Crain's Cleveland Business

VOL. 39, NO. 33

AUGUST 13 - 19, 2018

Source Lunch

Tax overhaul could ding nonprofits with highpaid executives. Page 3

CLEVELAND BUSINESS

Alan Nevel, MetroHealth Page 27

The List 100 largest Northeast Ohio employers Page 20

BANKING ON BOOZE

The liquor business is hardly on the rocks, but Ohio sees room for growth

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

When it comes to government, not everything should be run like a business.

But when it comes to the liquor sector in Ohio — where the state owns the spirits supply, charging a 6% commission on retail sales — doing just that could roughly double annual sales growth for an industry that feeds reve-

nue to JobsOhio, the nonprofit economic development organization that leads the state’s business attraction and retention efforts.

And as the state takes this new approach to liquor, it’s opening at least 18 new liquor stores throughout the state.

Most are clustered around the key metros of Cleveland, Cincinnati and Columbus. That’s a significant develop-

LIQUOR SALES

this case, is the Division of Liquor Conment considering the state has opened virtually no stores in the past five years. trol.

The state-sponsored operation of li“Historically, the state has just sort of deferred to the (liquor) agency. quor sales through JobsOhio beThat’s problematic for a number gan in 2013. While sales have of different reasons,” said Jim gradually increased on their Canepa, superintendent of own through the years, the Number the division of liquor control. state hasn’t taken any active of liquor “A lot of them don’t have the role in the retail end of the agencies in resources to do merchandisbusiness.

Ohio today Think of it like a ing or facelifts. The other issue franchisee operating is consistency.” without any guidance by their parent company that, in SEE LIQUOR, PAGE 25

465

LIQUOR SALES PROJECTIONS

STATE CHARGES

billion in 2016

$1.14

billion in 2017

9%-15%

6%

(5.6% increase)

(6.4% increase)

Year-over-year increases projected going forward

Commission state charges retailers on liquor sales

$1.07

Getty Images

REAL ESTATE

Wolstein’s partner ID’d in 200 Public Square bid

By STAN BULLARD sbullard@crain.com @CrainRltywriter

DRA Advisors LLC, a mammoth New York City-based real estate investment manager, is Cleveland developer Scott Wolstein's partner as

the pair closes in on purchasing the 200 Public Square skyscraper.

The identity of DRA surfaced as the new ownership entity for the 45-floor office tower was formed July 31 in the state of Ohio under the name G&I IX Public Square LLC, along with another affiliate to hold the parking garage, G&I IX 200 Public Square LLC.

Entire contents © 2018 by Crain Communications Inc.

G&I IX is well known as a real estate investment fund operated by DRA, which owns more than 200 office buildings, representing about 50 million square feet of rentable office space around the United States, as well as apartment, industrial and retail properties.

Wolstein confirmed DRA is his part-

Inside Companies must work to wipe sensitive data.

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ner. He said both parties will serve as "co-general partners" of the property.

"We've done a lot of deals and we've made a lot of money together in the past," Wolstein said, referring to co-investments that DRA made with Beachwood-based DDR Corp. during his long tenure as the shopping center company's CEO.

"DRA is a great partner. It's shrewed. It's not a passive investor," Wolstein said.

DRA's looming investment in downtown Cleveland is a hot topic in the city's office-leasing grapevine.

Partially that's due to the city attracting a major out-of-town investor, as SEE DRA, PAGE 26

Tri-C’s Corporate College training program is finally on solid footing.

Page 12

Retailers adapt amid shifting consumer taste.

Page 14

8/10/18 2:21 PM

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CRAIN’S CLEVELAND BUSINESS

NEO punches above its weight in HQ jobs

By JAY MILLER jmiller@crain.com @millerjh

Northeast Ohio has the second-highest concentration of employment in jobs that support business or corporate headquarters among the 20 largest metropolitan areas in the country, according to an analysis by Team NEO, the regional business attraction and economic development nonprofit.

The analysis compares the percentage of the region’s total employment working at headquarters offices in Northeast Ohio with the percentage of headquarters employment in other metropolitan areas.

Cities such as New York and Chi-

cago have larger numbers of headquarters employees, but they are a smaller percentage of total employment in those regions. By the Team NEO analysis, the region is second to the Minneapolis-St. Paul area.

“We continue to see evolution within the sector and it continues to be one of our healthiest sectors,” said Jacob Duritsky, Team NEO’s vice president of strategy and research.

“It’s important because it’s where decisions get made on a lot of other things in companies and, oftentimes, research and development and innovations occur alongside” headquarters operations.

One of the reasons for the growth is the lower cost of doing business in Northeast Ohio. That’s a factor, Duritsky said, that Team NEO can capi-

“We continue to see evolution within the sector and it continues to be one of our healthiest sectors.”

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

talize on to attract firms to move their back office operations here from higher cost markets such as Boston, Chicago, New York or Los Angeles.

“Why pay Class A rents in New York City for back office work?” he said.

The 18-county region surveyed by Team NEO has 187,000 workers who

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support the work of business owners and executives, lawyers, accountants and other professional service professionals. And that number, Team NEO said, is expected to grow by 8,000 over the next decade.

Team NEO’s research suggests that the employment growth in this sector will come from workers who handle insurance and employee benefit funds, design services, real estate services, computer systems design and scientific and technical consulting services.

For example, the downtown Cleveland office of the Jones Day law firm has 194 lawyers, according to Crain’s 2018 list of the area’s largest law firms, but a total of 629 employees, many of whom handle billing, information technology, production and

other back office functions for the firm, which has 2,500 lawyers in 43 offices worldwide.

Employment in the sector has grown from 162,000 workers in 2001.

That analysis is highlighted in Team NEO’s latest quarterly review of economic indicators. In its data section, the review reports that employment in the fourth quarter of 2017, the latest, most accurate data available, was 1,938,000, up more than 3,300 jobs, or less than 0.2%, from a year earlier.

Gains of 3,200 jobs in construction and 1,000 jobs in manufacturing were offset by losses in utilities, the public sector and the oil and gas industry, Duritsky said.

The Federal Reserve Bank of Cleveland doesn’t track growth in headquarters employment. It reports a similar growth in the broader category of professional and business services employment, though it measures employment only in the seven-county Cleveland metropolitan area, about half of the employment of the Team NEO region. Its recent Cleveland Metro Mix reports a 14.4% gain in employment in that category.

But Cleveland Fed economist Joel Elvery wonders if some of that growth just reflects a change in the way workers and the places they work are categorized.

“Firms and employees get classified (by federal agencies) by the primary activity that occurs” at a location, he said. “As manufacturing has declined — and production employment drops below 50% (as a percentage of a company’s workforce at a location that also includes headquarters’ operations) — that means production employees could be reclassified" as headquarters employees.

Duritsky agreed that reclassification might account for some of the growth, but he said Northeast Ohio still had a growing and disproportionately higher share of headquarters employment than other metropolitan areas.

The quarterly report also examines the region’s gross regional product (GRP), which reflects the region’s economic health. It measures market value of all goods and services produced in a region.

The regional GRP has grown 6% since 2013, to $236 billion. That’s below the U.S. rate of 9%, Team NEO said, but above 4.5%, half the national rate, which has been the regional target.

Team NEO attributes the region’s slower performance in large part because the region has not seen enough economic diversification beyond manufacturing, which is not creating jobs, and health care and the health sciences industries.

“In particular, Northeast Ohio has lagged U.S. growth rates as they relate to finance, information and professional, scientific and technical services,” the report said.

Since 2014 Team NEO has led a broad, civic commitment to measure the region’s economy with the goal of creating a strategy for speeding up the sluggish regional economy.

It has been tracking a group of “aspirational” measurements that includes growth in employment, productivity and per capital income, as well as GRP, to measure the success of the region’s economic development organizations. The five-year goal was to see if the existing efforts could bring the regional growth rate to half the national rate. It appears to have succeeded, at least in GRP growth.

8/10/18 3:33 PM

CRAIN’S CLEVELAND BUSINESS

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Tax overhaul dings high nonprofit salaries

By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

The 2017 federal tax law may mean an added bill for a handful of nonprofits in Northeast Ohio.

The law imposes a 21% excise tax on nonprofits that employ people with compensation greater than $1 million. In Northeast Ohio, this doesn’t have a widespread impact, but it will affect large institutions, like the health systems as well as Case Western Reserve University.

“I don’t think the not-for-profits know what hit them with this law change,” said Elliot Dinkin, president and CEO of Pittsburgh-based Cowden Associates, an independent compensation, health and benefits, and retirement consulting firm.

“What the idea behind the 21% excise tax on compensation greater than a million is was that they were trying to put the not-for-profits on par with some of the large public for-profit companies who are basically not permitted to deduct compensation greater than a million.”

Dinkin said this would largely affect smaller to midsize nonprofit organizations that can’t as easily absorb the added tax. It’s a “math exercise,” he said, with a choice between figuring out where to come up with the added cost or decreasing compensation.

“It would put some of these notfor-profits who are generally somewhat smaller or mid-size at a competitive disadvantage because there are private companies that they compete (with) for talent that aren’t subject to the tax issue,” he said.

University and hospitals will “certainly” be impacted, Dinkin said.

Such is the case in Northeast Ohio, where smaller to midsize nonprofits don’t generally crack the $1 million threshold, but larger institutions do.

In a statement, Cleveland Clinic estimated that the cost of the tax for the system would be between $1 million and $2 million. In an email, Clinic spokeswoman Heather Phillips said the system is “waiting for further clarification from the Internal Revenue Service (IRS) on how to treat certain compensation matters.”

University Hospitals didn’t provide a dollar amount, but said in a statement, “Our patients and the community will notice no direct effects from the new excise tax. We will continue to provide compassionate and comprehensive care to our patients and work as an organization dedicated to service to our community.”

Summa Health System spokesman Mike Bernstein said the impact to the system, “if any, is expected to be minimal.”

And at Akron Children’s Hospital, the estimated financial impact is about $307,000, based on the total compensation for its CEO and president, William Considine.

“This represents a fraction of a percent of the organization’s annual total net revenue and we have been able to absorb this into our 2018 operating budget,” Michael Trainer, CFO and treasurer for Akron Children’s, said in a statement. “It will have no impact on the quality and growth of our patient care programs.”

Case Western Reserve University didn’t provide a statement, but its president, Barbara Snyder, made $1.5 million last year in reportable compensation.

“I don’t think the not-for-profits know what hit them with this law change.”

— Elliot Dinkin, president and CEO of Pittsburgh-based Cowden Associates

Commanding a high salary In today’s marketplace, top talent can command a high salary, said John Goheen, partner at Ulmer & Berne and chair of its income tax group.

“Top talent could work at a tax-exempt organization or for a for-profit,” Goheen said. “So if the tax exempts are going to feel a little restrained about getting up to that million dollar

over $1 million, could be putting part of the base pay in a deferred compensation plan, “You could defer money to the future but you may just be deferring the tax liability,” Dinkin said. “So it may not be a question of if; it just may be a question of when.”

Ultimately, it may be that the excise tax simply becomes an added cost of hiring someone.

“So my question then is OK if that is the case and you’re not willing to do those cuts, where within my organization am I going to adjust to pay for this?” Dinkin said. “If I can’t increase the budget size and I can’t increase revenue, I’m going to have to cut something else to pay for this excise tax. right? It’s gotta come from somewhere.”

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Untitled-1 1 P003_CL_20180813.indd 3

level, cause that’ll trigger that 21% excise tax, there is a worry. There’s just a worry — I don’t think it’s been borne out yet — but a worry that … it’ll be harder for them to compete for the top talent.”

If organizations are unable to compete on base pay, they need to look at other things they offer. Dinkin said nonprofit organizations should look at their total compensation offerings, including health, welfare, time off, retirement and disability benefits.

“Obviously when you’re trying to

hire people in the not-for-profits, you’re trying to find people who are maybe more mission-driven, if you will,” Dinkin said. “But you’re trying to compete in other ways. Maybe it’s a better career path, a career track.

Try to make jobs more interesting.

Again, all those other factors that may help contribute and offset differences in pay, base pay.”

Some nonprofits may run into problems adjusting to the new tax if their executives are under contracts, Dinkin said.

“If I have a contract that’s in place today, I can’t change it unless an executive said, ‘Sure, I’ll be happy to reduce my pay or make changes to avoid the excise tax,’” he said. “How is that going to happen?”

One option, for people making just

8/8/18 12:39 PM 8/10/18 1:37 PM

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Social Kitchen owners Courtney Barton (left) and Ashley Nuskey (right) stand with Karen Small, chef-owner at the Flying Fig, where the startup has taken their traveling diners. (Contributed photo)

Startup takes diners on road for fun, mingling and variety If dining out is one of our favorite forms of entertainment, who’s to say it can’t become an even better party?

That’s what entrepreneurs Ashley Nuske and Courtney Barton aim to conjure with the Social Kitchen, their Cleveland-based “dinner crawl and event” startup.

The concept is simple. Gather a gang of adventurous food lovers, pile them into a limo bus and take them to a series of Northeast Ohio restaurants.

That’s where the fun begins. The group — hopefully a genial bunch of strangers, or a bunch of friends who choose to book a party — mingle over cocktails as they meet one another and start their crawl. Over the course of three-plus hours, they’ll visit a trio of restaurants and sample dishes, be they house specialties or “chef’s whimsy” selections.

They’ll spend roughly one hour at each eatery, sampling three tasting-size portions. As they nibble (and maybe sip an optional drink), participants meet the restaurant’s chef and staff. It’s an opportunity to learn about the place they’re visiting, hear the chef’s perspective on the dishes and share their views.

In short order, they’re back on the limo bus and off to the next stop.

“The whole idea is to meet new people, try new dishes, mingle and have a lot of fun,” said Nuske, 29.

She and Barton have done their time in the hospitality industry.

Nuske, who describes herself as a “military kid, a nomad,” attended Kent State University’s hospitality management program, moving on to stints on the Walt Disney World Resort’s hospitality staff (and a gig performing Tinker Bell).

Barton, 30, worked in a procession of restaurants and breweries. Her husband, Gregg, coaxed her to expand her culinary horizons and broaden her interest in the hospitality field.

“We knew, initially, we were each bringing something different to the table,” Nuske said.

“But one big thing we have in common is that Courtney and I are ‘people people.’ We thrive off of that with each other, and we’re proud that we can engage with people and ice-break.”

That ability to get strangers to mix

and mingle, is essential to creating a great evening, they said.

“Really, the big idea was to bring back community e n g a g e m e n t ,” Barton said. “You know, you go out Joe and see so many Crea people … face deep on their phones and not communicating with each other. We thought we could change that. And what better way than through food?”

Thus an open call for members of the public to join in went out. While the partners are big on booking private events — anything from a bunch of friends who want a night out to celebrations like showers and bachelor parties — some of the best evenings come from the relationships spontaneously spawned by newbies meeting for the first time.

“Obviously, it’s most common for people to buy tickets in groups and book a party, which is totally fine,” Nuske said. “But what we wanted to prevent from happening was that people came in a box and then only interacted with the people they came with.”

So guests are seated communal style. Barton and Nuske sit back and coax a bit of casual interaction.

“Then, when you put good food in front of people, they really can’t help but talk about it,” Nuske said.

“Honestly, the hesitation beforehand may be there, but when people get on the bus with us and people start chatting, it flows from there. I don’t think we’ve ever seen an occasion where people aren’t having a good time,” she added.

Now with about 17 events under their belts, they’re emphasizing prominent and rising independent restaurants. The business partners say an array of local talent has been part of Social Kitchen’s lineup, from Karen Small of Flying Fig and Jill Vedaa of Salt, to Eric Williams of Momocho and El Carnicero, and Fabio Salerno of Lago. Plus there have been stops at 1890 at the Hyatt Cleveland Arcade and the Wyndham at Playhouse

Square.

Ticket prices typically range around $70 per guest. That includes food, transportation, a drink on the bus, any planned beverage pairing and a gratuity for wait staff.

Barton explained that timing and portioning are essential. “(While in transit) we’re in contact with the restaurant the whole time, so they know when we’ll be arriving, and when we’re in, they drop the food (get it ready to serve). … The guests settle in and eat, the chef and/or owner comes out and talks, and then we head off to the next place,” Barton said.

“And we work with the chefs to keep things perfectly portioned, to keep it a good mix but not overwhelming servings, in a true ‘progressive dinner’ style,” Nuske added.

Crowded Cane’s Wondering what was causing that traffic jam on Pearl Road south of state Route 82 last week?

Diners were trying to get their first taste at Strongsville’s latest fast-casual restaurant, Raising Cane’s. It’s the Northeast Ohio first location for the Louisiana-based chain.

Police controlled the flow of drivers nosing their vehicles into the spot’s somewhat confusing entryway. Once in, there was a long wait for the signature dish: deep-fried chicken fingers.

My wife, a friend and I waited more than 20 minutes at a near standstill to shout our order into the drive-thru’s speaker. The menu is pretty simple: a variety of combos (most include crinkle-cut fries, slaw, Texas toast, peppery Cane’s sauce and a drink), including sandwiches, dinners and bigger quantities.

Honest? We didn’t love the fries (limp) and the slaw was standard issue, but those chicken fingers were damned good. Plump, moist and piping hot, the fresh (“never frozen”) chicken was lightly but crisply coated and — hurrah! — lightly seasoned.

None of that impossibly salty stuff.

I’ll definitely go back after the crowds die down, which, from the looks of things, may take a while.

Raising Cane’s is located at 14356 Pearl Road.

8/10/18 12:46 PM

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Nonprofits partner on senior-living facility

By STAN BULLARD sbullard@crain.com @CrainRltywriter

Land-rich legacy senior citizens service provider McGregor Foundation and affordable living provider CHN Housing Partners are teaming their talents for a $12 million senior assisted living project in East Cleveland.

The three-story, 90-unit building rising on part of the foundation's McGregor Home, a 32-acre campus at 14900 Private Drive, is designed to serve the growing population of aging people that's producing a welter of senior living projects in the region and nation.

However, there's a big difference because the name of the game here is not profit, even though the building due to open next year will provide a mix of low-income and market-rate units to make it a go.

R. Robertson Hilton, McGregor Foundation president and CEO, said in an interview last week at McGregor's office at McGregor Home, "We've long been aware of the appalling shortage of senior housing, particularly for the low-income people we serve. We've spent seven years working together to produce this plan."

Rob Curry, executive director of Cleveland-based CHN, put the effort in broader perspective in the same interview.

"The private sector is doing a great job building senior housing, if you can afford it," Curry said.

"There's wonderful care for those who can afford it, but that leaves everyone with limited means with fewer options."

Hilton said McGregor turned to CHN rather than a consultant to use its skills in developing housing with assisted-living house credits as well as constructing housing. The partnership is less expensive for the well-endowed foundation than doing the project itself, he said, and allows it to use 2 acres of its grounds for the project.

For CHN, it's the first ground-up project under a strategic plan to extend its reach beyond its traditional single-family home offerings and to partner with other capable nonprofits. It has previously renovated older senior citizen housing complexes with partners in Lakewood and Bedford, but McGregor is its first to start with an empty site.

The partnership also means that McGregor through its McGregor Pace affiliate will operate the facility by providing the same all-inclusive services it already provides to help elderly people remain in their own home. The central kitchen at McGregor spares the project from needing its own cooking facilities, a big cost savings for the effort.

The bottom line, thanks to the low-income housing tax credit allocation CHN helped McGregor win from the Ohio Housing Finance Agency, is more units for the public at lower cost. Senior citizens with incomes below $29,700 annually will be eligible for low-cost units that rent for as little as $600 monthly if they have Medicare or Medicaid support, while people with more income than that will pay about twice that rate. Both are far less than the for-profits rent of more than $5,000 monthly, although many occupants are helped by eli-

P005_CL_20180813.indd 5

gibility for federal Medicare and Medicaid payments.

Despite the active market for senior housing in the region, Curry pooh-poohs concerns about competition for this one. A market study performed for CHN of East Cleveland, Cleveland Heights and surrounding areas determined need for affordable senior living is "unlimited," he said.

"You can serve a broad market at this Taj Mahal of senior living with grounds like this," Curry said, referring to the vast green acreage, city and lake views and the brick-andtimber buildings.

Moreover, Lee Ann O'Brien, McGregor director of community relations, said McGregor already has a waiting list of about 100 for its exist-

ing assisted-living building. She noted it also anticipates some residents from its other operations may need to move into the assisted living building.

McGregor dates from 1904, when its original facility, A.M. McGregor Home, was opened as a home for elderly women by Tootie McGregor Terry to honor her late husband, Ambrose McGregor, an associate of John D. Rockefeller in Standard Oil Co., on a family-owned farm.

Although funds from the sale of low-income housing tax credits and a loan from Citizens Bank support the project, it also received a $2 million loan from the McGregor Foundation, which Curry said the project will repay.

The McGregor Senior Assisted Living building rising in East Cleveland was designed by the Hiti, DiFrancesco and Siebold architecture firm and constructed by the Krill Co., both of Cleveland. The $12 million building is scheduled to open next year. (Contributed rendering)

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The grass, weeds and cattails on Cleveland-owned land at Madison Avenue and West 110th may give way to bulldozers and industrial buildings if revived plans for the site bear fruit.

Legislation is pending before Cleveland City Council to provide Weston Inc. a tax abatement on nonschool property taxes. Councilwoman Dona Brady said a measure is in preparation to authorize the sale of the 22-acre site to the Warrensville Heights-based real estate owner and developer.

Brady, whose Ward 11 includes the site, said the tax abatement and sale measures may go before the full council for passage at a special meeting on Wednesday, Aug. 15, if they are approved Tuesday, Aug. 14, by council's development subcommittee.

"It's August, and they really need to get rolling if they want to get anything done this year," Brady said.

Council authorized negotiations with Weston for the site last year.

One piece of legislation, a to-be proposed measure next week, will authorize the Jackson administration to sell the industrial land to Weston in two phases, according to a Cleveland economic development department summary of the agreement.

The first phase would be 9 to 10 acres for a project to be launched by year's end. A second sale would come within two years if Weston performs on the first phase.

A site plan for the project that Brady provided envisions a building parallel to Madison Avenue for the first phase with 162,500 square feet.

The subsequent phase might consist of two buildings, each of 108,300 square feet, that would be perpendicular to the first one and parallel to West 110th and West 106th streets, respectively. The actual sizes of the buildings, however, would vary to accommodate demands of prospective tenants.

Brady said she backs the plan because the buildings will bring at least 100 jobs to the neighborhood and

Vegetation may make it look green but the brownfield site once home to a truck chassis maker may soon be put back to use as a business and industrial park. (Stan Bullard)

support the adjoining industrial district between Berea Road and Western Avenue.

She added that Weston intends to develop and retain ownership of the entire parcel, which will be more consistent than selling the sites to individual owners.

Weston owns properties nearby on Berea Road, part of an industrial portfolio of 13 million square feet nationally, much of it in Northeast Ohio.

The economic development department's briefing document on the project said that Weston believes it has growing tenants in its properties that might want to expand on the Madison site or other local or out-oftown prospective tenants.

Suzanne Broadbent, Weston's spokeswoman, did not return three calls and an email about the proposed transaction by Crain's deadline last week. T.J. Asher, Weston CEO, did not return two phone messages.

Terry Coyne, an industrial and office broker who is vice chairman of the Cleveland office of Newmark, Knight Frank, said he is confident that Weston would find takers for space in the new multitenant buildings.

"The market is busy and needs space," Coyne said.

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The vast parcel once housed Cleveland operations of Midland Steel Products Inc., which closed in 2003. The property's first owner afterward razed the buildings but surrendered the site to the city because it was fouled by toxic wastes. More than $5 million in federal funds went into restoring the brownfield site to standards so it could be resurrected with new industrial uses.

The city proposes to sell the site to Weston for a total of $1.65 million, based on the city's appraisals, Brady said. Such a written-down price is seen by experts as necessary to fund development of brownfield sites.

Brady said she supports the tax abatement because it is standard city industrial policy and continues to provide funds for city schools. The proposal would reduce property taxes by 60% for 10 years after the projects are completed.

The city estimates when fully developed the parcel could still produce $1.4 million in property taxes for schools and city income tax receipts of at least $875,000 annually if the site is fully occupied by businesses.

As a Crain's reporter photographed the site last Thursday, Aug. 9, a woman driving by on Madison Avenue shouted from her car window: "Finally! Something's happening there!"

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Opinion From the Editor

Browns win with debut of ‘Hard Knocks’

Editorial

Power play It has been a summer of introspection and discussion about what it will take to push Cleveland's economy in more of an innovative direction and into a higher gear. One project that represents both just received a key state approval and, while it's still far from becoming a reality, gives us hope for economic improvement and energy independence.

The Ohio Environmental Protection Agency at the end of July issued a Section 401 water-quality certificate of approval for the Icebreaker project, a $126 million electric power-generating wind farm proposed for Lake Erie. The certificate confirms that Icebreaker complies with federal standards on water pollution.

Beth Nagusky, director of sustainable development for the Lake Erie Energy Development Corp. (LEEDCo), one of the wind farm's sponsors, called the state EPA's decision an "important step forward" for Icebreaker.

The six-turbine, 20.7 megawatt Icebreaker project still must earn approvals and/or permits from 14 local, state and federal agencies. One key approval awaits from the Ohio Power Siting Board, whose technical staff last month recommended the board approve construction, though a final decision is pending.

Project supporters says it has potential to create more than 500 jobs and add $168 million to the regional economy, in addition to kick-starting the development of affordable clean energy that would lead to significant benefits in years to come.

A recent report, "Powering Ohio: A Vision for Growth and Innovative Energy Investment," produced by Synapse Energy Economics in partnership with Case Western Reserve University’s Great Lakes Energy Institute, argues that the state is well positioned to thrive in green energy, due to its status as a "manufacturing powerhouse," its presence of "dozens of corporate and federal research-and-development centers;" and the 20,000 science, technology, engineering and math students graduating from Ohio colleges and universities.

It offers a compelling vision that a new approach to power in Ohio is in reach.

Get it right

It shouldn't have come to this, but the board of the Greater Cleveland Regional Transit Authority did the right thing last week in putting off until 2019 a decision on asking Cuyahoga County residents for a tax increase to bolster the finances of the beleaguered agency.

Transit advocates are rightly disappointed that the board couldn't get its act together in time to meet an Aug. 8 deadline to place a tax measure on the November ballot. The financial need certainly is there, if RTA is to get back on more solid economic footing so it can fulfill a key role of connecting workers with workplaces in the agency's service area. A decline in state aid, a general decline in Cuyahoga County sales tax collections and a federal decree that Ohio may not apply its sales tax to Medicaid managed-care organizations have left the transit agency facing a $20 million hole in 2020.(RTA at present relies on a 1% county sales tax for a large part of its budget.)

In a perfect world, the board would have spent a good portion of 2018 working on a plan to ask voters to approve a sales tax increase, or perhaps a hike in the property tax, or something else. But that didn't happen, in large measure due to a leadership vacuum stemming from the resignation of former board president George Dixon and the accelerated departure of CEO Joe Calabrese. Various tax-hike ideas floated at a meeting last Tuesday, Aug. 7, had nothing near consensus, so the only choice was to regroup and look ahead to the next opportunity to get on the ballot, in May 2019.

A tax hike of any variety will be a big ask for strapped county voters. We believe RTA will have a good case to make for more support. Now the board — under its new president, Westlake Mayor Dennis Clough — needs to get about the business of both identifying Calabrese's successor and coming up with a viable strategy to get on the Cuyahoga County ballot next spring. They owe it to taxpayers and RTA's users to get it right.

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

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“Hard Knocks” on HBO, which premiered at 10 p.m. last Tuesday, is must-see TV. You don’t have to be a Browns fan or even a football fan. When I watched, I was struck not only by the way it humanized athletes, but how it carried themes that would resonate with any “team” in the business world.

Football fans already know about the award-winning reality-TV sports documentary. The 13th season turns its cameras on the beleaguered Cleveland Browns, coming off an 0-16 season. The team’s performance has been so bad, it’s drafting so futile in recent years, you’d think you have to look away when the cameras show the inner workings.

The opposite is true.

The Browns turned down several invitations to be the focus of “Hard Knocks,” Elizabeth which follows one team through training McIntyre camp and the beginning of the NFL season.

This year, they said “yes.” It’s a refreshing sign of transparency for an organization that says it has put its mistakes behind it.

Kudos to the Browns management for green-lighting the project. Yes, you could argue after a 1-32 record over two seasons that the only way is up. But it takes real courage for any business, especially a struggling one, to lift the curtain on its operations. As a business owner or C-suite executive, would you be willing to invite an army of cameras into your workplace (and your car, your home, your grieving phone calls after the deaths of your mother and brother, as Coach Hue Jackson did?)

The episode begins with Jackson fulfilling a promise to “jump in the lake” if the Browns went winless. Could it be the moment the bad mojo was washed away from the Browns franchise?

What we see in “Hard Knocks” is an organization trying desperately to change its culture. We see Jackson listening to his coaches, thanking them for their input, then sticking with his decision to rest certain players despite the coaches’ objections.

We see him processing the news about his mother’s death and struggling with his grief, then switching back to football mode to get the job done. As someone who is dealing with that kind of grief while working in a management capacity, it hit home, hard.

The key to success in any business is its people. And while management can set the tone, rank-and-file leaders who set an example are crucial to success. “Hard Knocks” showed Jarvis Landry, the newly signed receiver, as that kind of leader, imploring teammates to shed past negativity and commit to practicing at 100%.

Linebacker Christian Kirksey asked his teammates to write down their “why” for playing professional football and then tape it on their mirrors or over their beds so they’d sleep and wake with an understanding of their motivation. That’s not a bad exercise for any of us. Why do we produce newspapers or manufacture car parts or practice law? Why did you start your business?

One of the “whys,” of course, is money. And perhaps the funniest moment of the inaugural episode of “Hard Knocks” came when defensive end Carl Nassib enthusiastically and profanely explained the concept of compound interest.

The cameras are there for the good and the bad. This week we’re likely to see how the team handled the trade of disappointing 2016 first-round draft choice Corey Coleman. And soon we’ll see the fallout from the marijuana citation of rookie receiver Antonio Callaway.

Will the Browns be winners this year? We can only hope. I’ll settle for games as interesting as “Hard Knocks.”

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

Sound off: Send a Personal View for the opinion page to emcintyre@crain.com.

Please include a telephone number for verification purposes.

8/9/18 4:32 PM

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REDEFINING CORPORATE HOSPITALITY Personal View

Internships are key to building talent pipeline

By HOLLY HARRIS BANE

A July 16 opinion column in Crain’s (“Personal view: Colleges, employers must help young adults enter job market”) highlighted the despair that many parents feel when their about-to-graduate college student just can’t find a job. The author Tricia Kuivinen called upon colleges and employers to do more to help prepare successful students for the job market, through more robust internship and training programs.

At the Northeast Ohio Council on Higher Education (NOCHE), we couldn’t agree more. As a collaboration of businesses, industry and higher education leaders, we are focused on strengthening internship programs and providing the talent pool that employers need to grow their businesses and reduce recruitment costs.

A recently published survey of regional employers found that internships can build and sustain a strong and competitive workforce. Having a supply of interns familiar with an organization provides an easy and affordable way to strengthen a company. Interns are often hired immediately after graduation, eliminating the cost of recruiting and training new employees.

The findings of the survey, conducted by NOCHE in partnership with the Employers Resource Council (ERC), reflect the experiences of more than 100 organizations and reinforce the importance of internship programs and ongoing relationships between employers and universities in providing seamless access to a talent pipeline.

Many organizations don’t have formal internship programs because they believe it’s too much work to sustain them. But there are many resources available

in the market to help them. For example, NOCHE provides a matching platform for recruiting interns and job candidates, and offers internship training workshops and online courses for employers.

The survey can also help employers learn about current rates of pay for interns and recent graduates in various fields, how to use performance evaluations, and the kinds of projects interns are often assigned.

Interestingly, the ERC/NOCHE survey also found that many employers use prior internship experience as a hiring criteria with the same frequency as they use work experience that is not internship based. Even if the new hire did not intern with them previously, the fact that he/she had internship experience somewhere is considered an asset for a new employee and the company.

We urge employers that do not have internship programs to contact NOCHE to see how they can benefit from internships in the short and long run. Test-drive potential employees before hiring full-time. Cultivate a talent pipeline of highly trained future hires. Maximize recruiting dollars.

Sixty-one percent of the employers surveyed have hired or plan to hire new college graduates this year, and most of the new graduates are coming into the local employment market from Northeast Ohio colleges and universities. As we continue to expand internship opportunities, more parents like Tricia Kuivinen will be able to breathe a little easier when their new graduate crosses the stage, accepts a diploma, and steps into a productive and rewarding job.

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Holly Harris Bane is the president of the Northeast Ohio Council on Higher Education in Independence.

Neglecting infrastructure is more costly than we realize

By DAVID KROCK

How did we get here?

Any homeowner or car owner knows the hazards of delaying needed repairs or maintenance. Over time, we lose the full function and enjoyment of these important possessions. Moreover, when the bill to make things right comes due, it has often grown immensely in dollars and degree of difficulty to repair. When it comes to the water we draw from our taps or driving over roads and bridges, the societal stakes are immense with respect to the safety of our family and loved ones, the economic health of our local communities and the long-term competitiveness of our country.

In short, not only is deteriorating infrastructure a health and safety issue, it is impeding Northeast Ohio’s ability to compete.

As many have noted recently, the condition of neighborhood streets, water main breaks, sinkholes from failing sewers, and basement flooding that we are experiencing throughout Northeast Ohio are a wake-up call as to the challenges that we face to fix our aging infrastructure. In fact, the American Society of Civil Engineers estimates it will take $4.6 trillion over the next decade to fix our infrastructure in the United States and has given America’s infrastructure a grade of D+. However, the infrastructure plan presented to Congress earlier this year has allocated only $200 billion over 10 years in federal funds. This is a huge funding shortfall and there is no relief in sight from the federal government, leaving the fiscal challenge of fixing these problems solely to the state and local level.

In many respects, our national post World War-II growth and suburbanization throughout Northeast Ohio has caught up with us, leaving us with more infrastructure to maintain than ever before. Across the Midwest, the acreage of developed land between 1982-2012 increased by 41%, while population increased by just less than 14%. During this robust development period, the developers that built these new housing developments, shopping centers or industrial parks also heavily contributed to the costs of new roads, sewers and water mains. Additionally, the population of our region continues to decline. We now have a much larger infrastructure footprint to maintain per capita, and as this infrastructure ages and needs repair, sufficient funds are no longer there.

We are driving on roads in need of repair, including many with bridges rated structurally deficient, and our underground utility systems require a multi-billion dollar reinvestment. Unfortunately, with our water, sewer and stormwater infrastructure that is all beneath the ground, the problem is “out of sight, out of mind”. But the evidence of ailing infrastructure is abundant: sinkholes, water main breaks, sewerage overflows, potholes and bridge failures.

Infrastructure has a useful life, and much of it in our region has reached the end of that life. The first major wave of construction in the Northeast Ohio was from 1900-1930. Nearly everything built during that time period will need to be replaced in the next 20 years,

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Focus

MIDDLE MARKET

A SWEEPING SUCCESS?

Companies must take measures to safely dispose of data-rich equipment

By DOUGLAS J. GUTH clbfreelancer@crain.com

Digital security covers a wide array of methods and protocols, including safeguarding networks and monitoring access to them. But what happens when a network-connected computer, smartphone or server is ready for that big data dump in the sky?

Experts interviewed by Crain’s said companies must take proactive measures to safely dispose of old equipment so no trace of sensitive information is left behind, particularly given the growing number of gadgets now linked to network infrastructure. According to those on the ground floor of data

destruction, organizations that don’t implement device end-of-life protocols are putting crucial info in unnecessary danger.

“Not everyone is thinking about a cohesive strategy when identifying areas of risk,” said Jason Taylor, group president of secure asset disposition at MCPc Inc., a Midtown-based technology company with an emphasis on cybersecurity. “Companies are taking the path of least resistance, finding the lowest price vendor to just take away a device for free. You’ve got to create a strategy on protecting data from cradle to the grave.”

MCPc manages the “chain of custody” around client devices and data, planning to expand its services later this year with its Security Technology

Asset Disposition (STAD) Center in Old Brooklyn.

When the 117,000 square-foot STAD facility opens in late October, the company says it will be at the forefront of data sanitation, using a heavily vetted process to destroy or redeploy IT assets at the end of their life cycle.

MCPc vice president of marketing and communication Peter Anagnostos said too many organizations only consider junking their electronics without regard to the precious information residing within. Some B2B “e-waste” outfits offer data erasure services, but often don’t provide clients with step-by-step details on specific disposition procedures, Anagnostos said.

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Illustration by Andre Ucini for Crain’s

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MIDDLE MARKET

Tri-C’s Corporate College on solid footing

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Success was slow going for Tri-C’s Corporate College, but the program seems to have found its place in recent years.

The professional education program got its start in 2003 but struggled to find its footing before the recession devastated the economy. It’s safe to say corporate training is less of a priority for companies during such economic turmoil.

“Quite frankly, when you look at the significance and the depth of the recession, it’s amazing that Corporate College survived,” said Corporate College president and CEO Robert J. Peterson.

Peterson joined Corporate College in 2012. He views working at Cuyahoga Community College almost as a way to give back to the community where he was born and raised. The college has a significant impact on so many different people, he said. Prior to joining Corporate College, Peterson had an accomplished career in the private sector, working in tax law at the firms now known as Squire Patton Boggs and Ernst & Young and in roles including vice president and general counsel at Cleveland-based Park Corp.

Corporate College East is in Warrensville Heights. (Contributed photo)

“I tell people that working for Tri-C is almost like working for a church because you’re saving souls. It’s so satisfying to work in an organization that does so much good and benefits the community so much,” Peterson said.

When Peterson arrived at Corporate College in 2012, the program was recovering but still essentially operating as a startup.

“With startups, you know, you oftentimes have losses until you can turn the corner,” Peterson said.

Profit has fluctuated in recent years, but has been in the black since

at least fiscal year 2012. The preliminary figures for fiscal year 2018, which ended June 30, show revenue of $5 million and profit of $509,000.

Those improvements show success, but Peterson said Corporate College’s goal isn’t to turn a profit.

“We’re here to serve the community,” he said. “We’re not here to make that extra dollar or get a bigger bonus or anything. We’re here really to move the needle, helping Northeast Ohio close the skills gap.”

There have been a variety of factors that have contributed to Corporate

College’s success.

Brand recognition has improved.

When Peterson started with Corporate College, people rarely knew what the program was, he said, or if they Peterson did, they didn’t know it was affiliated with Tri-C. Support from leaders like Alex Johnson — who joined Tri-C as its president in 2013 — has helped. As has continuity of leadership. Peterson was the seventh president in nine years, so his tenure has brought some stability to the program. And he has no immediate plans to leave.

But Peterson attributes much of the recent success to the team he brought to Tri-C, many of whom had industry experience. People from the private sector understand the challenges companies face, in terms of budgets and time, and they know how to meet those demands.

“And I think that’s made a big difference,” he said.

Corporate College offers open courses for individuals, as well as customized corporate training for companies and nonprofits. The largest employers often do internal training, and the smallest ones don’t al-

CLEAN

MCPc in October will open a facility that will boost its data sanitation efforts. (Contributed rendering)

To destroy or redeploy?

IT asset disposition (ITAD) best practices involve both “logical” and physical destruction of obsolete or unwanted gear, experts say. Before a device is physically obliterated, special software overwrites the hard drive, the preferable option to simply deleting files from a folder, which does not erase them from the system.

“Companies will just get rid of a bunch of files or folders, but the data is still there until it gets overwritten,” said John Nicholas, a professor of business and information technology at the University of Akron. “Plus there’s different levels of wiping, all the way up to the Department of Defense level that writes over the disk nine different times. It varies by company and depends on how savvy their IT people are about getting rid of data.”

UA plays defense first, encrypting

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Getting an education

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“There should be a chain of custody that will stand in a court of law, and an elaborate amount of logging so customers can see how the process was done,” he said.

As the STAD facility goes online, MCPc is currently wiping and remarketing client devices in an ad hoc fashion. Personal computers, laptops and tablets get the disposition treatment, as do data center mainstays like servers and network storage equipment. With the rapid adoption of the Internet of Things (IoT) enabling everyday objects to send and receive data through embedded electronics, even innocuous items like printers and copy machines are a hacking risk.

“There’s always been a fortress mentality of firewalls and intrusion software to keep people out, but every day there’s thousands of IoT devices touching data centers,” Taylor said. “That is MCPc’s focus now.”

ways have the training budget or the employees to spare, Peterson said.

The majority of Corporate College’s clients falls into the middle market.

The college has two campuses — one in Warrensville Heights and one in Westlake — and works with a variety of companies, locally and outside of Ohio, on a wide range of projects.

For example, plumbing products maker Oatey has been working with Corporate College to analyze two of its entry-level positions: a production operator position at its manufacturing site and a material handler position at its distribution center. The goal is “identify what are those knowledge, skills and abilities that are needed,” said Maureen Pansky, senior human resources manager for the manufacturing facility. That will help the company be more precise in hiring. The labor market is tight, and Oatey is expecting a lot of upcoming retirements, Pansky said. And jobs are always changing.

“So we want to make sure that we’re doing as good a job at selection, so we can select people that are going to do great and be in a position to be able to advance,” Pansky said.

“Because that’s what we want. We want people to have a career here.”

The college recently delivered a report to Oatey with its findings, and the company was still deciding how to best proceed, Pansky said.

MCPc’s technology logistics center in Cleveland is where immunized technology is sent out to the world — securely. (Contributed photo)

every active hard drive in case it’s lost or stolen. During end-of-service processes, the school uses Wipe Disk software to erase data, or, depending on the value of the asset, resets the

hard drive back to its factory format.

Dumping machines includes literally smashing them to pieces with a hammer, or driving nails through the hard drive disk (or “platter”) on which

magnetic info is stored.

“Hospitals have crucial HIPPA data to protect, but if you’re a small or mid-size company, destroying hard drives is going to be more cost-effective,” Nicholas said.

Device destruction is a last resort for MCPc’s new asset disposition center, officials said. Items carrying non-critical data will be cleaned, then recycled or resold back into the market. Only a client’s most valuable storage media devices are tabbed for physical shredding following a comprehensive logical data wipe, with MCPc closely vetting each step in the process. Another option is degaussing, where a powerful magnetic field erases a hard drive or tape. Degaussing won’t work on a solid state drive that uses integrated chips, meaning those chips should instead be pulverized into data-free silicon dust.

“If an executive has important IP, we’ll recommend they do all the steps,” said Taylor of MCPc. “There’s a potential for exposure in that drive getting out there. That’s the keys to the kingdom for a corporation.”

Thompson Hine has implemented a set of strategies for lost, stolen or out-of-date electronics, said Tom Zych, a Cleveland partner and chair of the law firm’s emerging technologies practice. Wayward mobile phones, which themselves are password-protected before a user can enter the system, are wiped remotely using third-party software.

Meanwhile, the firm puts old laptops, desktop PCs and other obsolete equipment into factory reset, or has them destroyed or disabled. Monitoring technology tracks gadgetry for anomalies, with Thompson Hine’s security team staying appraised of evolving threats.

“Our team monitors threat intelligence through peer organizations we belong to,” Zych said. “We have to be a moving target, because hackers are a moving target.”

Although the level of end-of-service data sanitization is industry dependent, the National Institute of Standards and Technology (NIST) offers basic guidelines on what organizations can do to protect themselves. ISO 27001 is an additional framework companies can study to glean intricacies of secure device disposal, Zych said.

“When people get rid of printers or copiers, they can easily forget those devices can have a wealth of information,” he said. “You have to be careful with that info when devices go out of service.”

Ultimately, businesses must educate themselves about eliminating digital data before it leaves their custody for good, said Taylor.

“Companies will put old units in a room, not realizing the exposure they’re creating if that equipment isn’t highly secured,” he said. “They could be exposing their IP, or someone’s health conditions. Or lose financial, legal or customer data. This is happening to companies.”

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MIDDLE MARKET

Adviser: Kate Hubben

Don’t surrender to health care inflation when solutions abound

High-performance networks Currently, only 15% of companies tap into high-performance networks that connect plan members with local, cost-efficient providers. According to the Willis Towers Watson Best Practices Survey, 51% of companies will use such networks within two years. If you don’t know about them, it may be a good time to see if it is an option for your company.

A high-performance network is similar to a narrow network that rewards members for using in-network providers, but also bases reimbursement on successful outcomes.

Most medical carriers have high-performance networks that offer limited provider choice and have reduced copays and out-of-pocket maximums.

Cost containment is an obvious plus, with a potential 35% less in claim costs than in traditional networks.

It might also help members build a closer relationship with a primary care physician, which has been shown to pay future dividends by avoiding large claim costs.

A downside of the high-performance network is lack of choice. Employees love choice — and if they don’t have it, they will let you know.

Companies don’t have to build consensus when offering employee benefits, but also don’t want unhappy employees.

Another disadvantage is targeted branding. Carriers change the brand/ name/flavor of their high-performance network every few years, and it can cloud the decision-making process for companies and plan sponsors. Good communication with your employee benefit advisor will allow you to compare networks and make sure that you are able to compare “apples to apples.”

Manage specialty pharmacy costs By 2020, it is estimated that seven of the top 10 most expensive drug claims for companies will be specialty drugs, and specialty prescription costs will double in three years. Employers are winning the “generic versus brand name” battle but losing the war to specialty pharmacy. Potential solutions to this dilemma include

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Improve Business Productivity Through Lean Six Sigma

Hubben is a client advocate at Willis Towers Watson in Cleveland.

Exceptional Results

hiring a consultant with a pharmacy practice to audit the claims, audit the contract, make sure you are getting your rebates and price a carve-out pharmacy benefit manager. Another outstanding idea is to ask your consultant to hold a vendor summit, which facilitates discussion about how all your vendors can work together better.

Direct contracting Some companies avoid insurance carriers and go directly to an accountable care organization (a network of health care providers) or a hospital, and negotiate a relationship directly. This option reduces cost by eliminating insurance carriers and their profit margins. The negative, however, is that it’s very complicated to accomplish administratively, and a company needs to have a few thousand employees to establish a relationship.

For smaller companies, reference-based pricing — a model of direct contracting — is a potential consideration as it offers a price advantage that reflects providers being paid based on a Medicare reimbursement plus standard deduction.

The major disadvantage is that employees can be “balanced billed” if the provider maintains there was insufficient payment for the visit or procedure. Unlike direct contract, reference-based pricing compels companies to hire a third-party administrator to adjudicate claims.

18-0719

Many employers would agree that if they raised their prices annually, clients and customers would push back. But that’s not true in the health care market where it has become accepted practice to expect increases every year. In light of this unrelenting pattern, it’s hard work to avoid the inertia common with annual health care renewals. Employers need to pause and be thoughtful about innovative solutions for cost containment, even if they mean more work for your consultant and your human resources team. There are viable ways, however, to manage claim costs.

Let’s look at some of your options available in the marketplace.

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A U G U S T 13 - 19 , 2 018 |

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Hudson-based JoAnn recently opened a new concept store in the Columbus area. (Contributed photos)

Shifts in consumer behavior prompt retailers to adapt

By DOUGLAS J. GUTH clbfreelancer@crain.com

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“Right product, right place, right time� is an enduring retail adage that could nevertheless use some updating considering disruption and transformation have become industry watchwords in an era of e-commerce, mobile consumerism and personalized shopping experiences.

John Nicolopoulos, a retail and restaurant sector leader with middle market consulting firm RSM, said retailers need a multi-channel strategy to engage customers, whether through digital means or experiential interactions in-store. “Now it’s about ‘the right message to the right person at the right moment,’� Nicolopoulos said. “It’s a hard model to manage, but understanding customers is the No. 1 priority — to interact with them and drive them to whatever channel they want to shop in.�

To address these trends, Cleveland area middle market retailers are harnessing technology and creating unique consumer experiences, with an overarching goal of reinvigorating their brands in a fast-moving marketplace.

For example, in the past few years, JoAnn Fabric and Craft Stores “went back to basics� in connecting with its buyer base, said Steve Miller, senior vice president of marketing and e-commerce for the Hudson-based crafting and fabric retail giant. By studying shopping trends both online and through various pilot programs, the company arrived at a new idea that serves as a technology-infused community hub, classroom and crafting studio.

JoAnn’s concept store, which opened in June on Polaris Parkway in Columbus, offers learning spaces and custom services. Crafting enthusiasts find inspiration and share their creativity during shopping trips, fostering a DIY mentality that’s become the new store’s foundation, Miller said. “We found sharing to be a common thread across customers,� he said. “It manifests itself in sharing a skill or crafting experience with a friend or on social media.�

The store also offers a custom sewing service, a personal shopper concierge and a service that facilitates bulk purchases.

A dedicated creator’s studio is the 40,000 square-foot location’s centerpiece, where live crafting streams from San Francisco-headquartered Creativebug — a company JoAnn acquired in April 2017 — play over high-definition video screens. Customers can also learn to make custom shirts using electric fabric cutting machines, and learn new craft ideas from touchscreen kiosks. Onsite concierge services provide sewing, tailoring and home dĂŠcor, while the company’s JoAnn+ program, a business-to-business bulk ordering service, also has a home at the concept space. “You won’t find another craft store anywhere — not just in Ohio — with this kind of attention to detail for sharing and education,â€? he said. “We didn’t want a store that was incrementally different, we wanted something that caused people to say, ‘I didn’t know shopping for crafts could be this fun.’â€?

Creating brand loyalty While mobile apps are crucial to the shopping process, most people still utilize brick-and-mortar to complete a purchase, said Nicolopoulos of RSM. However, physical stores must provide more than vast quantities of products, with the most innovative retailers offering helpful digital interactions and a complimentary

showroom experience.

Home Depot customers, for example, plug their shopping list into an interactive app, introducing a map that directs them aisle by aisle. At luxury apparel provider Rebecca Minkoff, patrons request clothing — or a glass of champagne — via fitting room touch screens. Nordstrom Local created experiential showrooms where consumers can sip a latte while contemplating clothing purchases with a personal stylist. “Target is bringing in college students with DJs and a party atmosphere,� Nicolopoulos said. “It’s a way to create brand loyalty.�

Northeast Ohio’s Geiger’s clothing and sporting goods hosts classes and other in-store events, promoting a family-owned brand in business for 86 years. During the summer, Geiger’s Lakewood location holds paddleboarding clinics, shifting to ski waxing classes when winter sports season rolls around.

Additionally, co-owners Chas and Gordon Geiger have partnered with Sibling Revelry Brewery for “pint night� events that include a stainless steel pint giveaway sponsored by footwear seller, Chaco. Ideally, Geiger’s multi-pronged marketing approach will connect to customers desiring not just a new coat, but a high level of brand expertise as well, said Gordon Geiger.

SEE RETAIL, PAGE 17

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Owners may face new sales tax burdens The U.S. Supreme Court recently unraveled a key concept underpinning where and how state sales tax can be imposed, leaving business owners all over the country potentially subject to new collection requirements.

In the landmark case of South Dakota vs. Wayfair, the Supreme Court decided states are allowed to collect sales tax from out-of-state merchants even when those merchants have no physical presence within state boundaries. That overturns a 1992 Supreme Court decision in Quill vs. North Dakota, which said states could only collect sales tax from businesses that operate in some capacity physically within the state.

In the era of the internet, businesses routinely sell their products into states where they physically do not have a presence. Internet sales represent an enormous and growing part of how Americans buy, both as individual consumers and in business-to-business transactions.

The historic limitations on state governments to tax activity only when sellers have a physical presence in the state has enabled internet commerce to flourish largely untouched by state sales tax. Sellers understand they must still collect and remit sales tax on transactions where they physically operate, but sales to remote locations are generally free of state sales tax.

In Ohio and in other states, there’s still a requirement for consumers, whether individuals or businesses, to keep track of their purchases and report use tax to state authorities where they did not pay sales tax. That’s an area of tax law that historically has been difficult to enforce, especially among individual consumers.

In the Wayfair case, the online retailer of furniture and home goods had no physical presence in South Dakota, so the company does not collect tax on sales to consumers in that state. The state of South Dakota told the courts that gives Wayfair an unfair advantage over retailers who are physically present in the state. Even further, the state said, South Dakota and its residents are punished by an unfair reduction in tax revenue.

The high court agreed with the state’s argument, saying the physical presence requirement established in early case law is “artificial.” The opin-

COLLEGE

CONTINUED FROM PAGE 12

The MetroHealth System recently worked with Corporate College to get about 50 employees Green Belt certified, said Stacy Johnson, director of learning and performance at MetroHealth. Green Belt certification is a Lean Six Sigma approach focused on process improvement.

Directors and other administrators from a variety of departments took part in the training. Each identified processes they wanted to improve within their own departments.

For example, Johnson said the health system’s food services department improved its process for the use of refrigerated products, reducing waste and saving the system money.

Johnson said the system has also worked with the college through its

P015_CL_20180813.indd 15

DeMarco is a senior tax adviser at the accounting and consulting firm of Meaden & Moore.

ion says Wayfair availed itself of the benefits of doing business in the state, so should bear equal responsibility for collecting and remitting sales tax. The decision notes the court should not maintain the physical presence rule in the modern e-commerce environment when it “ignores substantial virtual connections” to South Dakota.

While the decision overturns the earlier precedent associated with physical presence, it applies specifically to the statute in South Dakota that sought to impose sales tax on remote sellers if they did at least $100,000 in business or performed a minimum of 200 transactions in the state. It’s not clear exactly how that decision might apply to statutes in other states.

Some states already have statutes with various similarities to the law upheld in South Dakota, but it’s not clear how they might hold up to the same type of challenge brought by Wayfair.

Other states would have to enact new legislation imposing sales tax on virtual transactions, and observers are predicting those law are likely to develop.

Companies that do business in states where they do not currently collect sales tax should get familiar with the laws in those states and tune in to how authorities in those states are responding to the Wayfair decision.

Business owners could find themselves facing audits or examinations in those states with an eye toward sales tax collection. They may need to develop the systems and processes necessary to begin collecting and remitting more sales tax.

While business owners may incur some expense or some burden as a result, the consequences of not being proactive could be significant. Sales tax is ultimately paid by customers when a company complies, but the company will bear the burden if an audit years later determines taxes due were never even collected. coaching and feedback programs and it’s been pleased with the college’s “comprehensive programming.”

“I think they offer a wealth of knowledge with the people they have working for them, and we’ve always been happy with the services that they’ve provided for us,” Johnson said.

But Corporate College is far from complacent when it comes to its course offerings. Peterson said the college is always watching trends and exploring partnerships that help it develop programs to meet the needs of the business community it serves.

Currently, it’s in the midst of an intentional outreach campaign to learn more about the challenges Northeast Ohio companies are facing and to ensure that Tri-C’s programming meets those needs. Peterson framed it as a “listening tour.” He said it’s been going on for about a year, but that it’s ramping up now.

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By JEREMY NOBILE jnobile@crain.com @JeremyNobile

VOL. 39, NO. 21

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The largest money manager in NortheastFINANCE Ohio, which has been quietly amassing Byrather JEREMY NOBILE size for well over a century, has achieved explosive growth sincejnobile@crain.com a management-led and private equity supported separation from Key@JeremyNobile Corp a few years ago.

Now, following a recent IPO, Brooklyn, Ohiobased Victory CapitalThe Management’s parent largest money manager in Northeast company, Victory Capital Holdings, is setting Ohio, which has been rather quietly amassing NOBILE the stage for its next size era of driven by itsBy JEREMY forgrowth well over a century, has achieved exmulti-boutique model and agrowth consistent acquiplosive since a management-led jnobile@crain.com and sitions strategy. private equity supported separation from Key@JeremyNobile CEO David Brown: “We eventually evolved to the point where it just didn’t make sense for Key “We saw an opportunity the market Corp a in few years ago.to do to be the owners of Victory Capital.” (Ken Blaze for Crain’s) something different than what was happening, following a recent IPO, Brooklyn, OhioNow, which was our integrated, multi-boutique no animosity there.

The relationThat was nearly five years ago. And while The There largestwas money manager in Northeast based Victory Capital Management’s parent model that we havecompany, today,” said Victory CEOOhio, ship between Keyrather and Victory is still strong, in Crestview is still a majority owner of the busiwhich hassetting been quietly amassing Victory Capital Holdings, is David Brown, who joined the firm in next 2004 era while — the headquarters off exTiedeman ness — of which employees own a 35% stake fact for well overlatter’s century, has achieved the stage for its ofsize growth driven bya its plosive growth since a complex management-led and staff it — it’s given Brown and Victory’s board freeit was still a part of Key. Road sits within for KeyCorp multi-boutique model and a consistent acquiequity supported separationThe from Key- simply dom to operate how it likes.

That model, whichsitions truly started to develop atprivate subleases from the company. timing strategy. a few years ago.said, CEO separate from Key,where Victory on an Victory following a management-led buyoutCorp Brown for Victory step out oneventually its Once David to Brown: “We evolved to the point it set justout didn’t make sense for Key “We saw an opportunity in felt theright, market to do following a recent Brooklyn, OhioNow, to be the owners of Victory (Kenstreak Blaze for acquisition toCrain’s) give it more scale. It’s from Key in 2013, is largely what Brown feels po-what own continue theIPO, work it had been doing for Capital.” something different than wasand happening, based long Victory Capital Management’s parent sitions the firm to flourish as its industry bought companies as Key refocused on other which was our evolves. integrated,somulti-boutique There wasstrategies. no animosity there.

The three relationThatsince was then: nearlyMunder five years ago. And while company, Victory Capital Holdings, is setting management business Key’s investmentmodel 2014); Efficient Model Port- owner of the busi“We eventually evolvedbetween to the point it Capital that we have today, ” said CEO Keyitswhere and Victory is still (in strong, inCompass Crestview is still a majority the stageVictory for its next era ofship growth driven by that eventually became Victory was more thanthe firm folios (in 2015), which became known as CEMP; just didn’t for—Key be the owners thetolatter’s David Brown, who joined in 2004make whilesense multi-boutique model andfact a consistent acqui- headquarters off Tiedeman ness — of which employees own a 35% stake a century old as theitcompany to shedsitions RS Investments 2016).

It also took and a mi-Victory’s board freeof Victory Capital,” Brown said.

Road sits within a complex forand KeyCorp staff it (in — it’s given Brown was still alooked part of Key. strategy. the division several years ago.

CEO David eventually to the point where it just didn’t make sense for Key fromtothe TheBrown: timing“We simply domevolved to operate how it likes.

That model, which truly started to develop at subleases “We saw an opportunity in the market docompany. to be the owners of Victory Capital.” (Ken Blaze for Crain’s) Many banking conglomerates were making felt right, Brown for Victory to step out on its Once separate from Key, Victory set out on an Victory following a management-led buyout something different than what was happening, Victory Capital at a said, glance similar moves around thatKey time, shedding theirwhich There wasbeen no animosity The relationwas our multi-boutique years acquisition streak toThat givewasit nearly more five scale.

It’sago. And while continue the work it had doing for there. from in 2013, is largely what Brown feels integrated, po- own and  Victory Capital spun out KeyCorp a management-led, private equity-supportmoney managers to cut costs focus on coreas ship Key and Victory bought is still strong, incompanies model that weevolves. have today, ” long said Victory CEO following Crestview is stillthen: a majority owner of the busisitions theand firm to flourish its industry three since Munder so asof Key refocused onbetween other strategies. ed buyout at firm $246 million in 2013. the point latter’swhere headquarters off Tiedeman ness — of which employees fact — David Brown, who valued joined the 2004 while banking services in those following management the investment business Key’syears (in 2014); Compass Efficient Model Port-own a 35% stake “We in eventually evolved to the it Capital  Since Road sits within a complex forfolios KeyCorp staff — it’s given known Brown as and Victory’s board freeit was still amore part that ofthan Key. deal,just thedidn’t firm has gone from $18 billion assets to $60.9 billion, 148it which last recession. Key eventually sold the business that eventually became Victory was (in 2015), became CEMP; make sense for Key to bein the owners employees totruly 300,started 18 investment to 72 andthe five franchises to nine, plus a dom to operate how it likes. from company.

The timing simply model, which to developstrategies at subleases to Victory employeesa—century there were at Thatlooked old about as the148 company to shed of Victory Capital,” Brown said. and RS Investments (in 2016). It also took a misolutions VictoryShares.

Once separate from Key, Victory set out on an followingplatform, a management-led buyout felt right, Brown said, for Victory to step out on its the time — and New York private equity firmVictory the division several years ago. acquisition streak to give it more scale. It’s and continue the work it hadThat beencapital doing for from Key 2013, is raised largely what Brown po- in aown  in The firm about $140feels million recent IPO (NASDAQ: VCTR). will help Crestview Partners for Many $246 million. bankingProceeds conglomerates were making Capital glance sitions the firm toits flourish as itsVictory industry evolves. bought three companies since then: Munder so long asat Keyarefocused on other support eventual separation from Crestview Partners, the New Yorkstrategies. private equity firm of Key’s sale were used to buy back stock, benesimilar moves around that time, shedding their investment business Key’sthat “We eventually evolved to the point where it Capital (in 2014); Compass Efficient Model Portstill holdsmanagement a majority stake in the business. fiting shareholders. money managers to cut costs and focus on core  Victory Capital spun out of KeyCorp following a management-led, private equity-support-

SUCCESS IS IN VICTORY’S SIGHT

that eventually became Victory was more than

just didn’t make sense for Key to be the owners

folios (in 2015), which became known as CEMP;

ed buyout valued at $246 million in 2013. banking services in thosea years following the century old as the company looked to shed of Victory Capital,” Brown said. and RS Investments (in 2016). It also took a milast recession. Key eventually sold theseveral business the division years ago. Since that deal, the firm has gone from $18 billion in assets to $60.9 billion, 148 employees to 300, 18 investment strategies to 72 and five franchises to nine, plus a to Victory employees — thereMany werebanking about 148 at conglomerates were making Victory Capital at a glance solutions platform, moves around shedding their VictoryShares. the time — and New Yorksimilar private equity firmthat time,  Victory Capitalinspun out ofIPO KeyCorp following a management-led, money managers to cut costs  and focus onraised core about The firm $140 million a recent (NASDAQ: VCTR).

That capital willprivate help equity-supportCrestview Partners for $246 million.

Proceeds ed buyout valued at $246 million in 2013. support its eventual separation from Crestview Partners, the New York private equity firm banking in those years following the of Key’s sale were used to buy backservices stock, beneholds a majority stake in the  Since that deal,business. the firm has gone from $18 billion in assets to $60.9 billion, 148 last recession. Key eventuallythat sold still the business fiting shareholders.

to Victory employees — there were about 148 at the time — and New York private equity firm Crestview Partners for $246 million. Proceeds of Key’s sale were used to buy back stock, benefiting shareholders.

employees to 300, 18 investment strategies to 72 and five franchises to nine, plus a solutions platform, VictoryShares.

The firm raised about $140 million in a recent IPO (NASDAQ: VCTR). That capital will help support its eventual separation from Crestview Partners, the New York private equity firm that still holds a majority stake in the business.

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CRAIN’S CLEVELAND BUSINESS

MIDDLE MARKET

Post Up Stand helps clients make a splash

By RACHEL ABBEY McCAFFERTY

This display includes LED lights to illuminate graphics on the banner.

rmccafferty@crain.com @ramccafferty

Post Up Stand makes products that help its customers stand out.

The printing and display company’s new tagline — your message is our mission — drives that home.

The company, which was founded in 2004, makes trade show and marketing display products in materials ranging from vinyl to fabric to metal.

President Kevin Moak said there’s been a shift from static products, like a traditional retractable banner stand, to those that are more engaging. While Post Up Stand believes there’s still a place for traditional print products, it’s also working to expand into the more dynamic market by offering new products like lighting that helps highlight banners, displays and podiums.

“We’re in a really strong push to introduce new products and new categories, attract new customers,” Moak said.

Marketing director Dennis Lieberman said the company previously focused on trade shows. While that’s still a market for Post Up Stand, the company is branching out into markets like retail and higher education.

The American subsidiary of the German TAKKT group acquired Post Up Stand in 2015. At the time, TAKKT planned to pay $15 million when the transaction closed, which was expected to take place that April, and another $1.5 million in 2018. An additional payment of up to $13.5 million was also possible in 2018. In an email, Moak said the final terms of that agreement were not being disclosed.

The acquisition has helped to put a

Right: This banner stand comes with magnetic endcaps.

(Contributed photos)

“corporate structure in place,” Moak said, though the parent company has tried to maintain Post Up Stand’s entrepreneurial nature. That has meant adding some new functions, like professional purchasing and merchandising.

“So we’re filling those gaps in the business where it didn’t exist before,” Moak said.

Post Up Stand added about a half dozen new positions in just the past year, including in operations, merchandising, e-commerce, purchasing and IT, Moak said. Moak is also new to Post Up Stand, having joined in June of 2017.

Post Up Stand now has 72 employees, Moak said, having added a net of about 15 jobs since the acquisition.

The company leases four buildings in Maple Heights, with its main production site on Dunham Road. The long-term plan is to consolidate those buildings and bring everyone under one roof. Moak said the com-

Left: Post Up Stand’s retractable banner stand comes in a variety of sizes and banner material options.

(Contributed photo)

pany would need to find a larger building than any it’s currently using.

“So as we grow, that’s going to become even more important,” Moak said. “It’s manageable right now, but as we get bigger, we’re going to need everybody in one place.”

Right now, Post Up Stand has two

production facilities, a warehouse and an office with a showroom, said director of operations Tina Schulte.

Schulte was in customer service management for about seven years before taking on the new director of operations role in February.

Post Up Stand’s buildings are

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CRAIN’S CLEVELAND BUSINESS

MIDDLE MARKET

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LAND FOR DEVELOPMENT Beacon West Park in Westlake Smaller sites approved for professional users.

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Customers can choose between three and four PVC panels.

(Contributed photo)

ouse said ulte. vice ears or of are

home to cutting, printing and sewing operations. While some of the cutting is still done by hand, Schulte said the company recently invested in a digital cutter that will help it work more efficiently and more easily create non-square products.

The company has customers

across the United States and Canada, and Schulte said it can ship to other countries, as well. It does not share annual revenue.

One of the ways Post Up Stand tries to differentiate itself is by offering a quick production turnaround time of 48 hours — or less. “Our motto is to never say no,�

Schulte said.

Marketing moves fast today and working with companies like Post Up Stand help Kaulig Media meet its needs, said Michael Howenstine, president of the Hudson-based company. Kaulig Media was created in the last year as the marketing arm for a group of companies including Kaulig Capital and Kaulig Racing.

Kaulig Media does a lot of event marketing at trade shows, auto shows

and festivals, Howenstine said. He said he likes working with Post Up Stand because they’re local, which means he can see the products up close if need be, and they have a quick turnaround time. Post Up Stand has also worked with them to customize items, cutting them down to a specific size, which Howenstine said he appreciated. “And the customer service, which is more important than anything to me today because they’re an extension of my company, (has) been awesome,� Howenstine said.

Moak said, longterm, he hopes customers turn to Post Up Stand for help finding solutions to problems, viewing them as a partner, rather than just ordering products from them. That’s key for any company, he said.

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RETAIL

CONTINUED FROM PAGE 14

“We’re trying to grow engagement with our community, and not just online,� he said. “We’ve got to reach out and create a conversation as best we can.�

Knowing how and where to connect with consumers is a challenge for any midsize retailer bereft of a multimillion-dollar marketing team, so Geiger’s takes what its owner metaphorically calls a “shotgun approach.� “Defining your customer means you have to be in many different places on a regular basis,� Geiger said. “We see the value of supporting your local brick-and-mortar retailers, and communicate that message in everything we do.�

Express yourself Westlake-based American Greetings Corp. is perhaps one of the more iconic local brands working in the retail realm — and it too has been working feverishly over the last several years to reinvent itself in the digital age. The company, for one, sold its U.S. and Canada retail stores to Schurman Fine Papers in 2009, focusing instead on direct-to-consumer digital sales and offering products through Amazon and other third-party retailers. American Greetings — a 60% stake of which was sold to private equity firm Clayton, Dubilier & Rice of New York in April — says today it provides greeting cards to more than 60,000 retail stores.

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The greeting card manufacturer sold e-cards during the internet’s early-90s consummation, and now guides customers along the entirety of their online purchasing journey.

Let’s say little Joey wants a Marvel-themed birthday get-together.

Searching the recently relaunched American Greetings website produces a selection of licensed Marvel products and party decoration ideas, along with a printable Avengers e-card.

Although print-on-demand cards are prepared professionally upon request, the site has tips on what to write for most any occasion, said

chief marketing officer Alex Ho. “Marketing and buying is not a single event, or someone just clicking on a buy button or walking into a store,� Ho said. “People are looking for a meaningful way to express themselves, and we’re responding to that demand.�

Digital may be a game-changer in nurturing a client base, but there are numerous channels for local retailers to switch to when directing customers to purchase products, said Nicolopoulos. “The best retailers address customers across every channel seamlessly,� he said. “That’s where you want to get to.�

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8/9/18 3:50 PM

PA G E 18

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A U G U S T 13 - 19 , 2 018 |

CRAIN’S CLEVELAND BUSINESS

NEGLECT

cal governments to face given their limited budgets, it’s critical that we tackle this head-on.

and that’s an expensive price tag.

In past decades, the federal government was a strong partner to local and state governments in funding infrastructure projects. However, that funding source has decreased significantly.

As a percent of GDP, the federal government now spends roughly half of what it did 35 years ago on infrastructure.

In addition, as communities neglect their infrastructure repairs, they may see home values decrease or businesses relocate, pushing down property values and leaving a smaller tax base. For instance, property values may fall on a street filled with potholes or with a history of basement flooding, as there will be fewer buyers for those homes.

While funding infrastructure fixes is a tough reality for our state and lo-

What can be done?

CONTINUED FROM PAGE 9

It is not an easy undertaking, but Northeast Ohio communities are not powerless to improve the scenario just outlined. First, it will take a coordinated and concerted effort around educating decision makers and citizens about the importance of fixing aging infrastructure, how to make it a priority and the options around funding. Failure to invest in infrastructure — the foundation of strong, healthy communities — means failure to sustain and develop our communities toward future success. We all have a stake in it.

Second, local municipalities and citizens need to persuade our state representatives to restore the level of funding that the state provides to local governments. In the last decade, these

CRAIN’S

GIVING GUIDE

funds have decreased by 50%, yet these dollars are critical in allowing local governments to move forward with needed infrastructure fixes.

Third, communities and our citizens need to have difficult conversations around paying for these fixes, which may involve raising user fees or taxes or choosing to shift money away from other initiatives. Unfortunately, many politicians are often attacked for even proposing rate or tax increases, even though the projects being discussed are vitally important to the well-being of citizens. But just as we’re open to rate or tax increases to fund our schools, libraries and police, fire and EMT response, we all must realize that sound, safe infrastructure is just as critical for our communities.

David Krock is the director of the Northeast Ohio office of OHM Advisors, an architecture, engineering and planning firm.

TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. Liens reported here are $10,000 and higher.

 Cirque Du Kids LLC 8706 Garfield Blvd., Garfield Heights Date filed: May 15, 2018 Type: Annual tax return Amount: $95,549.20

LIENS FILED

 Advanced Homecare Professionals Inc. 14077 Cedar Road, Suite 200, Cleveland Date filed: May 8, 2018 Type: Employer’s withholding Amount: $65,228.16

 T & B Foundry Company 2469 E. 71st St., Cleveland Date filed: May 3, 2018 Type: Corporate income, unemployment Amount: $497,144.26  Cleveland Urology Associates

Inc. 10500 Antenucci Blvd., Suite 101, Garfield Heights Date filed: May 24, 2018 Type: Nonpayroll withholding Amount: $96,136.89

T

his special supplement is used as a tool for readers to become more actively involved within our region’s nonprofit community.

Use this advertising opportunity to showcase your organization along with your commitment to Northeast Ohio.

 Kamalt Corp.

5000 Rockside Road, Suite 130, Independence Date released: May 15, 2018 Type: Corporate income Amount: $49,968.06  Avon Drive In Laundry & Dry Cleaning Company 1830 Superior Ave. E., Cleveland Date filed: May 15, 2018 Type: Employer’s withholding, unemployment Amount: $41,738.49  Si Senors Partners of Westlake 16800 Lorain Ave., Cleveland Date released: April 27, 2018 Type: Employer’s withholding, corporate income Amount: $26,368.57  Sunshine Flowers Inc. 6230 Stumph Road, Parma Heights Date filed: April 27, 2018 Type: Employer’s withholding, corporate income, unemployment Amount: $20,917.68  Chagrin Valley Dental Studio -- Douglas Kenny Inc. 17747 Chillicothe Road, Suite 206, Chagrin Falls Date filed: May 3, 2018 Type: Employer’s withholding Amount: $17,184.66  Horizon Electric Company Inc. 15100 Arden Ave., Lakewood Date filed: May 3, 2018 Type: Employer’s withholding Amount: $16,331.24  Wireless Evolution Inc. 10139 Royalton Road, Suite A, North Royalton Date filed: May 24, 2018 Type: Unemployment, employer’s withholding Amount: $11,923.26  Fulton on the Go Inc. 3742 Fulton Road, Cleveland Date filed: April 26, 2018 Type: Annual tax return, unemployment Amount: $11,129.50  Royce Security LLC 3740 Euclid Ave., Cleveland Date filed: May 3, 2018 Type: Employer’s withholding Amount: $10,160.30

LIENS RELEASED

POWERED BY:

BOOK YOUR AD TODAY! CONTACT: Lisa Rudy • lrudy@crain.com

PRESENTED BY:

ISSUE DATE: Oct. 29 | AD CLOSE: Aug. 31 To view the 2017 Giving Guide, visit CrainsCleveland.com/GivingGuide

P018_CL_20180813.indd 18

 James Breen Real Estate LLC 1360 E. 9th St., Cleveland Date filed: Sept. 28, 2017 Date released: May 3, 2018 Type: Employer’s withholding, corporate income, unemployment Amount: $120,278.67  Johnny’s Tavern & Restaurant 3164 Fulton Road, Cleveland Date filed: Dec. 12, 2017 Date released: May 3, 2018 Type: Corporate income, employer’s withholding Amount: $93,034.26  Doll Transportation P.O. Box 22493, Beachwood Date filed: Aug. 14, 2008 Date released: May 17, 2018 Type: Employer’s withholding, unemployment Amount: $73,292.70

8/9/18 4:00 PM

SPONSORED CONTENT

August 13, 2018

ASK THE PROFESSIONAL

Energy Efficiency Financing for Commercial Property Owners

M

Insight from Ohio’s largest energy aggregator

aking energy efficient upgrades to a building (think new windows, solar panels or solar-thermal water heating) can save money on energy bills, increase a property’s value and enhance its appeal to tenants. Norma Fox Horwitz helps property owners realize the completion of these projects.

As special projects manager with NOPEC (Northeast Ohio Public Energy Council), Horwitz manages the organization’s two energy-improvement loan offerings — Savings Through Efficiency Program (STEP) and Property Assessed Clean Energy (PACE) — both of which can help commercial property owners finance energy savings and renewable energy projects up to $500,000. NOPEC is a nonprofit council of governments and lobbies for lower energy costs for residential and small business customers.

“We work with a team of professionals to process applications, from approval through closing, to help commercial property owners bring energy efficiency and lower energy bills to their facilities,” Horwitz says.

Crain Content Studio-Cleveland asked Horwitz to elaborate on how the cooperative’s STEP and PACE programs help facilitate those projects.

What types of projects are eligible for PACE and STEP loans?

Both programs are similar in several respects. Property eligibility is based on its classification. Commercial properties are eligible, which include both public sector and private sector, for-profit and nonprofit, as well as multi-family with five or more units.

Both energy efficiency and renewable energy improvements can be financed.

Typical improvements include interior and exterior lighting (including signage), HVAC, windows and doors, window film, roofing and insulation. Renewable energy projects like geothermal and solar energy qualify. These programs are not limited solely to existing buildings. New construction can also qualify. If a new building will have a white roof and/or solar panels, that cost would be eligible.

Other examples are occupancy sensors, window film and additional insulation.

The interest rate is fixed in both programs. STEP loans offer a 3% rate, and PACE financing offers rates from 2.5% to 4%. To qualify for either of these NOPEC programs, the property needs to be located in a NOPEC-member community.

What are the benefits of these programs?

Reducing energy costs helps improve the bottom line. PACE and STEP offer property owners long-term, fixed-rate financing options for projects that often pay for themselves within the financing term. The ongoing savings frees up cash that can be redirected into other areas or to improve net income.

Both owner-occupied and rental properties have greater long-term property value, increasing that asset’s worth. Im-

proved rental properties can provide a competitive edge to both property owners and to the tenants in those facilities.

Additional benefits specific to the PACE program include the ability to finance up to 100% of the improvement costs and preserve borrowing capacity through off-balance-sheet financing.

These programs give property owners access to capital for energy-related improvements that may not be readily available elsewhere. And it makes it more feasible for projects in smaller facilities by providing loans starting at $5,000.

There are no job-creation requirements (although adding new jobs would be welcomed) and borrowers can use qualified, licensed contractors of their choice.

What does the process involve, and typically how long does it take to secure financing?

The first step is completing the application. There’s no cost to apply for either program. The applicant completes the form and submits it with the supplemental information listed on the form. NOPEC verifies the project site is located in a NOPEC-member community, completes the credit analysis and reviews the energy audit report. Both programs require an energy audit to qualify for financing.

Eligible, qualified projects financed through the STEP program are issued a Contingent Loan Commitment Letter.

Closing takes 30 to 60 days from completed application. Eligible, qualified projects financed through the PACE program are issued a term sheet, and closing takes 60 to 90 days from application.

PACE is a unique financing mechanism, with the owner voluntarily placing an assessment on the property

to repay the upfront capital provided

by NOPEC. Since this process involves placing an assessment on the property — even at the owner’s request— by law the local community has to approve it.

Funds are available upon closing for both programs. STEP loans are repaid with monthly payments, and PACE through property assessment payments twice a year.

Who determines the loan terms?

NOPEC determines the loan terms based on several factors. Projects financed through STEP have a maximum 10-year term. PACE project terms are established based on the amount financed, the projected annual savings and the average useful life of the assets.

The goal is to have the annual savings cover the annual cost of assessments, or as close as possible, while taking into consideration the life of the assets.

Describe an example of a project that would receive financing through PACE and through STEP.

Smaller projects — those that need $5,000 to $100,000 — fit within the STEP program. Borrowers can finance 75% of eligible project costs, up to $100,000. The term is 10 years with a 3% fixed-interest rate. Eligible costs include both hard and soft costs. This means costs for engineering, audits and permits are all eligible.

PACE is available for projects that need $100,000 to $500,000. The term can be from 5 years to 20 years. Fixedinterest rates start at 2.5% for a 5-year term and increase by one-half percent for each additional five years added to

the term, maxing out at 4% for a 20year term. Both hard and soft costs are eligible in PACE as well.

Who is qualified to perform the energy assessment audit?

There are several options to choose from, including two that are energy-

specific professional certifications.

These include individuals with an American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) certification or Certified Energy Manager (CEM) certification.

STEP and PACE both require an audit as a qualification for project financing. Audits include a review and analysis of energy use over the past 12 to 24 months and a site visit. The project scope and borrower’s needs will help determine what’s needed. Some project improvements may be eligible for rebates.

NOPEC can help the borrower and their professional determine the appropriate audit for the project to meet the financing requirements and to take advantage of additional savings.

For more information, visit www.nopec. org or contact Norma Fox Horwitz at nfhorwitz@nopec.org or 440-249-7829.

Time for property improvements?

Get it done with competitive Fixed-Rate Financing

Rates as low as 2.5% for projects from $5,000 – $500,000.

• HVAC • Insulation • Lighting • Roof • Windows • and More & Doors

Learn how you can pay for property improvements with the energy savings generated from these upgrades.

Go to nopec.org/financing for more information or contact Norma Fox Horwitz at 844-209-3862 nfhorwitz@nopec.org This institution is an equal opportunity provider and employer.

18NOP35 PACEad_4x6.indd 1

SM

SM

7/19/18 12:13 PM

This advertising-supported section 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-Cleveland content.

P019_CL_20180813.indd 19

8/9/18 2:50 PM

PA G E 2 0

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A U G U S T 13 - 19 , 2 018 |

CRAIN’S CLEVELAND BUSINESS

THE LIST

100 Largest Northeast Ohio Employers Ranked by full-time equivalent local employees

FULL-TIME EQUIVALENT LOCAL EMPLOYEES THIS YEAR

ORGANIZATION

6/30/2018

STAFF IN 6/30/2017 % CHANGE OHIO TYPE OF BUSINESS

TOP LOCAL EXECUTIVE

1

Cleveland Clinic, Cleveland (216) 444-2200/www.clevelandclinic.org

44,843

41,622

7.7%

44,940

Health care provider

Tomislav "Tom" Mihaljevic, president, CEO

2

University Hospitals, Cleveland (216) 844-1000/www.uhhospitals.org

21,714

21,751

(0.2%)

NA

Health care provider

Thomas F. Zenty III, CEO

3

Group Management Services Inc., Richfield (330) 659-0100/www.groupmgmt.com

15,942 (1)

11,341 (1)

40.6%

22,136

Staffing and employment services firm

Michael Kahoe, president

4

U.S. Office of Personnel Management, Washington, D.C. (202) 606-1800/www.opm.gov

14,957

14,894

0.4%

51,130

Federal government

Jeff Pon, director

5

Progressive Corp., Mayfield Village (440) 461-5000/www.progressive.com

10,370

10,045

3.2%

NA

Insurance company

S. Tricia Griffith, president, CEO

6

Giant Eagle Inc., Bedford Heights 412-967-4551/www.gianteagle.com

8,300

8,641

(3.9%)

10,736

Multi-format food, fuel and pharmacy retailer

Bill Artman, senior vice president, retail operations

7

State of Ohio, Columbus (614) 466-2000/www.ohio.gov

8,096

8,159

(0.8%)

47,035

State government

John R. Kasich, governor

8

Cuyahoga County, Cleveland (216) 443-7220/www.cuyahogacounty.us

7,414

7,397

0.2%

7,414

County government

Armond Budish, county executive

9

City of Cleveland, Cleveland (216) 664-2406/www.city.cleveland.oh.us

6,828

6,561

4.1%

NA

Municipal government

Frank G. Jackson, mayor

10

The MetroHealth System, Cleveland (216) 778-7800/www.metrohealth.org

6,547

6,469

1.2%

6,547

Health care provider

Akram Boutros, president, CEO

11

Cleveland Metropolitan School District, Cleveland (216) 838-0000/clevelandmetroschools.org

6,517

6,392

2.0%

6,517

Public school district

Eric S. Gordon, CEO

12

Summa Health, Akron (330) 375-3000/www.summahealth.org

5,788

6,058

(4.5%)

5,788

Health care provider

Cliff Deveny, interim president and CEO

13

KeyCorp, Cleveland (216) 689-6300/www.key.com

5,498

5,369

2.4%

6,419

Banking and financial services company

Beth E. Mooney, chairman, CEO

14

FirstEnergy Corp., Akron (800) 736-3402/www.firstenergycorp.com

5,066

5,073

(0.1%)

7,022

Electric utility holding company

Charles E. Jones Jr., president, CEO

15

Kent State University, Kent (330) 672-3000/www.kent.edu

4,956

5,012

(1.1%)

5,270

Public university

Beverly J. Warren, president

16

Sherwin-Williams Co., Cleveland (216) 566-2000/www.sherwin.com

4,940

4,325

14.2%

6,081

Manufacturer of paint, coatings and related products

John G. Morikis, president, CEO, chairman

17

Akron Children's Hospital, Akron (330) 543-1000/www.akronchildrens.org

4,880

4,876

0.1%

4,965

Pediatric health care provider

William H. Considine, CEO

18

Swagelok Co., Solon (440) 248-4600/www.swagelok.com

4,671

4,140

12.8%

4,692

Manufacturer of industrial fluid system components

Arthur F. Anton, chairman, CEO

19

Case Western Reserve University, Cleveland (216) 368-2000/www.case.edu

4,534

4,501

0.7%

4,534

Private university

Barbara R. Snyder, president

20

Aultman Health Foundation, Canton (330) 452-9911/www.aultman.org

4,134

4,366

(5.3%)

4,133

Health care provider

Edward J. Roth III, president, CEO

21

Akron Public Schools, Akron (330) 761-1661/www.akronschools.com

3,576

3,602

(0.7%)

3,576

Public school district

David W. James, superintendent

22

Huntington National Bank, Cleveland (800) 480-2265/www.huntington.com

3,481

3,288

5.9%

10,613

Banking and financial services company

Sean P. Richardson, regional president - Cleveland

23

Ford Motor Co., Dearborn (800) 392-3673/www.ford.com

3,377

3,381

(0.1%)

NA

Automobile manufacturer

Kevin Heck, plant manager, Cleveland Engine Plant Jason Moore, plant manager, Ohio Assembly Plant

24

General Motors Co., Detroit (313) 556-5000/www.gm.com

3,000 (2)

4,500

(33.3%) (2)

3,000

Automobile manufacturer

Rick Demuynck, plant manager, Lordstown Complex Lamar Rucker, plant manager, Parma Metal Center

24

Goodyear Tire & Rubber Co., Akron (330) 796-2121/www.goodyear.com

3,000

3,000

0.0%

NA

Tire manufacturer

Richard J. Kramer, chairman, CEO, president

26

Lincoln Electric, Euclid (216) 481-8100/www.lincolnelectric.com

2,975

2,680

11.0%

3,015

Designer, developer and manufacturer of arc welding products

Christopher L. Mapes, chairman, president, CEO

27

Summit County, Akron (330) 643-2893/www.co.summit.oh.us

2,816

2,848

(1.1%)

2,816

County government

Ilene Shapiro, county executive

28

TimkenSteel Corp., Canton (330) 471-7000/http://timkensteel.com

2,648

2,503

5.8%

2,754

Customized alloy steel products and services provider

Ward J. "Tim" Timken Jr., chairman, CEO, president

29

Howard Hanna Real Estate Services, Mayfield Heights (216) 447-4477/www.howardhanna.com

2,602

2,692

(3.3%)

2,544

Residential and commercial real estate company

Howard W. "Hoby" Hanna IV, president

30

Nestle, Solon (440) 349-5757/www.nestleusa.com

2,510

2,438

3.0%

3,600

Food and beverage company

Steve Presley, market head and CEO of Nestle USA

31

Signet Jewelers, Akron (330) 668-5000/www.signetjewelers.com

2,501 (3)

3,239

(22.8%) (3)

3,091

Jewelry retailer

Virginia C. Drosos, CEO

32

Discount Drug Mart Inc., Medina (330) 725-2340/www.discount-drugmart.com

2,369

2,242

5.7%

3,023

Regional drug store chain

Don Boodjeh, CEO

33

The Lubrizol Corp., Wickliffe (440) 943-4200/www.lubrizol.com

2,330

2,309

0.9%

2,330

Specialty chemical company

Eric R. Schnur, chairman, president, CEO

34

ArcelorMittal, Cleveland (216) 429-6000/www.usa.arcelormittal.com

2,121

2,165

(2.0%)

3,114

Steel manufacturer

Mike Madar, vice president, general manager

35

Lake Health, Concord Township (440) 375-8100/www.lakehealth.org

2,111

2,150

(1.8%)

2,111

Health care provider

Cynthia Moore-Hardy, president, CEO

36

Mercy Medical Center, Canton (330) 489-1000/www.cantonmercy.org

2,086

2,057

1.4%

2,086

Health care provider

Paul C. Hiltz, interim CEO

37

Medical Mutual of Ohio, Cleveland (216) 687-7000/www.medmutual.com

2,019

1,908

5.8%

2,430

Health insurance company

Rick A. Chiricosta, chairman, president, CEO

P020_CL_20180813.indd 20

8/9/18 4:06 PM

THE LIST

100 Largest Northeast Ohio Employers

CRAIN’S CLEVELAND BUSINESS

Ranked by full-time equivalent local employees

|

A U G U S T 13 - 19 , 2 018

|

PA G E 21

FULL-TIME EQUIVALENT LOCAL EMPLOYEES THIS YEAR

ORGANIZATION

6/30/2018

STAFF IN 6/30/2017 % CHANGE OHIO TYPE OF BUSINESS

38

Greater Cleveland Regional Transit Authority, Cleveland (216) 621-9500/www.riderta.com

1,981 (4)

2,300

(13.9%) (4)

1,981

Public transit agency

Joseph A. Calabrese, CEO, general manager, secretary, treasurer (5)

39

The J.M. Smucker Co., Orrville (330) 682-3000/jmsmucker.com

1,941

1,985

(2.2%)

2,430

Food products company providing fruit spreads, coffee, peanut butter, shortening and oils

Mark T. Smucker, president, CEO

40

University of Akron, Akron (330) 972-7111/www.uakron.edu

1,937

2,057

(5.8%)

1,937

Public university

John C. Green, interim president

41

Southwest General, Middleburg Heights (440) 816-8000/www.swgeneral.com

1,914

1,802

6.2%

1,914

Health care provider

William A. Young Jr., president, CEO

42

Westfield, Westfield Center (330) 887-0101/www.westfieldinsurance.com

1,823

1,848

(1.4%)

2,069

Insurance, banking and financial services company

Edward Largent, president, CEO, board chair

43

City of Akron, Akron (330) 375-2316/www.akronohio.gov

1,814

1,815

(0.1%)

NA

Municipal government

Daniel Horrigan, mayor

44

Parker Hannifin Corp., Mayfield Heights (216) 896-3000/www.parker.com

1,800

1,800

0.0%

2,800

Provider of fluid power systems and electromechanical controls

Thomas L. Williams, chairman, CEO

45

Rockwell Automation Inc., Mayfield Heights (440) 646-5000/rockwellautomation.com

1,792

1,759

1.9%

1,881

Provider of industrial automation control and information solutions

Frank Kulaszewicz, senior vice president, architecture and software

46

Steris, Mentor (440) 354-2600/www.steris.com

1,780

1,715

3.8%

1,923

Provider of sterilization and procedural products/services to the health care industry

Walter M. Rosebrough Jr., president, CEO

47

Hyland, Westlake (440) 788-4988/www.hyland.com

1,777

1,697

4.7%

1,817

Information management software

Bill Priemer, president, CEO

48

JACK Entertainment, Cleveland (216) 297-4777, (216) 662-8600/JACKEntertainment.com

1,775

1,945

(8.7%)

2,808

Operator of JACK Cleveland Casino and JACK Thistledown Racino

Mark Tricano, senior vice president, Northeast Ohio operations

49

Ganley Auto Group, Brecksville (440) 584-8202/www.ganleyauto.com

1,764

1,616

9.2%

1,764

Auto dealer

Kenneth G. Ganley, president, CEO

50

Mercy Health – Lorain Hospital, Lorain (440) 960-4000/mercy.com

1,628

1,581

3.0%

NA

Health care provider

Edwin M. Oley, senior vice president Mercy Health; CEO Mercy Health - Lorain

51

Dominion Energy Ohio, Cleveland (800) 362-7557/www.dominionenergy.com

1,562

1,510

3.4%

1,705

Natural gas distributor

Jim E. Eck, vice president, general manager

52

Avery Dennison, Mentor (440) 534-6000/www.averydennison.com

1,549

1,509

2.7%

2,066

Manufacturer of pressure sensitive paper, film and foil, graphic materials and specialty tapes

Nick Tucci, vice president and general manager, Label and Graphic Materials North America

53

Cleveland State University, Cleveland (216) 687-2000/www.csuohio.edu

1,542

1,572

(1.9%)

1,542

Public university

Harlan M. Sands, president

54

Fred W. Albrecht Grocery Co., Akron (330) 733-2263/www.acmestores.com

1,539

1,589

(3.1%)

1,539

Grocery and pharmacy store operator

Jim Trout, president

55

Parma City School District, Parma (440) 842-5300/www.parmacityschools.org

1,505

1,546

(2.7%)

1,505

Public school district

Charles Smialek, superintendent

56

Cuyahoga Community College, Cleveland (216) 987-6000/www.tri-c.edu

1,439

1,439

0.0%

1,439

Community college

Alex Johnson, president

57

Eaton, Beachwood (440) 523-5000/www.eaton.com

1,377

1,322

4.2%

NA

Manufacturer of electrical, hydraulic, aerospace, truck and automotive products

Craig Arnold, chairman, CEO

JPMorgan Chase & Co., Cleveland (800) 935-9935/www.chase.com

1,355

1,400

(3.2%)

NA

Banking and financial services company

James M. Malz, head of commercial banking, Ohio Rudy Bentlage, executive director, commercial banking and market executive, Northeast Ohio

59

Ernst & Young LLP, Cleveland (216) 861-5000/www.ey.com

1,340

1,328

0.9%

2,052

Assurance, advisory, tax and transaction advisory services company

Monte Repasky, Cleveland office managing partner Whitt Butler, Akron office managing partner

60

Diebold Nixdorf, North Canton (330) 490-4000/www.dieboldnixdorf.com

1,325

1,340

(1.1%)

1,330

Self-service technology, software and security systems provider

Gerrard Schmid, president, CEO

61

Scott Fetzer Co., Westlake (440) 892-3000/www.scottfetzer.com

1,318

1,324

(0.5%)

1,820

Diversified manufacturer

Bob McBride, president, CEO

62

YRC Worldwide Inc., Overland Park (913) 696-6100/www.yrcw.com

1,285

1,330

(3.4%)

2,890

Freight transportation

Scott McCormick, distribution center manager, YRC Freight

63

Shearer's Foods LLC, Massillon (330) 834-4030/www.shearers.com

1,197

1,253

(4.5%)

NA

Manufacturer of snack foods

Bill Nictakis, chairman, CEO

64

Bridgestone Americas Inc., Akron (330) 379-7000/bridgestoneamericas.com

1,140

1,196

(4.7%)

1,941

Tire manufacturer

Nizar Trigui, chief technology officer

BWX Technologies Inc., Euclid (216) 912-3000/www.bwxt.com

1,100

1,080

1.9%

1,130

Pressure vessels, steam generators and electromechanical components provider

Jim Bittner, GM, BWXT Nuclear Operations Group Barberton; Chris Rhodes, GM, BWXT Nuclear Operations Group Euclid

66

The Timken Co., North Canton (234) 262-3000/www.timken.com

1,088

1,079

0.8%

1,848

Manufacturer of engineered bearings and mechanical power transmission products

Richard G. Kyle, president, CEO

67

Oberlin College, Oberlin (440) 775-8460/www.oberlin.edu

1,085

1,096

(1.0%)

NA

Private college

Carmen Ambar, president

68

Associated Materials Inc., Cuyahoga Falls (330) 929-1811/associatedmaterials.com

1,083

930

16.5%

NA

Manufacturer of professionally installed exterior building products

Brian Strauss, president, CEO

69

PPG, Cleveland (412) 434-3131/www.ppg.com

1,079

945

14.2%

1,474

Paint, coatings and specialty materials company

Stanley Zaharewicz, plant manager

70

Youngstown State University, Youngstown (330) 941-3000/www.ysu.edu

1,075

1,067

0.7%

1,075

State university

James Tressel, president

71

Third Federal Savings & Loan, Cleveland (800) 844-7333/www.thirdfederal.com

1,070

NA

NA

1,118

Savings and loan

Marc A. Stefanski, chairman, president, CEO

Medina County, Medina (330) 723-3641/www.co.medina.oh.us

1,039

1,041

(0.2%)

1,041

County government

Adam Friedrick Patricia G. Geissman William Hutson, commissioners

73

RPM International Inc., Medina (330) 273-5090/www.rpminc.com

1,032

1,013

1.9%

1,263

Provider of specialty coatings, sealants and building materials

Frank C. Sullivan, chairman, CEO

74

United, Cleveland (216) 501-5170/www.united.com

1,003

NA

NA

1,006

Airline

Drew Domitrovits, general manager

75

Covelli Enterprises Inc., Warren (330) 856-3176/www.covelli.com

1,000

NA

NA

NA

Franchisee of bakery-cafe fast casual restaurants

Sam Covelli, CEO

58

65

72

TOP LOCAL EXECUTIVE

SEE TOP 100 EMPLOYERS LIST, PAGE 22

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CRAIN’S CLEVELAND BUSINESS

THE LIST

100 Largest Northeast Ohio Employers Ranked by full-time equivalent local employees

FULL-TIME EQUIVALENT LOCAL EMPLOYEES THIS YEAR

ORGANIZATION

6/30/2018

STAFF IN 6/30/2017 % CHANGE OHIO TYPE OF BUSINESS

TOP LOCAL EXECUTIVE

76

Jo-Ann Stores LLC, Hudson (330) 656-2600/www.joann.com

1,000

NA

NA

1,200

Craft and fabric retailer

Jill Soltau, president, CEO

77

Hard Rock Rocksino Northfield Park, Northfield (330) 908-7625/www.hrrnp.com

992

978

1.4%

992

Gaming, dining and entertainment destination

Mark Birtha, president

78

Saint-Gobain Corp., Solon (440) 836-6900/https://saint-gobain-northamerica.com

966

918

5.2%

1,030

Building materials company

Tom Kinisky, president, CEO

79

Nordson Corp., Westlake (440) 892-1580/www.nordson.com

947 (6)

716

32.3% (6)

947

Industrial technology company

Michael F. Hilton, president, CEO

80

St. Vincent Charity Medical Center, Cleveland (216) 861-6200/www.stvincentcharity.com

924

977

(5.4%)

924

Health care provider

David F. Perse, president, CEO

81

Cleveland Heights-University Heights City School District, University Heights (216) 371-7171/www.chuh.org

918

NA

NA

918

Public school district

Talisa L. Dixon, superintendent

81

Menorah Park, Beachwood (216) 831-6500/MenorahPark.org

918

951

(3.5%)

918

Provider of full continuum of care for seniors including residential and community services

Jim Newbrough, CEO

83

The Reserves Network Inc., Fairview Park (866) 876-2020/www.trnstaffing.com

905 (1)

NA

NA

1,460

Office, industrial, professional and technical staffing services

Neil Stallard, CEO

84

Federal Reserve Bank of Cleveland, Cleveland (216) 579-2000/www.clevelandfed.org

861

850

1.3%

994

U.S. central bank

Loretta J. Mester, president, CEO

85

Charles River Laboratories, Ashland (419) 289-8700/www.criver.com

850

748

13.6%

1,093

Contract research organization

Andy Vick, corporate vice president, Safety Assessment Ohio

86

Dave's Supermarkets, Bedford Heights (216) 763-3200/www.davesmarkets.com

839

921

(8.9%)

839

Supermarket operator

Daniel Saltzman, president

87

Willoughby-Eastlake City Schools, Willoughby Hills (440) 946-5000/www.weschools.org

821

795

3.3%

NA

Public school district

Stephen Thompson, superintendent

88

PolyOne Corp., Avon Lake (440) 930-1000/www.polyone.com

817

799

2.3%

847

Provider of specialized polymer materials, services and solutions

Robert M. Patterson, chairman, president, CEO

88

Safeguard Properties Management LLC, Valley View (216) 739-2900/www.safeguardproperties.com

817

1,022

(20.1%)

822

Inspects and maintains defaulted and foreclosed properties nationally

Alan Jaffa, CEO

90

Babcock & Wilcox, Barberton (330) 753-4511/www.babcock.com

800

NA

NA

800

Engineering, manufacturing and construction services firm

Leslie Kass, president, CEO, Babcock & Wilcox Enterprises Inc.

90

Lakewood City School District, Lakewood (216) 529-4092/www.lakewoodcityschools.org

800

843

(5.1%)

800

Public school district

Michael J. Barnes, superintendent

92

Western Reserve Hospital, Cuyahoga Falls (330) 971-7000/westernreservehospital.org

791

781

1.3%

791

Health care provider

Robert A. Kent Jr., president, CEO

93

Northeast Ohio Regional Sewer District, Cleveland (216) 881-6600/www.neorsd.org

786

755

4.1%

NA

Wastewater and stormwater management utility serving 62 communities

Kyle Dreyfuss-Wells, CEO

94

Shaker Heights City School District, Shaker Heights (216) 295-1400/www.shaker.org

780

841

(7.3%)

780

Public school district

Stephen M. Wilkins, interim superintendent

95

Hospice of the Western Reserve, Cleveland (800) 707-8922/www.hospicewr.org

778

839

(7.3%)

778

Hospice and palliative care organization

William E. Finn, president, CEO

96

InfoCision Management Corp., Akron (330) 668-1400/www.infocision.com

758

873

(13.2%)

NA

Telemarketing firm

Craig Taylor, CEO Karen Taylor, board chair

97

Automated Packaging Systems Inc., Streetsboro (330) 342-2000/www.autobag.com

728

689

5.7%

NA

Packaging products manufacturer

Hershey Lerner, chairman; Bernie Lerner, CEO; Cliff Brehm, president, CMO

98

Quadax Inc., Middleburg Heights (440) 777-6300/www.quadax.com

719

767

(6.3%)

727

Health care revenue cycle software and services provider

John Leskiw, president

99

Sandridge Food Corp., Medina (330) 725-2348/www.sandridge.com

700

678

3.2%

NA

Manufacturer of refrigerated salads, soups and side dishes

Mark D. Sandridge, chairman, CEO

Vitamix, Olmsted Township (800) 848-2649/www.vitamix.com

699

702

(0.4%)

NA

Manufacturer of blending equipment for home and commercial use

Jodi L. Berg, president, CEO

100

RESEARCHED BY CHUCK SODER (CSODER@CRAIN.COM)

Want the Excel version of this list — and every other Crain's list? Become a Data Member: CrainsCleveland.com/data

The Excel version of this list contains full addresses for all organizations plus names of additional executives for the vast majority of them. Information is supplied by the organizations. Want your organization to be included on this list in the future? Have a correction, question or suggestion? Contact Chuck Soder: csoder@crain.com

(1) These are staffing firms; the vast majority of these employees work on behalf of other companies. (2) GM's Lordstown plant eliminated its second shift in June. (3) Signet's 2018 employment number fell significantly because the company sold its in-house credit portfolio, causing more than 700 credit operations employees to move to other companies. (4) RTA this year has reduced staff through layoffs and attrition in order to address a projected budget shortfall. (5) Calabrese is slated to serve as CEO and GM of RTA until Sept. 1, when he'll become an adviser to the transit agency. (6) Nordson's headcount increased because the company consolidated work from four facilities acquired through acquisition into a new facility in Austintown.

CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 | www.crainscleveland.com | @CrainsCleveland Publisher/editor Group publisher Managing editor Sections editor Creative director Web editor Associate editor/Akron Assistant editor Senior reporter

P022_CL_20180813.indd 22

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8/9/18 4:20 PM

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PA G E 2 3

ANALYSIS

Two big employers’ growth buoys top 100 list

By CHUCK SODER csoder@crain.com @ChuckSoder

For the most part, Northeast Ohio’s largest employers didn’t get much larger over the past year.

To be fair, two of the biggest organizations on our 100 Largest Northeast Ohio Employers list did grow substantially. And that’s the main reason why total full-time equivalent employment rose by 2.4% among the 93 employers that submitted data in both 2017 and 2018.

The median increase for that group, however, was 0% (a few organizations, like Goodyear and Parker Hannifin, submitted the same rounded employment figure in both 2017 and 2018, so the median would likely be slightly different had they submitted exact figures).

And if you remove the two organizations that posted the biggest increases in headcount — the Cleveland Clinic, No. 1 on the list, and staffing and employment services firm Group Management Services, No. 3 — total employment decreased very slightly.

But don’t go assuming that most local companies haven’t been hiring.

Unemployment in the Cleveland metro area fell by nearly one percentage point between May 2017 and May 2018, according to a study by the Federal Reserve Bank of Cleveland. It ended that period at 4.8% — not as good as the 3.9% national rate, but an improvement nonetheless. And at least some of that improvement is due to job growth, according to the report, which noted that workers leaving the region was also a factor.

Plus, other cross-industry lists produced by Crain’s this year showed

significant employment growth. For instance, employment on our Privately Held Companies list grew by 4.9% if you look at the 42 companies that submitted employment figures in both 2017 and 2018. And total employment on our Family-Owned Businesses list grew by 1.4% — growth that was spread out among 44 of the 69 companies on that list.

And let’s not discount the employment gains made by the Cleveland Clinic and Group Management Services. The Clinic posted a 7.7% staff increase, pushing its total to 44,843 full-time equivalent employees.

Richfield-based Group Management Services reported 15,942 full-time equivalent employees, a whopping 40.6% increase over the past year. The company has posted large headcount increases for a few years in a row. Since it’s a staffing firm, most of those employees work on behalf of other organizations.

Two other staffing companies that were in the Top 10 on last year’s list — Minute Men and Area Temps — did not submit information for this year’s list.

A few other firms did post sizable employment increases over the past year. For instance, Sherwin-Williams, No. 16 on the list, added more than 600 employees locally, a 14.2% increase. Nordson Corp., No. 79, added 231 local employees, a 32.3% increase, after the Westlake-based industrial technology firm consolidated work from four facilities into a new plant in Austintown.

General Motors posted the biggest decrease, going from roughly 4,500 employees to 3,000. GM’s Lordstown plant eliminated its second shift in June. It also posted the biggest decline on last year’s list, after the plant cut its third shift in January 2017.

OUR FAVORITE ANSWER TO LOAN REQUESTS IS

List: Which suburbs are richest? That depends csoder@crain.com @ChuckSoder

Wealthiest Suburbs: See the top five suburbs for free online. To see them all, become a Crain’s data member: crainscleveland.com/data

We ranked last week’s Wealthiest Suburbs list by median household income — but the list would’ve looked a lot different had we ranked it by average household income.

The median figures are good for giving readers a sense of how well off the typical resident of a community is. Average figures, on the other hand, are better for highlighting the monetary muscle of towns with lots of rich people (or relatively small numbers of extremely rich people).

So it’s no surprise that Hunting Valley would still easily top the list were it ranked by average household income. In fact, its lead would grow substantially: The U.S. Census Bureau estimates that the average household brings in more than $420,000 annually, according to the bureau’s 2016 American Community Survey, which is based on surveys conducted from 2012 through 2016.

By comparison, the village’s median

household income is listed as +$250,000 (the bureau’s American FactFinder database has listed it with a plus sign since at least 2009).

But most communities would change ranks if we ranked the list by the average instead of the median.

Some would move substantially.

The one that we at Crain’s often hear about from readers is Rocky River, which hasn’t made the print version of this list since we started publishing it annually three years ago. It’s at No. 54 on the full digital list, which includes 100 communities and is available to Crain’s Data Members.

But if we ranked the list by average household income (figures that are included in the Excel version of this list), Rocky River — with help from all those wealthy households along Lake Erie — would move up a whopping 26 spots to land at No. 28.

Bratenahl would bulldoze its way into the top 10, moving to No. 8 from

By CHUCK SODER

No. 26. And both Chagrin Falls and Solon would jump into the top 15 from the 30s.

A few smaller communities would make even bigger gains. For instance, tiny Gloria Glens Park, which is south of Medina, would vault from No. 99 on the full digital list to No. 51. And Hiram would leap from No. 96 to No. 56.

No communities would fall that far down the list if we ranked it by average household income, but a few did drop substantially.

For instance, Timberlake would fall from No. 53 to No. 80, Mogadore would drop from No. 60 to No. 86 and Sheffield Lake would tumble from No. 73 to No. 96 — suggesting that those communities probably don’t have as many multimillionaries pulling up their averages.

Or at least, they didn’t have as many multimillionaries who happened to report their household income through the bureau’s American Community Survey during the fiveyear survey period. Estimates for smaller communities tend to be less reliable, since sample sizes for those communities are usually smaller.

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CRAIN’S CLEVELAND BUSINESS

AKRON

City hopes airport can be economic driver

By DAN SHINGLER dshingler@crain.com @DanShingler

For years, the backers of Akron Fulton International Airport have worried it would go away.

Now that it’s gone, they say they couldn’t be happier.

They’re excited, they say, by the new Akron Executive Airport — same spot, same buildings, same main runway, but with a renewed commitment by the city of Akron and others.

“We’re alive and well, and KAKR (the airport’s FAA designation) means business. We’re really serious about what we’re doing, and we sense some great opportunities there,” said Phil Maynard, longtime Akron businessman and chair of the advisory committee that recently convinced Akron Mayor Dan Horrigan to support the airport.

Horrigan, who already had a Blue Ribbon Task Force report on the city that also emphasized the airport’s importance, signed on fully. On Aug. 3, Horrigan announced that the city was renaming the facility Akron Executive Airport, reconfiguring its layout, investing in infrastructure, restarting nighttime operations and launching a new marketing campaign and website.

The major proposed change is the removal of the airport’s shorter north-south runway, which is about half the length of the 6,000-foot eastwest runway that is the airport’s workhorse. Maynard said he’s confident the FAA will approve the closure, and he expects it be done in a year or so.

Ironically, removing the runway frees up the airport to grow. Eliminating it will free up more than 100 acres of land, far more land than the runway occupies, because every run-

Summit Airport Services is Akron Executive Airport’s operator. (Contributed photo)

way has severe setbacks that create no-build zones, Maynard said.

“There’s probably going to be 80 to 100 acres we’ll pick up on one side,

by Triplett (Boulevard), and then on the other side of the runway maybe 30 more acres,” Maynard said.

Whether there will be demand for that land remains to be seen, but airports are proven economic development drivers, backers say.

“I was at a (real estate) conference two years ago. There’s a book called ‘Aerotropolis,’ and the concept is that future economic drivers and the success of a city is based on the development around airports. Obviously in Akron the scale isn’t going to be equivalent to what would happen in Denver, but the concept is still the same. So yeah, I think it’s a big deal,” said Jerry Fiume, managing director

of Akron's SVN Summit Commercial Real Estate Group.

The author of that book, University of North Carolina’s John Kasarda said that while small airports don’t support cities the way large ones can, they still play a part in economic development.

“Small airports have performed important roles in local economic development, but usually by serving a niche market that plays to unique competitive advantages of the area such as tourism and resort attractions, nearby high-value industries such as specialized health services, and general aviation aircraft maintenance and repair. To have an aerotropolis-type of impact usually requires substantial commercial airline service found in larger airports,” Kasarda said in email correspon-

dence.

Akron Executive Airport has seen some development in recent years, along the lines that Kasarda describes, too, for specialized companies that can leverage the airport to help their businesses.

Randy Theken, who founded a group of medical device companies, has centered his operations at the airport. Those businesses include NextStep Arthropedix and NextStep Extremities, which design joint and extremity implants; and Slice Manufacturing Studio, a maker of medical devices and other advanced-manufacturing products.

Theken started at the airport in 2004, when his company bought its first plane and he purchased the 15,000-square-foot former airport terminal building and converted it to

NextStep’s headquarters.

“Then, right next to that we just built a 40,000-square-foot building (in 2016), and Slice Manufacturing is in there now,” Theken said.

Why does a medical device maker feel the need to be at an airport?

It’s simple, Theken said. Selling spine and joint implants to surgeons often requires meeting with them to explain and demonstrate the product. That works best in person, Theken said, but getting a highly paid surgeon to take multiple days to fly to Akron and back was a tough sell.

Moving to the airport solved that problem and increased sales.

“We are probably bringing in about 100 physicians a year since having the plane,” Theken said. “Before that, we were lucky if we had five a year.”

Now the company owns four planes.

While Theken laughs when asked if he enjoys having nearly his own private airport, he’s quick to point out that’s not what he wants. He’s hoping others follow his lead and use the airport as well to ensure it remains open and receives future investment.

John Hogarth hopes that happens as well. He owns North Coast Air Care, an aircraft maintenance company, and Summit Airport Services, the airport’s operator and fuel vendor.

Hogarth said about 15 companies now keep planes at the airport, with many more flying in and out as well.

It wasn’t that way when he moved his companies from New Philadelphia in 2000. Hogarth made it happen.

“We engaged in a program to get those flights here. We would see a corporate jet going into Akron-Canton or Cuyahoga County, and we’d SEE AIRPORT, PAGE 25

Skycasters looks to compete in SD-WAN market

By JUDY STRINGER clbfreelancer@crain.com

Skycasters, an Akron-based satellite network operator, has spent the past 15 years or so providing internet connectivity to places where there are no phone lines, cables or wireless hotspots. Think off-shore oil rigs or sub-Saharan power stations.

The Arlington Road company, however, is poised to break out of this niche market with a technology that is designed to make fast, reliable and secure communications links more affordable for a wide variety of businesses who operate over large geographical areas.

Founder and owner Don Jacobs said Skycasters recently procured — via bankruptcy court — the assets, intellectual property and software of Acceleration Systems of Northfield.

Jacobs said the July acquisition includes “a patent for what’s called multiple secure link architecture,” which will help his company usher in a new service for secured networking between corporate offices and their distant facilities or partners.

Under the “old model,” according to Jacobs, businesses connect to their outside operations through a VPN, or virtual private network, which allows users to efficiently and securely send

P024_CL_20180813.indd 24

and receive data across the internet via servers based at the main location and branch offices or sites. That works great for direct communications between the headquarters and off-site locations. But when off-site users want to access cloud-based applications, such as email or a product like Microsoft Office 360, those requests have to be sent over the VPN to the corporate server and then redirected to the cloud.

Jacobs said the newly acquired multiple secure link architecture allows Skycasters “to essentially put that main server in the cloud” and install networking software on the end-user devices.

“Then, the optimization does not just work to a specific location, it works throughout the whole internet,” he said. “Now instead of a remote location having an optimal link only back to corporate, it also has an optimal link into the cloud, so you don’t have to backhaul all that traffic.”

Jacobs estimates the technology would enable businesses to add to their total network speed and capacity at roughly one-fourth of the cost of conventional optimization services.

“It will bring WAN (wide area networking) costs way down,” he said, “and it’s significant. It’s not like 10% to 20%. It’s like 60% to 75%, in some

cases.”

Beyond cost savings, companies would benefit from the “increased efficiencies you get from better connections to remote locations, especially when they need to access cloud services or different databases and company IT assets that are in the cloud,” he said. “It basically gives them a lot more out of connections they already own or enables them to scale back their connections because of the efficiencies.”

From satellites to SD-WAN Jacobs believes the new offering is a natural extension of Skycasters’ existing portfolio. While providing satellite-based internet access is still the company’s backbone, earlier this year it introduced a service dubbed CWI, which stands for converged wireless internet. CWI combines Skycasters’ satellite links with LTE wireless internet services — in partnership with Verizon and another major LTE provider — to give users a single managed service.

Jacobs said most of his existing satellite customers already combined the two, so offering one supplier rather than two or three helps simplify communications needs for clients and allows Skycasters to evolve into “more of a managed network operator.”

The addition of multiple secure

link architecture, however, gives the Rubber City company a unique position in the fast-growing SD-WAN space, the software-defined approach to managing wide-area networks. Jacobs said that Skycasters will differentiate itself from the dozens of SD-WAN offerings popping up because “we are also the network operator.”

“We have our own satellite network, we also have our own private LTE networks through our partners and we can combine those connections for a customer,” he said, “and we can also include MPLS or DSL connection or a cable connection along with either cellular, LTE or both.

“So what I am saying is that a single site, whether remote or urban, instead of relying on one connection, they can have two or three connections serving them simultaneously for redundancy, so it increases uptime dramatically, because as long as one of those networks is up, the site is up.”

The new service will target companies such as large- and mid-size manufacturers with multiple suppliers, offices or distribution centers, as well as medical, insurance and banking operations or “basically, any instance a company needs to connect multiple sites together,” according to Jacobs.

He anticipates the 15-person Skycasters will see 200% to 300% growth as a result of new customers “possibly as soon as the next 12-18 months.”

Jacobs tags the privately held Skycasters’ current revenues in the $10 million to $50 million range.

Texas-based Gartner analyst Ted Corbett said that although the firm does not follow Skycasters in particular, many providers are retooling to get a foothold in the emerging SDWAN market. Gartner has forecast SD-WAN to grow at a 59% compound annual growth rate through 2021 to become a $1.3 billion market.

SD-WAN capabilities have been around for six to seven years, according to Corbett, but “are now in the limelight” as more companies are shifting workloads into the cloud and looking for other ways to reduce operational costs. He estimates that SDWAN can be up to two and a half times less expensive than a traditional WAN architecture.

Another benefit is ease of use, Corbett said. Under a conventional WAN setup, changes to networks in branch offices require manual configurations to be created and installed, and likely an on-site technician to do it.

“With SD-WAN, a network user can simply go to a cloud-based dashboard and set up or alter policies,” he said.

8/10/18 1:49 PM

CRAIN’S CLEVELAND BUSINESS

LIQUOR

CONTINUED FROM PAGE 1

Canepa was brought on to the liquor division about a year ago with the exclusive purpose of improving it.

A self-described “change agent,” he has revamped processes at other state agencies in the past, including the Ohio EPA and the departments for transportation and public safety.

He was hired to direct an initiative in the liquor division because the state realized it was leaving money on the table.

That initiative began with ramping up a new inventory control database to better account for products and track sales. That spurred the state’s efforts to purge its supply of discontinued and unpopular products.

The next step was to modernize the retail environments.

Canepa convened industry experts, consultants and spirits suppliers on how it could revamp stores to improve customer experience and, ultimately, sales at large retail stores and smaller shops alike.

There was virtually no cost to that program, Canepa said. The improvement ideas mostly centered around clarity with products and on shelves, but even more attention was given to educating staff at liquor stores on how to talk with customers about products, like explaining to someone the differences between whiskey, Irish whiskey and bourbon.

It’s far from rocket science. In fact, it’s something most craft beer and wine shops and even marijuana dispensaries already consider a best practice in the retail world. The state simply wasn’t doing anything like that in the liquor sector before Canepa arrived.

After a 90-day pilot period at six stores across Ohio in 2017, Canepa found that simply reorganizing

From left, Dan Saltzman, Division of Liquor Superintendent Jim Canepa and Burt Saltzman cut the ribbon to officially mark the opening of the contract liquor agency Aug. 8 at Dave’s Mercado in Cleveland.

(Contributed photo)

shelves, stocking them with products people actually want and engaging customers with knowledgeable staff led to increased sales between 9%15% just over the trial period. There were negligible costs for those efforts that focused on organization of existing space and training liquor store staff.

“Historically, I think the big box retailers, and not just them but all retailers, have an agency contract, so they were just used to the state being blasé and not being active, or supportive, in any of this,” Canepa said. “We’re running it like a business now. And we’re seeing the results.”

Well-performing stores have seen annual sales growth of roughly 5%6%, Canepa said. With the gains achieved during the pilot period in mind, Canepa is hopeful that 9%15% growth will become the next standard.

By creating a better retail opera-

tion, the expectation is the state, which is the customer of spirits suppliers, will snag the most high-demand items that will then trickle into Ohio stores.

“They’re going to ask, where is the best market for those? I’m trying to create a real enticing environment, and that’s how we can compete," Canepa said. "It’s creating a market that’s enticing to suppliers."

Another round, please With an improved retail process hammered out and new methods for tracking the movement of products, the state is capitalizing on its newfound sense of growth potential in the world of booze by opening at least 20-some other liquor agencies.

Of those, 18 licenses have been awarded and several new stores have opened at existing retailers, including Dave’s Mercado in Cleveland.

There are currently 465 liquor

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agencies in the state. Those existing ones are getting “refreshes” of their spaces, Canepa said. Those are being unveiled in an anticipated 125 stores by the end of October.

The sense is there’s a lot of pent up demand for spirits, Canepa said, and the time is ripe to capitalize on that.

And he’s right.

According to the Distilled Spirits Council, total U.S. liquor sales reached $26.2 billion in 2017, growing 4% over 2016. Liquor saw its eighth consecutive year of growth in market share last year as well with it now accounting for 36.6% of the alcohol beverage market.

In Ohio, total liquor sales were $1.14 billion in 2017 versus $1.07 billion in 2016, according to the latest report from JobsOhio. Both those years marked annual growth of 6.4% and 5.6%, respectively.

That growth in retail sales reflecting overall consumer demand for spirits has inspired some of Northeast Ohio’s distillers to pursue their own projects.

That includes Cleveland Whiskey, which is weighing expansion efforts and recently launched its second $1 million equity crowdfunding campaign, and Western Reserve Distillers, which is preparing to open its new distillery, bar and restaurant in Lakewood.

Meanwhile, according to the National Alcohol Beverage Control Association, as of June, total sales of 9-liter cases (an industry standard) is 2.9 million, which is 4.14% growth over the same period in 2017.

Those figures suggest the state’s efforts may already be having an impact on total sales.

Canepa stressed, though, that the goal isn’t to make people drink more, but to simply come across high quality products that they can learn about and come back to.

“We want people to drink better,” he said, “not more.”

A U G U S T 13 - 19 , 2 018

Phone: (216) 771-5276 Contact: Kate Lynn Calcaterra E-mail: CLBClassified@crain.com Rozek AUCTIONS

CONTINUED FROM PAGE 24

call them and say, “Why are you flying there? Why not try us?” Hogarth said.

It’s easier to fly into than Akron-Canton and a no-brainer for corporate executives with meetings in downtown Akron.

It’s a compelling pitch for others as well because the airport is less than a mile from Akron’s interstates, he said.

“Our target is Akron, Canton and up north, let’s say, up to Hudson — anyone doing business in that area,” Hogarth said.

Folks like Theken and Hogarth are the sort of people that city officials and Maynard support, in the hope they will continue to push the airport forward.

Hogarth said the city recently awarded him a 25-year contract to run the airport, instead of a five-year contract like it has issued in the past.

That gives him and the airport more certainty about its future and confidence to invest, Hogarth said.

Others are starting to take note and use the airport. Stark State College announced it will open a commercial-drivers-license school at the airport at the end of this year, in response to local business demands for more truck drivers and the city’s marketing of airport property.

Akron Economic Director Sam DeShazior said the airport has been an important part of Akron’s economy almost since it was first built in 1929 and the city hopes it will continue in that role.

“One of the assessments (of the Blue Ribbon Task Force) was that this airport is a valuable commodity for a city like ours and we should put it to good use,” DeShazior said.

“I look at is as a place to attract talent, innovation and investment.”

AUCTION

AUG 23

TRUSTEE ORDERED

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8/10/18 3:44 PM

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A U G U S T 13 - 19 , 2 018 |

DRA

CONTINUED FROM PAGE 1

most downtown owners are increasingly small, primarily local, groups.

The other reason for such interest is that DRA and Wolstein are expected to award big-ticket leasing and property management assignments for the 1.3 million-square-foot tower.

The current owner, an affiliate of Norfolk, Va.-based Harbor Group International, operates the structure with its own staff and has had Colliers International's Cleveland office, which is a tenant in the structure, leasing the space.

Alec Pacella, managing partner of Beachwood-based NAI Daus and a frequent instructor in real estate valuation nationally, said it's good to have "outside money" placing bets

CRAIN’S CLEVELAND BUSINESS

on Cleveland's real estate future.

"I'm sure it speaks to yield, and how much income they can get here compared to other markets where Wolstein institutional investors primarily invest, with a lower acquisition cost here," Pacella said.

Bob Nosal, executive managing director of Newmark Knight Frank's Cleveland office, said the high level of occupancy in the building means it presents a "cash flow" opportunity.

He and Pacella both feel the primary avenue for growth is increasing rents as downtown office vacancy, now at 11% for Class A

properties, continues to trend down, and no new office buildings are going up.

However, speculation about the building's potential sale price is scarce.

Office values in town generally have declined, but 200 Public Square is a notable turnaround story under Harbor Group's ownership.

"They've done a terrific job leasing it up," Nosal said.

When Harbor Group, through Cleveland Financial Associates, bought the building for $141 million in 2005, it had substantial vacancy, including many floors of empty space.

It's now just 8% vacant, according to online realty data provider CoStar.

The structure is stocked now with blue-chip tenants ranging from Huntington Bank and Cleve-

ADVERTISING SECTION

land-Cliffs Inc. to multiple national and regional law firms. Harbor Group installed retailers in its firstfloor space from Ruth's Chris Steak House to Bloom's Bakery. The current owner also updated the eight-story atrium at the structure's base to give it a more contemporary feel. However, a glitzy boxy area built into the atrium's north side to give Ruth's Chris more seating room is widely reviled as looking chintzy.

DRA Advisors did not return two emails and phone calls about its interest in 200 Public Square. Harbor Group has declined to discuss the offering, although it is listed with the JLL brokerage and is widely available on the LoopNet online real estate marketplace.

For his part, Wolstein said he believes there are significant opportunities to preen the property. For example, he said the executive dining

room atop the tower dates from "the old Standard Oil days" when the oil giant built it as its U.S. headquarters in 1985.

"It needs to be demolished to provide a sense of what that space can become," Wolstein said.

Wolstein, chairman of Cleveland-based Wolstein Group, said his interest in the property, following an unsuccessful run at Key Tower two years ago, is its iconic design and Public Square location. Adding the tower to his family's holdings at U.S. Bank Centre in Playhouse Square and EY Tower at Flats East Bank gives him a bigger role in the city's office market.

"I think we understand the Cleveland office market as well as anyone.

With capital investment, we can grow operating income at the building," Wolstein said. "This building's best days are ahead of it."

MBA

WEATHERHEAD SCHOOL OF MANAGEMENT

www.crainscleveland.com/onthemove

To place your listing, visit www.crainscleveland.com/onthemove or for more information, please call Debora Stein at (917) 226-5470 or email dstein@crain.com.

PROFESSIONAL SERVICES

weatherhead.case.edu

SUPPLIERS

ACCOUNTING Tom Libeg Partner

Grant Thornton LLP Grant Thornton LLP admitted Tom Libeg as a partner in the firm’s Cleveland office. He previously served as a managing director in the transaction services practice. With more than 17 years of experience, Libeg leads advisory projects for private and publicly held companies, including buy-side and sell-side mergers and acquisitions. He joined Grant Thornton in 2015.

Marc Newman

Ross Vozar

Lisa Gugino

Assurance Partner

Assurance Partner

BDO USA, LLP

BDO USA, LLP

Vice President of Engineered Solutions

Mr. Newman will lead work with real estate clients on financial statement audits, accounting and tax issues.

He is part of BDO’s Real Estate group and has more than 19 years of experience serving clients that develop, construct, invest in, and own and operate all types of real estate property. When he is not servicing his real estate clients, Mr. Newman works with social service organizations, private schools and various types of employee benefit plans.

Mr. Vozar will focus on transactional work involving due diligence, integration planning and implementation, synergy identification and capture, valuation and divestiture planning. Mr. Vozar has more than 20 years of public accounting experience, providing transactional guidance to clients across a variety of industries including manufacturing and distribution, consumer products, professional services, aerospace, software and restaurants.

APG Office Furnishings APG Office Furnishings is pleased to welcome Lisa Gugino as Vice President of Engineered Solutions. She will lead the new MAARS Living Walls division of APG. MAARS is known for its best-in-class acoustics in architectural and demountable wall products.

Lisa will work with Corporate, A+D, Healthcare, Higher Education, and Government clients for all APG locations.

APG offers furniture, accessories, and services that help businesses become more successful through innovative workspace solutions.

FINANCIAL SERVICES Lindsay J. Keith Trust Officer

Johnson Investment Counsel Lindsay has recently joined Johnson Investment Counsel as a Trust Officer serving the Cleveland, Columbus, and Cincinnati markets. She has over six years of experience in the financial services industry. Her responsibilities will include administering fiduciary accounts and assisting with estate administration. In her new role, she will utilize her working knowledge of investment advisory services and financial planning to ensure that the needs of all beneficiaries and clients are met.

HEALTH CARE Greg Hensley Senior Vice President

Plante Moran Living Forward Senior living development advisory firm Plante Moran Living Forward announces that Greg Hensley has joined as senior vice president. Greg joins after 30 years working as an executive and consultant in the industry and will help clients primarily with repositioning projects. His start coincides with the promotion of the group’s practice leader Dana Wollschlager to partner.

LAW Chris Zirke

KNOW SOMEONE ON THE MOVE? For more information or questions regarding advertising in this section, please call Debora Stein at (917)226-5470 or email: dstein@crain.com

P026_CL_20180813.indd 26

Senior Counsel

The Gertsburg Law Firm Co., L.P.A. Gertsburg Law Firm welcomes attorney Chris Zirke to the firm.

Mr. Zirke’s practice focuses on contracts and franchise law, counseling and advising both franchisors and franchisees throughout their respective business cycles. Chris joins a team made up of attorneys who know what it takes to run a successful business because they have done it themselves, either as owners or as in-house counsel.

Chris has done both. For more information about Chris and Gertsburg Law Firm, visit gertsburglaw.com.

8/10/18 2:16 PM

CRAIN’S CLEVELAND BUSINESS

Source Lunch

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Alan Nevel

Chief diversity and human resources officer, MetroHealth Alan Nevel believes strongly in bringing your whole self to work.¶ He doesn’t want, for instance, a member of the LGBT community to feel like they must hide part of their lives at work.¶ So Nevel, MetroHealth’s new chief diversity and human resources officer, works to build inclusive work environments that welcome and celebrate diversity.¶ “If you’re known as having an inclusive culture, where people can come in, where we embrace their respective aspects of diversity, where they can bring their whole self to work, they’re able to contribute at much higher levels, and you ultimately have success,” said Nevel, who started in his role June 18.¶ Previously, the roles of chief diversity officer and chief human resources officer were separate, but he’s been brought on with both titles, which he said is a unique approach that will give him an advantage in fostering an inclusive workplace and a talented workforce. — Lydia Coutré

Five things Hobbies?

Football, coaching/mentoring, music

Best concerts you’ve been to?

Bruno Mars, Jay Z, Charlie Wilson, Maxwell, Mary J. Blige

Personal motto?

Aspire to inspire before you expire, because if not now, when?

Best piece of advice you’ve received?

Have a point of view. if you have a point of view, then you will have a voice to be heard and a seat at the table.

Last book you read?

“Totally Useless Information”

Lunch spot Ty Fun Thai Bistro 815 Jefferson Ave, Cleveland, OH 44113

The meal Spring rolls, Pad Kra Prow with chicken, vegetarian curry, ginger honey iced tea

The vibe Tucked away in Tremont, Ty Fun offers an expansive menu, a warm, welcoming environment and outdoor patio seating.

The bill $ 41.02 with tip

P027_CL_20180813.indd 27

What made you decide to go to MetroHealth?

I’ve had all of these experiences. I’ve been to over 47 countries in my prior roles and through my work with Accenture and Sherwin Williams, I’ve been exposed to a lot. It’s time to bring that back home. So for me, I bleed Cleveland. I’ve got T-shirts: ‘Cleveland or die.’ That’s me. And I’m not East Side, West Side — all of this is Cleveland. … So for me, it’s an opportunity to bring all those learnings back home and make a difference in my community.

Why is MetroHealth the place to do that? Why does that represent the space for you to help Cleveland?

The values of MetroHealth resonate inside of me. … When I look at our CEO, it took me three minutes tops to know that I wanted to work for (Dr.) Akram (Boutros, president and CEO of MetroHealth). He gets it. He gets the importance of diversity and inclusion.

He gets the importance of having, really being a destination for top talent. If we really want to change the world. which is what we’re going to do — it’s not we want to do, we’re going to do — we have to have the best and brightest minds working with us. We also have to be a good corporate citizen. We have to invest in our community. We have too many companies that make a ton of money, but they could care less about what’s going on outside the four walls of their institution. Metro for 180 plus years has had a mindset of we will take care of everybody, regardless of how poor they are, or how sick they are. That resonates with me.

Tell me about the culture you’re walking into. What’s the foundation you’ll be building upon at MetroHealth?

Another reason I decided to take this job was the warmth, authenticity and sincerity that has permeated the whole place. I remember, I came in for one of my interviews, and there was a woman who basically is kind of a greeter and points you in the right direction. She treated me like I was a family member. It was like I was a long-lost cousin. And that warmth, it was genuine. … You hear the stories of people who’ve been with Metro for 15, 20, 30, 40 years. When they had opportunities to go elsewhere, but they’re still here, because it is a special place. And you feel that as

soon as you come in. And for me, that’s the environment that I want to be in, because I know these are people who want to make a difference. So in terms of being like-minded, there’s nothing that’s going to hold us back. We want to make a difference in this city, in this county, in this region. You know, our goal is to become the top public health care system in the United States. For my role, I want to have the top diversity and inclusion and HR functions at a public health care system in the United States. So my goals align with our overall goals as an organization and I know we can be successful.

What are some of the areas you think MetroHealth could improve on?

We tend to look at diversity in the following order: gender, race and ethnicity. … There are at least 42 other characteristics. I think we have an opportunity to, while we’re focused on ensuring that we’ve got the right representation in terms of gender, race and ethnicity, we need to begin looking at different abilities in the workplace, and also veterans. …The other thing is, we have opportunities to take our diversity and inclusion efforts to the next level in terms of impacting both community, through programming, through partnerships, through initiatives, as well as helping us achieve our business goals.

What does the combined role of human resources and diversity and inclusion enable you to do that you couldn’t do if you were doing one or the other?

So the beauty of it is because I have deep experience in the world of diversity and inclusion, I can always have my inclusion lens operating as I look at every aspect of our human resource function. So be it talent acquisition, talent management and development, be it compensation, be it benefits, be it employee assistance programs, be it our culture, our diversity and inclusion efforts, how we look at organizational change management, I’m always looking at those through the lens of inclusion first. Then, how does that translate into the diversity of our workforce? Because I’m blessed enough to be the leader of that function, I can ensure that all the folks who work under me have a similar mindset. So we always have our D&I hat on, if you will, as we go about our work.

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8/10/18 12:10 PM

CRAIN’S

PRESENTED BY

WOMEN OF NOTE AWARDS

THANK YOU On Thursday, July 26, Crain’s Cleveland Business and the Cleveland Foundation welcomed more than 400 attendees to the Huntington Convention Center of Cleveland to pay tribute to the 2018 Women of Note class.

Sixteen remarkable and influential women from Northeast Ohio, including Dee Perry, who was this year’s Cleveland Foundation Legacy Award Winner, took the stage as the room honored them for their talents, passion and exceptional commitments to Greater Cleveland.

Crain’s would like to extend a very special thank you to our presenting sponsor, the Cleveland Foundation, and to all our sponsors and partners for supporting the Women of Note event.

SPONSORS:

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8/10/18 9:31 AM