Crain's Cleveland Business

VOL. 39, NO. 31

JULY 30 - AUGUST 5, 2018

Source Lunch

Akron Akhia is addressing talent gap with ‘inside’ presence. Page 16

Frank Braun, Baldwin Wallace School of Business dean Page 19

CLEVELAND BUSINESS

BUSINESS OF BEER

The List Top barrel-producing breweries Page 15 FINANCE

Shotgun wedding?

True love?

Elliott has blessings of FirstEnergy, RPM shareholders

By DAN SHINGLER dshingler@crain.com @DanShingler

CRAFTING A DYNASTY

Great Lakes Brewing Co. co-owner Patrick Conway and plant manager Mike Heidinger tour the newly installed brewing system in Ohio City. The majority of this portion of the state-of-the-art system was imported from Germany. (Tim Harrison for Crain’s)

At 30, steady, cautious Great Lakes Brewing shows no signs of slowing

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

After a meeting in the mid-1980s about a new business idea, Pat Conway needed a long walk through the Flats to cool his head.

He and his brother, Dan, had just

pitched the concept for a Cleveland brewery focused on fresh, German-style beer that was coming into popularity in the states in the shadow of Big Beer’s dominance. With a restaurant mixed into the business — a novel idea at the time — it would be different from previous iterations of Cleveland breweries, which had all shut down by 1984, when C. Schmidt & Sons closed its doors.

INSIDE Key ingredients: Related businesses provide breweries with crucial beer-making tools. Page 10 Women brewers: Craft beer industry is hoping to find a more diverse mix.

Page 11 Five to try: These local craft brews are worth a taste. Page 14

But John Conway (no relation), an operator of a local beverage distributor who was consulting with the Conways and their father, Jack, a local tax lawyer, about the business, was incredulous about the idea. He pointed out that Pat, a teacher, and Dan, a bank loan officer, had no experience running such risky enterprises.

SEE GREAT LAKES, PAGE 12

REAL ESTATE

Kassouf-led group nears big Erieview deal

By STAN BULLARD sbullard@crain.com @CrainRtywriter

Cleveland parking lot operator and longtime real estate owner James Kassouf heads an investor group that

is closing in on buying the 40-story Tower at Erieview and the Galleria, 1301 E. Ninth St., from lender-owner RAIT Financial Trust of Philadelphia.

Tenants in the building have received a legal document indicating Erieview Acquisition LLC, an Ohio limited liability corporation that lists Kassouf as its

Entire contents © 2018 by Crain Communications Inc.

president, is the prospective owner of downtown's fourth-largest skyscraper and the attached glass-topped Galleria, a mall with multiple vacancies.

The circulation of such a document indicates the pending transaction is in its final stages. Sources familiar with the situation said the Kassouf-led group expects to close within the month and will pay about $30 million for the long-troubled property. Joseph Kassouf, one of James Kassouf's sons, has met with brokerages seeking to represent the office tower and has indicated the new owners are considering following through on a plan to convert part of the tower to apartments. More than 250,000 square feet of the complex is empty, according to online real estate data firm CoStar.

SEE ERIEVIEW, PAGE 18

The 40-story Tower at Erieview has been part of Cleveland’s skyline since the 1960s. (Crain’s)

Don’t look now, but two Northeast Ohio stalwarts recently became worth a lot more than they were just a few months ago — almost $4 billion more, in fact.

One of them has a major subsidiary in bankruptcy, and the other just missed its quarterly earnings target by more than 10%.

They are Akron-based FirstEnergy Corp. and Medina’s RPM International, and if you think they have little in common, you’re mostly correct. But they’re both recent targets of activist shareholder Elliott Management, a $34 billion New York hedge fund known for sometimes taking a heavy hand in guiding its portfolio companies — and for nearly always increasing the value of the investments it makes.

In January, Elliott bought into FirstEnergy with what the utility company termed a “transformational” investment of $2.5 billion from Elliott and fellow investors Bluestone (Energy), hedge fund Zimmer Partners, and Singapore’s GIC sovereign wealth fund.

Then, on June 28, RPM, a maker of specialty coatings and sealants, surprised the markets by announcing it had reached an agreement with Elliott — without disclosing Elliott’s stake in the company — to review its business practices and install two new members to its board of directors.

The share prices of both companies soared on the days they announced the news and largely have kept their updrafts. Since Elliott’s presence became known, FirstEnergy’s stock is up 19%, to about $35 per share, while RPM has gained 23.5% to recently trade at $64 per share.

Why the big gains? It’s at least in part because investors believe Elliott will ensure the company’s increased shareholder value — in the case of RPM by at least reducing costs and with FirstEnergy by aggressively reorganizing as a traditional electrical utility.

Perhaps more importantly, investors have confidence those things will happen even if it requires Elliott raising a little hell.

SEE ELLIOTT, PAGE 17

CONTENT

SPONSORED BY

NEWS AND TRENDS FROM NORTHEAST OHIO’S TECHNOLOGY SECTOR

TECH MATTERS The Art of Artificial Intelligence T he digitally savvy and world-renowned Cleveland Museum of Art has been transforming the way people interact with art through its integration of onsite and virtual technology. And through the last few years, CMA has been collecting massive quantities of data as part of its quest to become a full-fledged data-driven museum.

Last September, the museum partnered with Pandata, a Lakewood-based data science company, to distill all the raw bits and bytes of location data to help determine how to ramp up visitor engagement to the next level. A crosscollaborative museum team and Pandata spent the bulk of the last year analyzing, testing and verifying the quality of the data, before launching

the first phase of its data toolset project on July 1.

“We have our first iteration of data visualizations that will give us a closer look at pathways and time spent in the museum,” said Jane Alexander, the museum’s chief digital information officer. “We’re putting a lot of energy and resources into amplifying the visitor experience and making a free museum as accessible as possible to our community.”

From cultural institutions and nonprofits, to entities small and large in the for-profit world, artificial intelligence is revolutionizing the way companies and organizations operate.

“Artificial intelligence is one tool in the toolbox that can address business challenges,” said Pandata partner and chief data scientist Cal Al-Dhubaib.

Oftentimes, Al-Dhubaib said, business leaders approach him with a vague understanding that

their business needs artificial intelligence, but they’re not exactly sure why or how. The most important first step is to address what business problem they want to solve, he said. Pandata uses a holistic approach that examines a company’s culture, process and technology infrastructure before creating the right intelligence solution to help advance management decision-making.

Parker Hannifin, for example, has been working with Pandata to double down on customer experience. “We evaluate our transaction-based customer experience surveys on a quarterly basis,” said Brad Fischer, director of global retail operations.

About half of those responses have some sort of text or qualitative feedback, and with more than 4,000 responses on average per

LEGAL ISSUES OF AI IN THE WORKPLACE

T

he deep learning capabilities of machines and robots are the new artificial intelligence frontier, with technologies being designed to perform tasks that have relied upon human intelligence and reasoning. From virtual personal health care assistants, to investment bank intelligent assistants, to machines that use predictive inventory management in grocery stores, the prospects for companies across Moore all industries to free up their human workforce for higher-value tasks (think innovation and client relations) indeed are exhilarating.

But hybrid workforces can also present unique challenges, particularly in terms of communication, employee privacy and job

CALENDAR OF

EVENTS A PRODUCT OF

insecurity, says Sarah Moore, a partner at Fisher Phillips, a Cleveland-based labor and employment law firm. Moore says implementing a thoughtful strategy on AI can minimize legal complications — and workforce uncertainties — now and down the road. Among those main considerations:

1

DEVELOP A SOLID COMMUNICATION STRATEGY THAT ADDRESSES THE AI SOLUTION’S INTENT. Make sure employees know what the technology’s purpose is and what type of work it will be performing, especially if integrating the solution involves workforce reduction.

It’s tempting to let your imagination get ahead of practicality when it comes to the machine’s workforce applications, but remember, AI is not a replacement for humans. “A computer may be able

to do thought-process work, but you still need human computer coders who are not necessarily well-versed in the industry or company using the AI solution. Preserving your company’s knowledge base for AI is key to maintaining the new technology and to future innovation. Machines simply cannot replace human relationship-driven experiences.”

2

MONITOR ONGOING PRIVACY CONCERNS. With companies utilizing AI to mine the personal information data they collect, legal exposure based on privacy issues is increasing. “When it comes to privacy, AI will continue to present significant ongoing legal exposure,” Moore said. “Whether used by a human resource or sales department, personal information is being used at greater rates to predict behavior or

month, compiling a story with this data was difficult, he said. Utilizing Pandata’s perception intelligence solution enables the global company to consolidate feedback from multiple survey channels and languages; apply artificial intelligence to categorize responses and sentiment; and prioritize the most relevant comments by category, Fischer said.

“We’re now able to consistently quantify customer feedback with hard numbers and uncover improvement opportunities across the enterprise,” he said. “We gain tremendous insight from our own data and are able to channel our efforts to those areas that are most important to the customer.”

habits of applicants, employees and customers.”

This information is used to make decisions on hiring, discipline, advertising and other matters that impact our relationships and interactions.

“Many are predicting that AI may cause society to redefine what constitutes protected freedom from observation,” she said. “The fact is privacy in 2018 is extremely different from what it was like pre-internet, and AI will be the force that pushes us to adjust our societal expectations on what information about ourselves should be legally shielded from public distribution.”

3

INVOLVE LEGAL COUNSEL EARLY ON, PARTICULARLY IF WORKFORCE REDUCTIONS ARE POSSIBLE. “AI can have a significant effect on a company’s operations,” Moore said. “For companies with unions, how and when the announcement is rolled out to the union is critical to successful implementation and to minimize deliberate slow-down of work performance prior to AI’s arrival. It’s best to get legal counsel involved as early as possible to create a short- and long-term labor component strategy,” Moore said.

AUGUST 10

AUGUST 16

FALL 2018

DATA ANALYTICS AND THE SUPPLY CHAIN: 8 a.m. to 2 p.m., Cleveland State University’s Student Center, 2121 Euclid Ave., Third Floor Ballroom, Cleveland. Open to students, faculty and the business community, this event dives deeper into big data, business analytics and SAS. Info: events.csuohio.edu

LEADERSHIP CONFERENCE: 8 a.m. to 4 p.m., Cleveland Metropolitan Bar Association, 1375 E. Ninth St., Floor 2, Cleveland. This biennial leadership conference invites you to connect with other civic and business leaders and offers resources to help you maximize your leadership impact. Info: cleveleads.org/ events/conference/

HOST A RITE SITE VISIT FOR LOCAL HIGH SCHOOL STUDENTS: Regional Information Technology Engagement, or RITE, is seeking companies interested in hosting a half-day site visit for students interested in learning about technology.Info: getithere.net/ employers/site-visit/

CRAIN CONTENT STUDIO C l eve l a n d

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

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State bill could give big projects sizable jolt

By JAY MILLER jmiller@crain.com @millerjh

The financing of big real estate projects will get a bit of a lift if legislation now before the Ohio Senate becomes law.

HB 469 would authorize a new tax credit of as much as 10% of the development cost of what the legislation calls “transformational mixed-use developments.” To qualify for the tax credit, a project would have to have a planned development cost of $50 million or more, include a building at least 15 stories high, or otherwise include 350,000 square feet of space, and more than one use. It could be some combination of office space, residential units, a hotel, retailing, structured parking or a recreational use, according to an analysis by the Legislative Service Commission, the Legislature’s bill-writing and researching arm.

The director of the state Development Services Agency (DSA) would determine if a project meets the criteria for a transformational mixeduse project. The project also must demonstrate that state and local tax collections will increase by more than the credit amount within five years of the project’s completion.

The tax credit creates capital for the project, since a developer usually sells the tax credit to help with financing. The investor who acquires the tax credit — in this legislation, it must be an insurance company — can subtract the amount of the credit from the taxes owed to the state.

The legislation was introduced by Republican state Reps. Kirk Schuring of Canton and Thomas Patton of Strongsville. It passed the House 91-0 late in June and was introduced in the Senate on July 5.

Schuring said the bill grew out of a conversation he had with Cleveland developer Robert Stark of Stark Enterprises. Stark has been working for several years to finance and develop NuCLEus, a mixed-use project proposed by Stark Enterprises in Cleveland’s Gateway district across from Quicken Loans Arena.

NuCLEus could include 200,000 square feet of office space, 500 apartments, 150,000 square feet of restaurants and retail shops and nearly 1,500 parking spaces.

Schuring said the bill targeted insurance companies as beneficiaries of the tax credit because “it just makes sense. They like to invest in big development projects.”

An earlier version of the bill limited tax-credit eligibility to projects costing $400 million or more and included a 20-story building on no more than 7 acres. That would have limited eligibility to a very small number of developments in major metropolitan areas. The changes would open the tax credit up to projects in smaller cities — meaning the districts of more legislators.

“It’s what you call the art of legislation,” Schuring said. “What you have to do when you legislate is build consensus.”

The only opposition voiced has come from Policy Matters Ohio, which opposed the initial version of the bill, as well as the substitute. The nonprofit think tank, which opposes most tax breaks, believes the state already has too many tax credits and exemptions, which, it says, represent $9 billion in revenue foregone annually from the state general fund.

“The reduction in HB 469 does not

change our opinion,” said Wendy Patton, a senior project director at Policy Matters, of the changes in the substitute bill. “It makes the proposed tax break more accessible. The bill as passed (by the House) could result in a larger tax expenditure than originally proposed.”

This credit, which could be claimed only by insurance companies, would reduce an insurance company’s state insurance premium tax by $5 million revenue for each $50 million project that wins the credit.

But Shuring said the tax credits would not have a negative effect on tax collections overall.

“The developer has to show that it will have a transformative effect on an area of at least a quarter-mile radi-

us around the project,” Schuring said, boosting the project area’s economy.

“It also must show, in a five-year forecast, that there will be a greater amount of sales taxes, property taxes and income taxes collected than are reflected in the tax credit, so that at the end of the day, there will be a net tax gain from the project.”

The project is also supported by the Ohio Chamber of Commerce and the Ohio Municipal League (OML), which represents Ohio cities. Kent Scarrett, the OML’s executive director, also compared the new tax credit to the historic tax credit, but he emphasized the importance of large, new mixed-use complexes.

“Mixed-use buildings are playing a crucial role in revitalizing municipal downtowns across the country and in

some municipalities across our state,” he told the committee. “An entire workforce of young talent looks for benefits like walkability and access to local amenities when they decide where to live. For the millennial workforce, which last year became the largest component of the American workforce, they no longer follow the jobs.

The jobs come to where they are.”

Steve Coven, Stark Enterprise’s vice president of real estate development, told the Ohio House Government Accountability and Oversight Committee that tax credits similar to this one, for the redevelopment of historic buildings, has renewed Cleveland’s central business district.

“This program has encouraged our urban areas to preserve their historic buildings, which is what gave our cit-

ies their character, and now we need to complement that character with a program that will allow our cities to set the stage for their futures,” he told the committee.

Michael Farley, vice president of legal and government affairs with the Ohio Insurance Institute, said in a telephone interview that the tax credit will be attractive to insurance companies because they are attracted to real estate since it is a relatively safe, long-term investment.

“I think it’s in recognition of the long-standing investments the insurance companies have made in economic development projects across the state and the country, actually,” he said. “It gives more opportunity for (insurance companies) to deploy our capital, because we are capital heavy.”

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Change could aid access to substance abuse care Old rule limited Medicaid reiumbursement for larger facilities

By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

A change to an old rule around Medicaid reimbursement could help increase access to care for those struggling with substance use disorders.

The rule, which has been in place since Medicaid began, prohibits federal reimbursement for treatment in certain institutional settings, specifically in Institutions for Mental Disease (IMD). An IMD is a hospital, nursing facility or other institution with more than 16 beds that primarily treats and cares for persons with mental disease.

“The purpose of that rule was that back at that time, there were large state institutions, and the feds did not want to pay to warehouse individuals in these large state mental institutions,” said Thomas Stuber, president and CEO of The LCADA Way, a Northeast Ohio provider of alcohol and addiction treatment and recovery. “And so they put a limit of 16 beds. ... Sixteen was chosen as a cap for any community-based provider in terms of being able to house individuals and still bill Medicaid.”

In recent years, some have questioned the appropriateness of this rule, given the incredible need for access to treatment during the opioid epidemic.

Now, thanks to maneuvers at the federal level a couple of years ago and the subsequent behavioral health redesign within the state, Medicaid dollars are allowed to cover some substance use disorder treatment in residential facilities with more than 16 beds.

This opens up the door for some facilities to increase the number of beds they offer for treatment, reducing wait times and getting more people in the door for treatment.

The LCADA Way recently an-

“Not only are we dealing now with the opioid epidemic; we’re again seeing a spike in cocaine, and we’re also seeing increase in methamphetamine, so those may be the epidemics of the future.”

— Thomas Stuber, president and CEO of The LCADA Way

nounced that it is increasing the number of beds in its women’s treatment facility from 16 to 21, now that the IMD exclusion no longer applies.

It plans eventually to grow to a total of 36 beds.

“We anticipate the demand is going to continue to go up,” Stuber said.

“Not only are we dealing now with the opioid epidemic; we’re again seeing a spike in cocaine, and we’re also seeing increase in methamphetamine, so those may be the epidemics of the future. The other problem we’re seeing is that we’re seeing a lot of other drugs being laced with fentanyl, which is the opiate, including marijuana, methamphetamine and cocaine. … And that’s going to be creating the opiate addicts of the future.”

Jim Tassie, assistant director of Ohio’s Department of Medicaid, said he has heard anecdotally of other providers looking into expansion as a result of the IMD exclusion change.

So long as providers are growing responsibly and not simply for the sake of adding beds, this growth “makes a lot of sense,” he said.

Scott Osiecki, CEO of the ADAMHS (Alcohol, Drug Addiction and Mental Health Services) Board of Cuyahoga County, said the agency will encourage providers living within the 16-bed

guideline who have the room and capability to expand to do so, “so that we could meet the continuing need for residential treatment for folks recovering from addiction issues.”

The IMD rule change also frees up some money for the ADAMHS board to spend in other ways to fight the opioid epidemic.

The ADAMHS board spends $4.3 million funding alcohol and drug residential treatment services in five agencies in the area that have more than 16 beds. Now that these facilities are eligible for Medicaid coverage, the IMD rule change has freed up funds for the ADAMHS board to spend on recovery supports, prevention activities, crisis services and more.

Some of the $4.3 million will continue to go to those agencies to fund room and board, but the majority of it has been spent on services, which are now eligible for Medicaid coverage, Osiecki said.

The IMD rules still have some limitations. The federal changes allow coverage for up to 15 days in a calendar month through Medicaid managed care plans. As part of the state’s behavioral health redesign, a goal was to carve behavioral health services into managed care plans, Tassie said.

“By doing that — and that took effect on July 1 of this year — we now have the ability to pay for those IMD services under that broader Medicaid managed care rule that has that 15-day limit in it,” he said.

The 15-day rule gave the state “the first window” into being able to pay for these services, Tassie said. Now, the state is planning to submit a waiver to the federal government to be able to pay for longer stays, he said.

“I think as we build capacity both on the mental health side, but in particular on the substance use disorder side, I think it’s going to help us combat that epidemic,” Tassie said.

21-suite apartment complex in Tremont is in early stages

By STAN BULLARD sbullard@crain.com @CrainRltywriter

Tremont Lofts, the apartment building remake of the former Union Gospel Press complex in Cleveland’s Tremont neighborhood, may get some company.

Plans for a four-floor, 21-suite apartment building on the southwest corner of Jefferson Avenue and West Seventh Street were given a conditional approval by Cleveland City Planning Commission at its meeting on Friday, July 20. The commission usually provides final approval, but it OK’d the plan with the condition that the developer of the project, J. Brian McCreary, receive approval of landscape and lighting plans for the project from the city’s Near West Design Review Committee before securing building permits.

Chris Smythe, the name principal of Smythe Property Advisors, returned calls to McCreary and Paul

“It’s too premature to talk about.”

— Chris Smythe, name principal of Smythe Property Advisors

Beegan, a Lakewood architect, about the project dubbed “Grosvenor Place.” He said he is among investors in the planned project, which incorporates parking on its first floor and three floors of suites above it.

“It’s too premature to talk about,” Smythe said, but the project may begin construction early next year if final drawings and financing are secured by the end of 2018.

Smythe is a past president of the Northern Ohio Apartment Association trade group and owns apartments. He also is a partner in the West 25th Street Lofts at West 25th Street and Church Avenue, an Ohio City multifamily conversion of a former commercial complex that was finished in 2016.

Beegan’s design is for a contemporary building with three one-bedroom suites, 13 two-bedroom suites and five three-bedroom suites. It would replace a vacant lot and a smaller apartment building at 2430 W. Seventh St. that McCreary has owned since 2000, according to Cuyahoga County land records.

The proposed plans do not include a development cost for the project, but constructing an apartment building with that many suites would cost more than $2 million, according to industry estimates.

Tremont Lofts, which put more than 100 apartments in the former Christian publishing house, was opened in 2010 after more than two decades of failed development attempts. It commands rents of more than $1,295 monthly, according to the Apartments.com website for residential rentals. Both properties are near Tremont’s eastern edge and are less than two blocks from the Professor Street commercial district.

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JumpStart made good money on its original nonprofit investment fund — enough to sustain the organization’s efforts to invest in local tech startups for the foreseeable future while also paying for new programs designed to help entrepreneurs.

So far, JumpStart has more than doubled the $27 million put into the first version of its Evergreen Fund, CEO Ray Leach said. Through that fund, the nonprofit invested in 76 startups over nearly a decade, starting in 2004.

Several of the companies JumpStart invested in through that fund have been sold, and a few of them fetched high prices — CoverMyMeds in particular. In early 2017, McKesson Corp. acquired the medical software company in a deal that so far has generated nearly $1.37 billion for CoverMyMeds shareholders. That total could rise if CoverMyMeds hits performance targets in 2019.

Leach isn’t allowed to say how much money JumpStart made on the deal, but consider this: JumpStart brought in $23.63 million in investment income during the 12-month period ending on June 30, 2017, according to a Form 990 for that year.

By comparison, the nonprofit made just $838,676 on its investments the previous fiscal year.

Not bad — especially considering that JumpStart invested just $500,000 in CoverMyMeds, which is based in Columbus but has an office in Highland Hills.

Returns from the fund could continue to grow because 33 of the 76 startups are still active JumpStart

portfolio companies.

The idea that the Evergreen Fund could possibly be as renewable as its name suggests bodes well for JumpStart’s long-term ability to invest in local early stage tech startups.

The Cleveland-based nonprofit has other investment funds, but they serve somewhat different purposes: Its nonprofit Focus Fund invests in startups led by women and minorities, and its for-profit NEXT Fund makes larger investments in later-stage startups. Both target startups throughout Ohio.

JumpStart was able to form a second version of the Evergreen Fund a few years ago with capital from the Ohio Third Frontier economic development program and philanthropic groups.

Those capital sources are still available to JumpStart — a fact that Leach believes won’t change anytime soon. But he noted that the Third Frontier soon will be overseen by a yet-to-be elected governor, and it’s not yet clear whether either of the candidates — Republican Mike DeWine and Democrat Richard Cordray — would set different priorities for the program.

Plus, JumpStart’s local philanthropic funders in recent years have encouraged the organization to do more to help minority-led startups as well as established small businesses — including non-tech companies — with the potential to create good-paying, accessible jobs in Northeast Ohio’s inner cities. The idea is that those businesses are well positioned to create jobs for the people who need them most.

Leach said those philanthropic groups remain supportive of JumpStart’s original core mission of helping local tech entrepreneurs and in-

vesting in the companies they run, and he noted that most of JumpStart’s budget still goes toward that original mission.

“At the same time, I also believe more and more of this work will be led by the private sector in the coming decade,” he added.

Leach said JumpStart received less philanthropic support this past fiscal year than in previous years, excluding a $24 million grant it received from KeyBank Foundation, which is going toward new programs targeting small businesses in Ohio and upstate New York. “They (philanthropic groups) no longer need to help us the way they used to because we’re funding more and more of our work ourselves,” he said.

The success of JumpStart’s original Evergreen Fund already is helping it fund new programs targeting entrepreneurs, Leach said, noting support JumpStart has provided to Growth Opportunity Partners, a separate nonprofit that makes loans to small local businesses that have the potential to create good jobs, and the Plug and Play Cleveland health tech startup accelerator. JumpStart and the Cleveland Clinic were the first corporate partners to fund the Cleveland outpost of the storied Silicon Valley accelerator.

All the while, the nonprofit also aims “to dramatically increase our direct high-tech startup investing activity over the next year,” Leach said.

He noted that the “Opportunity Zones” provision in the Tax Cuts and Jobs Act of 2017 provides tax incentives that should help JumpStart and other organizations raise for-profit investment funds targeting distressed census tracts.

“This isn’t an ‘either/or,’ ” he said.

“It’s an ‘and.’ ”

Four Lake County hotel projects check in at $50M

By STAN BULLARD sbullard@crain.com @CrainRltywriter

Four new hotels will be checking into Lake County over the next two years.

Construction of an $11 million Hampton Inn started recently on a site at 171 Water Tower Drive in Madison Village that, once it reaches its four-story height, will be visible from I-90. It will join a $10 million Holiday Inn Express that will open in August on an adjoining site.

A 100-room Holiday Inn Express under construction on Gold Court in Concord Township is scheduled to open next year. In addition, a Home2 Suites extended-stay property is proposed for a site on Crile Road, also in Concord Township.

Mark Rantala, executive director of the Lake County Ohio Port and Economic Development Authority, said the projects have a total dollar cost exceeding $50 million.

“The hotel boom has spread east to Lake County,” Rantala said, referring to the hotel projects that opened the last three years in neighboring Cuyahoga County.

Rantala is tracking the projects,

An $11 million Hampton Inn is being constructed at 171 Water Tower Drive in Madison Village.

(Contributed rendering)

although the port did not provide financing for them.

Instead, Rantala said, the port seeded the idea in 2015 by engineering a $50,000 study of the Lake County hotel market. The report was funded by Lake County’s commissioners.

“We felt we might be able to get some new hotels because our existing hotels are getting older and there are holes in the market,” Rantala said.

“With the amount of financing available for hotels, we thought it would be a good time to do a study.”

The report by Hotel & Leisure Advisors of Lakewood focused on five

potential hotel locations in the county, and two have attracted developments. Rantala said a portowned site in Fairport Harbor near that community’s iconic lighthouse is being readied for development after the study found support for a 300-room waterpark near the lake.

“We hope to get that ready to do a (request for proposals) for a developer to undertake that site,” he said.

A site in Willoughby has gotten no takers. Rantala said the opening for a hotel on the west end of the county was filled by the $10 million renovation of the 143-room Radisson Hotel on Curtis Boulevard in Eastlake.

Dallas-based Stonehill Hotels is preparing to rename it as a Four Points

by Sheraton property.

“Instead of a new hotel, we got a refurbished property that includes banquet space,” Rantala said.

Charlie Borsukoff, vice president of JCI Contractors of Ashtabula, said the study was “very crucial” for the decision to proceed with the Madison Hampton Inn, the family owned company’s first hotel through its Vineyard Hotel Group affiliate. He said the rise of the winery business in Lake and Ashtabula counties is attracting more visitors to the region.

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Fiduciary rule will be gone, but not forgotten

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

The U.S. Department of Labor’s fiduciary rule may be dead — for now — but its spirit lives on in how it has shaped the world of wealth management.

Meanwhile, financial advisers and broker-dealers are left in the lurch regarding how a similar set of fiduciary rules could be set by the Securities and Exchange Commission.

“At least for now, the industry is pointing to the decision of the Fifth Circuit Court of Appeals, a well-respected and prestigious circuit with good judges, as evidence the fiduciary rule is dead,” said Scott Matasar, Cleveland attorney specializing in the retail securities industry who often defends advisers when they get in regulatory trouble. “It’s possible another federal circuit court might reach a different decision, though, which could set up a Supreme Court challenge.”

In the meantime, any changes advisers made to comply with the rule are unlikely to be thrown out the window.

The labor department rule dates back to the Obama administration and was set to be phased in by financial advisers between April 10, 2017, and Jan. 1, 2018. The myriad provisions under the

rule itself targeted advisers working on retirement accounts, requiring them to provide “best-interest” advice, charge no more than reasonable compensation, and avoid misleading statements.

The idea was to promote transparency by requiring broker-dealers to disclose commissions they’d earn for certain products to clients. The rule required firms to create a paper trail proving how the adviser was putting someone’s money in products or vehicles that ultimately benefit clients’ interests over their own — hence the “best interest,” or fiduciary standard.

Opponents of the rule — large Wall Street wirehouses in particular — argued such rules would be so costly to comply with and restrict investing so much it could make them close down smaller client accounts and stifle revenues. Some claimed the move would force smaller and boutique firms out of business.

Industry lobbyists influenced the Trump administration’s decision to delay implementation of the rule. But on March 15, the Fifth Circuit Court of Appeals threw the rule out in a split decision, declaring it unreasonable and calling it an overreach of governmental power. Efforts to appeal that decision were for naught, which sets up the SEC to make its own best-interest regulation. A pub-

Real estate magnate Otto ups stake in DDR

By STAN BULLARD sbullard@crain.com @CrainRltywriter

European real estate magnate Alexander Otto is continuing to up his holdings in Beachwood-based DDR Corp.

Otto bought 6.3 million shares in the real estate investment trust in May and June, bringing his stake in it to 18%.

After those trades, Otto, who sits on the DDR board and is CEO of Hamburg-based ECE Group, owned a total of 32.6 million shares of DDR stock, according to a Securities and Exchange Commission filing June 29.

That makes him the owner of more of the shopping center company than Vanguard Group, its largest single institutional investor, which held 18 million shares, according to its latest report April 30.

Chris Kuiper, REIT analyst at CFRA Research of New York, said having an individual own so much of a public REIT is rare, particularly since Vanguard and others have launched exchange-traded funds. Usually such instances are due to founders who have just taken a real estate company public and continue to own a large stake in it.

He views Otto’s role, and that of his family who have been less acquisitive in DDR stock of late, as positive.

“Otto is the owner of a massive shopping center portfolio in Europe,” Kuiper said. “An insider, who has more knowledge of the company than a typical shareholder, buying the stock is a good thing for shareholders. He clearly sees value in the company.”

The run-up also increased in lockstep Otto’s share in RVI, the company DDR spun out July 2 at the rate of 10 RVI shares to one DDR share.

Even before the latest buys, Otto’s increasing purchases of DDR triggered

a question for David Lukes, DDR CEO, on his most recent conference call with analysts and investors April 24. Lukes called Otto “an absolute pleasure” to have on the board Otto and a source of ideas for operations because of his focus on real estate.

Other DDR insiders who have met Otto at board meetings consider him valuable for the company because he takes a long-term view of the business rather than the typical quarter-by-quarter approach in the United States.

At ECE, Otto runs a company that manages more than 200 shopping centers, many in urban areas, in Europe, as well as office and warehouse space. He also sits on the board of Paramount Group, a publicly traded REIT that owns skyscrapers in New York City, Washington, D.C., and San Francisco.

Forbes estimates Otto’s net worth at $11.4 billion. He declined to be interviewed about DDR through an ECE spokeswoman.

The Otto family may own as much as 30% of DDR stock under the 2009 agreement the company approved when the family injected $300 million into the struggling company during the U.S. credit crunch. He has a long way to go before reaching that ceiling.

DDR is now on its fourth CEO since then. After putting 50 properties in RVI, specifically formed to sell them, Lukes said the strategy will allow the company to focus on growth opportunities in its remaining portfolio of 235 properties.

DDR’s stock was trading at $14.09 on Thursday, July 26, and has ranged between $10.95 and $17.95 over the last year, according to Yahoo Finance.

lic comment period for that rule is open through Aug. 7.

The notion the government would mandate good behavior is something some advisers disagreed with, even registered investment advisers (RIAs) already operating at the fiduciary standard (versus the lower level “suitability” standard broker-dealers operate by).

“The rules were OK, but I thought they were unnecessary because to legislate being good to your clients just seems silly to me,” said Ron Gross, president and CEO of Beachwood-based wealth management firm MGO and co-founder of Beachwood firm One Seven.

Despite that, those already at a fiduciary standard felt those rules would level the playing field and do so to the benefit of customers.

With the rules thrown out, for now, fiduciaries see an opportunity to once again separate themselves from broker-dealer competitors. And now they can do so with the benefit of customers being more knowledgeable as to what that really means.

“Before they couldn’t even spell fiduciary,” said Carina Diamond, founder and CEO of Akron’s Springside Partners. “Now, I get many, many more clients asking if we’re a fiduciary, and I’m proud to say, yes,

we are. The public now knows what this means. And for the business model, that’s a differentiator.”

It’s one factor that may be driving growth for independent RIAs. Global analytics firm Cerulli Associates has projected that the independent RIA and hybrid RIA channels combined will increase total asset market share from 23% in 2015 to 28% in 2020 — likely outpacing wirehouses.

Other Cerulli data show the RIA market today stands at $4.1 trillion of total assets under management with an 11% compound annual growth rate, and RIA share of the overall wealth market has increased to about 23% from about 15% over the past 10 years.

Those stats show that RIAs are claiming more share of the market and that those trends are expected to continue, particularly as advisers continue an apparent exodus from large wirehouses to independent firms and take clients with them.

So for those firms, the saga of the fiduciary rule has been good for business.

Meanwhile, Paul Ewing, founder of Prosperity Advisory Group, which recently acquired SS&G Wealth Management from Springside, said another effect of the fiduciary rule is that it’s creating some fresh competition in terms of costs and fees.

It’s also driving a shift toward “lev-

elized” fees, which effectively refer to fees by a fiduciary adviser collecting money from third-parties for their recommendations that are offset against the typical 1% annual fee — meaning the adviser is still collecting no more than that 1% flat, or level, fee.

“We definitely think levelized compensation is going to become a larger part of the business,” Ewing said. “That shift will continue.”

Wirehouses have restructured how they do business in anticipation of the fiduciary rule and are unlikely to throw out major changes they’ve already made, particularly as the jury remains out on how the SEC might craft rules of its own, Matasar said.

After all, it’s good business for them to do so as clients are more knowledgeable of what fiduciary means.

“The whole debate over the fiduciary rule, even though it is going away, has led to a more educated and savvy investor community here in America,” Matasar said. “The firms that have already taken steps to get ready won’t suddenly go back to the wild, wild west of 10 years ago. But what it means is they now have the ability to customize their organization’s implementation of the basic precepts of the rule in a way that makes sense for their particular organization and the liens of business they operate in.”

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CRAIN’S CLEVELAND BUSINESS

Opinion Personal View

We need leaders willing to break from status quo

By JOHN G. LYNCH

Editorial

Right course The board of the Greater Cleveland Regional Transit Authority took a tough, but necessary, step last week when it accelerated the timetable for a leadership transition. It’s an encouraging sign that the board, itself under new leadership, is ready to make even more tough decisions ahead.

Joe Calabrese, RTA’s general manager and CEO since early 2000, will exit those posts on Sept. 1. He previously planned to stay until the end of his contract in 2020. (Calabrese will remain an adviser to RTA.) The agency’s new board president, Westlake Mayor Dennis Clough, said the quicker exit will “better position RTA for the future.”

Calabrese on balance has been a strong leader of RTA, with accomplishments that include the creation of the HealthLine, which made Cleveland a leader in bus rapid transit, as well as the implementation of a downtown trolley and expanded use of energy-efficient fuels.

The last year, though, has been difficult, as RTA has reduced service and raised fares in the wake of a cut in state aid that cost the agency more than $20 million annually, or about 7% of its budget. In March, longtime board president George F. Dixon III was forced to resign after improperly receiving health care benefits and unpaid premiums for insurance provided by the agency over 24 years. RTA, like most transit systems nationwide, also is contending with diminished ridership.

The board, at the strong urging of transportation advocates including Clevelanders for Public Transit, is considering putting a levy on the November ballot to help alleviate financial pressure on the agency. There’s not much time for that, as RTA would have to file the measure with the county Board of Elections by Aug. 8. It’s a step that, with the GM transition pending, might be better left to next year.

Regardless of the levy decision, the next GM of RTA will have much to address right away. It’s on the board to conduct a search that leads to the hiring of an outsider who will bring fresh thinking and energetic leadership to the job.

Trade off

In the early days of the Obama administration, particularly surrounding health care reform, it was common to hear business executives complain about policy “uncertainty” that made it hard for them to chart the future for their companies. The complaints were overblown in some cases, but they generally had merit.

The putatively pro-business Trump administration is creating plenty of uncertainty these days with an unsteady approach to trade that threatens to undermine recent gains made in the economy. Tariffs implemented by President Donald Trump are starting to have real bite. As Bloomberg noted, tariffs on metal imports “are playing havoc with earnings at some of the most recognizable industrial companies in America,” as increased demand and a 25% levy on steel have sent the benchmark domestic steel price “surging more than 40%.” In turn, many big companies are cutting profit forecasts.

Retaliatory tariffs from trading partners have had an immediate impact on the agricultural industry, which led the administration to announce $12 billion in subsidies to farmers — an expensive step that wouldn’t be needed if the administration had a more sensible approach to trade.

Trump last week backed off his threat to levy tariffs on cars imported to the U.S., but by the time you read this, his position may have changed again. As Sen. Rob Portman, a Cincinnati Republican and the former U.S. Trade Representative, told Bloomberg, “It’s a first step. We’ve still got to work out the details. But it’s been hard these last few weeks to see any light at the end of the tunnel,” with no signs of progress with Europe, Mexico, Canada or China.

Business leaders need to speak up in defense of trade policy based on creating growth opportunities, not on tariffs that lead to an endless cycle of retaliation.

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

CLEVELAND BUSINESS

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Scott Suttell (ssuttell@crain.com)

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Timothy Magaw (tmagaw@crain.com)

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This summer has seen plenty of dialogue about the leadership in the city where I live: Cleveland. This dialogue is necessary and reflecting on this dialogue is vital.

A theme in these discussions of city and regional leadership is the old guard vs. the new guard. In articles, at public forums and on social media, many seem to be drawing a distinction based on age and years of tenure: that new, younger leaders might advance the regional economy in ways that eluded current, more tenured, older leaders. They may be right. I’m not writing to weigh in on that position.

I’m writing because we need to take a deeper, more nuanced look at leadership. Age and years of tenure — whichever way you view them — are a poor proxy for leadership capacity. It is much more important to consider how individuals conceive of the role of a leader.

There are many leadership Age and years typologies. Two clusters I view of tenure — as relevant are: 1) those who think the role of a leader is to whichever way preserve the status quo, and; 2) you view them — those who think the role of the leader is to build a better future are a poor proxy for society, and will work to- for leadership ward that end even if it requires capacity. It is a break from tradition, from the status quo. This distinction is much more particularly important to the important to current discussions in Cleveland because — as almost ev- consider how eryone has pointed out — the individuals status quo is not working.

Some — perhaps those who conceive of the think the dilemma is as simple role of a leader. as the old guard and the new guard — may look at these differing views of leadership and claim that many of the established leaders in the Greater Cleveland area fall into the first category. Some may even conclude that in general the younger emerging leaders in the region fall into the second category. Again, those conclusions may be empirically warranted.

However, I urge us all, wherever we are, to continue exploring the nuance of leadership typology, to not just collapse the discussion back to the crude categories of old guard and new guard.

Why? Because there is danger in sidestepping the question of what leadership actually means. This danger can have very real consequences. Looking at my own experience with leaders of all ages and persuasions, I feel there are some current, established leaders in Greater Cleveland who understand that leadership should be about building a stronger future for all and who have demonstrated the galvanizing vision for systems change that get us a step closer to that future. These leaders should not be put out to pasture simply because they have a few gray hairs or have been in leadership positions for some time.

Even more dangerous than disregarding the old guard en masse is wholesale endorsement of any and all younger emerging leaders. As someone who has championed in various forms the voices of younger leaders in Cleveland, I don’t say this lightly.

The unfortunate fact is there is no shortage of younger emerging leaders champing at the bit to be the next generation of status quo defenders. Luckily, there are just as many young emerging leaders who embrace the view of leadership that seeks to improve the status quo.

SEE LEADERS, PAGE 9

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At the Table

Taste of the Browns benefit set to mark 20th anniversary Benefits, Blended Burgers and a bittersweet goodbye are on the docket in the coming weeks. Here’s a taste.

Taste of the Browns The Greater Cleveland Food Bank is the beneficiary for one of the city’s biggest annual fundraisers, and this year, Taste of the Browns celebrates its 20th anniversary.

If you’ve ever attended the event, you know it’s one of the city’s biggest bashes.

This year’s benefit will run from 6 to 9 p.m. Monday, Sept. 24, at FirstEnergy Stadium and will feature past and present players from the Cleveland Browns.

Although this year’s roster of onfield talent hasn’t yet been announced, I’ll never forget the thrill of meeting one year’s star presenter: the legendary Lou Groza. It’s that kind of opportunity, plus plenty of great eats and drinks, that makes this a one-of-a-kind evening.

Plenty of the city’s most popular restaurants will be on hand to dish out samples of some of their best dishes. From A to Z, they’ll include B Spot, Barrio, Blue Point Grille, Corleone’s, Deagan’s, Edwins, Flemings, Heck’s, Johnny’s Downtown, Momocho, Parker’s Downtown, Pearl of the Orient, Sushi 86, University Hospital Ahuja Medical Center and the Zack Bruell Restaurant Group. That’s just to name a cross section of the culinary that will be onboard this year.

The evening will include a silent auction, wine pull, beer pull, a raffle and a live auction, plus opening remarks and Browns players and alumni introductions.

Last year’s event raised roughly $250,000 to aid the food bank in providing food to more than 1 million struggling children, women and men in the Greater Cleveland area.

Ticket prices start at $177, including a $2 fee per person. For more information on the event and to reserve admission, go to tinyurl.com/tasteofbrowns.

Whalen returns to Mentor Chef Rocco Whalen is one of the first guys to lend a hand. Mentor is hometown to the owner of Fahrenheit restaurants in Tremont and Charlotte, N.C., and he’ll go back there for a fundraiser on Wednesday, Aug. 8.

Whalen will head up a culinary bene-

LEADERS CONTINUED FROM PAGE 8

Cleveland will not be well served by status quo defenders who are young in the same way that Cleveland will not be well served by status quo defenders who are old. How someone views their role as a leader is more important than their age or years of tenure.

This tension shines some light on what’s so tricky about the status quo,

fit in support of Mentor police officer Mathew Mazany, who was killed in the line of duty. Whalen will team up with the Longo family, who gave him his Joe start in the kitchen Crea of Longo’s Italian Restaurant and now operate Pastina Rustic Italian Kitchen, 9354 Mentor Ave. Pastina head chef Josephine Todd will join Whalen in producing a fivecourse Italian dinner, including wines. The evening will begin at 6 p.m. with cocktails and hors d’oeuvres. After the meal’s final course is served around 8 p.m., Whalen, restaurant owners Joe Longo and his sister Tina Greci, and members of the Mazany family will share their thoughts on the fallen policeman.

On June 24, Mazany, a 14-year veteran on the Mentor force, was struck and killed by a hit-and-run driver while assisting a fellow officer during a traffic stop. Proceeds from the event will go to support Mazany’s family, especially his son.

“Anyone who knows me knows my love for Mentor,” Whalen said in a prepared statement. “My family is still there, including my brother who is a firefighter for Mentor. We were all talking about doing a special dinner together, and then when this unfortunate tragedy happened, we knew instantly the focus of our evening.”

Reservations for the event are $100 per person, including beverages, with $75 from each ticket going to support the Mazany Memorial Fund.

For more information or reservations, go to tinyurl.com/Mazanybenefit.

Blended Burger contest Time’s running out to try, and vote for, Cleveland restaurants participating in the James Beard Foundation’s Blended Burger Project. The nationwide competition runs through Tuesday, July 31.

You may recall the project’s mission (sponsored by the Beard Foundation and the National Mushroom Council) is to produce delicious burgers containing at least 25% less animal products, resulting in a healthier and more environmentally friendly meal.

At the Burnham Restaurant, locator any dominant paradigm for that matter: It is very good at resisting change. The status quo has inherent incentives to resist change. Change, even when necessary, is difficult.

I agree we need some fresh leadership.

I agree we absolutely need better leadership.

We need leaders with the awareness and humility to know when the status quo represents a downward trajectory, when mindful change is necessary for the future vitality of the region.

ed in the Hilton Cleveland Downtown, 100 Lakeside Ave. E., patrons can celebrate Cleveland Burger Week (Monday, July 30, through Sunday, Aug. 5) with a selection of $5 burgers.

Sandwiches will include a Neoclassical Redo (Ohio Angus beef, Burnham burger sauce, cheddar, shiitake bacon and greens), the Siegel & Shuster (Ohio Angus beef, pastrami, Cleveland Kraut, Swiss and Stadium Mustard infused with Great Lakes Brewing Co.’s Dortmunder Gold) and Summer Keeps on Kicking (Norwegian salmon, mango Scotch bonnet chutney, avocado spread and baby greens).

The Burnham’s house Blended Burger will still be on the menu through July 31.

If you’re in the mood, you can still try burgers at all participating contestants throughout Northeast Ohio.

They include Alley Cat Oyster Bar, Astoria Café & Market, Bistro 185, the Burnham, Burntwood Tavern’s Solon location, Chinato, Cowell & Hubbard, Creekside Restaurant & Bar, Der Braumeister, Garretts Mill Diner in Stow, Lake Effect Inn in Willoughby, L’Albatros Brasserie, Parallax Restaurant & Lounge, Retro Dog in Cuyahoga Falls, Table 45, Thyme2 in Medina, and the Tremont Tap House.

Then cast your vote or your favorite burger by midnight July 31 at tinyurl.com/blendedburger2018.

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Merchant Street closing ICONIC VENUES

Last week, John McDonnell, one of the city’s most-loved restaurant raconteurs (Fulton Bar & Grill, Tartine) took to Facebook to announce he would be closing his short-lived Merchant Street bistro overlooking Tremont’s lovely Lincoln Park.

“It was just not covering its cost as it was,” McDonnell wrote. “The restaurant world has changed a lot in the last number of years in this city. So many new restaurants, so many new neighborhoods. I appreciate all those who came to love our restaurant, our creative menu and new chef, but it was just not enough to keep going. It was a good run and anyone who knows me understands I would never sacrifice quality over anything.

“Love you all,” he added.

No word on McDonnell’s plans for his next chapter, but here’s hoping it will be a grand slam.

We need leaders with the genuine desire, curiosity and vision for creating a better future for all.

We need leaders with the collaborative leadership capacity, the risk tolerance and the ability to challenge institutional assumptions required to execute on that vision.

Those are the leaders we need, regardless of their age and years of tenure.

Lynch is principal at JGL Strategy, a consulting firm helping organizations with strategy, culture and execution.

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Focus BUSINESS OF BEER

Great Lakes Brewing Co. brewers Mark Hunger, left, and Brad Voldrich use caramel and base malts from Cleveland-based Haus Malts. “There’s probably three or four beers where we’re using all or part of their malt, and that number is growing,” Hunger said. (Contributed photo)

Region is crafting something special Northeast Ohio’s breweries are far from the only beneficiaries of industry’s continued rise

By DOUGLAS J. GUTH

intact the enzymes used in malt making, while a process called mashing extracts sugars that are eventually converted to alcohol.

West Branch’s materials are sourced exclusively from Ohio farmers, the closest to Cleveland being Dechant & Notley Farms in Oberlin, where the company contracts 100 acres. The malt house has an additional 300 acres in Dayton, bolstering a companywide “keeping it local” vibe that also serves as a marketing tool.

“Most people don’t know that the majority of malt comes from out west or overseas,” Randy Thatcher said.

“Craft beer drinkers are very interested to hear about a local ingredient that performs at world-class levels.”

clbfreelancer@crain.com

Northeast Ohio’s craft beer scene continues to trend upward on a wave of barley-and-hops-fueled profitability.

According to a report from real estate firm CBRE Group, the region’s 73 craft breweries occupy more than 713,000 square feet of real estate, accounting for 29% of the statewide total.

While most of the area’s breweries reside within Cleveland’s urban core, additional facilities, such as the massive Fat Heads Brewery in Middleburg Heights, are springing up outside the city. Nor is the sector’s surge only bringing in more brewers. An array of related businesses are providing breweries with crucial beer-making tools, whether it’s the malted barley used in brewing or high-grade hardware that packages libations once they’re ready.

West Branch Malts in Brunswick has been a player in Northeast Ohio’s ancillary “field-to-glass” beer industry since opening in 2016, processing locally grown barley for breweries including Canton’s Royal Docks Brewing Co., The Butcher and the Brewer and The Jolly Scholar in Cleveland, and Thirsty Dog in Akron.

The 13,000-square-foot malt house, run by Randy Thatcher and his father, Tom, produces 30 tons of malted grain per week, amounting to about 3 million pounds annually.

‘We want everyone to succeed’

West Branch Malts processes locally grown barley in their production facility in Brunswick. (Contributed photo)

“Craft beer drinkers are very interested to hear about a local ingredient that performs at world-class levels.”

— Randy Thatcher, West Branch Malts

Malt is created from raw grain, most commonly barley, through a process of steeping, germinating and kilning.

Production begins by soaking barley in water to encourage the grain to sprout, then drying it to halt progress once sprouting beings. Drying keeps

Royal Docks, a craft brewery opened in September 2015 by John Bikis and Dave Sutula, harnesses West Branch’s base malts for beers including its seasonal Hoptopod IPA. The brewer also works with Second Sons Hopyards — one of an increasing number of Ohio farms cultivating hops — and procures malts from LD Carlson, a Kent-based supplier of wine and beer-making products.

Bikis appreciates having a personal relationship with ingredient providers, something he’d never get with larger suppliers.

SEE BEER, PAGE 12

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BUSINESS OF BEER

Industry seeks a more diverse worker mix

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

An effort by craft brewers to stand out in an increasingly crowded market has created the most diverse array of brands and styles consumers have ever seen.

That’s not just for styles that have only begun to resonate with U.S. consumers in recent years, like barrel-aged sours. There’s no shortage of diverse — and outright weird — options today.

Some beers are made to taste like pizza. Others get brewed with oysters, coffee beans partially digested by elephants or even space dust from lunar meteorites. At least one is fermented with yeast grown in its brewmaster’s beard.

But the makeup of people working in the craft beer industry is not nearly as diverse as the selection of beers on shelves and taps.

Some groups are trying to change that.

“Diversity and inclusivity matter in every industry. In the world of craft beer, we claim to value new ideas, creativity, independence and choice, so it makes perfect sense that we should work to bring different voices to the table,” said Marissa DeSantis, public relations supervisor for Great Lakes Brewing Co. “To push boundaries and ideas, to reach new audi-

Beer Women Rock member Megan Riordan stirs a batch of brew during a recent event at Brick and Barrel in the Flats. (Contributed photo)

ences, to be the inclusive and progressive industry we’re often advertised to be, we absolutely need

to make craft beer inviting and welcoming to all in an honest way.”

DeSantis is a member of Beer

Women Rock, a Cleveland-area group with about 30 members supporting women in the craft beer industry that also hosts annual fundraisers for local charities. Its fourth event, held on July 27, was in support of Emerald Development and Economic Network Inc. As anyone at a craft beer festival or industry conference has probably noticed, the crowds, like the industry itself, usually are dominated by white men.

The Brewer’s Association, which tracks demographics of beer drinkers, has acknowledged that there’s not much comprehensive data on what workers in the field actually look like. Ohio Craft Brewers Association executive director Mary MacDonald, though, cited a survey featured by Girlpower Marketing finding that 4% of U.S. craft breweries include ownership by women, with 29% of all workers in the field being female.

The BA is trying to address the lack of diversity however it can. That’s why it created a diversity committee in 2017 and in April appointed its first diversity ambassador, J. Nikol Jackson-Beckham.

As far as how we got to this point, Jackson-Beckham said there’s “simply no easy answer here as we’re dealing with the ways the brewing industry has been a part of and responded to broader social, cultural, economic and political forces in the U.S.” But, she emphasized that groups at

national and local levels are trying to improve their demographics all the same because it’s the right thing to do, and it also makes good business sense.

Diversity: a key to growth?

In Northeast Ohio, there are several women in craft beer-related jobs and a handful of female brewery owners. That includes HiHO Brewing Co. in Cuyahoga Falls, which is coowned by business manager Ali Hovan, and Noble Beast Brewing Co. in Cleveland, which is co-owned by JoLyn Yasaki, whose husband, Shaun Yasaki is half-Japanese (making him one of a few, if not the only, minority craft brewery owners in the region).

Hovan is involved with both Beer Women Rock and a smaller group of Akron-area women in craft beer called NEO Women in Brewing. The latter has about a dozen members and a similar mission as the Cleveland group.

“I think women are go-getters and natural leaders, so if there’s not something there, we create it,” she said. “We thought, we’re all in this together, so why not create a support group for women going through the same issues?”

Despite competition among businesses, the craft beer world is wellknown for its camaraderie. And most women reached for this story say their experiences in Ohio have been generally positive.

SEE WOMEN, PAGE 18

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PA G E 12

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GREAT LAKES CONTINUED FROM PAGE 1

“He said breweries close left and right, and restaurants close on an hourly basis,” Pat recalled. “I’d say something, and (John) would say, I don’t think so.

The Buds and Millers and Coors dominate, and there’s no room for eccentric takes. I would respond like, yeah, but I read all these beverage magazines and spent two years reading about them in libraries. I said there was this movement afoot and we need to be a part of it.”

The shift Pat was researching was toward flavorful German beer. Imports saw a spike in popularity around that time in the ’70s and ’80s as American tastes evolved in the wake of bland, mass-produced food and drink like white bread, canned coffees and jug wines that were dominating the market then.

Their consultant was unimpressed.

Pat, disheartened, left the meeting fuming.

“I remember walking down through the Flats for like two hours just seething because here was this guy who annihilated everything I thought was extremely creative and timely,” Pat said. “I went to dad’s house, had a drink and said thanks for the effort, even though we made no headway.”

That’s when Jack said he’d support

the project, regardless of the concerns that were raised, however valid they may have been.

“He said, if there’s anything I could do to help, you let me know,” Pat said.

“I was just like, whoa.”

Now 30 years old, the Conways’ Great Lakes brewing Co. has cemented its place in the national craft beer fabric, blazed a trail for others to follow and helped shape Cleveland itself by leading a revitalization of a once-dingy and deserted area of Ohio City.

It’s the 20th-largest craft brewer in the country — pumping out 150,000 barrels of beer on average each year — and the 30th-largest brewer overall, in the company of conglomerates like Anheuser-Busch and MillerCoors.

Its growth has been steady and calculated, driven by a strategy that seems all the more conservative compared to some other breweries in today’s craft beer market.

But the Conways have always played by their own rules. So as they plot the company’s path for another 30 years, expect them to think with their guts.

After all, it’s what’s gotten them this far.

Competing in a crowd Great Lakes was the first brewer in Ohio after all other breweries shut down in the mid-1980s. Startup costs,

including the original seven-barrel brew system still used today, were about $500,000 at the time, Dan said.

Since then, it has expanded gradually, absorbing buildings around its home base on Market Avenue for its campus and growing to a 75-barrel brew system added in 1999.

Their beer portfolio today includes roughly 67 beers that are made in a calendar year, said plant manager Mike Heidinger. Their distribution touches 12 states and Washington, D.C. To beer fans, Great Lakes may be almost too conservative in its offerings compared with competitors.

Platform Beer Co. co-owner Paul Benner estimated the brewery had made more than 530 unique beers as of February, and that business is just four years old. That’s more than 130 different beers on average annually from one manufacturer. Platform, which was named one of the fastest-growing breweries in America this year, also plans to open a new facility marrying beer, coffee and barrel-aging in Cincinnati.

A brand like Great Lakes may be a victim of its own success in that it’s been around for so long there’s a perception it’s content coasting on its most popular beers instead of shaking up the portfolio with experimental products.

But the business has a history of innovation.

Consider its Christmas Ale, first

brewed in 1991. The style is an Americanized version of other traditional, dark, holiday beers (often bocks). It incorporated flavors like ginger, cinnamon and honey that were designed to remind drinkers of tastes you’d encounter at the holiday table, said Andy Tveekrem, brewmaster at Market Garden Brewery and the second brewmaster at Great Lakes who helped develop its first Christmas Ale. Great Lakes helped popularize that style, which was novel back then but an increasingly common offering today.

“They were definitely pioneers in that regard,” Tveekrem said.

Quality has always been a focus for Great Lakes, he said, which tends to trump experimentation.

But Tveekrem, who worked at the brewery from 1991-2000, said it’s unquestionably conservative.

“There was a time in the ’90s when there was lots of growth in the business, and it frustrated me that things seemed to be going so slowly,” Tveekrem said. “I thought we should’ve focused more on ales. They were into lagers. It was an interesting choice. But they’ve always been conservative that way. It’s played well for them, though, especially if you’re not trying to take over the world.”

Indeed, Great Lakes has no aspirations for that.

“We’ve always grown cautiously

and prudently over the years,” Dan said. “We are trying to grow incrementally instead of this huge downstroke that could put the company in jeopardy because of the huge cost of building breweries.”

As far as experimenting, Mark Hunger, Great Lakes’ brewmaster today,

From Heid mar Lake

said they M are

BEER

CONTINUED FROM PAGE 10

He and Thatcher, along with Kevin Rice of Second Sons, recently spoke to a group of Ohio State alumni about the benefits of sourcing materials locally, another perk of having ancillary beer businesses nearby. “(With national companies), you can go on site and test the product, but you’re not going to know who’s doing the growing or malting,” Bikis said. “The major thing here is knowing the guy and being able to walk into the malt house and see the equipment.”

Sutula, a professional brewer of 25 years, said the synergy Royal Docks has with West Branch allows him to experiment with batches of undermodified malts.

“To take advantage of that service, I have to buy their off-the-shelf malt, which is no problem,” Sutula said.

“We might launch a year-round product using Randy’s base malt, then the next summer I’ll have something to play with in the malt house.”

A spirit of collaboration permeates the relationship, to the point where the companies exchange names of local repair outfits when a malt house pump goes down. Economic benefits are not the only boon in nurturing a regional ecosystem of growers, brewers and maltsters, Sutula said.

“By supporting maltsters, I’m supporting an entire supply chain, back to the guy who sold the farmer seeds to plant the barley,” he said. “All those people live in our community. We want everyone to succeed.”

Benefiting from the brewing boom Great Lakes Brewing Co. is partnering with another local family owned maltster — Haus Malts on Carnegie Avenue in Midtown.

Founded in 2015 by Andrew and Craig Martahus, Haus Malts supplies GLBC with caramel and base malts for a handful of beers. Its Caramel 60 malt, made from grains grown at Sugar Creek Valley Farms near Wooster,

Royal Docks purchased this canning line for their Canton production facility from Pneumatic Scale Angelus of Stow.

(Contributed photo)

serves as an ingredient in Burning River Pale Ale. “There’s probably three or four beers where we’re using all or part of their malt, and that number is growing,” said GLBC brewmaster Mark Hunger.

The brewery makes a concerted effort to cast for locally sourced materials, getting leads from friends in the industry, Hunger noted.

“We’re a tight community, so when somebody opens a place like (Haus Malts), the word spreads pretty quick,” he said. “But we’re not using those guys because they’re local and have a good story. We use them because they have good quality malts.

We wouldn’t jump on the bandwagon just because.”

Andrew Martahus said his company’s connection with local breweries helps keep beer-brewing dollars in state.

“The grain is grown by Ohio farmers, cleaned in Ohio and transported using Ohio trucking companies,” he said. “My business is the keystone

Wes sou are like

betw ers. wha and

Dan crewny in st of

Hunday,

CRAIN’S CLEVELAND BUSINESS

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PA G E 13

BUSINESS OF BEER its 75-barrel system.

But the company is largely restricted in what it can make as there’s an expectation from distributors to supply the Great Lakes favorites, particularly seasonals. And there’s simply no physical room for a larger brewery yet.

“So we are limited in capacity and found ourselves handcuffed with how much we could experiment with beers for the market,” Hunger said.

To Scranton and beyond

From left: Patrick Conway, co-owner; Daniel Conway, co-owner; Mike Heidinger, plant manager; Bridget Barrett, vice president of sales and marketing; and Mark Hunger, brewmaster, are pictured in the Great Lakes Brewing Co. facility in Ohio City. (Tim Harrison for Crain’s)

said they’re restricted in how much they can do.

Many new or experimental beers are pub exclusives created on the

ow.

ning

four rt of owMark

d efterithe

hen Haus etty sing and bealts. wag-

|

mparies s in

West Branch sprouts locally sourced barley. In turn, the rootlets are used to make malt for brewers like Royal Docks. (Contributed photo)

rmrted ” he one

between the brewers and the farmers. We help the brewers translate what they want in their beer to how and what the farmers grow.”

original seven-barrel system. And earlier this year, the brewery added a $300,000 two-barrel pilot system that’s a truly scaled-down version of Maltsters and farmers aren’t the only ones benefiting from the craft beer boom. Pneumatic Scale Angelus, which sells food and beverage canning equipment to Kraft, Coca-Cola and PepsiCo, broke into the craft beer industry in light of more breweries embracing aluminum cans over bottles.

The century-old company, with facilities in Akron and Stow, debuted its CB50 Filler and Seamer in 2017, championing the $120,000 machine’s ability to fill and seal up to 50 cans per minute. Pneumatic Scale Angelus also offers the $235,000 CB100, capable of spitting out 100 cans per minute.

“Cans are the preferred package for beer (over bottles), as light and air impact taste,” said sales executive Mark Pirog. “You can fit more beer onto a truck and onto store shelves. It all adds up.”

The company has a canning line operating at Market Garden Brewery, with another purchased by Royal Docks for a production facility in Canton. Nationally, Pneumatic Scale Angelus has sold equipment to breweries in New Orleans, Denver, Atlanta and Baltimore.

Vice president of sales Adam Brandt said Market Garden acted as a test bed for the machine, with the brewery recently releasing three new beer brands using the canning line.

Both the CB50 and CB100 are scaled down versions of high-speed machines turning out up to 2,200 cans a minute.

“We had can manufacturers telling us about the craft beer industry’s need for a quality can seamer at slower speeds,” Brandt said. “We took our high-speed technology and shrunk it down to a point where it would work for the industry.”

Whatever the product or service, craft beer’s close-knit beer businesses tend to support one another, ideally fueling the sector’s further growth regionally, said Thatcher of West Branch.

“Our challenge is to get our malt into the brewer’s hands,” he said.

“Once we do that, they’ll see it’s comparable from what they’re used to from national brands. All we need is a foot in the door.”

In terms of future plans, the biggest developments came this spring when the company bought 8 acres on the Scranton Peninsula (for an undisclosed amount) and announced an employee stock ownership plan.

Those moves come as the Conways have turned down lucrative acquisitions from strategic buyers in America, Asia and Europe.

“We are worried about our culture.

We want to give back to the community. We want to be close to our employees and suppliers. If all of a sudden a big brewing concern comes in, it just might change the whole culture,” Pat said. “They might get rid of the environmental chief we have, or say this 1% plan (to give 1% of sales to charitable groups) is frivolous, or the Burning River Fest gets thrown out. Those were big deals to us even though those

(buyout) dollars were significant.”

So as far as a physical expansion, why plan that in Cleveland? Besides a connection to the city, its customers and staff, there are plenty of good business reasons.

CEO Bill Boor said Great Lakes views itself as a Cleveland company no matter what. That identity becomes diluted when new facilities are opened elsewhere, he said.

“My belief has always been, even in other markets, it’s important to have a connection to a place, and ours is Cleveland,” he said.

The Scranton Peninsula offers obvious expansion space. Boor jokes that he’s routinely pressed for details about a project there, but he asserts there’s no secret plan in place.

Having the land means being able to plot out different scenarios. For one, the brewery is behind the times with not having its own canning line, so that’s on the wish list. It also needs more warehouse space, which it currently gets by subleasing from a distributor. Another restaurant, brewhouse or taproom could happen. Seating by the waterfront would be highly coveted by patrons. And being so physically close to its Ohio City headquarters, the business can simply share existing staff between the facilities.

It could offer an extension for its urban farming, which is part of its sustainability and environmental

values. The brewery established Pint Size Farm in 2008 in collaboration with Hale Farm and Village.

While deciding what path to take is a challenge, the company is committed to a project at Scranton, Boor said, where it’s positioned to be a lead business at an empty area — not unlike when the brewery became a lead business spurring the redevelopment of Ohio City decades ago.

It’s just not clear what that project might be yet.

“It would be highly unlikely for us to say we bought this land, now let’s just go do a project and build a large brewery with all the things,” Boor said. “What’s more likely is we phase into this. And we’re still figuring out exactly what that means.”

For the business overall, the Conways said they’re even vetting ideas to make other products or other complementary services, like a zero-waste initiative. Dan said some other opportunities could involve expanding its mustard line, or getting into making other products like sausages, breads or even ice cream.

No matter what, expect Great Lakes to stay independent and committed to Cleveland.

“Our plans are imprecise,” Dan said. “But that idea of being strong in the Great Lakes region is not going to go away.”

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PA G E 14

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Five Ohio beers to drink this summer For us, post-work happy hours are all about discovering new beers from local brewers. And with more brands in the market than ever, there’s always something novel to try. After some extensive research over several pints and flights, here, in no particular order, are some of the Ohio beers we think craft fans might enjoy this summer. Selections are purely based on types we tried for the first time that managed to leave us impressed. — Jeremy Nobile and Timothy Magaw

Formidable Cool (Milkshake IPA)

67 Alaska (Kölsch)

Vox Maris (Barrel-aged sour)

Double Fanboi (Imperial IPA)

Red, Wheat and Blue (Saison)

Platform Beer Co. (Cleveland)

Royal Docks Brewing Co. (Canton)

The Bottlehouse Brewing Co. (Cleveland)

Terrestrial Brewing Co. (Cleveland)

Elevator Brewing Co. (Columbus)

7.8% ABV; 0 IBU

5.5% ABV; 21 IBU

10% ABV; 16 IBU

8.2% ABV; 15 IBU

5.9% ABV; 20 IBU

Notes from the barstool: Platform does a great job with its experimental IPAs, but for me, this one stands out from the pack. The hazy libation features a bludgeoning dose of milk sugar and oats, as Platform points out, which give it a thick body with hints of vanilla. It all jibes perfectly with a collision of cantaloupe, apricot, peach and orange flavors. There’s probably some puree in there, but it’s forgivable. I’m all about dank and skunky IPAs, but this delicious, malty offering is on the other end of the spectrum. You’d never guess by tasting that it’s nearly 8% ABV. Expect to walk away from this beer craving a creamsicle. — J.N.

Notes from the barstool: This well-balanced Kölsch lacks the skunky notes that often permeate this variety of golden brew crafted in the tradition of Köln, Germany, making it an easy-drinking summer staple. Royal Docks, a growing brewery in Stark County, describes this mild libation as its “signature beer” and notes that its recipe hails from the East Anglia region of the United Kingdom. The 67 Alaska — brewed year-round — carries an assertive sweetness, though nothing that would overpower the palate. The name comes from the address brewery owner John Bikis and his wife, Adriana, lived at for a period in the Royal Docks area of London. I’ve rarely met a Kölsch I’ve enjoyed enough to recommend, so I was pleasantly surprised to find one from a local brewer. — T.M.

Notes from the barstool: This strong ale aged in bourbon barrels is loaded with tart cherry flavor and carries a dark amber color with deep red hues. There’s just the right amount of tangy funkiness you’d expect from the style complete with the signature dry, mildly vinegary finish that fans of the type tend to find pleasantly refreshing. This offering strikes a solid balance between sweet and sour and leaves you questioning whether you’re having an actual soured beer or one simply made with sour cherries. And while its ABV is lower than batches of a previous generation, it still packs a punch. Let’s rejoice that this one has come out of retirement. — J.N.

Notes from the barstool: Given the number of IPAs flooding the market, it’s proving difficult as ever to find one that truly stands out. Look no further than this smooth, creamy, flavorful and, of course, boozy dankfest imagined by Terrestrial Brewing, a young brewery that opened last year in Cleveland’s Battery Park on the city’s near west side. Offering an almost caramel-colored pour, this libation is as attractive as it aromatic. The Double Fanboi is a New England-style IPA — “an established national phenomenon,” according to Thrillist, given the style’s “hazy aesthetic and a flavor profile that emphasizes a softer juiciness met with markedly less bitterness than other IPA styles.” If this makes me a fanboi, so be it. — T.M.

Notes from the barstool: Saisons are specialty beers known for complex profiles that range from yeasty to spicy to fruity. I expect something a little different with each one I try because they can vary so greatly between brewers. This offering from the 19-year-old Columbus brewery caught my attention for its outright quaffability. Just the right amount of berries imbue the beer with a glorious reddish-purple hue and pleasant fruit flavor with just a hint of spiciness.

Well-balanced and not obnoxiously sweet like many fruited beers can be, this is one proper, thirst-quenching farmhouse ale. Coincidentally, the style is also one of brewmaster Doug Beedy’s personal favorites. Of all the saisons I’ve tried, this ranks among the most memorable. — J.N.

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THE LIST

Breweries

Ranked by barrels produced in 2017

THIS YEAR COMPANY

BARRELS PRODUCED IN 2017

LOCAL STAFF FULL-TIME/ PART-TIME 7-1-2018 TOP SELLING BEERS

SELL BEER IN YEAR HEAD TAP ROOM? RESTAURANT? STORES? FOUNDED BREWER

TOP LOCAL EXECUTIVE

1

Great Lakes Brewing Co. 2516 Market Ave., Cleveland 44113 (216) 771-4404/www.greatlakesbrewing.com

150,000

140 61

Dortmunder Gold Lager, Christmas Ale, Commodore Perry IPA

¥

¥

¥

1988

Mark Hunger

Patrick Conway, co-owner Daniel Conway, co-owner Bill Boor, CEO

2

Fat Head's Brewery 17450 Engle Lake Drive, Middleburg Heights 44130 (216) 898-0242/fatheads.com

30,000

166 104

Head Hunter IPA, Bumble Berry Ale, Sunshine Daydream Session IPA

¥

¥

¥

2009

Matt Cole

Matt Cole, brewmaster

3

Platform Beer Co. 4125 Lorain Ave., Cleveland 44113 (216) 202-1386/https://platformbeer.co

19,000

25 15

New Cleveland, Speed Merchant, Rosellini

¥

¥

2014

Danny Monnot

Paul Benner Justin Carson, co-owners

4

Thirsty Dog Brewing Co. 529 Grant St., Suite B, Akron 44311 (330) 252-2739/http://thirstydog.com

15,000

78 20

12 Dogs of Christmas, Blood Orange IPA, Labrador Lager

¥

¥

¥

1997

Joe Lero

John P. Najeway, co-owner

5

The Brew Kettle Taproom and Smokehouse 8377 Pearl Road, Strongsville 44136 (440) 239-8788/http://thebrewkettle.com

10,000

102 66

White Rajah, Winter Warmer, Big Woody Lager

¥

¥

¥

1995

Jack Kephart

Chris Russo, owner

6

Market Garden Production Brewery 1849 W. 24th St., Cleveland 44113 (216) 373-0700/www.marketgardenbrewery.com

6,500

20 15

Progress Pilsner, Prosperity Wheat, Citramax IPA

¥

¥

2011

Andy Tveekrem

Sam Sloane McNulty, cofounder

7

Royal Docks Brewing Co. 7162 Fulton Drive N.W., Canton 44718 (330) 353-9103/http://docks.beer

3,500

10 18

Tanglefoot IPA, Leatherhead IPA, Backyard Crusher

¥

¥

2014

Dave Sutula Eric Smith

John R. Bikis Adriana I. Bikis, owners

8

Sibling Revelry Brewing 29305 Clemens Road, Westlake 44145 (440) 471-8589/http://siblingrevelrybrewing.com

2,000-2,500 (November 2017 estimate) (1)

22 10

IPA, Red, Swing State

¥

¥

2016

Pete Velez

David Sorace, operations manager

9

Hoppin' Frog Brewery 1680 E. Waterloo Road, Route 224, Akron 44306 (330) 352-4578/www.hoppinfrog.com

1,865

10 14

B.O.R.I.S. The Crusher OatmealImperial Stout, Turbo Shandy Citrus Ale, Gangster Frog IPA

¥

¥

¥

2006

Fred Karm

Fred Karm, founder, president, brewmaster

10

Hofbrauhaus Brewpub 1550 Chester Ave., Cleveland 44114 (216) 621-2337/http://hofbrauhauscleveland.com

1,400

25 85

Original Lager, Hefeweizen, Dunkel

¥

¥

2014

Josh Jones

Andi Udris, president, managing owner

11

Market Garden Brewpub 1947 W. 25th St., Cleveland 44113 (216) 621-4000/www.marketgardenbrewery.com

1,300

80 20

Frosty Lime Wit with Tangerine, Prosperity Wheat, Chinook Strike IPA

¥

¥

2011

Andy Tveekrem

Sam Sloane McNulty, cofounder

12

Butcher and the Brewer 2043 E. 4th St., Cleveland 44115 (216) 338-7906/www.butcherandthebrewer.com

1,130

50 25

Repeater Kolsch, Stop Hop Kaboom, Albino Stout

¥

¥

2007

John McGroarty

Jason Workman, operating partner

13

Canton Brewing Co. 120 3rd St. N.W., Canton 44702 (330) 409-0343/drinkcantonbeer.com

1,050

10 25

Tuscora Pilsner, Cascade Pale Lager, Carpe Noctum Coffee Porter

¥

¥

2014

Dylan Hamilton

David Beule, owner

14

Avon Brewing Co. 37040 Detroit Road, Avon 44011 (440) 937-1816/www.avonbrewingcompany.com

1,000

5 30

Ohana Wheat, Eagle IPA, King KoKonut Imperial Porter

¥

¥

2016

Mathias Hauck

Mathias Hauck, general manager, brewmaster

15

Willoughby Brewing Co. 4057 Erie St., Willoughby 44094 (216) 255-4727/http://willoughbybrewing.com

938

5 25

Peanut Butter Cup Coffee Porter, Nut Smasher

¥

¥

1998

Rick Seibt

Rick Seibt, brewmaster Jeremy Van Horn, partner

16

Saucy Brew Works 2885 Detroit Ave., Cleveland 44113 (216) 666-2568/www.saucybrewworks.com

900

10 12

Habituale, B.F. Hefe, IPA ASAP

¥

¥

¥

2017

Eric Anderson

Brent Zimmerman, CEO

17

Collision Bend 1250 Old River Road, Cleveland 44113 (216) 273 7879/www.collisionbendbrewery.com

850

65 30

Lake Erie Sunset, Old River Kolsch, East Bank IPA

¥

¥

¥

2017

Luke Purcell

NA

18

Rocky River Brewing Co. 21290 Center Ridge Road, Rocky River 44116 (440) 895-2739/http://rockyriverbrewco.com

800

30 15

Hop Goblin IPA, Rocky River Pirate Light and On Blueberry Hill Blueberry Ale

1998

Jim Lieb

Gary Cintron, president

19

Shale Brewing Co. 7253 Whipple Ave. N.W., North Canton 44720 (330) 776-8812/www.shalebrewing.com

800

4 12

Roughneck Red, Deep Driller Porter, Cold Rolled Ale

¥

¥

2012

Jason GasperHulvat

Jenna Rae Gorski, operations and marketing manager

20

Hansa Brewery 2717 Lorain Ave., Cleveland 44113 (216) 281-3177/www.hansabrewery.com

750

4 5

Black Flag SchwarzBier, FemDom Kolsch, No Fox Pilsner

¥

¥

2016

Corey Miller

Corey Miller, brewmaster

21

Goldhorn Brewery 1361 E. 55th St., Cleveland 44103 (216) 465-1352/goldhornbrewery.com

650

8 5

Polka City Pilsner, Dead Man's Curve IPA, Agora Altbier

¥

¥

¥

2016

Joel Warger

Rick Semersky, owner

22

Mucky Duck Brewing Co. 4019 S. Main St., Akron 44319 (330) 644-0137/muckyduckbrewery.com

600

4 21

PLX IPA, Nauti or Nice Christmas Ale, WTM Irish Red Ale

¥

¥

¥

2013

Erica L. Wathey

Joseph A. Wathey, managing member

23

Terrestrial Brewing Co. 7524 Father Frascati Drive, Cleveland 44102 (216) 465-9999/facebook.com/terrestrialbrewing

500

5 3

Public Pilsner, Promised Land, Fanboi

¥

2017

Ralph Sgro

Ryan Bennett

24

The Bottlehouse Brewing Co. 2050 Lee Road, Cleveland Heights 44118 (216) 214-2120/thebottlehousebrewingcompany.com

500

4 8

Rising Star Coffee Stout, Barrel Aged Sours, Bike To Work Pale Ale

¥

2012

Brian Benchek

Brian Benchek, owner, brewmaster

25

Bad Tom Smith Brewing 1836 W. 25 St., Cleveland 44113 (216) 862-9296/www.badtomsmithbrewing.com

500

2 5

Wickked Sheryl's Blush Pale Ale, Jailbreak Churro Brown Ale, Hazy River New England IPA

¥

2012

Sean Smith Garth P. Moore

John R. Vojtush, managing partner Sheryl L. Vojtush

25

Railroad Brewing Co. 1010 Center Road, Avon 44011 (440) 723-8234/www.railroadbrewingcompany.com

500

2 8

Tender Blonde, Red Caboose, Trainwreck IPA

¥

2015

Jerome Moore

Tom Wagner, president

¥

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RESEARCHED BY CHUCK SODER (CSODER@CRAIN.COM)

Want the full Excel version of this list Ñ and every Crain's list? Become a Data Member: CrainsCleveland.com/data There are 42 breweries on the full digital list, which also includes an email address for most of the companies. Information is provided by the companies unless footnoted. Breweries that submitted the same number for barrels produced are then ranked by full-time employees. Send feedback to Chuck Soder: csoder@crain.com (1) Sibling Revelry did not provide Crain's with a final number for 2017; this was an estimate provided to Crain's in early November 2017.

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AKRON

Akhia goes ‘inside’ to help fill talent gaps

By JUDY STRINGER clbfreelancer@crain.com

It’s been roughly five years since Akhia Communications pivoted internal processes and services to transition from a traditional marketing and public relations play to a more holistic communications consulting firm.

Now the Hudson company is taking another step in its mission to help companies overcome business challenges via effective messaging — a step inside its clients’ offices.

Earlier this month, Akhia formally announced the launch of Akhia Inside, a program in which the agency’s employees work temporarily at clients’ offices to help with communications strategies and day-to-day marketing tasks alongside in-house teams.

Akhia president and CEO Ben Brugler said the need is there. Companies today have to move faster than ever. Projects that used to be allotted six to nine months are now compressed into two to three months, or even weeks. As a result, marketing teams often are scrambling to staff up, and “that’s a challenge because of the labor/talent shortage.”

“Another factor having an impact on our clients is that because many of these projects are short-lived or have a short shelf life, sometimes they don’t want to absorb the cost of new full-time employees that they might only need for two to three months and not again until the next project rolls around,” he said.

Those “pain points” are a nice fit for Akhia, given the company’s focus on strategic planning and business integration, specifically in B2B communications.

“We are not the marketing agency

Under president and CEO Ben Brugler’s leadership, Akhia Communications has grown from 15 to nearly 50 employees. (Contributed photo)

“Sometimes our marketing clients are operating as a department of one or two, and being able to say to them, ‘We can come in and really build that team around you quickly,’ is appealing, as you can imagine. They need the resources and support quickly.”

— Ben Brugler, Akhia Communications president and CEO

that just does the project and moves on,” Brugler said. “We become familiar with all aspects of the business.

We become familiar with what the company’s values and objectives are.

Then they have a comfort level with us, and it just makes sense for us to step up and provide that support inhouse.”

On the flip side, the CEO added, it

benefits Akhia in that the agency is able to get a unique understanding of its clients’ day-to-day operations and possibly identify other challenges or opportunities that may be solved or addressed through communications.

While the Akhia Inside program was only recently announced, several clients have hosted Akhia staffers informally “on and off for years,” according to Emily Nelman, senior account executive.

At any given time, Nelman said, the agency has between two to five clients using the service for various lengths of time.

How the agency bills clients for

Inside Akhia program services can differ depending on the client, Nelman said.

However, most program clients are on a retainer and have a set number of hours established each month.

To this point, Brugler said, the most the firm has loaned out at once to any client is two team members, but he sees the model lending itself to bigger “team-based” placements for large-scale, time-sensitive projects.

“Sometimes our marketing clients are operating as a department of one or two, and being able to say to them, ‘We can come in and really build that team around you quickly,’ is appealing, as you can imagine. They need the resources and support quickly,” he said.

The launch of Akhia Inside comes amid other changes at the agency.

Late last year, founder Jan Gusich transferred majority ownership to Brugler, who became president in 2013 and CEO along with his elevated ownership position in 2016. Under Brugler’s leadership, the agency has grown from 15 to nearly 50 employees.

Then in May, the 22-year-old company revealed a new brand, changing its name to Akhia Communications to reflect its evolution toward “building teams and capabilities to help our clients achieve their business and communications goals across departments and entire organizations,” according to a news release.

Ownership, titles and names aside, Brugler said one thing that has not changed is the core mission of the company, which is the same as when Gusich launched Akhia Public Relations in 1996.

“Our focus is still 100% on the client, how we can support their business, how we can drive their business,” Brugler said.

Turning the page on a hobby to start a small biz

By BETH THOMAS HERTZ clbfreelancer@crain.com

For Matt Mignona, the journey to entrepreneurship started when he was a competitive athlete in his youth.

He said he had great coaches and mentors who encouraged him to take the time to reflect on his efforts and to set goals.

When he later went to work in the business world, those positive messages, including ones encouraging him to reflect through journaling, helped him excel.

So he wanted to share the power of journaling with others, and that is how the Happier Mind Journal and his business were born.

The printed book uses writing prompts to walk users through 90 days of self-reflection to foster positivity and personal growth. Its fill-inthe-blank format helps overcome the challenge many people face when trying to journal — not knowing how to start on a blank page, he said.

Mignona — who has kept his day job as executive vice president of sales and marketing at COMS Interactive, a Broadview Heights software company — said it took him 15 years to figure out how to incorpo-

Matt Mignona’s company, The Happier Mind Journal, creates a book with written prompts to help journalers get started. (Contributed photo)

rate journaling into his life. After he did, he often found himself talking about the benefits of it to groups of newly hired employees at his company.

“I saw the huge impact that it had on their lives, but I got tired of explaining the concepts over and over, so I created a how-to guide that I could share,” he said. “I was blown away by the profound positive impact it made on my employees’ lives.”

Since he had that framework in place, he then went to work with a local designer to put it into a journal format that he could print and sell.

“It was a personal itch I wanted to scratch,” he said.

Mignona launched his micro business from his Medina home in January 2017. He worked with a local editor, warehouse and printer — Bookmasters in Ashland — to help him.

He wrote the content himself but acknowledges he was heavily influ-

enced by the work of many personal growth experts, particularly self-help author Napoleon Hill.

While business started slowly, word of Mignona mouth helped sales pick up, and today he has sold thousands of journals in nine countries. Though he declined to discuss specific sales numbers, he said that through the first six months of 2018, sales are up threefold compared to all of 2017. And his current run rate is greater than tenfold higher than in 2017.

He expects gross sales to exceed $100,000 this year.

“The company is now cash flow positive and earning a profit each month,” he said.

He recently signed a 12-month deal with the Whole Life Challenge, an internet-based event held four times a year, that he thinks will double his sales over its term. Whole Life Challenge participants work on many aspects of their well-being, and the Happier Mind Journal will be offered to the participants at a slight discount.

“We introduce our (participants)

to products that can help them better their lives, and we believe that Matt’s journal can be part of that for many of them,” said Jon Gilson, CEO of the Whole Life Challenge, which is expected to have about 65,000 participants this year.

Gilson said he thinks the journal can be a tool to help people achieve a happier mindset, better relationships and more gratitude.

“It is very much in alignment with our philosophy,” he said.

Mignona is the only employee of his company for now, working nights and weekends to fulfill orders and manage inventory. He invested about $50,000 of his own money over about a 12-month period to launch the company.

Mignona primarily markets the journal on social media, but said he’s in the early stages of conversations with businesses to offer the Happier Mind Journal to their employees as part of benefits and wellness packages.

The journals, which retail for about $32, are available on Mignona’s website and Amazon, and at Medina’s Book Store and Handmade Marketplace.

Mignona said he plans to introduce other products in the next 24 months but declined to provide details.

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ELLIOTT

CONTINUED FROM PAGE 1

“What they’re saying is that though the company is in fine shape financially, it’s underperforming. Fix it. That’s what these guys do. They’re the Gordon Geckos of the world,” said Bill Ridenour, an investment banker with North Carolina-based Polymer Transactions who has long followed RPM, referencing the famous movie character played by Michael Douglas in “Wall Street.”

So far, shareholders and their advisers are glad for Elliott’s presence.

“Obviously, when active investors take a position, it’s usually good for the stock at least in the short term,” said Morning Star analyst Charles Fishman, who follows FirstEnergy.

Fishman said he knows Zimmer firsthand and is aware of Elliott’s track record. He was glad they showed up.

“When they announced that in January that they were going in at $2.5 billion, we already had the stock on the Morningstar Best Ideas list, but that (investment) really gave me a lot of confidence,” Fishman said.

Do even a little research on Elliott and you’ll run into the phrase “CEO resigns,” because Elliott is known for, among other things, forcing change when it’s not pleased with an existing CEO’s performance. But while Elliott founder and CEO Paul Singer has never made any apologies for his activism, sometimes Elliott is just a quiet investor.

So far, Elliott seems to be giving RPM and FirstEnergy room to breathe, and it’s not been disclosed by either company whether Elliott was invited, or barged in. Both FirstEnergy and RPM declined to comment on Elliott at all.

Opportunity knocks In the case of FirstEnergy, the company had a plan in place and needed, more than anything else, capital to execute it.

At the time, FirstEnergy was preparing to go to the equity markets, anyway, though not for $2.5 billion. The company had been talking about raising $1.5 billion or so, largely to address pending debt payments, when Elliott showed

Paul Singer, founder and president of Elliott Management, has taken an active interest in FirstEnergy Corp. and RPM International. (Misha Friedman/Bloomberg)

up with more and cleaned up FirstEnergy’s entire balance sheet, including its pension liabilities.

“I don’t think it’s something that FirstEnergy asked for, but I don’t think it’s something they mind one bit. ... They were telling people they needed a billion and they got $2.5 billion,” says Andy Devries, an analyst who follows FirstEnergy for New York-based CreditSights.

“I don’t think it’s something that FirstEnergy asked for, but I don’t think it’s something they mind one bit. … They were telling people they needed a billion and they got $2.5 billion.”

— Andy Devries, a CreditSights analyst who follows FirstEnergy

The money also likely allowed or prompted FirstEnergy to more rapidly separate itself form its beleaguered unreglulated subsidiary, FirstEnergy Solutions, which was getting beat up in the power generation market.

In April, FirstEnergy Solutions’ long-threatened Chapter 11 bankruptcy became a reality, separating FirstEnergy from most of its underperforming generation assets and moving the parent company a long way toward its goal of returning to a purely regulated utility.

There was also a buyout of 500 FirstEnergy employees in late June.

That was part of the company’s strategy to move away from its unregulated businesses and represented a long-term cost-cutting measure. In February, FirstEnergy announced nine senior management changes and a new board chairman.

Analyst Andrew Weisel, who follows FirstEnergy for Scotia Howard Weil, said he thinks Elliott is in mostly as a traditional investor, rather than a disruptive activist. A standstill

agreement between the two even ensures that Elliott remain in that role, at least for now, he says.

“If that were to be strictly enforced, I don’t think they could even make proposals to the board,” Weisel said. “I view it more as them being opportunists and putting a lot of money through a private placement into a company they believe is undervalued.”

Cautious outlook With RPM, the situation might be more complicated. True, the company’s costs are higher than those of its peers, but RPM has always held itself out as unlike other companies. It has built itself up over the decades with countless acquisitions and then allowed the acquired companies to function largely autonomously, and entrepreneurially.

Since Elliott came aboard, RPM has undertaken a limited streamlining of its senior management, which included the early retirement of chief operating officer Ron Rice, an-

nounced July 6.

But its culture could clash with cost-cutting efforts, some observers say.

Ridenour thinks Singer and RPM’s existing management are headed in the right direction, but should be cautious.

“I think they’re being astute to take it to the next level. They need to be careful not to rob those businesses of their entrepreneurial spirit in the process, though,” he said.

Kevin Hocevar, an analyst following RPM for Northcoast Research in Cleveland, agreed, though he thinks Elliott deserves credit for helping pump up RPM’s stock price.

“I don’t know how much room they have before that eats into the soul of what RPM is, but it obviously has to be monitored,” Hocevar said of potentially aggressive cost-cutting and consolidation efforts at RPM. RPM could even find itself on the other side of acquisition negotiations. Hocevar said a sale of RPM is conceivable, for the first time.

“I always thought, no way RPM ever gets acquired. How does anyone buy RPM? … But if they’re going through this exercise, and depending on how deep they cut these costs and how much it changes the culture at RPM, maybe it does create or set itself up to be sold at some point,” Hocevar said.

And then there’s what Singer told interviewer and fellow financier David Rubenstein in a July 2017 appearance on Bloomberg TV: “Our style, my style and our style as a team, is doing the work as thoroughly as we can to develop a thesis to assess whether we think there really is an action or a series of actions to eliminate underperformance or emolliate a situation.

Then contact a company privately and try to generate a dialogue, and sometimes you find you’re knocking on an open door. Sometimes there’s a founder or a management team that’s ready to sell out or happy to go on to something else, but they don’t want to feel like they’re abandoning their staff and employees.”

One thing is for sure: Both companies are going to be watched with more interest than before in the months ahead, including by new shareholders drawn by Elliott.

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CRAIN’S CLEVELAND BUSINESS

WOMEN

male craft drinkers in three years.

The report also found that minority craft drinkers are increasing, but only as a function of the overall pool

of drinkers growing. So the percentage growth there is flat.

The underlying takeaway here is they have a real market opportunity

to appeal to those groups.

And one way to do that is by highlighting women and diverse people in the companies themselves.

“From a business standpoint, the opening of new markets is critical to growth,” said MacDonald, noting how the craft brewery segment’s overall growth has slowed from double-digit trajectories between 20142016 to about 5% in 2017. “Gender and ethnic diversity could lead to additional market share for craft beer.”

She also pointed to the growth of imports like Modelo Especial, which is the largest-selling beer brand in California, noting the Latino market is one brewers should try to appeal to.

There’s also the benefit of simply having more opinions at the business table. Some female input may have nixed beers like “Leg Spreader,” which was brewed by Route 2 Brews in Lowell, Ind., which actually went out of business in February.

“One thing I’ve seen in the past is some not-so-tasteful beer names that are derogatory against women, and I hope that case is changing, especially with things like (#MeToo) because that’s not, I think, reflective of true craft beer culture,” JoLyn Yasaki said.

More than 250,000 square feet of the Tower at Erieview is empty, but potential investors in the complex are interested in the 400-space parking garage underneath the complex.

(Stan Bullard)

The elder Kassouf divides his time between Cleveland and Beirut, Lebanon, Joseph Kassouf told Crain’s in July 2017 for an article about the Liberty Textile project, which has not proceeded. The younger Kassouf at that time said that the family business wanted to do additional real estate development in Cleveland.

Joseph Kassouf, reached by phone, said he could not discuss the Erieview deal because his cell phone reception was poor, and a return call was not received. James Kassouf did not return a call left last Wednesday, July 25, at Metro’s office.

Tenants and real estate sources spoke on grounds they not be identified because they are not principals in the transaction or are bound by nondisclosure agreements from the RAIT offering. RAIT did not return inquiries about the pending transaction.

The high-vacancy Galleria, which now includes several office tenants, was added when the property was expanded in the 1980s by the former Jacobs, Visconsi, Jacobs Co., which then operated a mall empire around the nation. The property later was returned to its lender and sold to an investor group led by Bethesda, Md.based Werner Minshall in 2001. Min-

shall added several top-tier tenants to the property through the years, but also lost several due to local closings in mergers and acquisitions. RAIT assumed control of the property in 2016.

Although several insiders say the skyscraper has great value, the operating costs for the enclosed mall ruin the property as an investment. Rico Pietro, a principal at Cushman & Wakefield Cresco, said the property will need an active owner and substantial investments to compete in the city’s office market.

RAIT got the property listed on the U.S. Register of Historic Places. That would entitle the building for federal and state historic tax credits for a qualifying adaptive reuse project, which developers say is crucial to restoring vacant structures.

Tower at Erieview is among several structures constructed as part of Cleveland’s Erieview urban renewal plan, largely considered a failure by planners, to rejuvenate downtown in the era of suburban flight. The plan’s primary result was creating multiple parking lots downtown. Several of today’s parking lots date to the demolition in the 1960s of blocks of old commercial and residential properties.

CONTINUED FROM PAGE 11

“Our whole thing is we want to reach out to other women and girls and talk about being entrepreneurs and how the brewing industry really is welcoming toward women,” Hovan said.

But there are always some exceptions.

“I wanted to find my place in the craft beer community, and to be honest, it wasn’t an easy start,” said Ann Cinovec, a Cleveland sales rep for Dogfish Head Brewery and organizer for Beer Women Rock. “Being a young woman in the industry, you had to earn your place. I started at the very bottom and had to put in a ton of work to prove myself. I had seen countless less-than-qualified male candidates get jobs over myself and other female colleagues. It was great to find a place where other women knew what I had gone through to get to where I was, and they didn’t question my knowledge or passion for beer.”

A June analysis by BA economist Bart Watson, citing a report by Nielsen Harris on Demand, noted that

Members of Beer Women Rock gather during a past brew day at Brick and Barrel in the Flats. (Contributed photo)

women who drink craft “at least several times a year” grew to 31.5% in 2018 over 29.1% in 2015. That translates to about 6.6 million “new” fe-

ERIEVIEW CONTINUED FROM PAGE 1

The Kassoufs have been keenly interested in the 400-space parking garage underneath the complex, one of the sources said, a reflection of the family’s nearly 40-year history operating parking lots in downtown Cleveland. The Kassoufs operate Metro Parking Systems, which operates a large parking lot overlooking the lakefront between West Third and West Sixth streets, and others.

Said to be part of the buying group is Robert Corna, a designer who has been involved through the years with Nautica Entertainment Complex owner Jeffrey Jacobs in the 1980s and K&D Group’s Stonebridge project, both in the city’s riverfront Flats area.

Corna late last year posted a YouTube video that includes concepts for redoing the complex by adding apartment towers straddling Galleria and recreating the mall as a lush green space. Corna has accompanied Kassouf in a meeting with one prospective local investor who chose not to participate in the transaction.

However, one of the sources said the concept has since evolved to drop its

most intriguing — and expensive — component: two high-rise apartment towers that might have been built over part of Galleria.

The deal was on, then off last winter and now is on again. The offering was even circulated again among prospective buyers in the early summer by HFF, the global brokerage retained by RAIT to sell the property.

However, the Kassouf-led group outbid others again. One insider said the 1-million-square-foot property will trade for about $30 million.

Kassouf was an early investor in

downtown Cleveland’s Warehouse District. He continues to own the Johnson Block Building, 1370 W. Sixth St., and Liberty Textile Building, 1777 W. Sixth. Liberty Textile, which dates from 1890, has not been renovated and appears to be used for storage.

Kassouf won an allocation for $5 million in Ohio Historic Preservation Tax Credits for a proposed $20 million conversion of the building to apartments as part of a plan that would include building apartments on an adjoining parking lot that a Kassouf affiliate owns and Metro operates.

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Frank C. Braun

Dean, School of Business, Baldwin Wallace University Frank C. Braun came to higher education after a career in industry, and finding somewhere where the two work closely together was important to him. ¶ “I really like to find places where those two worlds intersect,” Braun said. ¶ Braun joined Baldwin Wallace in June from Northern Kentucky University, where he most recently served as department chair in informatics. Before that, he worked in IT in a variety of industries and started a consulting firm. ¶ At Baldwin Wallace, Braun hopes to better weave technology into the School of Business. The university already has a strong technology program, but it’s affiliated with the arts and sciences college, he said. Braun said he is hoping to “bridge” the two. — Rachel Abbey McCafferty

Five things Hobbies He loves automobiles, so a lot of his time is spent researching and going to car shows. And he and his wife rescue boxers.

And the dogs are ...

Bentley and Brock

What he wanted to be when he grew up The owner of a garden center or a flower shop, like his parents and grandparents. Or an airplane pilot.

Favorite tunes He’s a fan of techno and electronic music, as well as instrumental jazz.

Motto to live by “You will see much further with a positive lens than you ever will with a negative one.”

Lunch spot Mike’s Bar & Grille 130 Front Street, Berea 440-234-2300 www.mikesbarandgrille.com

The meal One had a black bean burger and fries with a water, and the other had a Cobb salad with an Arnold Palmer.

The vibe Dim lighting, sign-covered walls and a steady stream of classic rock: It feels like a quintessential neighborhood bar, but with plenty of elevated food options.

The bill $26.19, plus tip

What made you want to enter academia?

It was not on the horizon. If you would have asked me in the late ’90s, you ever think you’d be a university professor? I’m like, well, that sounds like an interesting job, but I don’t know. A pretty lofty goal.

As part of starting a business, I thought, you know, let me look at NKU — I lived in northern Kentucky. They had a class on new venture management. I thought, let me just sit in and audit this class on new venture management, which is kind of like, you started a new venture and what are the things you want to do if you like guerrilla marketing, and how do you present things? ... I already had an MBA, and the instructor asked me, “What are you doing in this class?” And I said, “Well, I just want to come in and learn” and such. So after several dialogues, she said, “I have this idea of starting an entrepreneurship institute at the university. Would you be interested in being one of the founding advisory board members? You’re transitioning from industry into starting your own business. You have that angle.” And so, they started the entrepreneurship institute. As an adviser, one of the department chairs asked her, the director, “Would any of your advisers be interested in teaching a class?” So they approached me, and I said, “You know, that would be kind of interesting. I said, I’ll teach a class.”

Where did you go to undergrad?

Miami University. Miami is undergrad, Xavier is my master’s and Case is the doctorate: all Ohio. ... And so, in taking classes, my father said, “You know, computers are becoming much more a part of the way business is run. You ought to take a course.” So Miami had a very strong program in systems analysis, so I took an introductory course in analysis methods and design, and it just kind of, I got it. I could see where that would be a great bridge between tech and business. And so my degree was kind of a cross between business and systems analysis. And that served me very well because I was very quick through the ranks. I became the vice president and CIO of United Dairy Farmers, I think I was 26. And all my peers were 10, 15 years older than me. When I would go to CIO meetings, they would look at me and say, “Your boss couldn’t make it?” I said, “No, I’m the person.” ... Even today, the technology folks and the business folks speak different languages. So most of my career, I’ve been that liaison.

What is it that you enjoy about academia?

Two things. One, the pursuit of knowledge to understand and to create new understandings. The research and that aspect of it. The other side is the making a difference in a student’s life. ... So enlightening, giving students not only the content knowledge in the different aspects and disciplines of business and general education, but also, offering other ways to think, how to look at a phenomena. I know you see this, but you could also look at it this way. And, also, building a sense of creativity. You know, one of the best tools in problem-solving is creativity.

Is there anything you’re looking forward to doing at Baldwin Wallace that you wanted to mention?

Trying to build a stronger, engaged practice in cybersecurity and risk management, especially in health care.

Along the same lines, I’m interested in what got you interested in IT to begin with.

How did you find yourself in that field?

Well, I started out as a business major.

At BW, will you be in a purely administrative role or will you be teaching, too?

Well, there’s not an expectation initially of me teaching, but knowing me, I’ll be in the classroom. At a minimum, as multiple guest lectures.

What are some of your impressions of Northeast Ohio, your soon-to-be home?

I was invited to go to the Cleveland Leadership Center; they had a reception for new leaders. And the impression I made really strong, which was really exciting, was what a committed, dedicated community around making a difference in Cleveland. Of that caliber of individuals going through programs to help think about how to do things better, creating the network and relationships it needs in order for that to really work. And you have a base of people that are open, willing and welcoming.

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

1-877-824-9373.

Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-9911, or email to customerservice@ crainscleveland.com, or call 877-824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.