Page 1

VOL. 38, NO. 38

SEPTEMBER 18 - 24, 2017

Source Lunch

Akron Now is not a bad time to own a plastics company. Page 26

Howard Katz, Cleveland-Marshall College of Law Page 31



The List The largest hotels in Northeast Ohio Page 24 REAL ESTATE

Energy Focus CEO eyeing brighter future Forest By RACHEL ABBEY McCAFFERTY @ramccafferty

Ted Tewksbury likes a turnaround. That’s good, because Energy Focus Inc., where he’s currently chairman, CEO and president, certainly needs one. Energy Focus, a Solon-based maker of LED lighting products, saw

its net sales drop from about $64 million in 2015 to $31 million in 2016. The company had long put a focus on military sales and was working to diversify, but it wasn’t happening fast enough. Tewksbury was named to his current role in February of 2017 and quickly began making changes to the company’s sales strategy and its product roadmap. He has a Ph.D in electrical engineering from the Massachu-

setts Institute of Technology, and he previously was CEO of Integrated Device Technology Inc. and of Entropic Communications. So, with his technology background, it’s no surprise Tewksbury is putting a focus on how Energy Focus can better use it. Tewksbury wants the company to move beyond what he calls “passive” light tubes to “smart lighting,” which can respond to occupancy and activity levels in a room. Energy Focus had

no such products when Tewksbury joined. “This tube is capable of doing a lot more than just being a source of light. This is a little plastic container, and it’s got a fair amount of space inside of it,” Tewksbury said, holding one of the company’s LED products. “So, today, we put a string of LEDs in here and call it a tubular LED. But there’s a lot of room in here to put other stuff.” SEE ENERGY, PAGE 28


‘Mortgage desert’ gets helping hand

Executive director Rob Curry said CHN can be “a tough landlord.” (Ken Blaze for Crain’s)

CHN Housing Partners is seeking to expand its services for low-income homeowners By STAN BULLARD @CrainRltywriter

Cleveland Housing Network is outgrowing its name, but not its mission of using quality affordable housing to help build strong low-income families and vibrant neighborhoods.

The new name, effective Thursday, Sept. 14, is CHN Housing Partners, which the Cleveland-based nonprofit’s board and staff leaders believe incorporates the larger scope of activities it plans and in some cases has already undertaken. It also builds on the organization’s reputation burnished by working since 1981 with low-income people on a panoply of

Entire contents © 2017 by Crain Communications Inc.

housing-related initiatives from lease-purchase housing to energy conservation. A major initiative for CHN is need-driven in many Cleveland and suburban neighborhoods in the wake of tighter lending standards for banks providing home mortgages under federal regulations created after the housing bust and Great Recession.

Rob Curry, CHN executive director, said, “There are absolute mortgage deserts out there. We want to create mortgage products that, before and after purchase, move the needle for families with low incomes. It’s one of the riskiest types of loans and costs lenders as much for smaller mortgages as large ones.” SEE CHN, PAGE 29

City tests sale, joint venture By STAN BULLARD @CrainRltywriter

Today’s Forest City Realty Trust is far different from the sprawling, multipronged real estate development firm that grew since 1920 from Cleveland roots to the national level. It's still the owner of a vast portfolio, but the smaller, more focused company it has become in the past six years may be on the threshold of even bigger changes. Although experts discount the chance Forest City may disappear from Cleveland, that specter surfaced last week as the real estate investment trust’s board announced it has hired investment bankers to undertake a broad review of options for the property owner with assets from New York and Washington, D.C., to San Francisco. It’s also a secondary outcome after the $15 million sale of Post Office Plaza in August marked the company’s exit from the ranks of downtown Cleveland property owners. That was not much money in the totality of Forest City’s $8 billion portfolio, but it meant a lot for the company in a far different way. “Buyers like portfolios based in major metros,” said Sheila McGrath, a New York-based Evercore analyst who covers the company. And in this case, after Forest City’s board announced Sept. 11 it would examine all options to improve shareholder value, which ranges from being sold to forming a joint venture or making acquisitions to give its stock values a lift, Citigroup analyst Michael Bilerman’s team headlined its report on the development this way: “Don’t you want me(?)” However, wanting Forest City and getting it are likely to be two different things. SEE FOREST CITY, PAGE 28

Meeting and event planner << Are

trade shows still relevant in the digital economy? Page 13 Sustainability is within reach for meeting and event planners. Page 20 It’s showtime in Summit County. Page 22

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NEW ERA. NEW AGAIN. CLEVELAND-CLIFFS While we are proud of what we have accomplished in the last three years, Cliffs Natural Resources going forward will be called by its traditional name: Cleveland-Cliffs. For 170 years, we have been the foundation of the North American steel industry, providing the highest quality iron ore to integrated mills. Reinventing the company once again, our expansion into hot briquetted iron (HBI) to serve the electric arc furnace (EAF) steel industry is key to our growth. The future’s bright – we are excited about expanding our reach while continuing to serve our long-term core customers. See what’s new at


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When Drew Pierson was in charge of the caddies at a high-end private golf club in Florida, he oversaw a box that any given time contained $50,000 to $60,000 in cash. â&#x20AC;&#x153;As an assistant golf pro, that was more money than I was making in a year,â&#x20AC;? said Pierson, who is now the director of golf at Shaker Heights Country Club. The scenario is a common one at country clubs, where caddies most often work as independent contractors and are paid by the members for their services. The catch: The club usually pays the caddies in cash and is reimbursed by the golfer, which can result in a bit of a financial crunch during the busy summer months. Circuit Technologies, a Cleveland startup that has space in the United Bank and Trust Building in Ohio City, believes it can relieve that cash burden for private golf clubs, and help them with potential scheduling issues. Circuit, with the help of DXY Solutions, developed an app that is now in place at a couple Northeast Ohio country clubs â&#x20AC;&#x201D; Shaker and Mayfield Sand Ridge. The app allows golfers to request caddies for specific tee times. Once a caddie accepts and completes the assignment (a loop, in club parlance), he or she is paid, via a Stripe account, by the member, who gives the goahead for a credit or debit card payment via the Circuit app. The idea stemmed from conversations Ryan Bartels had with his uncle, John, during the summer of 2016. Ryan, who had been caddying since he was 15, was an intern at Ancora Advisors at the time. The 20-year-old junior finance major at Indiana University was living with his uncle, who is a board member at Shaker Heights Country Club. â&#x20AC;&#x153;I came to Cleveland and started caddying on the weekends,â&#x20AC;? said Ryan, an Illinois native. â&#x20AC;&#x153;I started finding that they were having the same problems in Cleveland that the clubs were having in Chicago. I started thinking, â&#x20AC;&#x2DC;How can we solve this?â&#x20AC;&#x2122; â&#x20AC;? John Bartels, who founded Independent Advisors in 2000, said he liked his nephewâ&#x20AC;&#x2122;s idea of paying and scheduling caddies via an app, and he helped Ryan shape it into what he thinks is now a viable business. John and his brother, Chris (Ryanâ&#x20AC;&#x2122;s dad, and the owner of an Illinois landscaping company), put in the original seed capital. They raised another $200,000 in the spring, and plan to raise $1 million in growth capital, via convertible note, beginning this fall. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re very excited about where weâ&#x20AC;&#x2122;re headed,â&#x20AC;? said John, an Ancora managing director who wanted to make clear that the Cleveland investment firm is not involved in Circuitâ&#x20AC;&#x2122;s fundraising. â&#x20AC;&#x153;We keep getting excellent feedback from general managers and golf pros.â&#x20AC;?

Paying now, and later John Bartels is Circuitâ&#x20AC;&#x2122;s chairman of the board. His nephew â&#x20AC;&#x201D; who takes all of his college classes on Mondays and Wednesdays, giving him more days during the week to work on the business â&#x20AC;&#x201D; is the startupâ&#x20AC;&#x2122;s founder. John and Ryan Bartels have brought in a vice president of sales

When a golf club member uses Circuit Technologiesâ&#x20AC;&#x2122; app, he or she can tell the club how many caddies are needed and which type of caddie is preferred, plus rate and pay the caddies with their credit or debit card. The app also helps the clubs schedule their caddies.

and operations (Dan Hanna, who worked in sales for the Indians for 10 years), a senior VP of business development (Tom Lamb, a former PGA Tour caddie for the likes of Jay Haas, Steve Stricker and Brad Faxon), plus a sales staffer in Florida and a parttime chief marketing officer. Soon, Circuit will add a salesperson to cover the Northeast, Hanna said. Hanna is a former Shaker Heights Country club caddie master who said he used to â&#x20AC;&#x153;get a metal box with $20,000 in cashâ&#x20AC;? to pay the caddies during a busy weekend. â&#x20AC;&#x153;As we were going through and developing this, we said thatâ&#x20AC;&#x2122;s not a really good business practice,â&#x20AC;? Hanna said. â&#x20AC;&#x153;We can take that off the clubâ&#x20AC;&#x2122;s list of things they worry about.â&#x20AC;? Pierson, whose club was the first to use Circuitâ&#x20AC;&#x2122;s technology to pay and schedule its caddies, liked the idea so much that heâ&#x20AC;&#x2122;s an investor and board member. Shakerâ&#x20AC;&#x2122;s director of golf said heâ&#x20AC;&#x2122;s heard stories about clubâ&#x20AC;&#x2122;s dipping into their lines of credit because they were fronting so much cash to pay caddies, and some who had a sizable amount go missing. (Because members are billed by the month, if he or she golfs on the first of the month, the club wonâ&#x20AC;&#x2122;t get reimbursed for the caddie payment until late the following month, when the bill is due.) â&#x20AC;&#x153;There are times when cash isnâ&#x20AC;&#x2122;t available,â&#x20AC;? Pierson said. â&#x20AC;&#x153;You have to send someone to the bank or pay a courier to bring cash to you. The easy loop is when a member pulls cash out of his wallet. But weâ&#x20AC;&#x2122;re in a cashless society. â&#x20AC;&#x153;Caddies donâ&#x20AC;&#x2122;t like it, either,â&#x20AC;? Pierson said. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a win-win for the caddie, a win-win for Shaker.â&#x20AC;?

On deck: Circuit Pro The Shaker Heights golf pro might be even more pumped about other features of Circuitâ&#x20AC;&#x2122;s app. Circuit gives members the chance to tip and rate the caddies, and allows clubs to send a notification to multiple caddies as they try to fill rounds. â&#x20AC;&#x153;The technology will say I need two caddies,â&#x20AC;? Pierson said. â&#x20AC;&#x153;The first two to hit accept on a push notification will get the round. Itâ&#x20AC;&#x2122;s two clicks for me. It takes the time down from potentially half an hour of work (after sending out text messages and waiting on responses) to potentially 10 seconds.â&#x20AC;? Doing so, Ryan Bartels points out, can â&#x20AC;&#x153;reduce the clutter around the clubhouse,â&#x20AC;? since caddies donâ&#x20AC;&#x2122;t necessarily have to sit around and wait to be asked to work a loop. Circuit charges an annual licensing fee for the service, and it gets $1 for each of the caddie payment transactions. Hanna said he expects Circuit to have relationships with 30 to 40 clubs by the spring, mostly in Northeast Ohio and suburban Chicago (where Ryan Bartels resides when heâ&#x20AC;&#x2122;s not in school). John Bartels thinks Circuit Technologiesâ&#x20AC;&#x2122; next venture, Circuit Pro, could be even more valuable. When finished, that technology will give golf and tennis pros the ability to show members an inventory of lesson times, and will process the payments in a similar manner as the caddie app. â&#x20AC;&#x153;If we do that, it opens doors quicker for the clubs to use Circuitâ&#x20AC;&#x2122;s caddie app,â&#x20AC;? Bartels said.



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New specialty hospital slated for Beachwood By LYDIA COUTRÉ

At a glance @LydiaCoutre

69,800 square feet 6-8 operating rooms  25 patient beds  24-hour ER services  20 physicians  150-200 support staff  Architect: Hasenstab Architects  Developer: Manna Isle Ohio Services  

Cleveland’s competitive East Side suburbs will soon see a new hospital, but its developers say it won’t look or feel anything like one. A team of more than 20 independent doctors have come together with a single vision: a specialty hospital for doctors who want to showcase their skills, believe in a patient-centered culture and are looking for a “beautiful place where they can add value and improve our quality,” said John Lin, CEO of Premier Physicians and the concept developer for Manna Isle Ohio, which will develop the yet-to-be-named hospital in Beachwood. Under construction at the corner of Richmond Road and Chagrin Boulevard, the for-profit, full-service hospital will specialize in orthopedics, urology, general surgery and gastrointestinal procedures. The hospital, slated to cost between $50 million and $60 million and open in late 2018 or early 2019, will be built for hospitality and comfort in collaboration with Aurora-based luxury inn and spa Walden. It’s the latest in a series of bold moves by independent docs in the region — a group that has seen its ranks thin considerably in recent years as the Cleveland Clinic and University Hospitals acquired several independent practices. In late July, Premier Physicians and Jubilee Healthcare, which does business as

    

Radiology Surgery ER services Patient care wing Physical therapy

Source: Premier Physicians

NorthShore Healthcare, announced they would merge into a single independent group. “We want to have the top doctors in a beautiful facility where the patients come first, and they’re treated like the most important people in the facility,” Lin said. Lin and Dr. Reuben Gobezie, a local physician who’s started various practices, shared the idea of a specialty hospital — a facility focused on certain service lines — in the hopes of what they say will improve outcomes, lower costs and improve patient experience. Soon thereafter, Rob Rosencrans, managing partner of Walden, joined the team, bringing his perspective on customer service, environment and aesthetic. Walden — a AAA-rated, 5-Diamond inn —

will manage the patient experience and design interiors. “Just because it’s health care doesn’t mean it can’t feel good,” said Rosencrans during an interview in one of the Walden’s suites that feels more like an upscale studio apartment than a hotel. The hope is to draw inspiration from the zen-like luxury of the Walden, Lin said. It offers the feel of a very comfortable, beautifully designed home, but is not over the top, he said. “You hire health care architects to design a hospital, they’re going to design you a nice glass box or a nice concrete, sterile box,” he said. “Although that can look really elegant and really nice and really expensive, it wasn’t the home feel that we wanted, and it

didn’t reflect our personalities.” Staffed with 150 to 200 employees, the 69,800-square-foot, inpatient hospital will have 25 patient beds, six to eight operating rooms and 24hour emergency room services. Areas of the two-story building — at 25501 Chagrin Blvd. in Beachwood — include the ER, radiology, surgery, physical therapy and a patient care wing. Hasenstab Architects of Akron is the architect of the facility, which will have a facade to match that of the adjacent building. The developer, Manna Isle Ohio, will own the hospital, while the physicians will manage it. Although the hospital could remain independent, Lin said they are considering a plan to partner with a health care system that shares their values.

Doctors specialize in nose, bones, heart, eyes, lungs and on and on. But the facilities in which they practice aren’t specialized, Lin notes. “And we don’t really understand why that’s not the case,” he said. From the person who brings a patient to their room to the nurses to the surgeon and team to the person who cleans the instruments after an operation, everyone is specialized in that field, Gobezie said. The efficiencies and competencies that come with that repetitive work help to define a specialty hospital, he said. “We’re never going to do everything and do it all really well,” Lin said. “The only way for us to do something better than anyone is if we specialize in the things that we’re good at.” Right now, the hospital’s specialized services are based on the expertise of the physicians who are on board, but Lin said those could expand as they find other top specialists. As word gets out about the project and as the building continues to go up, Lin wouldn’t be surprised to see the more than 20 physicians involved double by the time they open. With University Hospitals Ahuja Medical Center down the road and Cleveland Clinic Hillcrest just a few miles away, the East Side suburbs certainly aren’t facing a shortage of capacity. Allan Baumgarten, a Minnesota-based health care consultant who studies the Ohio market, said he’s not surprised to hear that the hospital is slated for Beachwood. SEE HOSPITAL, PAGE 27


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NEO firm hopes to ease Ohio’s marijuana ‘stigma’ By JEREMY NOBILE @jeremynobile

Nelsonville’s Hocking College recently unveiled intentions to develop a cannabis research lab and related programs alongside a coming bid to do required testing of the state’s coming medical marijuana supply, bucking a trend of other Ohio universities shying away from the opportunity. But if not for the efforts of Northeast Ohio scientist Jonathan Cachat, founder of CCV Research — the acronym stands for Conscious Cannabis Ventures — those plans may have never come to fruition. In 2014, Cachat established his marijuana research and consulting firm in Northern California. Some of his work there centered on the effects of various drugs on the brain, including the combined impacts of alcohol and cannabis, in a state that has approved both medicinal and recreational marijuana use. But he returned to North Ridgeville in January, bringing his firm and research with him to spur the cannabis industry in his home state. “I’m puzzled why this is even like this,” said Cachat, referencing the reluctance of some to embrace the marijuana industry, from universities to doctors. “I think it has to deal with the stigma and taboo here in Ohio. But fundamentally, that’s all based in a lack of education. So I wanted to come help Ohio with this.” Testing is a critical element of the Ohio medical marijuana program, which will launch officially in September 2018. And lawmakers have mandated that an Ohio college be the first to test the plant material, medicinal oils and edibles before it’s made available to consumers. Applications for private companies to test the material in Ohio won’t be released until June 2018, which probably wouldn’t provide enough time for a facility to be approved, up and running before medical marijuana is supposed to be available for patients. Before Hocking’s Sept. 5 announcement that the technical school would offer to do the testing, concern was mounting whether any school would even be interested. Major collegiate research institutions seemed disinterested, fearing what could be at risk if the federal government decides to crack down on marijuana. The prevailing worry is a college testing a plant still federally classified as illegal might see its federal funding torn away — or worse. “It is an unfortunate reality made worse by mixed signals from the federal government. For instance, Congress continues to extend budget riders preventing federal law enforcement from interfering with state medical marijuana programs, yet Congress allows marijuana to remain a Schedule 1 substance,” said Thomas Haren, a Cleveland lawyer at Frantz Ward LLP specializing in marijuana law. “The concern I think extends not only to funding, but also to the risks that every operator takes when entering the industry: the risk of federal prosecution," he said. “Remember that possession of marijuana alone is prohibited under the Controlled Substances Act. This is true for any operator cultivating, processing, dispensing or even testing marijuana for commercial purposes.”

Jonathan Cachat moved CCV Research from California to North Ridgeville in January. (Contributed photo)

What testing marijuana could mean to the technical school’s federal dollars was duly considered, said Hocking president Betty Young. “But we also understand this administration believes in and supports state rights,” Young said. “So we don’t really think it’s anything at the federal level this administration would oppose.” “And for me,” she added, “this isn’t about us deciding on the merits of medical cannabis. The state already decided that. If we as an institution have the ability to help, once the state has decided that merit, then we absolutely want to be a part of that.”

Cachat knocked, Hocking answered When Cachat, 32, returned to Ohio earlier this year, he began contacting the state’s major colleges, attempting to make inroads with officials to talk about building a cannabis test facility. No one would take the meeting — except for Young. The school was already working on a laboratory science curriculum designed to train students for a growing number of jobs as medical and chemical laboratory technicians, and include tracks for those technicians, in addition to forensics and chemical laboratory science. Cachat and Young discussed how a cannabis testing lab could work inside that program. After all, the visions for both plans align: the overall intention it to support their respective industries and build the workforces they need. Meanwhile, doing the cannabis testing would build a new revenue stream into the school. It all added up perfectly, coming together like a “patchwork quilt,” Young said. If things go according to plan, the cannabis test lab will be independent of the lab technician program for which Cachat will be the director. He’ll also oversee the testing facility that will be built if Hocking gets licensed. The school is establishing an endowment to pay for that facility, which would add an estimated dozen new jobs, and related startup costs. It's seeking $3 million to start. Young said the school already has a location in mind on campus, but she’s not ready to disclose where that is just yet. “That endowment is so important to us,” Young said. “People who believe in medical cannabis have supported this in other communities in

other states. We are looking for people like that to join us here in Ohio to make this feasible for us.” As far as what Hocking could earn from testing, that’s hard to predict. However, Cachat said about 10% of a crop needs to go through a testing lab before it can be used in products. The plant is tested for a variety of things, included THC levels and presence of mold. And if their plans do come to fruition, Hocking and Cachat may develop the first cannabis-related lab technician program offered at a university in the country, if not the world. Meanwhile, for CCV itself, getting involved in a lead role for testing could be huge for Cachat’s own work. Besides researching the drug’s effects on the brain, Cachat is working on other ventures, including energy-saving, hybrid-lighting solutions for cultivators. As Cachat becomes more ingrained in the nascent marijuana industry here, not only does his company and Hocking stand to flourish, but each could play a pivotal role in the industry’s budding development. “It’s all very exciting,” Cachat said. “This is everything I’ve been working toward. It’s great to see Ohio is on the verge of launching this in a way that stands to benefit neighbors, families and the community enormously.” If the license were denied to Hocking, the lab technician program still will move forward. The greater question is what that could mean to the Ohio marijuana industry if no school comes online to handle the marijuana testing. After all, some question if even one test lab can handle the initial workload it could be facing. “With a statutorily-mandated September 2018 operational date, it will be interesting to see whether a single college testing will be enough to allow operators to go to market by next September,” Haren said. “I think it is unlikely that any private testing laboratory licensed by the state will be up and running quick enough to perform sufficient testing to meet that deadline.” If Hocking is indeed the only college to seek a testing license, Cachat finds it unlikely it could be denied one anyhow. “If Hocking is the only state college to apply, and this falls under (the state’s) mandate, there’s going to be a huge backlash,” he said. “I’d be surprised if the state denies the only public university trying to fulfill their own mandate.”

Educating the world’s next “greatest generation” of leaders The Foundation for an Inspired Life

A Commitment to Excellence

John Carroll University launched the academic year with 18 newly appointed faculty, increased enrollment for both undergraduate programs and graduate business programs, and expanded or added numerous programs. These efforts are focused on providing students with the experiences—both in and outside the classroom— that position them for successful careers and, more importantly, a life well lived.

This past year, John Carroll completed its Forever Carroll Campaign, raising more than $104 million for student scholarships to enrich academic and student experiences and build on its Jesuit heritage. In addition, John Carroll had a record-breaking year of cash donations, which supported new fellowships with the World Food Programme and the Cleveland Clinic.

John Carroll helps develop the skills that employers and graduate schools expect. Students learn to communicate effectively, understand and interpret data, solve complex problems in diverse settings, and work collaboratively with others. However, a liberal arts education built on hundreds of years of Jesuit educational excellence is so much more. At John Carroll, the focus is on the whole person—mind, body, and spirit. This is reflected in its University Learning Goals: intellect, character, leadership, and service.

A Focus on Distinct Programs The appointment of new faculty represents the University’s enhanced commitment to undergraduate teaching in Accountancy, Communications, Education, Marketing, Exercise Science, Sports Studies, Supply Chain, and Pre-Health Professions, as well as a renewed focus on its top-ranked MBA program and other advanced degrees in areas such as Clinical Mental Health Counseling. “Preparing students to pursue a successful life begins with the people whose mission it is to teach and empower,” says Dr. Jeanne Colleran, interim president of John Carroll University. “We are bolstering the ranks of our faculty as part of our commitment to consistently provide an exceptional academic experience for our students.”

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U.S. News & World Report

A Call to Engage the World John Carroll educates individuals of intellect and character who lead and serve by engaging the world. Its location just 10 miles from downtown Cleveland allows students to gain real-world experience year round. JCU students participate annually in more than 130,000 hours of service, countless research projects, and more than 400 internships with Fortune 500 companies, startups, and nonprofits. John Carroll STEM faculty are heavily involved in research and actively involve students in their work. These types of experiences are why employers rank John Carroll graduates #1 in Ohio for career readiness, according to Bloomberg BusinessWeek’s 2016 Employer Survey.

My professors and classmates inspire me to act, innovate, and lead with confidence and heart. John Carroll has taught me how to be a person with passions, who cares about others, and who works to share this with the world." Roserita ’18 | B.S. in Management; Peace, Justice, and Human Rights Minor

18 Newly Appointed Faculty (16 Pictured)

Backed by a 500-year-old Jesuit tradition, John Carroll challenges students to go beyond mastering the latest knowledge and skills. John Carroll provides the experiences that prepare graduates for a constantly changing world and helps students become their best selves so that they can be a force for good. More than 500 businesses in Northeast Ohio are owned or led by John Carroll alums. With its focus on programs that meet the needs of its students as well as the demands of the job market, John Carroll is educating the next generation of world-class leaders.

Excellence in STEM & Pre-Health Professions

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Midtown’s makeover will get lift from townhomes By JAY MILLER @JayMiller

The sprucing up of Cleveland’s Midtown neighborhood, once a ragged industrial district, is continuing. Soon, residents will be occupying $400,000 homes, and office workers will be toiling in the home of a former restaurant supply business. Ground recently was broken by Boston’s Vazza Real Estate Group for One Midtown, a complex of 23 townhomes at East 71st Street and Euclid Avenue, replacing a two-story brick building that last held a long-closed furniture liquidator. Vazza is building three-story, three-bedroom units with rooftop decks of between 1,800 and 2,200 square feet. One Midtown is Vazza’s first venture into Cleveland. Derek Holt, managing director of Vazza, said he has relatives and friends here and his firm has, for some time, been watching Cleveland “out of the corner of our eye.” At the same time, his firm has watched the cost of development rise in its existing markets closer to home. So, he said, it decided, “maybe we should take a closer look at Cleveland.” The firm has watched in Boston, where physicians who used to commute from the suburbs now are buy-

ing homes close to the city’s major in-town medical centers, and executives believe the same thing can happen here. Holt also believes the top end of Cleveland’s apartment rental market has risen to a point where buying can be cheaper, especially with the financial attraction of Cleveland’s tax abatement and a loan program available to employees of University Circle’s major employers. Pricing starts at $409,000. The homes qualify for Cleveland’s 15year property tax abatement, and borrowers may qualify for zero-interest Greater Circle Living (GCL) loans. The GCL program offers employees of several University Circle institutions — Case Western Reserve University, the Cleveland Clinic, the Cleveland Museum of Art, Judson at University Circle and University Hospitals — forgivable loans of as much as $30,000, if all conditions are met. At the same time, the Link 59 project from Geis Cos.’ Hemingway Development is moving another step ahead, with financing for the $22.4 million renovation of the former home of Ace Fixtures on East 61st Street coming before Cuyahoga County Council. Neither Fred Geis nor James Doyle, Hemingway’s partners, returned telephone calls by deadline last week.

Hemingway is asking the county for $2.5 million in loans at 3% interest. In addition, according to a project summary attached to county council legislation, JobsOhio will lend the developers $3.4 million with New Market Tax Credits, a HUD loan and several smaller loans and equity covering the rest of the cost. According to the county project summary, the developer has identified Infinite Arthroscopy, a biotech company, as the tenant for the entire second floor, bringing 10 employees with it. The project summary also notes that GradSchoolLoans, a client of JumpStart, the Midtown-based nonprofit that assists entrepreneurs that assists medical school graduates with their student loans, is expected to occupy half of the first floor. It would bring 20 employees with an expectation it will add 12 more fulltime jobs. The legislation that would authorize the loans got a first reading before county council Sept. 12. It was referred to council’s economic development and planning committee.

Correction JJA story in the Sept. 11 issue of Crain’s Cleveland Business misidentified the business that will share common space with Dante’s Inferno. Thirsty Dog Brewing Co. will share the bocce space.




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S E P T E M B E R 18 - 2 4 , 2 017 |


Opinion From the Editor

Tito handles Tribe team like a boss


Then there were two The people have spoken — well, a pretty small percentage of them, at least — and Cleveland City Councilman Zack Reed won the runner-up spot in last week’s Cleveland mayoral primary and earned the right to challenge three-term incumbent Frank Jackson in the Nov. 7 general election. Jackson won 38.7% of the vote in a primary in which about 33,000 people decided it was worth the time and effort to cast a ballot. It's not a great sign, when you’re a highly familiar political figure seeking a fourth term in office, that more than 61% of primary voters supported someone else to be mayor. But with light turnout, and voters’ attention not yet focused significantly on the race, it would be a mistake to count out Jackson. He’s a savvy politician who has the experience and financial backing to figure out how to get to 51%. Reed won 21.9% of the vote, besting fellow councilman Jeff Johnson, who came in third with 15.4%, and six other challengers who won single-digit percentage support. Johnson immediately threw his support behind Reed, a four-term councilman. Stylistically, Jackson and Reed could not be more different. Jackson, as voters know, is quiet, cautious and deliberate. He’s the epitome of a political realist whose signature phrase — “It is what it is” — reflects his dedication to pragmatism and a belief in incremental approaches to addressing issues like crime, housing and employment opportunities. Reed, by contrast, is more forceful and outspoken — traits that haven’t necessarily made him a major player on city council, but that could appeal to voters seeking a more aggressive approach to tackling the issues that have been a centerpiece of his campaign: combating violence and poverty. Regardless of how they talk about issues, they have much to talk about. Reed is right that neighborhood safety is a critical issue, both in improving the quality of life for residents and in helping to foster greater economic opportunities. He now can talk in detail about how he would do that, and how the city would pay for more police officers and other safety improvements. Jackson’s support of the controversial Quicken Loans Arena

renovation financing deal will no doubt be a major campaign issue, too, as it reflects a significant divide between the candidates in their approach to economic development. We hope voters become more engaged in the campaign over the next seven weeks. Demand specifics. If Jackson is to win an unprecedented fourth term, make him earn it. And if Reed’s the one to deny it to him, make sure the councilman shows he’s up to the job.

Good neighbor

One of the most intriguing pieces of MetroHealth’s ambitious campus transformation plan — a nearly $1 billion project that will physically remake the system as we know it — is the community tie-in. The bulk of Cleveland’s major construction efforts have at least some component to source local talent for construction jobs, but MetroHealth’s plans take that approach to the next level. And, of course, all of the local hospital systems have committed dollars in some regard to uplifting their surrounding neighborhoods, but none yet has taken it to quite the level that MetroHealth intends. The health system’s board in late July approved the creation of CCH Development Corp., a nonprofit devoted to revitalizing its West 25th Street neighborhood and developing nearby abandoned real estate in collaboration with various other partners. And while it's a unique model among Northeast Ohio hospitals, it’s not completely foreign to the region’s major institutions. Both Cleveland State University and Playhouse Square launched development entities — with success — focused on uplifting their neighborhoods. While we believe the region’s health systems should play an active role in uplifting the relatively poor locales they call home, none bears a greater responsibility than MetroHealth, which receives a modest, but critical, subsidy from Cuyahoga County taxpayers. Taxpayer dollars should come with clear expectations for community benefit, and no publicly funded institution in Cleveland appears to be setting the bar higher than MetroHealth.

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The Cleveland Indians’ torrid tear through late summer isn’t something we’ll soon forget. Weeks of history-making, nonstop winning tend to leave an impression. And it tends to work its way into every office conversation. Boardroom, 9 a.m.: “Before we get to the progress report on our deliverables on the Johnson account, how ’bout that Tribe?...” Something to consider about the team performing at its peak: Great management is a crucial component. Yes, the players are highly skilled and hard working. That’s key. But a lot of the credit for the Indians’ consecutive win streak also goes to manager Terry “Tito” Francona. Beyond the strategy of managing the game — what relief pitcher comes in when, who starts and who rests, when to shift fielders or Elizabeth call for a pinch runner — there’s a lot that busiMcIntyre ness leaders can learn from Francona’s winning combination of knowing his business and knowing his players. It’s not by happenstance that the Indians have been so focused and loose during the unprecedented streak. Francona creates an atmosphere that allows his players to relax and excel. Recently, I talked to Bob DiBiasio, the Indians’ senior vice president of public affairs, who relayed a telling anecdote about Francona’s managerial style. During Game 3 of the 2016 American League Championship Series in Toronto, after starting pitcher Trevor Bauer’s drone-injured finger began bleeding profusely in the first inning, Francona took the long walk to the mound. Bauer’s teammates surrounded the pitcher with heads bowed, knowing that Bauer’s injury prevented him from continuing. The game — and potentially the series — would rely on the bullpen patching together eight innings of relief, a Herculean feat. Francona knew that tensions were high. Just then, something on the scoreboard caught Tito’s eye, DiBiasio said. The stadium’s 50/50 raffle stood at $82,000. He turned to then-first baseman Mike Napoli. “Hey Nap,” he gestured to the scoreboard. “We need to get in on that.” Napoli and his teammates burst into laughter. It was just the release they needed at just the right time. A good manager knows when a light touch, and likewise a firmer one, is needed. The bullpen went on to win that game, 4-2. The 2016 team, despite injuries to Bauer and two other starting pitchers, pushed the Chicago Cubs to extra innings in Game 7 of the World Series, a feat no one thought possible. I emailed DiBiasio last week during the early innings of the game in which the Indians would set the American League record for consecutive wins. He shared with me a more recent story of Francona’s managerial prowess. The Indians were off to an abysmal start after this year’s All-Star break. After losing five out of six games on a West Coast road trip, the Tribe was barely over .500 and losing a grip on first place in the American League Central Division. Francona sat down with his team and asked the players two simple questions that he knew only they could answer: Who did they want to be? What identity did they want to create for themselves? Anyone who manages people can take a lesson from that. Francona can’t stand in the batter’s box and drive a 3-2 curveball up the middle anymore. His job is to get the players to perform at their peak. Managers in business should think about the questions they should ask when sales look bleak, or strategic plans crumble, or when the deliverables on the Johnson account have fallen way behind. And then hope their teams answer like the 2017 Indians.

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 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 Please include a telephone number for verification purposes.



S E P T E M B E R 18 - 2 4 , 2 017


PA G E 11


Letter to the Editor

Lower state taxes would be a start Bloomberg View columnist Noah Smith wrote an analysis piece in the Sept. 4-10 edition of Crain’s Cleveland Business offering his explanation for why Ohio has problems catching up with other states economically. I find it odd that one state he points to as “succeeding economically” is Illinois. If Mr. Smith spent less time writing and more time reading, he would know the state government of Illinois is nearing bankruptcy. Ohio has problems, and using Illinois as a role model for how to move in a positive direction is foolish. As an employer in Ohio, there are a few sets of data I keep an eye on. One is the State Business Tax Climate Index issued by the Tax Foundation. For 2017, Ohio ranks 45th out of 50 states. This rating was 47th in 2009, so for all practical purposes Ohio has remained a very expensive state to operate a business in as far as taxes go. Another figure I like to watch is the ratio of public-to-private sector employees working in Ohio. There are roughly 780,000 people working at some type of government job in Ohio, according to Bureau

of Labor Statistics data from July. This same source lists the total employment figure for Ohio at 5,468,100 people. States that earn favorable State Business Tax Climate Index from the Tax Foundation usually have fewer public sector workers as a percentage of the total workforce. Ohio’s public-sector-to-private-sector ratio has been one of the nation’s highest since the 1980s. I fail to understand how Mr. Smith can claim that all Ohio needs to do is stop “resisting recent demographic trends.” People gravitate to locations where they can find work. Mr. Smith feels Ohio needs to attract immigrants in order to get the state economy moving forward at a faster pace. This is backward. Ohio first needs to attract employers to provide jobs to those immigrants. I think a good way to do this is through lower state taxes. Reduce the number of public sector employees, and then you can reduce taxes. Charles Kerr President, Kerr Lakeside Inc. Euclid

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PA G E 13

ABB hosts its own trade show to showcase the company’s various divisions. The Rogers Co. in Mentor was the general contractor for this year’s show in Houston. (Contributed photo)


Can trade shows work in a digital age? While trade shows are far from dead, experts say exhibitors must tweak their approaches By TIMOTHY MAGAW @timmagaw

To understand Parihug’s product, you have to see it. In fact, you probably have to hug it. So, for the last two years, Xyla Foxlin — the company’s founder and a Case Western Reserve University senior — traveled to Las Vegas to attend CES, what was formerly known as the Consumer Electronics Show and is now the world’s largest trade show. The benefits, of course, were obvious — face time with eventual mentors and investors. She even got tips on how to improve Parihug’s electronically connected stuffed animals that allow users to hug loved ones over long distances. Notably, to make a version of “Pari” small enough to pack in a suitcase for traveling parents. “For a young company and as a young founder, I don’t have a huge professional network to work with,” said Foxlin, whose business also has attended South by Southwest and other shows. “I didn’t spend 50 years

Xyla Foxlin’s company Parihug was featured for the last two years at CES, the world’s largest trade show. (Contributed photo)

in industry because I haven’t been alive 50 years. You need some way to level the playing field and explode your network really fast.” Trade shows, of course, aren’t only for young entrepreneurs like Foxlin looking to make a splash. Corporate gi-

ants, too, have major displays at shows in their respective industries to maintain their visibility, meet prospective customers and keep tabs on what their competitors may be brewing. But given the seemingly dying art of face-to-face sales as business be-

comes more reliant on digital communication and the increased scrutiny of traditional marketing methods, some are questioning whether the growing cost of attending trade shows — particularly to ones that don’t pack the glitz of CES — are relevant in a 21st century economy. That said, experts say that while it depends on the industry, trade shows aren’t quite dead. However, there is a renewed pressure to prove one’s ROI — and doing so could take a little more work. “I still think they’re relevant, but the purpose needs to be different,” said Mark Goren, CEO of Point to Point, a Beachwood-based business-to-business communications agency that works largely in the manufacturing space. “They used to be a place to gather a bunch of sales literature. Now, all the information you’d collect is generally available on the web. Trade shows now have a bigger concept of community and getting a bunch of people together with a shared interest, and with that comes an opportunity to provide higher levels of engagement.”

The industry as a whole On a macro level, the trade show industry appears to be doing fairly well. According to data released in late August from the Dallas-based Center for Exhibition Research, the exhibition industry posted a “robust” year-over-year gain of 2.9%, compared to a 2.2% increase over the like period for real GDP. Moreover, all exhibition metrics in the second quarter — net square footage, exhibitors, attendees, revenues — posted year-over-year gains. Those gains were particularly encouraging following a slump late last year. It was the first time the exhibition industry outperformed the larger economy since the third quarter of 2016. Rick Busby of The Rogers Co. — a Mentor-based company that specializes in trade show display design and rentals for clients such as Avery Dennison, Rubbermaid and Steris — agrees the exhibition industry is faring well, though it largely depends on the market. SEE SHOWS, PAGE 15

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For one, he’s seen increased activity in technology, medical and energy spaces, an observation that seems to mirror what the Center for Exhibition Research is reporting. Busby said companies are looking at more cost-effective ways to tell their stories. For one, he said his clients are doing much more with graphics and technology rather than hauling a gigantic piece of equipment to display. Polychem Corp., a Mentor-based manufacturer of polyester and plastic strapping solutions, used to bring a large trailer to shows to demonstrate its wares. With Rogers Co.’s help, the company now boasts one made entirely of fabric. “I always tell customers our job is to help them build brand equity,” said Busby, president at Rogers Co. “That’s why they’re going to a trade show. Years ago, shows were about writing orders. In today’s world, some of that happens — in some industries, more than others — but it’s really about relationship management and finding out customer needs.” The best exhibitors are the ones creating different ways for their pitches to be heard — whether through personalized immersive education and some sort of interactive component, said Gary Schirmacher, the senior vice president of industry presence and strategic development for Twinsburg-based Experient, which works with 70 of the top 250 trade shows and is now part of the Maritz Global portfolio of companies. Technology, of course, has made that personalization much easier, as it allows exhibitors to know who exactly is attending the show and to set up meetings well in advance of stepping foot on the floor. “Have you ever sat at your desk and had a webinar on for an hour? How much did you really watch and how exciting was it?” Schirmacher said. He added, “The best (exhibitors) are the ones who can create a sense of personalization when I come in. Hands-on experience — that’s the difference maker.”

The Rogers Co. helped Polychem of Mentor rethink how it could display its capabilities at trade shows. (Contributed photo)

than an exhibitor, according to Lisa Zone, managing director at Cleveland-based communications firm Dix & Eaton. Questions to ask include whether it’s the type of show where business is being done and, of course, whether your brand’s absence might cause some prospective customers to scratch their heads. At the end of the day, though, it’s about creating value. The biggest mistake exhibitors make, Zone said, is not doing enough preparation. That prep includes outreach to prospective clients and the media leading up to the show. And then, making sure booth workers undergo proper training. “Everybody working the booth needs to be singing from same songbook and make sure the customers coming to the booth have a good experience,” she said. “When some-

body comes home back to their office, they need to have something — some educational training or information that can help the company — to tell their boss rather than how they wined and dined and not a lot of business got done.” For Daniel Weiss’ small software firm, Adatasol Custom Database Solutions in Beachwood, trade shows — especially niche ones — have been a “gigantic value” for his company’s growth. A few years ago, for instance, Weiss’ firm bought the rights to a piece of software that handles all aspects of tour management and booking. Being able to market it directly to the buyers of such services at the Student & Youth Travel Association conference in Albuquerque late last month was critical to executing Adatasol’s growth strategy.



Death of the tchotchke The cost of setting up shop at a trade show isn’t cheap. Industry estimates peg it at upward of $150 per square foot. As for the attendees, employers still aren’t embracing business travel as they once were. So, on both sides, there’s more pressure to generate value. That’s why focusing on engagement, Goren adds, is so critical. At the NAHB International Home Builders’ Show earlier this year in Orlando, Goren noticed attendees were glued to their phones rather than snagging the promotional items and branded totes. As such, he said, exhibitors should focus on crafting an interactive experience not unlike what Apple does with its stores and carefully scripted staff. Forget the branded tote bags, Goren said, because the idea is to make one’s booth a destination with comfortable seating, tailored talks and perhaps even a drink or two. “Apple comprehends engagement really well,” Goren said. “An Apple retail experience is not because of the magic of Apple and its products — it’s the way they guide you into a purchase. Trade shows should do the exact same thing.” Given the cost of exhibiting at a show, brands should carefully weigh a few factors. For one, they should visit one year as an attendee rather

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S E P T E M B E R 18 - 2 4 , 2 017 |







Q&A: Rick Turner

Account executive, Extraordinary Events Over the last 20 years or so, Rick Turner has worked for vendors, venues and even ran his own catering company. So, it’s fair to say he has a pretty thorough understanding of the meeting and events industry. He’s all too familiar, for instance, with the notion that it takes a team of vendors working in concert to pull off a successful event. For the last two years or so, Turner has worked as the Cleveland-based Midwest account executive for Extraordinary Events, a Los Angeles-based, international events planning giant led by Andrea Michaels, whom Turner called a “legend who created the industry as know it.” Turner is also one of the founders of the Event Expo, which after taking a year off, will return in July 2018 at the Huntington Cleveland Convention Center. The show is designed to help anyone planning an event, corporate outing or retreat find services and inspiration. “I love being an agent for change in this region. People think of Northeast Ohio as the opposite of Hollywood or New York City. But when I bring people into town, they don’t want to leave. We just have this energy, and it’s a positive one.” Crain’s recently chatted with Turner about his career, what makes a good event and, of course, how he stays sane in an industry where almost anything can happen. This interview has been edited for length and clarity. — Timothy Magaw What’s your main role at Extraordinary Events? What I really strive to provide is creativity for our clients. I focus on the corporate side of the industry. There are some incredibly talented social suppliers in the region. That’s a different animal. I like the corporate side because it’s very


transparent. You know the budget. They have a clearly defined idea of what they want, which always changes of course. It’s a little more analytical. I get to come in and bend, but not break, that ideology. I say, ‘Let’s think of something different. Let’s create a really thrilling experience or activation.’ It could



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“A lot of people think hiring an events professional is an unnecessary cost and that it can be handled internally. It’s important to bring in someone who lives and breathes this and has people anywhere and everywhere to put together something extremely dynamic. Why wouldn’t you want to do that?”

range from a conference, fundraising gala, new product launch, trade show or even incentive travel. What’s the biggest challenge working with corporate clients? The perception. A lot of people think hiring an events professional is an unnecessary cost and that it can be handled internally. It’s important to bring in someone who lives and breathes this and has people anywhere and everywhere to put together something extremely dynamic. Why wouldn’t you want to do that? You will be the rock star for flipping that switch. We always want people talking about what’s next and how they can top this next year. That’s always our goal. I

have been working in the Northeast Ohio for about 20 years. My focus is on getting in front of lot of companies and presenting the agency model to them. We are a one call, one solution agency. I want to bring world-class events in Northeast Ohio. We have the knowledge, team and resources to do that. What’s often overlooked by some when planning a corporate event? It’s important to remember that cheapest is not the best. You have to be mindful of corners that are being cut. I think it’s important to have an experienced planner or agency take the lead because the experience is the education. We’ve dealt with volcano eruptions,

earthquakes, tsunamis, hurricanes — things we don’t normally get in Northeast Ohio. Not to dismiss any other planners, but we know how to handle those things, so when the coffee comes out late, that’s something we can massage much more easily. We really want the organization — corporation, association, hospital — to be intrigued by all the creative things we can do and how we are going to promote their brand all over the country. I’m happy hiding in the shadows. The most rewarding thing to me is seeing that event go off. What type of person does it take to succeed in this industry? You have to be resilient, and we come from tough stock here in Northeast Ohio (Turner is from Brecksville). We deal with two seasons — July 4 and winter. Also, you have to be creative. You have to know what’s going on in the industry. Every week, we have this meeting at our company called Thank Tank Tuesday. Everyone’s job is to come in with cool stuff to share. Not only from the event industry — maybe it’s a tech thing, or a charitable cause. We’re just looking for new ideas. We always want to be able to go back to corporations and say, ‘We’re trying to inspire you.’ We’re passionate


S E P T E M B E R 18 - 2 4 , 2 017

about learning and want to extend that when we make their vision a reality. How do you stay level-headed when something inevitably goes wrong? It took a long time. When I started in this industry, I had a beautiful thick head of hair. You just have to realize things are going to happen. It is the live events industry. We strive for perfection, but perfection doesn’t always happen. You have to take a breath and a step back. But what you can do to prevent it is identify the people talking your talk and, most importantly, walking your walk. I strive for excellence every day when I get out of bed and I know my coworkers, my vendors and my creative partners are all doing the same. What are some of the best qualities in a vendor? Dedication to creativity and ethics. When it comes to business ethics, we sign a lot of non-disclosure agreements for private product launches, board meetings and retreats. We have to bring in people from all over to do that. It’s important that when the client says no photos, there are no photos taken. We are always up front with what our expectations are.


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Tell me about the Event Expo. It’s 10 years old, as old as my son. It started in 2007 and was a cocktail napkin idea to be a showcase of solutions for events in Northeast Ohio. The boilerplate is that it’s a showcase of products, services and ideas for the special events and hospitality industry in Northeast Ohio. We’ve grown from 25 vendors at a small conference center, and in July 2018 we’re taking it to Cleveland’s convention center. We didn’t have one last year — schedules didn’t work out. That gave us a chance to reset, reevaluate things and come out from the gates even stronger. We’re doing it now with a national focus. In Cleveland, you’re a three-hour flight from anywhere. We have national vendors that have identified this amazing industry we have in Northeast Ohio and want to show off their goods and services. We’re excited about the growth and the opportunity the convention center has provided us with. This is your one-stop shopping day you need to pull off a spectacular event. What’s the most important lesson you’ve ever learned? My grandfather taught me many years ago and would sign off on every phone call by telling me to keep my nose to the grindstone.

We here at the CMBA are meeting planners ourselves, so we know how many details go into executing a successful event. We do our absolute best to make sure every experience is seamless. You forget an easel, or need an extra registration table? We got you covered, free of charge. Our “all inclusive approach” lets you deal with one contact for all set up, AV, and catering needs. We can host board meetings, trainings, receptions, staff retreats, yoga, the list goes on. Best of all, our doors are open to all of Cleveland, whether or not you are part of the legal community. If you are someone who needs space, we have it. Check us out today!

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Augmented reality can take events to the next level It never ends. You’re just beginning to feel good with Instagram, Snapchat is still mysterious, and now you’re hearing that “VR” and “AR” are the next big things in special-event engagement? I’m right with you. Social-media event integration gets a lot of hype, but it’s so tough to measure its ROI. Creating content people genuinely want to share and interact with is even tougher. Similarly, don’t freak out over virtual and augmented reality — yet. Room-scale virtual reality, like the HTC Vive, does need to be experienced to be believed, but in terms of event engagement, it should be low on your priority list. Here’s why: J One headset is needed per user J A high-grade, room-scale VR zone starts at $2,000 J Almost nobody knows how to effectively use VR yet for business, which we lay out for you in a recent post at So then, what the heck is AR, and why does it matter so much more right now for your special events?

Plan your next corporate event at

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Instead of what, here’s the why: In terms of sponsor activation, guest engagement and crowdsourcing, there’s no more powerful tool available right now than smartphone-driven AR. Do you remember hundreds of millennials running around Cleveland last summer staring at smartphones, muttering about evolving Eevees and seeing Snorlax at the science center (say that three times fast)? The Pokemon Go app is the best example of “augmented reality,” and it can tell you all you need to know about how AR can dramatically enhance your special events. Why? Two reasons: Everyone already has AR in their pockets (and thanks to Google and Apple, it’s about to be everywhere). And AR is attention-getting and fun. Via your screen, AR creates a graphical overlay on top of the real world. In Pokemon Go, using your phone’s screen, you can “catch” cute little monsters all over the real world. Now picture instead of hunting Pokemon, event guests have to find


Chris Hatala, left, is the event director at Games Done Legit, which uses videogames and virtual reality creatively for corporate events and fundraisers.


S E P T E M B E R 18 - 2 4 , 2 017


PA G E 19



out which booths at a trade show have animated logos that ask a trivia question when scanned. Or perhaps you want a “hologram” of the CEO to great guests. Maybe you want to work your sponsors into a game people can compete against when they’re on downtime during a conference. Do all that and more, right now. For instance, look up this 30-minute how-to “Create an Augmented Reality Scavenger Hunt” on, which gives you all the resources you need to set up AR scavenger hunts for your events, for instance. has a how-to to make your own “Super Mario Bros. Augmented Reality” that can be

played via smartphone on any surface. This site has tons of free, readymade AR experiences for you to check out. Say you’re doing a project with a Cleveland sports team. You can replace Mario in the above template with the mascot and the field/court. Users can post high scores. The “Game Over” can take them to a video or landing page offering something of value to the player. It really is easy, too. VR and AR are making development less about obscure, esoteric tools and more about making it easy to create anything you imagine.


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Step into a new kind of “space.” Unique meeting space for your next corporate event.

Sustainability is within reach for event planners By JUDY STRINGER

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When Melanie Tindell left the interior design business four years ago to start an event-planning company, she took more than just her creativity, imagination and artistic flair. The Sagamore Hills resident took a decade of experience in environmental design and focused the new company on creating events that are meaningful, yes, memorable, of course, but also eco-friendly. “Especially when it comes to weddings, millennials are really that driver in the sustainable event market right now,” said Tindell, owner of Oak and Honey Events in Cleveland. “They tend to be more conscientious about the resources they consume normally, so adding that to the production of a wedding or other event comes more naturally.” The fact is weddings, parties, meetings, conferences and festivals take a heavy toll on the environment. From the invitations, itineraries and signage to food, trash and transportation, special events produce a ton of waste, strain natural resources and contribute to carbon emissions. The typical conference attendee, for example, generates slightly more than four pounds of waste and leaves a 389-pound carbon footprint each day, according to MeetGreen, a Portland-based sustainable planner. That means over a three-day period, a 1,000-person conference creates a waste stream equal to the weight of four compact cars and emits more greenhouse gases than burning 1,200 barrels of oil. Meanwhile, the average U.S. wedding is responsible for 400 pounds of garbage, according to “The Green Bride Guide,” by Kate Harrison, and produces the same amount of carbon dioxide — about 63 tons — in just one day as four to five people would in an entire year. Local event organizers say companies and couples looking for ways to bring these numbers down often focus on downsizing waste. “Increasingly, I think, people have a desire to kind of walk lightly on the earth and not have their events contribute to litter or pollution,” said Dan Brown, co-founder of Cleveland-based compost services provider Rust Belt Riders. “They want their events to be an extension of their brands and their image.”

Rust Belt Riders initially worked with restaurants and cafes to divert food waste from landfills, and while it still does that, events are becoming a larger part of the work, particularly in the summer when outdoor festivals, company outings and weddings are at their peak. For couples, Brown said, composting at the reception can be a nice opportunity to “have their values literally out on a plate” for guest to see. For companies, especially those with sustainability practices embedded into their core principles, composting at the summer picnic or holiday banquet is a “low hanging” opportunity to enact those ideals, he added. The Cleveland Foundation is one local organization examining how composting might be integrated into a bustling events calendar. Donor Relations Assistant Paige Mische said the foundation’s first large-scale foray into composting took place at the annual meeting in May. “Any food waste from the prep stage that was not served was composted,” Mische said. She and administrative services manager Laura Svitak, both members of Cleveland Foundation’s sustainability committee, would like to see composting extended to post-meal for internal events as part of its ongoing zero-waste program. They are also sharing information and results with the marketing team in hopes that compost bins might find their way into donor events hosted by the foundation. Hand-in-hand with composting food waste is the increasing use of



S E P T E M B E R 18 - 2 4 , 2 017

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Locally sourced food from Spice Catering is another sustainable flare that can be added to events. (Janelle Putrich Photography)

Rust Belt Riders is a compost services provider in the Cleveland area. (Contributed photo )

biodegradable plates, silverware and platters, which can be composted and significantly decrease the amount of plastic or paper trash produced at an event, said Melissa Miller, president of Momentum Events based in Bedford Heights. Miller also sees a trend in using evites and emailed invitations rather than conventional paper invites. “Most people now recycle within their own homes and they don’t want to create more of that by sending guests an invitation that will be need to be recycled or thrown in garbage,” she said. Seed-infused invitations are a trend among hosts who still want to put that piece of paper in their guests’ hands, Miller added. Rather than thrown away, the invitations can be planted to grow wildflowers or herbs. Hosts also are reducing waste by eliminating bottled water in favor of “good old fashion” water pitchers paired with glass or compostable water cups, according to Ed DiAntonio, director event management at Walt Disney World Swan and Dolphin Resort and incoming president of the National Association for Catering and Events. And, he said, more caterers now allow clients to place orders and instructions electronically rather than fill out paper forms, and more venues use digital HD screens for displaying meeting room information instead of paper or cardboard signs. Clients who choose to take their

eco-friendly events one step further typically think about locally sourced food and flowers, Tindell said. The closer a product is to the venue, the fewer natural resources are involved in its processing, packaging, transportation and sale. “They also like the idea of stimulating the local economy,” she said. It’s not uncommon for those same clients to look for ways to repurpose leftovers. Tindell and her team are asked to arrange for leftover food to be sent to homeless shelters, for example, and/or floral arrangements to hospice facilities. Miller said some hosts also reduce the impact of car travel by providing busing or shuttle services. She admits, however, that really has more to do with increasing safety at events where alcohol is served. Another trend — more so in the business world — is the purchase of carbon offsets to negate the environmental toll of an event. DiAntonio said online tools allow companies to calculate the impact of things like event travel, accommodations, food and beverage and then buy emission reduction credits from another organization’s project that results in less carbon dioxide or other greenhouse gases in the atmosphere. Making an event more eco-friendly does come at a cost. There is a premium for locally sourced food and biodegradable tableware. Composting and recycling stations often need to be staffed, especially for larger, open event like festivals where organizers have little control over materials coming into the venue. These event planners said a growing number of hosts are willing to take the hit, particularly when the environmental impact is compounded by another benefit such as giving a local farm a boost, providing guests with a safe ride home or feeding a hungry family. And when done properly, Brown said composting can even be cost neutral. “If you implement the right services and purchase the right kinds of materials — all compostable plates, etc. — you may not need to rent a dumpster at all,” he said.

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Summit County lights up the concert stage By TIMOTHY MAGAW @timmagaw



Cleveland rocks — but Akron does, too. Buoyed by another record-setting year for the concert industry, Cleveland hosted some of biggest touring acts, including U2 at FirstEnergy Stadium and Billy Joel at Progressive Field. Plus, it was revealed last month that Quicken Loans Arena ranked 11th nationally and 30th worldwide in terms of concert ticket sales — its highest rankings yet — in Pollstar’s midyear report of the top venues. And while Cleveland’s southern neighbors might not be drawing the likes of Bono and Co. — the nation’s top grossing tour so far this year — Summit County’s concert scene is hardly falling flat. A few factors are at play here, including a general uptick in the regional and national concert industry and, of course, an influx of modern concert halls in the Greater Akron area. Leading the ensemble is Hard Rock Live at the Hard Rock Rocksino in northern Summit County. The Rocksino, according to the midyear Pollstar report, ranks 46th in worldwide ticket sales in the club category, with 42,634 tickets sold. Rocksino officials hope to do 150,000 in ticket sales for the year and ultimately land in the Pollstar top 25 at year’s end.

a view


In terms of amphitheaters, Blossom Music Center in Cuyahoga Falls put forth a solid performance, landing at No. 8 in the Pollstar midyear rankings in the amphitheater category, up from No. 20 at the same point a year prior. “It’s been a very robust year for us,” said Mark Birtha, president of the Hard Rock Rocksino Northfield Park, whose concert hall this year hosted acts such as Brian Wilson, Dolly Parton and Melissa Etheridge, and seats just shy of 1,900. “It’s arguably the best year ever in terms of what we’ve been doing, surpassing expectations in terms of the programming here. It’s clearly a reflection of the marketplace in general. From stadium shows to small boutique ones, it’s been the busiest concert season since we’ve been here.” In Akron proper, Goodyear Theater, a stunningly renovated 1,500seat 1920s concert hall in the redeveloped Goodyear Tire & Rubber Co. complex known as the East End on East Market Street, is starting to gain some serious traction among concertgoers and artists alike. The venue recently saw its first two repeat acts — singer/songwriter Jason Isbell and the Yes touring outfit featuring Jon Anderson, Trevor Rabin and Rick Wakeman — after being in business a little over a year. “Artists would not come back if it was not a good facility. I can promise you that,” said Denny Young,

Jason Isbell is one of the two repeat acts thus far at the one-year-old Goodyear Theater. (Timothy Magaw for Crain’s)

co-founder of the Elevation Group of Beachwood that, in addition to booking Goodyear, is responsible for the Laurel Live and Cathedral Concert series. “Those are two very high-end artists, meaning that they are looking for the best of the best. We can take that as a real affirmation of what we’re doing.” Right now, Elevation is shooting for only two to four shows a month at Goodyear Theater. But as the rest of the East End development comes alive with retail and dining, one can expect the programming to increase in frequency. As it stands, aside from the residential component and neighboring Hilton Garden Inn, the

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Former Van Halen frontman Sammy Hagar shreds on the Hard Rock Live stage in northern Summit County. (Contributed photo)

Rubber City advantages

Gladys Knight hit the Rocksino’s Hard Rock Live stage last spring. (Contributed photo)

theater is the largest draw of the mixed-use project, which is being developed by Stuart Lichter and his Industrial Realty Group. So, Young said, the focus is on bringing high-performing shows rather than fueling other revenue streams. As other aspects of the development take shape — namely, a still-to-be named restaurant in the old bank — the music becomes more of an ancillary piece to the project. “I think that all of the elements work together,” said Peter Goffstein, a senior vice president at IRG. “The theater is a great element that helps activate the entertainment component of the East End and provides for evening and weekend activities, as well as it provides even for corporate users to use the facility for the day — just like Goodyear used to.”



The biggest news of all: AR is about to be everywhere. Google and Apple completely own the smartphone market in the Western world, and both are going all in on AR in a huge way. Each platform is getting a toolset (ARCore for Android and ARKit for iOS) that will give every smartphone user the power to create their own AR experiences quickly and easily. has a great piece and video (search “ARcore ARkit”) showing how easy it’s going to be to make your own AR for any event (and the amazing possibilities). People are begging to be entertained and interacted with through

It’s no secret Northeast Ohio music fans have bemoaned the fact that many large touring acts’ itineraries in recent years haven’t included a Cleveland stop. Some say the city’s admissions tax, which is taken from a show’s gross, has made Cleveland less competitive in attracting acts and, in particular, has hurt small venues within the city limits. Also, many observers argue the city — one that has continued to see its population decline — wasn’t as much of a draw in the current economy because of its location along Lake Erie. After all, fish aren’t active concertgoers, and it’s easier to draw acts and attendees to more central cities like Columbus or Pittsburgh. Of course, some of that criticism waned with the most recent summer concert season. That said, venues in the Akron area are still using their location away from the lake to their advantage. “If you drew a 50-mile circle around the venues in Cleveland, 25 of those would be in the lake,” Young said. “We feel that (Goodyear Theater) is centrally located to Cleveland, Akron, Canton and Youngstown.” The Rocksino’s comfortable location just off Interstate 271 in Northfield, between Akron and Cleveland, and its ample free parking also have been critical to its success — not just with concerts but with its gambling operation as well. The Rocksino has been a consistently high performer among the state’s four casinos and seven racinos. In August, it led all gambling facilities in the state with $20.3 million in revenue. Its July haul — $22.3 miltheir smartphones at events. More and more studies show a negative, depressing effect from social media use, but we’re all conditioned now to go to our phones when we’re bored despite this. If you can create a fun, positive relationship with people through their smartphone, you’re creating brand evangelists who will want to interact with you and will absorb your message. At your events, stop merely providing people with information, or worse, selling stuff to people or bombarding them with logos they don’t want to click on. Wow both your sponsors and attendees happy – take just a little time to learn AR so it can transform your upcoming events faster than you can say “I choose you!”

lion — was the best in its history. “I think the location is definitely something we’ve been able to use to be effective” Birtha said about the venue, which is typically booked by Live Nation, the mega concert promoter whose local presence is the result of an acquisition of Belkin Productions in 2001. “We’re in the heart of Northeast Ohio, between Cleveland, Akron and then south to Canton — even Youngstown isn’t that far away. Interestingly enough, we’re drawing audiences for some marquee events from 90 miles away

—even outside the state.” That said, it’s not just the newer venues making noise in the Akron area. Some of the legacy venues — namely the 2,600-seat Akron Civic Theatre and the 2,900-seat University of Akron-owned E.J. Thomas Performing Arts Hall — are exceeding expectations. Live Nation announced last week that Bob Dylan will return to E.J. Thomas in November with Mavis Staples as the opening act. The Civic within the past year has hosted the likes of John Mellencamp, Alice Cooper and the Avett Brothers.


PA G E 2 3

“It all goes back to the strength of the market,” said Howard Parr, executive director of the Akron Civic, which has a contract with the university to manage E.J. Thomas. “I think we have an incredibly strong market. As long as we provide a quality product, the number of venues we have is not relevant. The problem comes with the amount of product to put there. There are only so many shows.” Parr said while both venues remain viable for traditional concerts, they both have found much of their success with other types of events — like an upcoming show at E.J. Thomas featuring the first “Harry Potter” film with the Akron Symphony Orchestra performing John Williams’ score. “Those kind of shows, they’re not a typical concert, but the outcome is going to be full two sold-out nights and ticket sales that drive the overall sales for the year,” Parr said. And while E.J. Thomas had a rough few years that coincided with the now-settled turmoil in the University of Akron administration, the venue seems to be back on track with the Civic and Playhouse Square in reviving the popular Broadway in Akron series after the plug was pulled amid the university’s budget woes. Last year, E.J. Thomas’ ticket sales were up 30% over the prior year, and Parr said the venue is pacing ahead this year.

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Ranked by Number of Guest Rooms THIS YEAR HOTEL NAME





Kalahari Resort & Convention Center 7000 Kalahari Drive, Sandusky 44870 (888) 707-4155/







Todd Nelson

Brian Shanle


Hilton Cleveland Downtown 100 Lakeside Ave. E., Cleveland 44114 (216) 413-5000/







Cuyahoga County

Teri Agosta


Hotel Breakers at Cedar Point One Cedar Point Drive, Sandusky 44870 (419) 627-2106/






8 (2)

Cedar Fair LP

Paul Mesenburg


Renaissance Cleveland Hotel 24 Public Square, Cleveland 44113 (216) 696-5600/







Skyline International Development Inc.

Frank McGee


The Westin Cleveland Downtown 777 Saint Clair Ave. NE, Cleveland 44114 (216) 771-7700/





$139 and up


Optima Ventures LLC/ Sage Hospitality

Bob Megazzini


Cedar Point's Express Hotel 1201 Cedar Point Drive, Sandusky 44870 (419) 627-2106/






3 (2)

Cedar Fair LP

Tammy Ward


DoubleTree by Hilton Cleveland East Beachwood 3663 Park East Drive, Beachwood 44122 (216) 464-5950/







Twin Tier Hospitality LLC Satish Duggal

Steve Mitchell


Cleveland Marriott Downtown at Key Center 127 Public Square, Cleveland 44114 (216) 696-9200/







Millennia Housing Management

Hartmut Ott


DoubleTree by Hilton Cleveland Downtown-Lakeside 1111 Lakeside Ave. E., Cleveland 44114 (216) 241-5100/







The Hotel Group

Steve Groppe


Cleveland Airport Marriott 4277 W. 150 St., Cleveland 44135 (216) 252-5333/







Thomas Point Ventures

Greg Huber


Holiday Inn Cleveland South/Independence 6001 Rockside Road, Independence 44131 (216) 524-8050/







Janus Hotels & Resorts Inc.

Tom Moore


Holiday Inn Cleveland-Strongsville (Airport) 15471 Royalton Road, Strongsville 44136 (440) 238-8800/







Twin Tier Hospitality

George Iannacone


InterContinental Hotel & Conference Center 9801 Carnegie Ave., Cleveland 44106 (216) 707-4100/







Cleveland Clinic

Peter Clark


Marriott Cleveland East 26300 Harvard Road, Warrensville Heights 44122 (216) 378-9191/







Western and Southern Insurance-Eagle Realty

Scott Klukas


Hyatt Regency Cleveland at The Arcade 420 Superior Ave. E., Cleveland 44114 (216) 575-1234/







Skyline Cleveland Acquisitions Inc.

Todd Costin


Embassy Suites Hotel Cleveland Rockside 5800 Rockside Woods Blvd., Independence 44131 (216) 986-9900/







American Hotel Income Properties REIT LP

Michael Newman


DoubleTree by Hilton Cleveland-Westlake 1100 Crocker Road, Westlake 44145 (440) 871-6000/







Twin Tier Hospitality

Richard Somsak


Sheraton Cleveland Airport Hotel 5300 Riverside Drive, Cleveland 44135 (216) 267-1500/





$79 and up


LN Hospitality Cleveland LLC

Annie Martin


Hilton Garden Inn Cleveland Downtown and Gateway Conference Center 1100 Carnegie Ave., Cleveland 44115 (216) 658-6400/







1100 Carnegie Hotel LP

Joel Hoffmaster


Sawmill Creek Resort & Conference Center 400 Sawmill Creek Drive, Huron 44839 (800) 729-6455/







Gregory Hill

Gregory Hill


Crowne Plaza Cleveland Airport 7230 Engle Road, Middleburg Heights 44130 (440) 243-4040/







Toledo Inns Inc.

Brian Wipprecht


Cedar Point's Castaway Bay 2001 Cleveland Road, Sandusky 44870 (419) 627-2106/






6 (2)

Cedar Fair LP

Melissa McClure


Days Inn & Suites Richfield 4742 Brecksville Road, Richfield 44286 (330) 659-6151/







Richfield Banquet & Conference Center Sandip Thakkar

Sandip Thakkar


Embassy Suites Cleveland-Beachwood Hotel 3775 Park East Drive, Beachwood 44122 (216) 765-8066/







NF II Beachwood OP CO LLC Tulio Garonzi

Jason Dinkens


Sheraton Suites Akron/Cuyahoga Falls 1989 Front St., Cuyahoga Falls 44221 (330) 929-3000/







Riverside Community Urban Redevelopment Corp.

Jeffrey Lynch


The Ritz-Carlton Cleveland 1515 W. 3rd St., Cleveland 44113 (216) 623-1300/








Yael Ron


Crowne Plaza Cleveland at Playhouse Square 1260 Euclid Ave., Cleveland 44115 (216) 615-7500/







Playhouse Square Foundation

Brian Moloney


Want the full version of this list Ñ and every other Crain's list? Become a Data Member: The full digital list includes 33 hotels as well as additional information and executive names. Information is supplied by the companies. Send questions, corrections and suggestions to Chuck Soder: (1) Employee figures vary widely partly because some hotels report employees for affiliated meeting centers. (2) Cedar Point hotels have fewer employees because they are seasonal and share resources.



S E P T E M B E R 18 - 2 4 , 2 017


PA G E 2 5

Survey: Hotels on list hit hard by new competition By CHUCK SODER

Hotel survey @ChuckSoder

We asked if hotels in the Greater Cleveland market have been hurt by several new hotels that have opened since 2013. Here’s what the 25 respondents said:

It’s clear: The region’s largest hotels have indeed been hurt by all the new competition in town. How do we know? While compiling data for our list of the largest hotels in Northeast Ohio, we asked them whether their occupancy rates have been hurt by the new hotels that have opened since 2013. Not one hotel — not a single one — said that they have emerged totally unscathed. Of the 33 hotels on the full digital list, 25 answered the question before this story’s deadline. And 23 said their occupancy rate has been hurt, to varying degrees. The other two said they weren’t sure. Has the new competition pushed them to lower room rates? Just over half of the hotels, 13, said yes. Hotels based within the city limits of Cleveland were hit the hardest: They were more likely to report lowering room rates and being “hurt a significant amount.” This shouldn’t come as a total surprise to regular Crain’s readers. In a January story titled “Beefed-up Cleveland hotel market prepares for ‘a price fight,’ ” several hotel operators told us about the competitive pressure the new hotels have created.

citing data from STR Global, a hospitality analytics firm in Tennessee. But occupancy appears to have increased last year for many hotels on our list, which all have at least 150 rooms. Fifteen of the 25 respondents said occupancy was up in 2016. Four others said it barely changed. Of course, not every hotel answered our questions. Maybe some of them wouldn’t want to tell us if they had a down year (though we did promise anonymity). What drove the increases? When given six choices, 11 of the 15 hotels reporting an increase picked “The RNC and/or playoff runs by the Cavs and the Indians.” The 2016 Republican National Convention was one of several factors that has helped Northeast Ohio earn positive national press in recent years. But is all that good press helping hotels win business, judging by what hotels are hearing from clients? Sixteen of the 25 hotels said “yes.” Eleven of the yeses said the good PR has had “a modest impact;” four described it as “significant.” Seven others said “maybe” and two said “no.” As for the list itself, Kalahari Resort & Convention Center easily ranks as the region’s largest hotel, with 890 guest rooms and 215,000 square feet of meeting space. The No. 2 hotel is one of the new ones: The Hilton Cleveland Downtown, which opened in 2016 with 600 rooms.

Total respondents Cleveland respondents only Yes, hurt a significant amount 7/5 Yes, hurt a moderate amount 11/4 Yes, but only hurt a small amount 5/2 Not sure 2/0

No 0/0

13 have lowered rooms rates as a result of new hotel competition.

11 respondents said they have not

lowered rates. One did not answer.

That story noted that the Cleveland market gained about 2,000 hotel rooms in 2016 alone. About half of the new rooms were in downtown Cleveland. The story also noted that the region’s occupancy rate dropped to 61.3% in 2016 from 63% in 2015. On the bright side, total revenue per room increased to $109 in 2016 from $102 in 2015, the story noted,

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In plastics M&A, market is ripe for sellers Conditions could have an impact, in different ways, on local firms such as RPM International and A. Schulman By DAN SHINGLER @DanShingler

It’s a good time to own a plastics, polymer or specialty chemical company — especially if you’re of a mind to sell it. That could have ramifications for some of the Akron area’s big companies, too, including RPM International Inc. in Medina and A. Schulman Inc. in Fairlawn. “Pricing is the highest that it’s ever been — in history, actually — in terms of a multiple of earnings,” said Bill Ridenour, founder of North Carolina-based Polymer Transaction Advisors. He founded his firm 18 years ago in Newbury Township, where he still maintains an office, and said he still counts on Northeast Ohio’s strong chemical and materials industries for a lot of his business. Ridenour has represented big buyers, like Schulman and Westlake’s PolyOne, in the past, but he most often works with sellers that range from private family owners looking to exit a business to larger companies looking to sell off a division or business line. He’s expecting to be busy, he said, because there is a lot of money chasing plastics companies, driving up prices and inducing more owners to sell. Some buyers want into plastics to take advantage of the lightweight materials trend in the automotive industry. Some hope to take advantage of what they think will be industry growth driven by new supplies of raw materials from shale drilling, and some are big corporations looking to add to existing business lines or to enter new markets and niches. It adds up to a market that favors existing owners, in most instances, said Ridenour and others who follow companies in the sector or work to buy and sell them. “For the last couple of years, there’s

Given the company’s recent performance and the market conditions, Fairlawn-based A. Schulman Inc. might be piquing the interest of those looking to make an acquisition. (Shane Wynn for Crain’s)

been a lot of activity in this sector in general. Really, there’s been such a supply and demand imbalance in the marketplace,” said Kevin Mayer, who, like Ridenour, works in the M&A arena, as managing director of Cleveland-based Western Reserve Partners, part of Citizens Capital Markets. “There’s a lot of cash sitting on people’s balance sheets, and there’s a lot of private equity money. … It’s really been a seller’s market,” he adds. Mayer said there are simply not enough sellers to meet the demands of private equity investors and strategic buyers, which are mostly other corporations. That, along with low interest rates and a flood of acquisition capital on corporate balance sheets, is driving up prices. So what does that mean for big local companies like Schulman and RPM International? Likely very different things. RPM is and has long been an acquirer, while Schulman has struggled of late and could be an acquisition target. Kevin Hocevar, an equity research analyst with Northcoast Research in Cleveland, follows 14 companies in

the specialty chemical and buildings materials sectors. He noted how, while the overall sector is doing well, the success is not being shared by all. Even companies in very similar industries, like plastics compounders, are having varying degrees of success. “PolyOne has done really well. They’re up 15% year to date, but Schulman is down 7%,” Hocevar said. Schulman has been hobbled by troubles that came from its acquisition of Citadel Plastics in 2015 — an acquisition Schulman now says was rife with fraud as it sues Citadel’s former owners in an ongoing suit to try to recoup its $800 million sale price. It’s also in the midst of a CEO search to replace current chief Joe Gingo, who returned from retirement after the Citadel deal went bad. He’s halfway through the two-year stint he agreed to complete upon returning, the company says. Take those circumstances and add the fact that compounders, like Schulman, are in high demand, commanding high prices, and the pressure to sell likely builds, Ridenour said.

“A company like Schulman, in its situation, is probably being looked at by major private equity groups right now,” Ridenour said. For its part, like most companies asked about a possible acquisition, Schulman is guarded. “Yes, we can see that it’s a busy environment for M&A in the industry. As for A. Schulman, we have openly and consistently communicated that we are looking to improve our performance, while — as always — remaining open to alternatives to enhance shareholder value,” said company spokeswoman Jennifer Beeman in email correspondence. “We have a responsible board that takes its fiduciary duties seriously and is focused on driving growth and value creation. Beyond that, it’s our policy to not comment or speculate on M&A.” For acquirers such as RPM, the situation is far different. The company is known as an extremely active acquirer of others, but these days — the pickings are slim and prices are high — keeping up the deal flow could be a challenge. But RPM also has some advantag-

es that other buyers, especially private equity firms, don’t: the ability to realize synergies by combining new companies with its existing operations and a reputation for allowing its subsidiaries a lot of operational freedom while providing corporate support. “I absolutely think they’ll continue to be very active,” Hocevar said. For its part, RPM hardly seems concerned it will be shut out of potential deals. “We’ve always had to wrestle with high valuations,” said RPM vice president of investor relations Barry Slifstein. “But we offer something that our competitors don’t offer: We’re a great home for entrepreneurial businesses … Roughly 70% of the deals we do are what we would categorize as product integrations. But even in those deals, we’re smart enough to hang on to the entrepreneur who was the innovator,” he said. That sounds like strategic corporate marketing — and it is. But when you check up on RPM’s claim, it appears to be true. John Ormsby, president of RPM’s Legend Brands subsidiary in Washington state, said he remained with the company after it was sold to RPM in 2011. He said the company backs up what it says. “I’ve been through family ownership, two private equity owners and, by far, RPM is the best and most supportive,” Ormsby said. If everyone, including Slifstein, is correct, there might be a lot of M&A activity ahead that could impact not only companies such as RPM and Schulman, but one of Northeast Ohio’s biggest industrial sectors. And, depending upon what happens at a national level, it might be even busier than is now forecast. “If you see a change in the tax environment, that’s certainly going to spur a lot more activity,” Mayer predicted.

InsightFuel making headway in CNG market By DAN SHINGLER @DanShingler

Maybe Jeff King should have been an oil and gas driller instead of a manufacturer of compressed natural gas (CNG) components and fueling assemblies. He’s got the never-say-die sort of optimism that makes for rich wildcatters in places like Oklahoma and Texas. And he’s still drilling with his company in Macedonia, InsightFuel, and still striking sales in the compressed natural gas, trucking and transportation industry. People tend to do what they know, and King knows how to bend, fabricate and form all sorts of metal tubing and pieces and put it all together into a working system. He was head of SSP Products in Twinsburg before he spun off InsightFuel last year. Admittedly, King said, the conditions have been tough and rocky of late. The huge price advantage in terms of operational costs that CNG once of-

fered truck fleets has dwindled to almost nothing. The rate of new CNG fueling-station construction, which along with vehicle systems is I n s i g h t F u e l ’s bread and butter, King also has slowed on the resulting uphill grade. But King has not only the optimism that conditions will improve — oil and diesel prices are fickle things, blown by global winds, after all — but a plan for the near term. “There are 1,600 stations that have been built since the early 1990s that are all still in operation and aren’t getting any newer. So, with a team of field technicians and some efforts to enter the aftermarket, we’ve been able to maintain a pretty healthy growth rate,” King said. Early this year, he expanded his capacity with a merger with R. Anthony Enterprises, a Columbus construction firm that specializes in building

CNG fueling stations and in repair and expansion work. InsightFuel is still not huge. Sales are under $10 million, and the total staff is 17, King said. But it’s profitable and able to maintain growth even during tough times. For those existing stations, InsightFuel is not only selling general repair and supply services, it’s also doing things like offering a hose-rebuilding service, which allows station owners to replace high-pressure fueling hoses but keep the expensive hardware already attached to their old hoses. InsightFuel also has developed a modular expansion system for existing stations. Looking like a giant erector set with high-tech plumbing, it allows existing fleet owners to expand quickly and inexpensively, King said. “It’s a minimally invasive station expansion,” he said. “The idea is to approach an existing vehicle owner that has additions to his fleet and have a program where we can provide … 14 new fueling points to his station for about $100,000.” King and others say that organiza-

tions that have made big investments in CNG trucks and vehicles — entities like Smith Dairy, Frito-Lay and the Stark Area Regional Transit Authority — remain committed to the fuel, even if its cost advantage is down to a trickle. They like that it burns clean and presents a progressive image for their companies, said Craig Young, owner of Young Truck Sales in Canton. A third-generation seller of big rigs and smaller trucks, Young said he has local customers committed to CNG as a fuel. “Those that are invested have already made a substantial investment, and it’s now about more than just saving money on gas,” he said. That means they not only continue to grow existing fleets, but often maintain their own fueling stations — all good for companies like InsightFuel. Young will sell his customers whatever kind of truck they want, whether it runs on diesel or CNG. He doesn’t stock vehicles like a car dealer. Six-figure rigs are ordered one at a time. But he has invested about a half-million dollars in a service cen-

ter for CNG trucks, and, like King, said he’s still finding business in the aftermarket. He benefits from the fact that there are not that many companies equipped to service the vehicles, let alone certified by big engine companies like Young is. “There are still customers out there,” he said. As for a return to the fast growth the industry enjoyed a few years ago, that will largely depend on the price of natural gas and diesel fuel. Prices for both fuels are being depressed by abundant supplies, especially for natural gas in the U.S. But the cost of diesel is dependent on the price of crude oil, and, unlike natural gas, oil has a pretty much uniform price around the world. Wars, economic booms and other unpredictable factors can all drive up the price of oil and diesel, while domestic natural gas prices are shielded from such effects. If the price difference returns and growth comes with it, King said InsightFuel will be ready. “We have not exited the OEM market at all,” he said.



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Giving manufacturers a high-tech safeguard By JUDY STRINGER

Automotive suppliers have a problem. Yes, there is the uncertainty surrounding renegotiation of NAFTA and unrelenting increases in raw material costs. But this problem has to do with boxes or, more specifically, returnable shipping containers that are, well, not returned. The nonprofit Automotive Industry Action Group (AIAG), headquartered in Southfield, Mich., estimates that the automotive industry shells out more than $750 million annually to cover the issues related to reusable packaging and pallets in North America alone. That includes the direct cost to replace lost containers as well as softer costs, such as the lag in production when a reusable box container is not available and the incremental price of cardboard or other disposable packaging needed to temporarily replace missing reusables, according to Lang Ware, AIAG director of supply chain products and services. Adding to the expense, Ware said, is the increased risks for damage from the use of expendable packaging. Many automotive components have very specific packaging requirements to protect them during transport. Often, the disposable version of the packaging is simply not as effective. And for original equipment manufacturers and their suppliers looking to better track returnable containers, there’s the expense of manual cycle counts, meaning someone is physically counting packaging units. “It is something that takes days and sometimes weeks and multiple people, because they might not know where the containers are inside or they may be outside,” said David Zingery, vice president of global client solutions at Surgere Inc. in Green. “You just don’t know where these things are until you send people out find them.” Last month, Surgere announced the commercial launch of a robot de-


These types of developments are often in areas with higher median household incomes and good employer group insurance coverage. Beachwood’s median household income, for example, sits at $84,219, making it the 19th-wealthiest suburb in Northeast Ohio, according to a recent Crain’s ranking based on census data. Beachwood, Lin said, made sense for both its location that’s centralized for where doctors live and work, and for the demand he sees from the community. The hospital will be able to treat all patients, but will not hesitate to send them to a facility that has better expertise in an area. Lin said he sees the other hospitals in the market as partners, and expects the specialty hospital will be sending patients to them. “If we are not the best to take care of them, we will send them across the street to facilities that can,” Lin said. “There are a lot of other able hospitals in our market.” The high-end, hotel-like experience shouldn’t cost patients more,

ROBi, short for Robotically Optimized and Balanced Inventory product, can scan tags on containers and transmit location data to a cloud-based management system. (Contributed photo)

signed to take some of the sting out of reusable containers. The robot itself, an autonomous mobile unit, is produced by Fetch Robotics of San Jose, Calif., which creates a range of robotic machines that roam warehouse floors helping human workers locate and pull products. Surgere’s contribution is a proprietary data acquisition and analytics platform that allows this particular robot — equipped with an array of scanners — to scan radio-frequency identification, or RFID, tags on containers and transmit location data to a cloud-based management system. ROBi, short for Robotically Optimized and Balanced Inventory product, moves on pre-programmed routes, Zingery said, and can capture RFID label information from all angles and directions. It is the latest iteration of Surgere’s dive into harnessing location data for better inventory visibility. “Coming up with different types of technology over time has really kind of positioned us as leader in the asset management space, primarily in automotive but bleeding into other manufacturing areas like appliance manufacturing with clients like Whirlpool and Electrolux,” Zingery said. Lin said. Indeed, he expects the smaller facility and specialization to reduce costs. In theory, a hospital that aims to deliver higher-quality services at lower costs should do well in the market. But with the fee-for-service model that hospitals still in many ways operate in today, there can be some challenges in being able to work with payers and commercial insurance companies — a roadblock that has come up for specialty hospitals and other models in the past, Baumgarten said. “Opening hospitals is not for the faint of heart,” Baumgarten said. “There are a lot of things that can go wrong.” Lin said the new hospital will accept Medicare, Medicaid and commercial insurance coverage. Lin and Gobezie are confident that they can carve out a space in the market for a specialized hospital through referrals and the networks of the doctors behind the project. “At the end of the day, institutions are institutions, but a lot of times it’s easy to forget that doctors know doctors,” Gobezie said. “I don’t think Clinic or UH. I think we’ve got a city full of great docs. Who do you need to see?”

Yet asset management was not where the company started. Surgere began in 2004 in the package engineering space. It optimized the design of reusable shipping containers for auto suppliers. The company noticed pretty early on, Zingery said,

that workers had little regard for the specialized boxes it carefully crafted. Whether it was a plastic tote, collapsible large bulk bin or metal rack, “people just pulled the stuff out of it to make the part,” he said, “and the container would get lost. They get used for the wrong things. They would get stored out back. They would get left in tractor trailers or just disappear.” Soon, Surgere began putting its engineering expertise to work on software to manage reusable containers and acquired an RFID tagging system to create location data points. Knowing where containers are, manufacturers can better manage their returnables in-house, stop stockpiling surplus containers and perhaps even charge partners who fail to return them, Zingery said. The shift to more comprehensive asset management services was more or less organic. “These containers, they touch the people, the part or parts, the process, the transportation, so there are all kind of things you can learn just by watching them travel,” he said. “ We found ourselves not only addressing the loss mitigation piece of it, but it

quickly turned into an opportunity to provide some real analytics and data around what is happening in your supply chain — things like how fast materials are moving, where they are going, if they are sent to the wrong location, how long there are at a given location, etc.” ROBi provides one more way for data to be fed into the system, eliminating the need for employees to scan containers with hand-held devices or, worse yet, count them manually. Surgere’s roster of big-name clients includes Johnson Controls, the Timken Company, MAHLE, Alcoa Corp. and Nissan North America. The private company of about 40 employees does not publicly share revenue data. Zingery did say, however, that ROBi is one of a series of new applications currently under development to be announced formally over the next year or so. “As small as we are, we play really, really large,” he said. “We are doing business with some of the biggest companies in the world, and here we are just this little technology company next to the Akron airport. It’s really cool.”

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Experts say that even with plans to simplify its holdings to just two project types â&#x20AC;&#x201D; apartments and office buildings â&#x20AC;&#x201D; the real estate investment trust remains complicated. The company already has come a long way. In 2011, Forest City had properties and operations in eight product types, from residential land development to hotels and military housing. Technically, itâ&#x20AC;&#x2122;s still in the retail business, because its sale of regional malls and New York shopping centers is not completed, and it will be involved in the piece-by-piece transfer of federally assisted housing through the year. Moreover, the company is tough to value for Wall Street because the mixed-use story in 10 major metro markets that CEO David LaRue promotes for Forest Cityâ&#x20AC;&#x2122;s direction is a bit of an anomaly. While that is a plus in carving out a piece of turf for the company, it does not help it find a buyer. Most real estate investment trusts are pure plays â&#x20AC;&#x201D; either office, apartment, data center or retail â&#x20AC;&#x201D; and seek acquisitions in those property types. The National Association of Real Estate Investment Trust trade group lists 17 diversified REITs out of 171 REITs globally. The list of potential real estate investment trusts large enough to want a portfolio including both property types is short and augers for a private equity or hedge fund purchase.



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For example, Energy Focusâ&#x20AC;&#x2122; newest product, RedCap, has batteries embedded in the tube as an emergency backup that eliminates the need for a separate battery pack. Itâ&#x20AC;&#x2122;s set to be released at the end of this year. But there are also opportunities to embed sensors, controls and wireless connectivity into bulbs, which Tewksbury said Energy Focus will be working on going forward. He said the LED industry has big opportunities where it converges with building automation and the so-called Internet of Things â&#x20AC;&#x201D; a term used to describe the large interconnected network of electronic devices that is revolutionizing how people interact with technology. Tewksbury made a point to nearly clear the companyâ&#x20AC;&#x2122;s product roadmap after he joined, aside from the RedCap product. He hopes to see at least two new product introductions in 2018 and one per quarter starting in 2019. The company hasnâ&#x20AC;&#x2122;t given up on its military business, but it has been working to expand into commercial markets like education, health care and retail since before Tewksbury came on board. The company faces more competition for the Navyâ&#x20AC;&#x2122;s business today than it has in the past, including from companies outside the country. But even if it hadnâ&#x20AC;&#x2122;t, Energy Focus already had captured almost 50% of the sockets available in the U.S. Navy for its retrofit products, Tewksbury said. That makes it difficult to keep growing. In the second quarter of 2015, about 87% of the business was military, while 13% was commercial, Tewksbury said. Last quarter, 14% of the companyâ&#x20AC;&#x2122;s business was in military, and 86% was commercial. To help generate growth, Tewksbury set out to change the way Energy Focus sells its products. The company had previously had a small number of direct sales people. Now, it still has that base, but itâ&#x20AC;&#x2122;s also

Beyond that, the nature of Forest City as a real estate developer prompts more issues for stock investors. McGrath notes that Forest Cityâ&#x20AC;&#x2122;s active development pipeline causes some investors to find it hard to value. The company is spending about $470 million on 10 projects that are under construction or planned for the next three years. An option might be for buyers with massive portfolios in either the apartment or office property portfolios to combine in a joint venture to buy Forest City, but that faces a big problem because of Forest Cityâ&#x20AC;&#x2122;s conversion to a real estate investment trust in 2016. â&#x20AC;&#x153;If anyone bought Forest City, they would have limited flexibility for selling assets for another three years,â&#x20AC;? McGrath said. Such sales would bring adverse tax consequences. And most buyers want to prune portfolios to keep just what they want as a way to put their own stamp on them. However, while three years is a long time for Wall Street, itâ&#x20AC;&#x2122;s not in terms of real estate cycles or for private equity funds with patient money. The least likely course is that investment bankers Lazard and Goldman Sachs will find an attractive company or set of assets Forest City to buy that might improve its fortunes. Primarily, thatâ&#x20AC;&#x2122;s because over its history, Forest City generally has not been an acquirer. When it did buy, it typically targeted buildings or land that it could develop in massive projects. But if the last few years show

anything as Forest City has sold assets, lines of business and slashed staff, it has demonstrated repeatedly a willingness to do the unexpected to sharpen its game. The very idea it would sell the multitenant office building that houses its headquarters, Terminal Tower, and six other properties, or shed its substantial land development holdings for home builders, would have been unthinkable before the 2008 financial crisis. Some eye-popping strategies are afoot. For example, take New York REIT, launched in 2010 with the goal of unlocking unrealized value of Gotham properties. In January, New York REIT approved a plan to liquidate its portfolio of 3.4 million square feet of Manhattan and Brooklyn real estate â&#x20AC;&#x201D; 83% of it office. Last Thursday, Sept. 14, New York REIT agreed to sell a 48% interest in 2-millionsquare-foot World Wide Plaza for $346 million to two New York-based property companies. Forest Cityâ&#x20AC;&#x2122;s briefings already have pointed to its eagerness to begin buying in its major markets after it nets an estimated $1.5 billion from the sale of most of its malls and shopping centers. Likewise, although the idea is out there, little weight is given to Forest City getting swallowed up in a monstrous real estate deal. One analyst, Jamie Feldman of Bank of America, issued a report suspending his rating for the company because Forest City opened the door

â&#x20AC;&#x153;We needed to scale our costs to be commensurate with revenue decline.â&#x20AC;? â&#x20AC;&#x201D; Ted Tewksbury, Energy Focus Inc. chairman, CEO and president Energy Focus Inc.

using agencies to expand its reach. Agencies have existing relationships with potential customers for Energy Focus, and are able to offer those customers a portfolio of products and services, instead of Energy Focusâ&#x20AC;&#x2122; standalone product offerings. Plus, itâ&#x20AC;&#x2122;s a cost-effective way to expand the companyâ&#x20AC;&#x2122;s reach, as the agencies are commission-based. Of course, cutting costs is an important part of the turnaround plans, as well. â&#x20AC;&#x153;We needed to scale our costs to be commensurate with revenue decline,â&#x20AC;? Tewksbury said. Tewksbury put a plan in place to cut the companyâ&#x20AC;&#x2122;s operating expenses by about $8 million, or nearly onethird, from 2016. He said the company is on track to hit that by the end of the year. The cuts came from all areas. Outside consulting and legal fees were trimmed, some less distinctive products were cut and activities that werenâ&#x20AC;&#x2122;t aligned with the new strategy, like audits, were stopped, Tewksbury said. Plus, headcount was cut from 130 employees in December 2016 to 90 employees today. Most of the employees whose jobs were cut werenâ&#x20AC;&#x2122;t local. Energy Focus shut down offices in New York, Maryland and Minnesota. Now, Energy Focus has the Solon facility, where some assembly work is done, and one in Taiwan. CFO Michael Port said the company also uses contract manufacturers in Asia for some of its work. Time will tell if these changes equal success for Energy Focus, but there were some small signs of change in

the most recent quarterly report. While net sales in the second quarter of 2017 dropped to $6 million, compared with $7.1 million in the second quarter of 2016, operating expenses also dropped significantly, according to a news release. Overall net loss decreased to $3.1 million in the quarter, compared to a net loss of $3.9 million at the same time last year. Tewksbury said his goal is to have Energy Focus reach profitability by mid-2018. â&#x20AC;&#x153;After that, you know, the skyâ&#x20AC;&#x2122;s the limit,â&#x20AC;? he said. The stock market didnâ&#x20AC;&#x2122;t show drastic change after the results were announced. The stock closed at $1.82 on Aug. 8 and at $2.01 on Aug. 9, the day of the quarterly results. On Sept. 14, the stock closed at $2.76. Oppenheimer & Co.â&#x20AC;&#x2122;s most recent report, issued on Aug. 9, rates Energy Focus as a â&#x20AC;&#x153;performâ&#x20AC;? stock, which means the company expects Energy Focus to perform in line with the S&P 500 over the next 12 to 18 months. While the report said Oppenheimer is staying â&#x20AC;&#x153;on the sidelinesâ&#x20AC;? until revenue is more predictable and mentioned â&#x20AC;&#x153;inconsistentâ&#x20AC;? military sales as a risk, it also pointed to strong growth potential for Energy Focus. â&#x20AC;&#x153;We believe EFOI has significant advantages in the commercial and military lighting sector due to the limited failure rate of its products over extended lifetimes, a focus of its products which allows for accelerated product cycles, and the benefit the company is getting by aggressively leveraging the LED supply chain via innovative product development,â&#x20AC;? the report said.


for acquisition talk and can no longer be fairly valued. In a way, Forest City’s board confronted activist investors who have maintained the company has greater value to unlock from its portfolio. If no buyers emerge, there is no better way to increase the company’s value than to slog along its current course. Several analysts pointed out the move follows a recent road show by the company to the majority of its largest shareholders. Citi’s Bilerman wrote that he considered management’s behavior the past few years as effectively seeking buyers or acquisitions. The surprise, Citi wrote, was that the board was not willing to give management more time to continue to improve the company’s returns. James Ratner, Forest City’s non-executive chairman, pointed to continued marching orders for management to continue plans to simplify its business and reduce leverage even as he announced the review of alternatives was being launched. The outcome, McGrath and other analysts say, may be that no bidders surface quickly. If that's the case, the company will be able to continue to push for better yields on what is considered a set of highly desirable assets that have high barriers to new competition. That also augers for a chance for the company’s 450 headquarters staffers to continue working in Public Square in downtown Cleveland, which may be unlikely should a sale of the company surface. Colin Rusch, managing director at Oppenheimer, wants to see the company continue to gain traction on the commercial lighting side of the business, which is a fast-moving sector. Mark Miller, senior technology hardware analyst at Benchmark Co., said Tewksbury was “making the right moves” for Energy Focus with the cost cutting, the expanded sales approach and the focus on technology and unique products. Benchmark’s most recent report, issued Aug. 10, has Energy Focus as a “hold” stock and projected “breakeven results” in mid-2018.


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CHN Housing Partners led the development of the Hough Heritage Senior Housing complex. (Contributed photo)



As a result, CHN is studying forming a Community Development Financial Institution (CDFI) under federal law that would allow it to provide loans to low-income homeowners who would not meet traditional bank lending standards, such as high credit ratings, but satisfy other criteria. CDFIs are common and typically are focused on economic development rather than home lending. “We’re known as a tough landlord, so when someone misses a (rent) payment they will hear from us,” Curry said of CHN’s lease-purchase programs, and that close monitoring and after-the-deal counseling would be brought to bear on the lending program. A source of funds for loans could be found under community benefit agreements bank regulators have required lenders to provide in mergers such as KeyCorp’s purchase of First Niagara and others. Lining up such support is a key first step. A criteria to qualify as a CDFI, said Michael Griffin, CHN board president, is having a track record for providing loans. That means CHN needs

to assemble the staff for the effort to handle mortgage applications and underwriting before getting the designation, he said. CHN’s board has authorized the effort, but Kevin Nowak, CHN general counsel, said it may be a year before it can actually win the designation. “We’re at a collective roll-up-your sleeves level,” Curry said. The other reason for the name change is that CHN, traditionally associated with rehabilitating single-family homes it sells to low-income buyers through a lease-purchase, increasingly is undertaking full-blown construction and redevelopment projects of multimillion-dollar scale, often with other nonprofits that provide continued services to residents. One example is Hough Heritage Senior Housing, a 60-unit apartment building for independent senior citizens at 1844 E. 97th St., that went in on a site that is part of Boca Raton, Fla.based Finch Group’s Upper Chester, which neighbors Finch’s Innova market-rate apartments near the Cleveland Clinic. Another is focused on providing housing for the chronically homeless along with services called Emerald that has constructed nine buildings in locations scattered

among Cleveland neighborhoods from MidTown to Detroit-Shoreway. “We also work with nonprofits who own housing and need to recapitalize it,” Curry said. A big example of that is the $5 million renovation and updating of the Westerly Apartments, a pioneering senior citizen complex at 14300 Detroit Ave. developed in 1963 by a special-purpose nonprofit, Lakewood Senior Citizens Inc. Two buildings have been renovated, and a third is about to start. Another major initiative is being part of the Enterprise Community Partners and Cuyahoga County-led Housing First Coalition effort to reduce chronic homelessness in the county. CHN has played the role of developer for the nine Emerald Alliance permanent supportive housing complexes for the effort, each costing more than $10 million to construct and incorporating more than 60 suites. CHN worked to build community consensus, secure city approvals for the projects and oversee contractors who build them. The Eden nonprofit provides services to assist homeless people with social services and manages the operations with a goal of helping clients land jobs and their own housing. Kate Monter Durban, CHN assistant


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director, said the effort has decreased chronic homelessness by 85%. All the efforts stem from experience CHN gathered in its lease-purchase program, which provides new or renovated houses for low-income families on a lease basis that they may buy after 15 years. Throughout that time, CHN provides financial and other counseling to help long-term tenants make it as homeowners. “This is a labor of love for us,” Durban said. CHN has produced 2,000 such units, and 1,600 are now resident-owned. All told, CHN has developed 6,000 homes in the region. Those real estate and construction skills are leveraged with professional consultants to undertake the projects of scale. Over the years, CHN has expanded services as they relate to its mission to incorporate areas such as foreclosure prevention counseling, financial stability and youth counseling. When possible, it provides services such as home weatherization and heating and cooling services, as well as construction with its own staff. That has resulted in the growth of an organization with 170 staffers, most in maintenance, but also about a dozen each in accounting and real estate development. “We use the services that are robust,” Curry said, and produce more income such as the major developments to subsidize those that produce little extra revenue. That means its budget is about $50 million annually, which includes the cost of construction materials. Just 3% of its funds come from fundraising. “We’re an entrepreneurial nonprofit,” Durban said, operated with a business focus on meeting human needs associated with housing. All those tasks created expertise that CHN is increasingly taken outside the area, Nowak said, such as assisting in ironing out problems with lease-to-own programs supported by the affordable housing tax credit in Detroit and renovating older low-income buildings in Toledo and Massillon. Cleveland could cause confusion in such out-of-town contexts, but the C in CHN’s new name keeps that connection.



SEPTEMBER 18, 2017




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Sports Business -- Real Estate -- Health Care -- Manufacturing -- Small Business -- People on the Move -- Middle Market

Crain’s Executive Recruiter SYSTEMS ENGINEER For Echogen Power Systems, Inc. 365 Water St, Akron, OH 44308 Lead design of next gen. thermodynamic cycles in sup. of R&D & production engrg efforts. Analysis of ext. of Echogen heat engine technologies & their direct coupling to apps such as solar-power, waste heat recovery, nuclear, as well as primary cycles for fossil fuel power plants. Research, design, model, test, eval., install, operate, & maintain mech. products & equip., syst. & processes w/the power gen. industry; confer w/engrs & other personnel to impl. OPs, resolve syst. malfunctions, & provide tech. info; investigate equip. failures or difficulties to diagnose faulty op. & recommend remedial actions using Matlab/Simulink, GT-SUITE, Excel/VBA, AIMEsim (or equivalent) & other process modeling tools related to HVAC/refrigeration, high pressure fluid systems, or other complex engineered products that produce power or work in Supercritical CO2 (sCO2) PCSs. Req. MS in Mechanical Engrg +at least 2 yrs of relevant prof. exp. working in the same or similar position. Req. 2 yrs of hands-on working exp. w/ power generation equipment as well as 2 yrs working w/ each of the following tools on sCO2 Power Cycle or Organic Rankine Cycle Systems: Matlab/Simulink, GT-SUITE, Excel/VBA, AIMEsim, & process modeling tools. Send resume (NO CALLS) to Julie Maurer at address above.

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S E P T E M B E R 18 - 2 4 , 2 017 |



Weatherhead Executive MBA Develop transformational leadership skills for immediate growth in your career and life. Now offering a healthcare track in affiliation with the Cleveland Clinic.

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Adarsh Krishen

Lillian Williams

Jean R. Robertson

Evan T. Byron

Morgan Ricketts

Chief Medical Officer

Vice President, Health Services



Director of Development

Planned Parenthood of Greater Ohio

Planned Parenthood of Greater Ohio

Kaufman, Drozdowski & Grendell, LLC

Kaufman, Drozdowski & Grendell, LLC

Esperanza, Inc.

Dr. Krishen Appointed Chief Medical Officer. Planned Parenthood of Greater Ohio recently announced Adarsh E. Krishen, MD, MMM, FAAFP, as Chief Medical Officer. Dr. Krishen leads the physicians and health care clinicians serving 61,000 patients in 20 health centers; maintains quality service, clinical and medical standards; and oversees quality and risk management. He has 25+ years of experience and is a graduate of NEOMED where he is now a Clinical Professor of Family and Community Medicine.

Lillian Williams Named Vice President, Health Services Planned Parenthood of Greater Ohio announced Lillian Williams, B.S., M.A., as VP, Health Services to oversee its 20 health centers. Ms. Williams has been with PPGOH since 1994 in several roles including Director of Health Services, Regional Director of Health Service Operations and Director of Business Operations. Her wide experience in program evaluation and business development make her an asset across the Planned Parenthood organization.

Kaufman, Drozdowski and Grendell, LLC (KDG) welcomes Jean Robertson as a partner of the firm. Jean has more than 27 years of experience in the areas of insolvency, creditors’ rights and financial restructuring, with a niche in metal and manufacturing industries. Jean’s role as General Counsel for Beck Aluminum will continue. KDG offers a modern, streamlined and costeffective approach to legal services for business owners and in-house counsel. Learn more at

Evan T. Byron has also joined Kaufman, Drozdowski and Grendell, LLC (KDG) as a partner of the firm. Evan’s experience includes commercial and business litigation in state and federal trial and appellate courts, residential and commercial real estate, bankruptcy and creditors’ rights, banking, construction, and employment law. KDG offers a practical and personal approach to corporate issues and outside general services for small and middle market companies. Visit for more detail.

Morgan Ricketts has been named Director of Development for Esperanza, Inc., an organization that has focused on improving academic achievement for Hispanics in the Cleveland community for nearly 35 years. Previously, Morgan served in several roles in Alumni Relations and Development at the Weatherhead School of Management at Case Western Reserve University. Morgan graduated from Slippery Rock University where she studied Non-profit Management.



John Beaumont

Sam Wintermyer

Assistant general manager

General Manager



Toyota Motor North America named John Beaumont assistant general manager of the Cincinnati region sales office. Beaumont is responsible for sales and marketing, service and parts, customer relations and market representation activities in the region. He’s also responsible for human resources-related activities. Beaumont previously held the position of vehicle operations manager for the Boston sales region.

Toyota Motor North America named Sam Wintermyer general manager of the Cincinnati region sales office. Wintermyer is responsible for sales and marketing, service and parts, customer relations and market representation activities in the region. He’s also responsible for human resources-related activities. Prior to this position, Wintermyer served as assistant general manager for the Cincinnati sales region.



Richard Schneider

Claudia Blackham

Chief Strategic Officer

Director of Operations

NOMS Healthcare

NOMS Healthcare

NOMS Healthcare promotes Richard Schneider to chief strategic officer. In 2015, Rick came to NOMS Healthcare as a senior vice president, and in two years he has helped effectively double the size of the organization. His responsibilities include service line development, M&A, and operational performance. He has served as a board member for the Mercy Foundation, Physician Consortium of Northern Ohio, The Nord Center, and the Susan G. Komen Northeast Ohio Affiliate. Visit:

NOMS Healthcare promotes Claudia Blackham to director of operations. With 25 years’ healthcare experience, Claudia has expertise in healthcare billing, patient care and management. Her primary focus during her tenure at NOMS has been on-boarding physicians into private practice or into a multispecialty group. Visit:


For more information or questions regarding advertising in this section, please call Lynn Calcaterra at (216) 771-5276 or email:

David Mannarino Senior Vice President, Senior Commercial Banker

Fifth Third Bank Fifth Third Bank has named David Mannarino as Senior Vice President, Senior Commercial Banker. Mannarino is responsible for leading the commercial banking team within Northeastern Ohio and driving the Bank’s growth in the middle market space. He has been with Fifth Third Bank for the past 13 years. Previously, Mannarino was the Managing Director and Team Lead in Fifth Third’s London, England office.


Source Lunch


S E P T E M B E R 18 - 2 4 , 2 017


PA G E 31

Howard Katz

Legal educator-in-residence, Cleveland-Marshall College of Law Howard Katz is no stranger to Cleveland State University’s Cleveland-Marshall College of Law, having taught there as a visitor and as an adjunct. ¶ Now as the school’s first legal educator-in-residence, he will work with the dean and others to make sure the school is implementing best practices in areas from admissions to curriculum to academic support. ¶ “The dean of the law school very much understands that while the law school has a very strong and storied tradition, we also have to be thinking about how to move the law school forward into the future,” Katz said. ¶ Katz has a background in legal education and practice. He taught at Elon University School of Law in North Carolina and then Duquesne University School of Law in Pittsburgh, in addition to his work at Cleveland-Marshall, and worked in the Cuyahoga County Treasurer’s Office. — Rachel Abbey McCafferty

Five things How he keeps busy Playing basketball and volleyball (and he recently took a singing class)

Architecture fan Katz makes a point to check out the buildings in whatever city he’s in. Some favorites in Cleveland are the Arcade, the Cleveland Museum of Art and East 4th Street.

What he’s reading “Explaining America: The Federalist” and “Big Data Baseball” His role model His father. “He had a very realistic view about the pluses and the minuses of practicing attorneys,” Katz said. “So I always tried to keep both that optimistic view, but also recognize where attorneys fall short, ethically or in other ways.”

What he missed about Cleveland The public libraries and the pizza

Lunch spot Green Rooster Farms 2033 East 14th Street, Cleveland 216-862-7557

The meal One Harvest Grain Bowl and one Gobbler sandwich with a side of rotisserie chicken salad

The vibe A modern-looking, quick-serve restaurant that offers Playhouse Square visitors a variety of healthy options

The bill $22.47, plus tip

What interested you about the position? Being back in Cleveland is part of it. My father went to Cleveland-Marshall Law School. ... It was and still is a school of opportunity. My father ran elevators at the Terminal Tower after World War II to pay his way through law school and, therefore, allowed me to go to Harvard. Because I’ve been around legal education a long time, and because I’ve engaged in some of these national discussions about teaching and curriculum, and I have been an administrator at law schools previously — so the idea of being able to be helpful to the school, be helpful to Dean Fisher and to help the school think through some of these challenges and opportunities facing law schools, it just seemed like it would be a cool thing to do. What are some of the challenges facing law schools right now? The overarching issue facing law schools, one of them, is that there’s a decline of applicants. And there has been for several years. The last couple of sittings of the LSAT exam there’s actually been a bump up — no one knows exactly why that’s happening and whether it will continue — but in general, there has been a decline in interest by undergraduate students in going on to law school. There has also been a shift in the legal job market. Big law is not expanding as it used to. And therefore, with the increase in cost of legal education and a somewhat greater uncertainty about whether you can get a good job at the other end, that obviously causes anxiety among students. And at the same time, despite the fact that there are still these issues in the job market, there are lots of Americans who need lawyers at an affordable price and don’t get access to a lawyer. So there’s something of a paradox. What attracted you to law to begin with? My father was a solo practitioner. He solved people’s problems. And that’s what a good lawyer does. What made you want to teach it? I like playing with ideas. My father had also been a teacher. But the idea of conveying what you know to someone else just seemed attractive to me. I didn’t go to college thinking I would become a professor; I didn’t go to law school thinking that I would

become a professor. But I have to say, being a professor and, particularly, teaching first-year courses ... Obviously, the class is new to how to think like a lawyer, and you see those light bulbs go off during the first semester, and they figure out what it is we’re doing and what it is we’re trying to get them to do — is fantastic. And teaching law students, you don’t have to worry about kids throwing erasers at you or throwing erasers at each other in the back of the room — you know, if there are still erasers in classrooms. What drives you? Looking at a situation and figuring out how to make it better, which is both a combination of being analytical, but also, about understanding what is the purpose of whatever it is that’s going on. So, you know, at a law school, there’s all sorts of functions. There’s what’s going on with the curriculum, but we have to think about what is it that we haven’t been doing in the past that maybe we need to do in the future. So that’s going to be part of the conversation that Dean Fisher’s going to engage the faculty in in the next year with their strategic plan. A strategic plan — just for the law school? Right. ... So the idea of taking whatever it is you’re doing, whether it’s teaching next week, whether it’s being an administrator at a law school, whatever it is, and just saying, how do we make this better? Obviously, you’re not just making it better for its own sake. The reason we’re trying to make ClevelandMarshall a better law school is that those students are going to go out and be the next generation of practicing attorneys. And they are going to have clients who are going to have problems, whether it be a divorce settlement, whether it be an immigration issue, whether it be starting a new business, and that student, who now is a practicing lawyer, is going to have to give them good advice, because to that client, that problem is the most important thing in their life. So when we’re tweaking how we teach the first year of law school, when we’re deciding that every student should have either a clinical or an externship experience, the larger point is that we are educating the next generation of lawyers. And we want them to be the best they can be.

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Volume 38, Number 38 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 441131230. Copyright © 2017 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, 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, Michigan 48207-2912. 1-877-824-9373.

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Crain's Cleveland Business  

September 18 - 24, 2017 issue

Crain's Cleveland Business  

September 18 - 24, 2017 issue