the school is trying to “rightsize” in order to better support students so it can retain them and help them graduate. It is also re-evaluating its academic and extracurricular offerings.

The University of Akron continued its years long enrollment slide, posting a 8.3% decrease.

Odds and ends

TH YEA

1

2

3

4

5

6

7

This year’s list includes two top executives who will be leaving in 2019: Kent State University president Beverly Warren and Northeast Ohio Medical University president Jay Gershen.

And if you scan the endowment column, one school stands out: Case Western Reserve University had an endowment of $1.89 billion as of June 30, 2018. No other school comes close. It also has the largest operating budget.

8

9

10 T

L

R

4/10/18 11:11 AM

TH YEA

11

12

13

14

15

16

17

18

19

20

21 The University of Akron is about CONNECTIONS to a COMMUNITY, to the CITY

22

and in the WORLD. It’s about making an IMPACT and becoming THE NEXT BIG THING.

23

THAT’S WHAT MAKES US.

@uakron

@uakron

24

Wa

uakron.edu

Infor

P018_019_CL_20181105.indd 18

11/1/18 4:36 PM

ern. een the 655 fall, ood

nes.

9.8% deicaeviying suphem also xtra-

ued ost-

p ex019: BevOhio Jay

colCase ene 30, e. It et.

CRAIN’S CLEVELAND BUSINESS

|

N O V E M B E R 5 - 11, 2 018

|

PA G E 19

THE LIST

Largest Colleges and Universities

Ranked by fall 2018 full-time equivalent enrollment on Northeast Ohio campuses LOCAL FTE ENROLLMENT THIS YEAR COLLEGE OR UNIVERSITY

FALL 2018/ 2017

% CHANGE

% ENROLLMENT STUDENT: FACULTY ANNUAL TUITION/ UNDERGRAD/ GRADUATE RATIO ROOM & BOARD

OPERATING BUDGET TYPE OF INSTITUTION/ (MILLIONS)/ AFFILIATION YEAR FOUNDED

ENDOWMENT (MILLIONS)

PRESIDENT

1

Kent State University P.O. Box 5190, Kent 44242 (330) 672-3000/kent.edu

29,118 30,081

-3.2%

20:1

$10,756.0 $11,362.0

84.1% 15.9%

4 year public

$644.6 1910

$138.1

Beverly J. Warren (1)

2

University of Akron 302 Buchtel Common, Akron 44325 (330) 972-7111/uakron.edu

16,735 18,251

-8.3%

19:1

$9,216.0 $12,200.0

85.0% 15.0%

4 year public

$368.6 1870

$195.7

John C. Green

3

Cuyahoga Community College 700 Carnegie Ave., Cleveland 44115 (216) 987-6000/tri-c.edu

12,824 13,213

-2.9%

18:1

$3,436.2 NA

100.0% 0.0%

2 year public

$244.3 1963

$73.1

Alex Johnson

4

Cleveland State University 2121 Euclid Ave., Cleveland 44115 (216) 687-2000/csuohio.edu

12,759 12,817

-0.5%

18:1

$10,460.0 $12,670.0

75.0% 25.0%

4 year public

$279.9 1964

$84.0

Harlan M. Sands

5

Case Western Reserve University 10900 Euclid Ave., Cleveland 44106 (216) 368-2000/case.edu

11,072 10,917

1.4%

11:1

$48,604.0 $15,190.0

44.0% 56.0%

4 year private

$1,156.0 1826

$1,886.8

Barbara R. Snyder

6

Youngstown State University One University Plaza, Youngstown 44555 (330) 941-3000/ysu.edu

10,566 10,432

1.3%

14:1

$8,087.3 NA

90.8% 9.2%

4 year public

NA 1908

NA

James Tressel

7

Stark State College 6200 Frank Ave. N.W., Canton 44720 (330) 494-6170/starkstate.edu

5,915 6,132

-3.5%

21:1

$4,070.4 NA

100.0% 0.0%

2 year public

$62.6 1960

$6.9

Para M. Jones

8

Lorain County Community College 1005 N. Abbe Road, Elyria 44035 (800) 995-5222/lorainccc.edu

5,752 6,175

-6.9%

18:1

$3,485.0 NA

100.0% 0.0%

2 year public

$69.4 1963

$50.6

Marcia J. Ballinger

9

Lakeland Community College 7700 Clocktower Drive, Kirtland 44094 (440) 525-7000/lakelandcc.edu

3,852 4,259

-9.6%

16:1

$3,863.0 NA

100.0% 0.0%

2 year public

$59.8 1967

$0.4

Morris W. Beverage

Ashland University

3,520 3,743

-6.0%

13:1

$20,332.0 $9,942.0

70.0% 30.0%

4 year private

$105.1 1878

$45.6

Carlos Campo

College Ave., Ashland 44805 10 401 289-4142/ashland.edu THE(419) LIST

Largest Colleges and Universities

Ranked by fall 2018 full-time equivalent enrollment on Northeast Ohio campuses

HIGHER EDUCATION SOLUTIONS

LOCAL FTE ENROLLMENT OPERATING BUDGET TYPE OF INSTITUTION/ (MILLIONS)/ AFFILIATION YEAR FOUNDED

% CHANGE

% ENROLLMENT STUDENT: FACULTY ANNUAL TUITION/ UNDERGRAD/ GRADUATE RATIO ROOM & BOARD

(MILLIONS)

PRESIDENT

11

John Carroll University 1 John Carroll Blvd., University Heights 44118 (216) 397-1886/jcu.edu

3,488 3,471

0.5%

13:1

$41,340.0 $11,874.0

93.0% 7.0%

4 year private

$84.0 1886

$225.8

Michael D. Johnson

12

Baldwin Wallace University 275 Eastland Road, Berea 44017 (440) 826-2900/bw.edu

3,383 3,471

-2.5%

11:1

$32,586.0 $9,554.0

84.0% 16.0%

4 year private

$131.4 1845

$174.8

Robert C. Helmer

13

Oberlin College 38 E. College St., Oberlin 44074 (440) 775-8460/oberlin.edu

2,802 2,838

-1.3%

9:1

$54,346.0 $16,338.0

99.0% 1.0%

4 year private

$162.8 1833

$887.0

Carmen Ambar

14

Walsh University 2020 E. Maple St. N.W., North Canton 44720 (330) 490-7090/walsh.edu

2,180 2,221

-1.8%

13:1

$28,480.0 $11,045.0

73.5% 26.5%

4 year private

$78.7 1960

$27.4

Richard Jusseaume

15

University of Mount Union 1972 Clark Ave., Alliance 44601 (800) 992-6682/mountunion.edu

2,088 2,062

1.3%

13:1

$30,460.0 NA

92.0% 8.0%

4 year private

NA 1846

NA

Richard Merriman

16

The College of Wooster 1189 Beall Ave., Wooster 44691 (330) 263-2000/wooster.edu

2,001 1,993

0.4%

11:1

$49,810.0 $11,850.0

100.0% 0.0%

4 year private

NA 1866

NA

Sarah Bolton

17

Malone University 2600 Cleveland Ave. NW, Canton 44709 (330) 471-8100/malone.edu

1,441 1,483

-2.8%

12:1

$29,900.0 $9,500.0

76.7% 23.3%

4 year private

$28.8 1892

$19.1

David A. King

18

Notre Dame College 4545 College Road, South Euclid 44121 (216) 381-1680/notredamecollege.edu

1,420 1,574

-9.8%

14:1

$29,460.0 $9,980.0

92.0% 8.0%

4 year private

NA 1922

NA

Thomas G. Kruczek

19

Bowling Green State University - Firelands One University Drive, Huron 44839 (419) 433-5560/firelands.bgsu.edu

1,303 1,269

2.6%

20:1

$4,706.4 NA

100.0% 0.0%

2 year public

NA 1966

NA

Andrew Kurtz

20

Lake Erie College 391 W. Washington St., Painesville 44077 (440) 296-1856/lec.edu

1,172 1,199

-2.3%

16:1

$29,986.0 $9,908.0

83.4% 16.6%

4 year private

NA 1856

NA

Brian D. Posler

21

Hiram College 11715 Garfield Road, Hiram 44234 (330) 569-3211/hiram.edu

974 978

-0.4%

12:1

$34,008.0 $10,290.0

98.9% 1.1%

4 year private

$29.1 1850

$73.4

Lori E. Varlotta

22

Northeast Ohio Medical University 4209 State Route 44, Rootstown 44272 (330) 325-2511/neomed.edu

964 951

1.4%

NA

$40,500.0 NA

0.0% 100.0%

4 year public

$63.5 1973

$20.1

Jay Alan Gershen (2)

23

Ursuline College 2550 Lander Road, Pepper Pike 44124 (440) 449-4200/ursuline.edu

734 721

1.8%

8:1

$32,070.0 $10,776.0

59.0% 41.0%

4 year private

$30.0 1871

$46.3

Christine De Vinne

24

Cleveland Institute of Art 11610 Euclid Ave., Cleveland 44106 (216) 421-7000/cia.edu

655 624

5.0%

10:1

$39,300.0 $11,070.0

100.0% 0.0%

4 year private

$20.1 1882

$27.9

Grafton J. Nunes

THIS YEAR COLLEGE OR UNIVERSITY

FALL 2018/ 2017

maloneynovotny.com + 216.363.0100 ENDOWMENT

RESEARCHED BY CHUCK SODER (CSODER@CRAIN.COM) AND KASEY HARIMAN (KHARIMAN@CRAIN.COM)

Want the Excel version of this list — and every other Crain's list? Become a Data Member: CrainsCleveland.com/data Information is supplied by the schools. Send feedback to Chuck Soder: csoder@crain.com. (1) Scheduled to step down when her contract ends on July 1, 2019 (2) Scheduled to retire on Sept. 30, 2019

P018_019_CL_20181105.indd 19

11/1/18 4:35 PM

PA G E 2 0

|

N O V E M B E R 5 - 11, 2 018 |

CRAIN’S CLEVELAND BUSINESS

AKRON

UA polymer research turns toward opioids

By DAN SHINGLER dshingler@crain.com @DanShingler

The University of Akron’s College of Polymer Science and Engineering is finding new applications for polymers — and possibly bolstering its own relevance — by engineering new materials that can integrate with other molecules.

And one of the first areas where this approach is being applied is in the urgent world of opioid addiction.

Researchers have developed two new technologies — one that could lead to fewer patients becoming addicted to opioids as a result of a prescription and one that would help protect first responders.

“I think it’s a great opportunity, because it is a perfect example of how we can use polymers to meet a new need. It’s a niche that two of my faculty have tapped into — Matt Becker and Abraham Joy — but both in very different contexts,” said interim college dean Ali Dhinojwala.

Becker at the end of 2018 was awarded a $2 million grant from Ohio’s Third Frontier Program, which he said was matched by partners and investors, to develop and commercialize a new polymer-based delivery system for painkillers.

He’s developed a polymer film that can hold a painkiller, including opioids and less-powerful drugs sold without a prescription, and deliver it at a controlled rate over a 72-hour period.

“It’s a film, loaded with painkillers, that you could implant at the site of surgery,” Becker said of his work.

For example, if a doctor was doing rotator cuff surgery, he would place the film inside the incision at the place or places where he knows the pain will emanate after the operation. Then, for 72 hours, the polymer

Researchers at the University of Akron’s College of Polymer Science and Engineering, housed in the Goodyear Center, are developing two new technologies that they are hoping can be used to fight the opioid epidemic.

(Shane Wynn for AkronStock)

film will release the painkillers not into the patient’s general blood stream, but directly into the affected tissue where the pain is.

That’s huge, says Arthur Alfaro, CEO of 21MedTech, a North Carolina-based biomedical materials company that has a laboratory and does some of its synthesis in Akron’s Bounce Innovation Hub to work with Becker.

After 40 years in the medical device business, three of his own startups and past stints in executive positions at companies such as Boston Scientific and Medtronic — Alfaro said he was still surprised by the potential he saw in Becker’s new material.

“When I say this is the biggest opportunity I’ve ever been involved

with or seen, I don’t say that lightly. … It’s probably the biggest thing I've worked on since dissolvable sutures,” Alfaro said.

He said he jumped at the chance to be Becker’s manufacturing partner.

21MedTech now hopes to bring the product to market and has identified two other companies that can manufacture the material and are gearing up to do so.

The technology is critical, Alfaro said, because it can control the release of a painkiller over time and at a specific location.

“Virtually any doctor will tell you if you can control pain for 72 hours, you’ve cleared the hurdle for post-operative pain relief,” he said.

At that point, the patient is usually past the point of needing opioids to

control the pain, doctors say, so any future pain likely can be managed by less-potent and nonaddictive drugs.

And because the drug is delivered directly to the tissue that’s creating the pain, less of a drug is needed to be effective, Alfaro and Becker said.

“When you take an opioid for shoulder surgery, your big toe gets as much of that opioid as your shoulder does,” Alfaro said.

So does your brain and all those cerebral receptors that react to opioids and create addiction. With Becker’s delivery method, there’s never enough of an opioid in the bloodstream to really react with the brain — patients don’t get euphoria or addiction, just pain relief. Or, Becker said, often an over-the-counter drug will suffice with the new delivery

method increasing its effectiveness.

The next step, Becker said, is to complete testing and do more development work so a broader range of doses can be delivered. He said he thinks the film can be on the market and in use by 2020.

Meanwhile, Joy is developing another blend of polymers and other molecules and has designed a material that reacts with any opioid and changes color. That would be useful to law enforcement and emergency responders who deal with opioids and overdoses — and who in recent years have faced the threat of exposure and overdose. Last year, the Centers for Disease Control warned first responders that they were at risk of overdose, because some of the drugs they encounter are so powerful that just a tiny amount presents a big danger.

Joy was awarded $200,000 from Third Frontier and is continuing his research. Dhinojwala said he’s hopeful Joy can win a larger grant in 2019, which would allow him to progress toward development.

Right now, the material is made into mats, which Joy said he tests with the help of local police crime labs. He hopes to ultimately develop, among other things, disposable gloves that emergency workers and law enforcement can wear that would tell them whenever they touched something with an opioid residue on it.

“There are several challenges ahead before it is available for law enforcement to use in their work.

This includes the color change chemistry and the fabrication of the polymer mat into a suitable format with the right properties such as form, feel and response time of the test,” Joy said via email. “When fully developed, the simplicity of the design can make for an impactful product with widespread use.”

SEE POLYMERS, PAGE 21

Software startup takes deep dive into recruiting

By JUDY STRINGER clbfreelancer@crain.com

Ask 12 recruiters or hiring managers what is wrong with talent acquisition and you will likely get a dozen different answers. An Akron startup aims to tackle at least one of those issues.

DeepHire, launched by recent University of Akron graduates and hackathon enthusiasts Steven Gates and Russell Ratcliffe, is commercializing a video-screening platform designed to simplify and speed up the hiring process. The developers currently have three paying customers and just last week secured $25,000 in early stage backing from Elyriabased Innovation Fund America.

Gates said that while the focus to date has been piloting the video software with a handful of recruiters and recruiting firms, he is talking with “really big companies,” such as FedEx, about how it might be useful for in-house hiring of executives as well.

“The feedback we are getting is tremendous,” he said. “Now we are anxious to see how far we can get with this.”

Gates and Ratcliffe officially formed DeepHire in the summer of 2017, about a year after they chan-

P020_CL_20181105.indd 20

Gates

Ratcliffe

neled their own job-hunting struggles into a hackathon project by the same name. While at UA, the duo had went to a string of hackathons — 24hour coding competitions — across the country over the course of about 17 weekends, according to Gates, a Hungarian immigrant who grew up in Stow. All the while, they were sending out job applications but getting very little response.

“I think I sent out over 100, maybe even 150, applications, and I heard back from one company,” Gates said.

“It was like, ‘What the heck. I went to a lot of hackathons. I had a lot of coding experience. What is going on?’ ” The young software developers also had experienced what Gates called “cultural fit issues” at internships and in various research labs while in college. So, at one of the final hackathons of their 2015-2016 tour, MHacks in Ann Arbor, Mich., Gates

and Ratcliffe decided to hack a solution to some of the perceived problems in their own searches. What they came up with was a cultural assessment tool that uses artificial intelligence to match qualified applicants with organizations looking to hire by comparing an applicant’s video-interview answers to that of people working at the company.

As luck would have it, Gates said, San Francisco-based 1517 Fund was at the April 2016 event, saw promise in the DeepHire model and “gave us minimal seed funding to do something with the idea.” A few months later, a $35,000 investment from The Bit Factory in Akron and space in the downtown Bounce Innovation Hub followed.

By the next summer, after they both had graduated, he and Ratcliffe were “living and breathing recruiting” full-time.

“We went to market a few times, but nothing really resonated with the recruiters we were working with,” he said. “We ended up with a sourcing and screening platform, but in one of our pilots they really loved the video-screening tool and cared less about this culture sourcing part, so because of that feedback, we began to focus completely on building out the screening tool.”

The technology allows recruiters to send a link to job candidates. The link leads to the DeepHire website, where the candidates are videotaped answering pre-selected questions.

“Now recruiters have this TiVo-like recruiting view of candidates so that they can just fast forward or rewind through questions and candidates and quickly make decisions, and they can share videos of the most promising candidates with hiring managers, who also can quickly and easily navigate through interviews,” Gates said.

Recruiters also get a notice of when candidate videos have been viewed, so they can reach out to hiring managers while a candidate is top of mind. “(Recruiters) use it as a pitching tool to their client companies. The end result is they get a decision much quicker,” he said.

Given that recruiters commonly get commissions on each placement, delayed hiring decisions translate into slow or lost salaries.

Three clients — including Richfield-based GMS — are paying to use the DeepHire screening tool, and two other companies are testing it out.

Bit Factory mentor James Hilton said the Akron firm’s biggest challenge will be competing in a space where two “equally aggressive start-

ups” are also operating. Still, he said, DeepHire is unique in its focus on smaller, more nimble recruiters and recruiting businesses as a primary customer while others have been geared toward large companies and their in-house human resource teams, which tend to move more slowly when it comes to new technologies.

“They definitely have somewhat of a first-mover advantage in that respect,” he said. “Another advantage that Steven and Russell have is that they are their target market. They understand how to get into the minds of people their age and my age. The way we approach looking for jobs is just a little bit different than (the way) previous generations did.”

Gates think the key to early success will be patiently building on DeepHire’s current momentum and not worrying too much about competition just yet.

“Some startups are focused on fundraising and grabbing as much as possible, then they either flame out or they get big,” he said. “We are completely obsessed, razor-focused, on how can we get a group of 1,000 customers that really love what we are doing, that use it every day and that would be happy to pay triple the price.”

11/1/18 3:36 PM

CRAIN’S CLEVELAND BUSINESS

LEADERS

CONTINUED FROM PAGE 16

Akers: In terms of there’s no one to go to, I jokingly refer to what I call “the pilgrimage.” Bernie Moreno (who is advocating that Cleveland should be a center for the development of blockchain technology) is doing it right now. He’s going through the pilgrimage, because there isn’t a small group of folks that you can go to, or even better, multiple small groups of folks that you can go to with a big entrepreneurial idea. When we put Bridge Builders together, Laura Steinbrink and I counted, we met with — I believe it was 301 individuals either one-onone or in small groups over the course of a two-year window. But for the fact that we were really committed to what we were doing, I would have stopped at — I mean, most people would stop after 20 or 30. Baiju, how many people did you have to meet with when you were putting together BioEnterprise?

Shah: It was a big process. You know, a couple hundred people.

Akers: A couple hundred people. So think about that. If you want to get something done here — unless it’s an opportunity created by something external, like the RNC, which cuts through, you go through a pilgrimage. That’s what it takes. It’s very time-consuming. It’s painful. And how benign was Bridge Builders?

Shah: I guess I had a slightly different viewpoint than David on the way you described part of the challenge. Because I think one of our biggest challenges has been that because of our civic structures there’s been too few tables to go to for sponsorship and resources. If your idea wasn’t on the agenda of XYZ, then ABC is not going to fund it, and then they basically tell everyone else they’re not going to support it, and all of a sudden the idea is shut down. Why do people have to go through the same gateways and basically have to convince the same organizations for resources?

Whereas in the private sector, it’s generally you have multiple different potential points of sponsorship, because people are different people, and ideas may resonate with different types of individuals, so you’re able to then galvanize the resources you need to launch an effort.

So let me give you an example that dates back to the beginnings of BioEnterprise. At that time when we were looking at the medical sector, it was not a sector that was being embraced by the downtown business owners, because it was health care, it’s got an out-of-control cost line, and how can we possibly compete with cities or regions that were already far ahead of us in the biotech space?

It took Bill Sanford (the former CEO of Steris Corp., which creates and sells infection prevention products and services) and Mal Mixon (the founder of Invacare Corp., which makes wheel-

chairs and other home medical devices), two individuals from the private sector who were entrepreneurs, who also happened to be on the boards of major organizations like the Cleveland Clinic and Case Western and University Hospitals, to force people to come together and realize that there was an opportunity. It certainly wasn’t the civic leadership asking for unnatural acts to occur in Cleveland, because there is a little bit of fear on the part of individuals who live inside of organizations, whose job it is to make sure that the organization continues to survive, and that their role continues to survive.

I mean, it’s a pet peeve. We don’t celebrate entrepreneurs, we don’t include entrepreneurs in any way in our structures. We don’t — Akers: And, arguably, we drive them out, because they can’t stand the structures.

Jones: I think you have to have the entrepreneurs. I think you also have to have the big-box corporate types and some up-and-coming leaders for some of the midmarket companies.

Shah: It’s lots of companies, so we have this belief that it should be the corporations — in other words, KeyBank or whoever. It’s not their business. It is the entrepreneurs. It is the families. They have complete flexibility on what they can sponsor without responsibility back to shareholders or other stakeholders in a large

|

corporation. That’s very powerful.

We have a number of those types of families in Cleveland.

Therrien: Going back to the businesses. I think if you understand the way business leadership has really changed, where at the largest companies here the leaders are certainly not founders anymore, haven’t been for a long time. And I think many of their leaders have come from outside the region, born and raised and started a career outside the region. So they are transplants. And if you look at the average tenure of a major company CEO, they’re probably not going to stay here. So the decisions that they make with regard to the community are going to be different than in times past. That doesn’t mean they shouldn’t be involved and shouldn’t be asked to step up. And what about the middle market, right? This region is blessed with middle market companies. This is a window of time that you can invite them to the table where they probably were not invited before.

Miller: And how do we get them involved?

Therrien: The easiest way is to look at it just purely from a profit or survival motive. We have the tightest labor market in many a generation. So, there is a motive for a middle market company leader to say, “I’m head of this organization, this company, and I need employees, and therefore I

N O V E M B E R 5 - 11, 2 018

|

PA G E 21

need to work on talent attraction.” Or, “I need to work on whatever it’s going to take to build the labor force here and to attract the best.” If we get them involved just because of that, we’re still going to be better for it.

Jones: But even in terms of retaining folks here, we’re competing with other cities. I’m a consumer marketer, so how do we make sure that whatever we’re doing is keeping people here, attracting people? Those people work for businesses, those people are investors, they’re entrepreneurs. So what are we doing in terms of metrics when we talk about education? How is our education system comparing with other big-market cities that we could be losing population to, or be losing investment to, or companies are choosing to go to, instead of coming here?

Shah: The thing that I’d add on to Colette’s comments is, if we can have an articulated vision of where we’re going and where we want to get to, it’s going to be attractive to the people that are going to help us get there.

But if you have no vision, people don’t know why they should choose to move to Cleveland or stay in Cleveland versus going off to a city that has articulated their positions. So if you want to be in robotics, you know that Pittsburgh is a destination, because Pittsburgh has embraced it as a part of their identity, their vision. We don’t have that.

ETHODE

POLYMERS

The Valley City operation is wholly dedicated to crypto mining. But the other space is used for more traditional services such as providing fiber internet, cloud servers and desktop virtualization.

With practically no marketing, word spread in the tech industry of the data center’s capacity for crypto mining, and clients across the globe lined up to ship in their equipment.

The Valley City space, which is being continually built out, was consuming so much power from the getgo there were three outages in the first month. What the facility could handle was, apparently, debatable.

“FirstEnergy almost flipped when we hooked up and started using electricity that fast,” Holmes said.

He said they were told there was six megawatts available at the facility, but it ended up being more like two that the substation could handle.

“Of that two megawatts, everything is allocated,” Holmes said. “I could fill up a 100-megawatt data center tomorrow if it was ready. I have more people who want to be in here that I could ever serve.”

Holmes, who is from the region, opted to build that operation in Medina not just because of his connections to the area but because, practically speaking, it’s quite cheap.

Holmes declined to say what the going rate is to host a client’s rig.

But power is indeed cheaper in Ohio compared to other markets. According to a 2018 report by WalletHub, Ohio is the 32nd-most-expensive for energy out of the 50 states and Washington, D.C. And the inherently cooler climate, compared to coastal regions like California where tech firms tend to cluster, already saves on some of the costs to cool their servers.

Those combined features are what helped make LightSpeed, with its focus on crypto mining, such a fast-growing business.

Even with the price of cryptos

While Joy may still have some technical hurdles to cross, he’s close — and likely to bring a product to market even faster than Becker, Dhinojwala said, because his material does not require as much regulatory testing as something that’s put into the human body.

The potential of both developments could be very large. Becker’s, in particular, could save tens of thousands of lives, Alfaro said. The CDC says opioid deaths hit a record of more than 49,000 in 2017.

For the Polymer College, the research and development might have greater implications. It marks a new trend in development that involves integrating polymers with other materials, which Becker and Joy are already showing can result in new applications, Dhinojwala said.

“This is a generation of design, where polymers are an important part of it — but adding an important new molecule and the chemistry of that molecule is also an important driver,” he said.

More than that, it brings relevance to the college and to polymer science and engineering generally, he said.

Young people today want to have an impact and not just invent the next plastic bag or car part.

“That’s one of the reasons we (the University of Akron) are successful in biomimicry. The younger generation thinks about sustainability, about water and energy problems. Things like those more societal problems are attractive to the younger generation. Polymers can be cool again,” Dhinojwala said.

The college plans to do more work like this, he added. Toward that end, it recently hired Junpeng Wang, a physical organic and materials chemist who previously worked at the University of Chicago and the Massachusetts Institute of Technology.

Wang is working on polymers that combine with other materials and emit light under certain physical stress conditions, Dhinojwala said.

That could have important applications in structural engineering and other disciplines.

CONTINUED FROM PAGE 2

P021_CL_20181105.indd 21

CONTINUED FROM PAGE 20

LightSpeed Hosting’s Valley City data center. (Contributed photo)

dropping from their frenzied peak — Bitcoin rose to nearly $20,000 at the end of 2017 and is valued closer to $6,300 today — there’s still plenty of hungry miners.

Holmes And LightSpeed provides a facility for miners they probably can’t replicate themselves.

They also offer the legitimacy that comes with being backed by an established software business.

Balancing act Last year, company revenues were about an 80/20 split between Ethode and LightSpeed. That’ll be more of a balanced 50/50 split by the end of 2018.

“And if we play our cards correctly, it could be 25% Ethode, 75% LightSpeed by the end of next year,” Holmes said. “That would make me feel good.”

But Holmes, who’s an organizer in Cleveland’s Blockland initiative, said there’s still plenty of runway for Ethode, which is currently being marketed as a developer of blockchain-based apps.

“Right now, the fastest-growing sector is software developed around blockchain,” Holmes said. “And we’re finally in a position where a significant portion of revenue is in blockchain-based software.”

There are several potentially lucrative projects in the works Holmes can’t talk about yet publicly.

Other projects are in store to build out the data centers further.

And that’s all besides that expansion in Atlanta at Pinewood, where

the company is looking to spend about $5 million to $8 million on a data center for post-production rendering for Disney’s Marvel Studios.

There’s a temporary structure there now comparable to the current Medina facility with a few employees, but the rest of the buildout is dependent on Pinewood Studios. Holmes said his “gut feeling” is the rest of that facility will go live around 2020 or 2021.

When it’s running, Holmes said, there’s potential for it to bring in between $20 million to $30 million annually.

“There’s nothing about this that was predicted,” said Holmes, looking back on the past several years. “I’d love to be able to take all the credit, but I’m just not that smart. It’s exceeded our expectations tremendously, though. And I would say timing has played a key role.”

11/2/18 2:51 PM

PA G E 2 2

|

N O V E M B E R 5 - 11, 2 018 |

CRAIN’S CLEVELAND BUSINESS

Advertising Section

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

MBA

WEATHERHEAD SCHOOL OF MANAGEMENT

weatherhead.case.edu

ACCOUNTING

FINANCIAL SERVICES

PROFESSIONAL SERVICES

PROFESSIONAL SERVICES

REAL ESTATE

RSM US LLP

Ancora

RCF Group

RCF Group

Everest Land Title

We are pleased to announce that Dan Yaceczko has been promoted to Principal.

With over 20 years of experience in the areas of business consulting, information technology, ERP account management, ERP implementations, manufacturing and operations management, Dan focuses on distribution, wholesale distribution, manufacturing, food and beverage, retail, and multichannel retail clients.

Ancora is proud to announce the promotion of Ms. Renie Walters to her new role as the Chief Compliance Officer of Ancora Retirement Plan Advisors. Her main responsibilities include the oversight and regulatory reporting requirements for the Retirement Plans RIA. Renie will also continue to maintain the GIPS compliance program for the Asset Management division.

Ancora congratulates Renie on her continuous growth with the firm since her tenure began in 2007 and we wish her success in her new role.

RCF Group welcomes Michael Molinski as Director of Operations. A graduate of the University of Cincinnati, he is a registered architect with over 20 years of experience delivering integrated solutions for large, complex projects. His five-year tenure as Lakewood’s City Architect and Building Commissioner involved the implementation of Lean Six-Sigma principles to improve service delivery from the building department as part of an unprecedented $300 million in construction activity.

RCF Group welcomes Kelly Sekely as an Account Manager joining our Cleveland Clinic team. Kelly is an Interior Designer, formerly the Senior Space Planner for JLL on the Capital One Account in Richmond, VA. A Masters graduate in Interior Environments from Virginia Commonwealth University, she also holds an undergraduate degree in Mass Communications, with prior career experience in marketing and advertising. Certifications include Construction Document Technologist and LEED Green Associate.

Everest Land Title is pleased to announce that Amy RegalMedinger has joined their team as Sr. VP of Commercial Sales.

Amy is a veteran in the commercial real estate industry.

With over 20 years experience, she has represented local & national developers, investors, lenders, mortgage bankers & attorneys with their title insurance needs. She is a past president of the local chapter of NAIOP, current board member of the GCMBA, and a member of Crain’s Cleveland Business 40 under 40-Class of 2006.

REAL ESTATE

TECHNOLOGY

Carnegie Companies, Inc.

Maroon Group

David Khanin recently joined Carnegie Companies as Real Estate Analyst. David assists with analysis, facilitation, coordination, and management of the entire deal flow process. Prior to Carnegie, David worked for SherwinWilliams in the finance arena.

David graduated from CWRU in Business Management/Finance.

Maroon Group, a world-class distributor of specialty chemicals and ingredients, announces Scott Simmons, Director of Regulatory Affairs, to coordinate all cohesive corporate regulatory activities.

Scott has an extensive chemical industry background and a breadth of regulatory experience with industrial, food & CARE products, and end markets, and has been involved with the integration of various acquisitions. Scott holds a BS in Chemistry, a MS in Organic Chemistry, and is working on his MBA.

CLASSIFIEDS OFFICE SPACE Storefront Office Space Tremont Neighborhood 1100 sq.ft. at the historical Tremont Place Lofts, 2372 West 7th. Street, Cleveland, Ohio 44113 Please call for information: 216-274-0866

P022_CL_20181105.indd 22

BUSINESS SERVICES

FLYNN ENVIRONMENTAL UST REMOVALS - REMEDIATION DUE DILIGENCE INVESTIGATIONS

(800) 690-9409

NEW GIG?

Preserve your career change for years to come.

C O N TAC T

Plaques • Crystal Keepsakes Frames • Other Promotional Items Laura Picariello Reprints Sales Manager CRAIN’S CLEVELAND BUSINESS lpicariello@crain.com (732) 723-0569

|

S E P T E M B E R 3 - 9 , 2 018

|

PA G E 2 5

To place your listing in Crain’s Cleveland Classifieds Contact Kate Rozek at 216-771-5276 / email CLBClassified@crain.com Copy Deadline: Wednesdays @ 2:00pm -- All Ads Pre-Paid: Check or Credit Card

BUSINESS FOR SALE BUSINESS FOR SALE Distributor with Product Line Sales $440,000 Very profitable mike@empirebusinesses.com www.empirebusinesses.com 440-461-2202

SIGN UP FOR ONE OF OUR INDUSTRY NEWSLETTERS www.crainscleveland.com/newsletters Contact Kate Rozek at 216-771-5276 10/31/18 2:51 PM

CRAIN’S CLEVELAND BUSINESS

|

N O V E M B E R 5 - 11, 2 018

|

PA G E 2 3

SOURCE LUNCH

Amie O’Brien Founder, owner and elite pitching instructor, Leffew Fastpitch The first softball training facility Amie O’Brien opened was in a 2,400-square-foot space in LaGrange. The success of that business resulted in the 2016 debut of a 21,000-square-foot spot in North Olmsted. ¶ In case that wasn’t enough of a venture, O’Brien — a former standout pitcher for her father, legendary Ohio softball coach Dave Leffew, at Keystone High School — and her husband, Tom, opened Method Sports & Fitness in March. The latter — which offers training for all ages, with a focus on youth sports performance — was constructed in two retail spaces that had been built into the Leffew Fastpitch facility. The moves, O’Brien said, have paid off, as the two businesses are on track to bring in $500,000 in revenue in 2018. As of late October, Leffew Fastpitch had done more than 5,000 private lessons for the year. The softball business has 12 instructors, plus three employees, and Method has four employees. ¶ And, O’Brien notes, there are no contracts. “I don’t want anyone to pay us unless they want to,” she said. — Kevin Kleps

The O’Brien file Family business O’Brien’s mom, Suzanne, is the office manager, her dad is a pitching instructor and her sister, Rhonda Beglin, runs the front desk at Method Sports & Fitness.

Family business, Part 2 O’Brien’s husband, who was the CEO of TravelCenters of America for 11 years, is a big help on the business side of the operation.

Animal lover “I’d rescue every dog if I could,” said O’Brien, who has three dogs, all rescues, and two cats.

Lunch spot Rosewood Grill 2033 Crocker Road, Westlake 440-835-9500

The meal One went with a turkey club, Caesar salad, a cup of garden vegetable soup and a Pepsi; the other had a French Dip sandwich, Caesar salad, a cup of lobster bisque and a Diet Pepsi.

The vibe The cozy spot across from Crocker Park can get lively at lunch time.

The bill $37.69, plus tip

It’s been quite the journey the last eight years, huh?

Yes. It’s been really good. It was kind of nerve-wracking to go that big so quickly, because we went from two or three instructors to now having about 21,000 square feet, seven (batting) cages that we do private lessons in. … I mean, I knew there was a need. But right now, for pitching instruction at the elite level — we have three different levels, elite (basically, we do it for our profession), premium (they played in college or have been giving lessons for four or five years) and core (advanced students who teach the other kids) — an elite instructor right now does not have an opening until March. It is crazy. And our premium instructors, you’re looking about two months out to get in.

What do you attribute to the growth of your business?

Reputation. We have a really positive culture. We have a “don’t say don’t” philosophy with all of our instructors.

When you’re instructing, it’s really easy to tell a kid what not to do.

Our philosophy is that’s not teaching.

You need to show them how to do it well, and in a positive way. We don’t yell. We’re there to teach. We’ve also had a lot of really successful pitchers in the past. We feel like we do the healthiest and most scientifically correct methods. That’s because we are continuing to educate ourselves. I don’t teach the way I pitched. My dad doesn’t teach the way he taught before. We try to get as much knowledge from other coaches and the most recent science that’s out there. We’re continuing to evolve.

What are the best parts of youth sports from your perspective?

I work with them one-on-one. I don’t work with a team. It’s all one-on-one, and I’m so proud of the kids. It doesn’t have to be that they’re throwing 70 mph. It can be that they can hit 45 mph and they’re 11 years old, and they’ve been trying that for three months. They get so excited, and they’re so happy. Their successes are my favorite part.

How do you balance teaching the kids and wanting them to have fun, with parents who might think their kid is the next big thing and might not see things as they should?

Most parents are awesome. And even the ones who maybe seem over the top want the same things as the awesome parents. I’ve been doing this a long time. There are ways to just kind of motivate the parents to help the kid. When you’ve seen a lot of negativity, you remind them that that’s not going to be fun. High expectations are good for an athlete.

But criticism, especially for a girl, is really hard. We have a saying that girls have to feel good to play good, whereas guys are kinda the opposite.

Guys have to play well to feel good. If you look at a young female athlete and you tell her five things in a row that she did wrong, she’s gonna shut down. For a parent, we recommend five to one — five positives for every negative. And if you can’t do that, try three to one.

Do you have an example of dealing with a parent who is particularly challenging?

I have one dad who is a trooper. He

knows he’s over the top. I was using duct tape for a landing spot for one of the mats, and he was barking over there. I was like, “Do you need the duct tape?” And he said, “I think I do.”

He actually put the duct tape on for a picture and I posted it on Facebook.

So I think they know and they try. I tell parents, if you can’t be quiet, then you need to go to the outfield because they need to listen to their coach. And if you raise them right, they’re supposed to listen to you. So they’re going to hear you, and it’s distracting. Let ’em play.

How did the idea for Method Sports & Fitness come about?

We work with a lot of elite athletes in the fastpitch softball industry. The next thing to get them to the next level is they need personal training.

They need some sort of physical exercise to increase their talent.

You’re only going to get so fast (pitching) without getting stronger and faster physically. But what we saw out there, including franchises that we looked at, was it was very generalized, especially in the sports performance area. The next thing we looked at, we started everything with sports performance, and we’ve added fitness now, but when I looked at the other industry challenges, it was how do we make it convenient? ... Some parents have three or four kids, all playing sports. They want their kid to do personal training, and the class that they need is 7 o’clock on a Tuesday. Their other kid has practice on the other side of town.

We wanted to develop a program where the athlete can come in almost as conveniently as they can, when there’s an open spot available.

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

Chairman Keith E. Crain Vice chairman Mary Kay Crain President KC Crain Senior executive VP Chris Crain Secretary Lexie Crain Armstrong CFO Robert Recchia G.D. Crain Jr., Founder (1885-1973) Mrs. G.D. Crain Jr., Chairman (1911-1996) Reprints: Laura Picariello, 732-723-0569 or lpicariello@crain.com Customer service and subscriptions: 877-824-9373 Volume 39, Number 45 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for the last week of December, at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230.

Copyright © 2018 by Crain Communications Inc. Periodicals postage paid at Cleveland, OH, and at additional mailing offices. Price per copy: $2.00.

Postmaster: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912.

1-877-824-9373.

Subscriptions: In Ohio: 1 year - $64, 2 year - $110.

Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address.

For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, MI, 48207-9911, or email to customerservice@crainscleveland.com, or call 877824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.

THE WEEK Seeing stars The NBA and the Cavaliers on Nov. 1 made it official, announcing that Cleveland will host the 2022 NBA AllStar Game.

The announcement was years in the making, since the NBA promised that Cleveland would get a future AllStar Game when the Cavs and regional leaders debuted their plans for the renovation of Quicken Loans Arena.

It should be a lucrative event. Micronomics, a Los Angeles-based economic research and consulting firm, performed a study prior to the 2018 NBA All-Star Game in L.A. that estimated the festivities would generate $116 million in spending. Projections for the 2012-17 All-Star Games have ranged from $80 million (for Toronto, which had an $80 million to $100

P023_CL_20181105.indd 23

million estimate for 2016) to $200 million for New York in 2015.

Welcome to the neighborhood

Quicken Loans Arena, which has hosted 10 NBA Finals games the last four years and is undergoing a $185 million renovation, will be the home of the 2022 NBA All-Star Game. The event is projected to have an economic impact of $100 million. (Kevin Kleps)

Mayfield Village-based Progressive Corp. has leased a small office space in Cleveland's Warehouse District for a new team to find new opportunities.

The company announced Nov. 1 that it is forming a 40-person team to find profitable growth opportunities, and that it will be housed separately from its existing corporate campus in the east suburbs, primarily near its headquarters in Mayfield Village.

To that end, the company has leased about 9,000 square feet at The Worthington Building, 800-824 W. St. Clair Ave., and plans to occupy the new suite in April or May of 2019.

Change at the top Akron Children's Hospital CEO William Considine is stepping down from the role after nearly 40 years leading the independent hospital.

Considine, 71, will become CEO emeritus, and Grace Wakulchik is taking on the role of CEO. Wakulchik, 62, a longtime executive of the hospital, was named president in 2017.

Considine will serve in the role of CEO emeritus, focusing on child advocacy issues, through Jan. 1, 2020.

Considine had been one of the longest-serving hospital CEOs in the country, having joined the pediatric hospital in 1979. He oversaw the hospital’s growth as it transformed to a system with a $1.8 billion budget, more than 6,000 employees, hospital campuses in downtown Akron and in Boardman, and 60-plus locations.

11/2/18 1:21 PM

CLOSING THE GAP!

TITLE SPONSOR

Are you one of the many manufacturers facing these issues?

• There aren’t enough qualified employees to keep up with the workload.

• Your company is unable to grow with the current talent pool.

• Manufacturing doesn’t seem to be an interest for the next generation.

Come hear how three NEO manufacturers tackled these problems head-on and brainstorm with fellow attendees on best workforce development practices.

KEYNOTE SPEAKER:

Dr. Albert Green, CEO, Kent Displays, makers of Boogie Board

INTERACTIVE SESSION: SOLUTIONS FOR THE SKILLS SHORTAGE

PANEL DISCUSSION: STATE OF MANUFACTURING

TUESDAY | NOV. 13 Corporate College East

For more event topics and registration information, visit #CrainsMFG

Crainscleveland.com/CrainsMFG TECHNOLOGY PARTNER

SUPPORTING SPONSOR

CRAIN'S MANUFACTURING ASSEMBLY IS A PRODUCT OF THE

Questions? Contact Crain’s Events Team at CLEvents@crain.com or 216-771-5424.

Interested in advertising/sponsorship opportunities? Contact advertising director Lisa Rudy at lrudy@crain.com.

Full Page Template.indd 2

11/1/18 10:15 AM