Crain's Cleveland Business

VOL. 39, NO. 35

AUGUST 27 - SEPTEMBER 2, 2018

Source Lunch

An extra ‘voice’ Group is upping efforts to aid African-American businesses. Page 3

The Devil Strip’s Chris Horne Page 19

CLEVELAND BUSINESS

The List Cleveland’s highest-paid athletes Page 15

MANUFACTURING

RPM eliminates its ‘poison pill’ provision DAN SHINGLER dshingler@crain.com @DanShingler

The idea of Medina-based RPM International being bought might have become easier to swallow for those who once believed such a situation was unthinkable — or for any poten-

tial acquirer.

Already under the influence of activist Elliott Management, the specialty coatings and sealants company has thrown out its “poison pill” takeover defense, and its stock has hit an all-time high. A potential acquisition of the company has added a premium to RPM’s share price, longtime observers say.

“If every major private equity group

in the nation has not had them on their watch list by now, this will cinch it,” said Bill Ridenour, president of investment banking firm Polymer Transaction Advisors and a longtime adviser to Northeast Ohio companies.

“I look for the company to be sold within a year after the cost-cutting measures are completed.”

A poison pill is a corporate strategy

to ward off acquisitions, particularly by would-be hostile acquirers. They typically work by allowing existing shareholders to buy more shares, usually at a discount, once a potential acquirer buys a large amount of stock. That has the effect of diluting the shares for all shareholders, making it more difficult and expensive for a hostile takeover to be executed.

RPM told the Securities Exchange Commission on Friday, Aug. 17, that it had terminated its rights agreement, which was already due to expire in May 2019. A company spokeswoman confirmed that the filing signified the end of the company’s “poison pill” provision, though she did not elaborate beyond that.

SEE RPM, PAGE 6

SPORTS BUSINESS

WHEN IT COMES TO THE BROWNS, FAMILY MATTERS

Entire contents © 2018 by Crain Communications Inc.

For the Haslams, the big picture includes establishing next in line Dee and Jimmy Haslam want to be part of the Browns “for a long time.” But they’ve also made a move that many experts say is a must — establishing a clear succession plan. Page 10

Spire Institute Could its boarding academy be a hoops power? Page 13

Q&A: David Jenkins Browns’ COO has high hopes for new regime. Page 12

Illustration by Michael Hogue for Crain’s

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CONTENT

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NEWS AND TRENDS FROM NORTHEAST OHIO’S TECHNOLOGY SECTOR

TECH MATTERS The essential role of

data governance

E

very day, humans create 2.5 quintillion — that’s 2,500,000,000,000,000,000 — bytes of data. About 90% of today’s data has been created in the last two years alone. Data generation will only continue to accelerate with the proliferation of more connected devices, sensors and technologies, according to a 2017 IBM marketing trends report.

The sheer volume of data affords organizations the opportunity to extract meaningful insights that drive decision-making and strategy, so long as they know how to manage it.

That’s where data governance comes in.

“Data governance is the approach of understanding what data you have, how you protect it and how you govern access to that data. It’s about who’s watching the store, so to speak,” said Robert Eckman, security principal at MCPc, a Cleveland-based technology security solutions provider.

Implementing a well-executed data governance program is a company-wide effort that involves the full cooperation of senior leadership, and the IT, data analytics and cybersecurity teams — all of whom must manage data collection and access within the purview of an increasingly complex — and sometimes ambiguous — regulatory landscape, local IT leaders say.

“A good data governance process starts with managing your inventory,” Eckman said. “Identify what is your most sensitive data, and classify it into different tiers accordingly. The closer you get to a higher sensitivity of Corby data, such as protected health information and payment card industry information, the higher the level of protection, with more cybersecurity tools and encryption. Good security protection comes down to good cyber hygiene practices.”

The concept of data governance is nascent and evolving, so formalized data governance structures are still in their infancy.

The higher education sector, for example, is facing challenges in figuring out how to comply with the European Union’s General Data Protection Regulation (GDPR), which was implemented in May.

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The new regulation sets guidelines — and fines — pertaining to the collection and processing of the data of European Union citizens, explained Eckman, who is the executive director of Cleveland State University’s Center for Cybersecurity and Privacy Protection.

That comprehensive data privacy regulation puts the data owner in control of his or her information, whereas in the U.S., the collection, storage and dissemination of data — such as personal information gleaned for marketing purposes — is not always controlled by the data owner, Eckman said.

It is a critical piece of regulation for corporate compliance and within higher educational institutions that have an international student body.

“Higher ed is in a very difficult place because China also has their own flavor of GDPR, as well as India, the UK and even California and Colorado,” Eckman said.

About a year and a half ago, the University of Akron launched its Business Intelligence, Data Warehouse and Analytics initiative, which it defines as a long-term multiphase, university-wide project designed to improve decision-making with data, said John Corby, the university’s chief information officer of information technology services.

Driven in part by a transition from using obsolete technology and university leadership-wide support of developing a comprehensive data analytics strategy, Corby said the initiative involves integrating more selfservice applications for reporting and analytics into the users’ hands.

“We used to have an on-premise traditional analytics tool that required lots of IT care and feeding,” he said. “Now, we have a new suite of products that puts the data in a user’s hands, like human resources or the admissions department, and enables a department to manage data in a way that is specific to their need.

“Right now, we’re focusing on exploring retention and student success, and how effective our programs are to retention, progression and graduation rates,” Corby said. “A good data governance program will put us in a position to meet our goals.”

UNIVERSITIES RAMP UP CYBERSECURITY EFFORTS Earlier this month, Axios posited a question to some of the U.S.’s foremost intelligence experts: What global threat worries you the most? The resounding concern was the risk of a crippling electrical grid cyberattack that could cut off power to the nation and compromise government and / or financial data.

Cybersecurity breaches are a major concern for companies and organizations of all sizes. Organizations are gaining ground with cybersecurity investments, with about 87% of targeted attacks being prevented, but they face two to three breaches each month, according to Accenture’s 2018 State of Cyber Resilience Report.

Geopolitical tensions and emerging technologies present a tidal wave of potential chasms.

Higher education institutions throughout Northeast Ohio are amplifying regional cybersecurity efforts through more industry and institutional collaborations.

Case Western Reserve, Cleveland State, and Mercyhurst universities have formed an alliance that leverages each institution’s nationally recognized cybersecurity strengths to propel advances in the field.

The North Coast Cyber Research and Training Alliance is jointly developing research, education and training by weaving in program expertise from Mercyhurst’s cyber intelligence threat analysis and analytics; Case Western Reserve University, Case School of Engineering’s cyber engineering and hardware solutions; and Cleveland State University’s Cleveland-Marshall College of Law’s cyber regulatory and policy analysis program.

“The idea is to pair academia with industry so students get a better understanding of what comprehensive cybersecurity is all about,” said Robert Eckman, executive director of Cleveland State University’s Center for Cybersecurity and Privacy Protection. “So, they can get a well-rounded theoretical understanding of cybersecurity, then we can airdrop them into a device lab at Case to work with engineers on devices, or determine whether the devices meet regulatory measures at Cleveland State’s Cleveland-Marshall College of Law. These students will be working alongside engineers from Fortune 100 companies. It’s onerous that we keep talent in the region, and this is one way that we can show to the world that we have some of the most sought-after resources.”

Meanwhile, the University of Akron in May announced plans to establish a cybersecurity simulation lab that will advance the curricula of the university’s new cybersecurity bachelor’s degree. The lab also will enable corporate information technology professionals to monitor cyber risks without putting at risk their own operating systems, said John Nicholas, a computer information systems professor.

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CRAIN CONTENT STUDIO C l eve l a n d

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

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Group wants to be African-Americans’ ‘voice’ in biz

By JAY MILLER jmiller@crain.com @millerjh

African-Americans in Northeast Ohio have been gaining some ground in the regional workforce, especially in the health care and construction industries. Creating and growing African-American-owned businesses has been more of a struggle.

To speed up that process, the Presidents’ Council, a 22-year-old for-profit business development and investment entity, is expanding its role.

The Presidents' Council was originally created, said Eddie Taylor Jr., its president, to help “the members grow their businesses and in a comprehensive and cohesive way to make better the landscape for African-American entrepreneurs.” Taylor is president of TaylorOswald, a Cleveland insurance and retirement planning business.

In addition to the original for-profit Presidents' Council, which has 11 members, the organization includes two nonprofits — the Presidents’ Council Foundation and the Presidents’ Council Business Chamber — and a political action committee, the Presidents’ Council PAC. “Our focus is about creating scalable businesses for sustainable wealth beyond just the 11,” said executive director Erica Penick. “Many organizations come to us for information with regard to African-American issues, but we have not dominated in the space, we’ve not been the voice (for the African-American business community) we need to be. ” The key addition, in 2015, was the Business Chamber, an affiliate of the U.S. Black Chambers. Penick said it now has more than 130 members, who employ about 3,000 people.

“This was in response to what by all accounts was considered a closed organization,” Taylor said. “The members of the Presidents’ Council LLC recognized that it was important to share the relationships we’d created, the learnings we had come by and the opportunities for growth in a larger way with the community. So, we created the chamber of commerce for African-American entrepreneurs across the region.”

All are part of an overall strategy to both accelerate the growth of African-American businesses and give their coalition of businesses a more visible presence in the region.

“I like the way they have transitioned into the broader chamber focus, presenting business opportunities to African-American-owned businesses,” said Brian Tucker, vice president and director of corporate affairs at Dollar Bank, who has been active on the foundation board for many years. “I think Erica and the (Presidents’ Council LLC) board together have done a pretty good job of reshaping it.” (Tucker is the former publisher of Crain’s Cleveland Business.)

Another key element early on was the creation of an associates group comprised of business leaders of many of the region’s banks and larger organizations, including Eaton Corp., Key Bank, University Hospitals and other leading businesses and professional service firms.

“They were majority-owned or (majority-)controlled institutions that agreed that finding a way to better relationships between African-American entrepreneurs and their organizations would lead to better economic outcomes for the community,” Taylor said.

The foundation is a nonprofit, supported by foundation and corporate funding. It runs PC Scholars, a program for high school students, to prepare

them for college and provide them with scholarships and internships. It also operates At Your Business, an onsite technical consulting. The program helps entrepreneurs exe- Taylor Jr. cute a growth plan with the aid of pro bono or below-cost consulting services.

An earlier program, Emerging Entrepreneurs, was a business accelerator. But, Penick said, the organization believed Northeast Ohio had other accelerator programs where business owners could develop growth plans and the council’s efforts would be better focused on helping businesses

are the resources to help sustain and grow these organizations? That’s been the really challenging part.”

Penick said the organization also is looking to create a program to help African-American artists, who are dissatisfied with the lack of public arts funding coming their way. At a meeting of Cuyahoga Arts and Culture (CAC), the organization that distributes money from the cigarette tax created to fund arts organizations and artists, a group of African-American artists complained that only nine of 160 grants given to artists in a competitive grant-making process went to African-Americans, who make up about 30% of the county population.

Penick said the foundation has applied to CAC to be a partner with that organization to help artists in the Af-

rican-American community meet the qualifications for CAC funding.

Megan Van Voorhis, president and CEO of the Community Partnership for Arts and Culture, believes there is an opportunity for the Presidents’ Council to play in arts funding.

“It would be good for the Presidents’ Council to respond to CAC’s call for partners, given their expertise, particularly on the entrepreneurial side of things,” Van Voorhis said.

“There’s not a lot of dollars for that.”

The last, and newest piece, of the Presidents' Council portfolio is the PAC, still in its early stages. Said Taylor: “We wanted to make certain we were able to give dollars to issues and candidates that impact and influence African-American businesses and the communities we serve.”

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executives execute those plans.

“We work with clients and say, ‘You have this growth plan, now here are the areas that you need assistance in and we’re going to give you a certain number of hours with (consultants) at our cost to help you implement and scale up for an immediate impact,’ ” she said. “We realized that this was something that was not being done and a need that needed to be filled.”

A key goal of the business chamber is to match the strides made in minority employment to the area of minority business development.

“Business formation has been harder and the continuation following formation has been even harder,” Taylor said. “How do you sustain these businesses unless you have a place like a chamber of commerce? Where

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Step into the new showroom that Inspire Workplace Interiors is preparing to open in downtown Cleveland’s Warehouse District, and you may get a back-to-the future feeling.

The storefront space is carefully curated with samples of modern office furniture, from sit-to-stand desks to a new version of cubicles with whiteboard backstops and even a medical examination room.

It’s arrayed in a retail space at 1382 W. Ninth St. in the Crittenden Block Building, which dates from 1868, when it was built for Cleveland jeweler N.E. Crittenden. Structural wood columns topped with ornate capitals typical of the period line the suite, some revealed anew when old drywall was shed during remodeling.

John Quinones, Inspire’s vice president, said, “We are hoping to present our customers with a showroom that is itself an essential destination. Inspire is attempting to marry Midwest charm with clean, modern design sensibilities. The Warehouse District is the perfect venue for that.”

Inspire is a new division and brand launched by Brook Park-based National Office, a 50-year-old manufacturer of its own office furniture as well as an office furniture retailer.

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went into the old building in the city’s Warehouse District because “it’s so typical of Cleveland,” Quinones said.

The firm also landed in the evolving residential and entertainment district because it has lots of parking nearby, not only on the street but at surrounding lots. Inspire arranged for customers to receive free parking validated by the company at the lot across the street on the southeast corner of West Ninth and St. Clair Avenue.

Accessibility is a big reason the new division set up shop downtown.

Quinones said that its major competitors are all downtown or in nearby neighborhoods, and what he considers the short drive to Brook Park and its predecessor working showroom cost it chances to visit prospective clients.

“Architects told us that they have so little time with some of their clients that they couldn’t stop by,” Quinones said, which should not be the case now.

The space includes a café created

Former Rolling Acres site is likely spot for Amazon

By STAN BULLARD sbullard@crain.com @CrainRltywriter

All your business, office and warehouse needs

Contemporary variable-height desks grace the front window of a new showroom for Inspire Workplace Interiors in downtown Cleveland. (Contributed photo)

with cabinets where he looks forward to hosting lunches and coffees. The space demonstrates how many pieces of furniture can be put together by designers to create custom spaces for clients, he said.

Among the features is a cubicle wall that clients may customize that Inspire had covered with pieces of wood to tie into the wood floors that the company had the landlord restore to their original state.

The customizable wall unit, called Narrate, is produced by Kimball. Inspire is a Kimball dealer, and it handles other office suppliers.

Previously the 5,000-square-foot office was occupied by a Greek restaurant, the latest in a long line of tenants that dates back to the original jeweler as well as shoe, spice and millinery companies.

Several layers of wall coverings and grease spatters had to be removed to restore the space’s original brick walls, Quinones said.

Thomas Starinsky, associate director of the Historic Warehouse District Development Corp., said landing Inspire was a welcome chance to diversify the retail space in the district, which the nonprofit hopes to capitalize on in the future. Such space often is devoted to bars or eateries.

The new showroom will open in early September. Quinones said it will be staffed by five people including himself and open from 9 a.m. to 4 p.m. weekdays. A library is in the center of the suite devoted to catalogs, next to a table where clients can spread out fabric samples.

“This,” Quinones said, “is where it all comes together.”

Online retail juggernaut Amazon looks to be ordering up the cityowned former Rolling Acres Mall site on Romig Road in Akron for another large distribution center, its fourth, in Northeast Ohio.

City officials have stayed mum publicly as to the developer’s identity — beyond the cryptic, Delaware-based Akron Romig Road LLC — as Akron City Council in July adopted legislation for the project. Council members authorized the use of tax increment financing to fund public improvements associated with a 600,000-square-foot warehouse on the site. The measure also authorized the sale of the site to the firm.

However, a close look at Ohio public records and past Amazon projects in other areas tag the Seattle-based e-commerce giant as the user and an Amazon affiliate as the builder of the property.

On July 17, the day after Akron City Council OK’d the legislation, a new limited liability corporation was recorded in the Ohio Secretary of State’s office for a Buckeye firm dubbed Akron Romig Road LLC. The LLC said it was formed on behalf of CF Hippolyta LLC and Constantine

Dakolias at an Avenue of Americas address in New York City.

Hippolyta, in classical Greek mythology, was the queen of the Amazons, a society of women warriors.

The name was linked to the Amazon company in Charlotte, N.C., by city officials as the city council there in June approved the sale of city-owned land to CF Hippolyta Charlotte LLC for a massive fulfillment center that will create thousands of jobs.

Online records of the Delaware Secretary of State’s office not only show an LLC for CF Hippolyta LLC but another CF Hippolyta Akron LLC. Variations of the name also signify proposed or completed Amazon properties in Bessemer, Ala.; Bakersfield, Calif.; and Spokane, Wash.

Constantine Dakolias is the cochief investment officer of the Credit Funds unit of Fortress Investment Group, a hedge fund with offices at the same Avenue of Americas address as CF Hippolyta LLC. Fortress has more than $40 billion of investment funds under management, according to its website, with holdings in corporate credit, infrastructure, real estate and multiple other areas.

Local and state government officials are loathe to identify Amazon by name as a prospective business in their localities. That is because the online behemoth is said to demand secrecy when deals are gestating.

It’s an almost routine script now following prior deals in the region, although it played out on different stages. Amazon became a tenant at Cornerstone Business Park in Twinsburg two years ago and is having a warehouse built for it at the site of the former Euclid Square Mall in Euclid.

Amazon is the user of the soon-toopen fulfillment center on grounds formerly occupied by Randall Park Mall in North Randall. Amazon and its vendor developer and contractors conducted a tour of the Randall property Wednesday, Aug. 15, where it said the company is hiring about 2,000 workers for an operation in a 2-million-square-foot building.

In the prior three cases, sites were leased or bought from private developers, while in Akron the city is the seller.

The city gambled big on the site of the mall, which closed a decade ago, buying it at sheriff’s sale and demolishing it.

Asked about Amazon as the unidentified developer or user, Ellen Lander Nischt, press secretary for Akron Mayor Dan Horrigan, wrote in an email, “The city has nothing to offer.”

Amazon spokeswoman Rachael Lighty has repeatedly said, and reiterated last Thursday, Aug. 23, that the company does not comment on rumors or speculation.

A media spokesman at Fortress did not return an email and phone call last week.

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MetroHealth looks to push beyond Cuyahoga

By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

MetroHealth is looking at opportunities to expand to seven locations outside of Cuyahoga County — something now possible for the first time in the system’s 181-year history thanks to a recent change in state law.

System officials are mum concerning where those particular locations might be — aside from possibly Medina — or an associated timetable, but MetroHealth president and CEO Dr. Akram Boutros told Crain’s the plan is to start with one and see how things go.

“At the end of the day, this offers us three things: scale for greater efficiency; ability to live our mission for more people than ever before, as we have done so in Cuyahoga County; and a sustainable, low-cost, high-quality model for employers and payers in the region,” Boutros said.

MetroHealth, of course, isn’t the first Cleveland-based health system to expand its reach beyond the confines of Cuyahoga County. Cleveland Clinic and University Hospitals for years have been on aggressive growth trajectories, acquiring and building new facilities in Summit, Medina, Lorain and Portage counties, for example.

MetroHealth also wouldn’t be the only local system to recently inch out of its comfort zone, as Lake Health is plotting its first major foray beyond Lake County with a joint venture with a group of independent physicians on a new specialty hospital in Beachwood.

“In some sense, (MetroHealth is) a

little bit late to the game, because that’s what UH and the Clinic, and in parts of the region Lake Health, have already been doing for five or 10 years or more,” said Al- Boutros lan Baumgarten, a Minnesota-based health care consultant who studies the Ohio market, among others. “It doesn’t mean that there are not additional opportunities.”

For years, areas outside of Cuyahoga County have been asking MetroHealth to provide care, from school-based health programs to expanding MetroHealth offices in Discount Drug Mart stores to replacing services that have been closed or reduced, Boutros said.

But his answer has always been, “We can’t help,” he said, citing state law. Previously, MetroHealth could only open outpatient facilities outside of the county, and only through what Boutros called a “cumbersome” process.

MetroHealth went through that process once to open a facility in Brunswick, but after dealing with the multi-government bureaucracy of opening it, he swore never again.

Then the mayor of Medina, where Cleveland Clinic last year closed its maternity unit, pressed Boutros on why this limitation existed.

“So the question was why can’t we change it?” Boutros said.

And change it lawmakers did.

A recently passed bill, signed in late June by Gov. John Kasich, includes language that grants MetroHealth the ability to set up inpatient facilities outside Cuyahoga County

for the first time. Geauga, Lake, Lorain, Medina, Portage, Stark, Summit and Wayne counties will all be in play when the law goes into effect in September.

House Bill 111 — focused on authorizing nurses to compel mental health evaluations — includes a clause that, through specific language, applies exclusively to MetroHealth and opens up the eight other counties for the system to expand into. In deciding where to go, Boutros highlighted three main factors: the existence of a service gap; the ability to amass the expertise and staff to provide high-value care to the community; and whether there’s a customer base to sustainably support the additional services.

MetroHealth’s insurance product that it launched with Medical Mutual — dubbed CLECare — stands to benefit from the system’s possible expansion beyond Cuyahoga County.

One of the biggest complaints that Boutros said CLECare receives is that employers with multiple locations or employees who live outside of Cuyahoga have said there’s not enough easy access to MetroHealth facilities to warrant buying the insurance product.

Having MetroHealth facilities outside of the county will enable CLECare to expand beyond the county as well. And the potential added members that would bring would mean savings on the administrative side of running CLECare.

The model New locations could take shape in various ways, including partnering with current providers, adding services to established practices, opening new offices and locations, and

more. Boutros’ preference is to use existing facilities and spaces rather than building new, which is exactly what the system did in opening two new small hospitals in Cleveland Heights and Parma at the start of this year.

Expansion could also be through partnering on IT systems or on supply chains. He’s also not looking to compete with other providers, but rather partner with them or add access in places where there are gaps.

As MetroHealth looks outside of Cuyahoga, the system will have to find its space among the other providers, especially with the broadened reach of UH and the Clinic.

“They’ll never be of that size,” Baumgarten said, “but they can still be a formidable player in the market.”

Boutros said he sees a “significant amount” of independent providers in the nine counties MetroHealth can now reach.

“And if we can support one another to reduce costs and extend care to the population, we will do so,” he said.

MetroHealth receives about 2.8% of its revenue, or $32.4 million, from the health and human services levy to care for the most vulnerable population in Cuyahoga County. MetroHealth adds $128 million of its own money to help cover free care and Medicaid shortfall. In May, the MetroHealth board of trustees adopted a resolution that shows that every dollar of that levy will only be used to care for Cuyahoga County residents.

As MetroHealth enters other counties, it will be up to those governments to determine whether they add tax revenue to the system, but Boutros said he doesn’t feel there are

significant services that will require city or county support.

The potential decision to expand outside of Cuyahoga County comes as MetroHealth is also making significant investments in its main campus on West 25th Street in Cleveland, where the system is constructing a new hospital to replace its aging patient towers.

Boutros pointed to the system’s strong performance, growth and sustainability in recent years as evidence of its ability to expand while undertaking the $1 billion investment in its main campus.

Baumgarten said there is some risk with that strategy, but the system has proven itself capable of such growth, such as with its 2016 takeovers of former HealthSpan locations.

“They strike me as an organization with good leadership and one that can execute on a range of strategies at the same time,” Baumgarten said. “It will be a test, and it comes with some risks, but without any firsthand knowledge of what goes on in those walls, I think they’re in pretty good shape.”

For MetroHealth to continue to fulfill its mission, the system has to have a more regional reach and be able to fill service gaps for the community, Boutros said.

“MetroHealth’s mission compels us to provide care to those in need whenever we can, wherever they are,” he said. “My initial three years here or four years, we were focusing on Cuyahoga County because that’s all we could put on our plate. Today we have the experience, the capabilities, the capacity to help others. And in the process, to also strengthen MetroHealth and maintain its financial viability. This is, for me, a winwin.”

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RPM

CONTINUED FROM PAGE 1

“Our board elected to terminate the rights agreement (poison pill), which was scheduled to expire early next year, in response to changing corporate governance practices and investor input. Few companies continue to maintain rights agreements, like our former rights agreement, that have not been approved by stockholders,” said Kathie Rogers, RPM manager of investor relations, in an email correspondence.

But RPM is not in the situation of most companies. It has activist shareholder Elliott Management — by invitation or not; RPM has not said — helping guide the company. And neither RPM nor Elliott may have any incentive to tamp down speculation of a sale, because it drives up the price of the company’s stock.

RPM said in June that it had reached an agreement with the $34 billion hedge fund — without disclosing Elliott's stake in the company — to review the Medina company’s business practices and install two new members to its board of directors. That review has resulted in the cost-cutting program referred to by Ridenour, which is ongoing. Also, since Elliott came on the scene, RPM has undertaken a limited streamlining of its senior management, which included the early retirement of chief operating officer Ron Rice, announced July 6.

The appearance by Elliott already had the markets thinking RPM could be a potential acquisition target.

RPM’s share price shot up almost 25% per share in the month after the Elliott announcement and has continued to rise.

Since RPM’s SEC filing was reported on Monday, Aug. 20, RPM’s stock price has risen another $1 per share to about $66 at the close of trading last Thursday, Aug. 23. It was trading at fewer than $53 per share two days before the company announced it was working with Elliott Management.

“RPM actually has set new, alltime highs,” noted analyst Elliott Schlang of Cleveland-based Great Lakes Review, who has followed and owned shares of RPM for decades.

“Institutional accounts we work with love a stock with a catalyst. RPM always had a good reputation, but suddenly people think there’s a timing issue with a catalyst involved with Elliott and the acceptance of (elimi-

“Our board elected to terminate the rights agreement (poison pill), which was scheduled to expire early next year, in response to changing corporate governance practices and investor input.”

— Kathie Rogers, manager of investor relations, RPM

nating) the poison pill,” Schlang said.

Like many who have admired RPM under the Sullivan Family — current CEO Frank Sullivan is the third generation of his founding family to run the company — Schlang said he’s surprised by the company’s apparently willing embrace of Elliott. And he sees recent developments as part of a new scenario for the company created by the arrival of the activist investor group, which has usurped several CEOs at other companies and often triggers significant corporate changes at its target businesses.

“Because of the news of Elliott’s involvement, the stock has been on a steady uptrend and that’s been emphasized further by the poison pill,” Schlang said.

While the poison pill SEC filing alone doesn’t mean an acquisition is going to happen, Ridenour said, he’s convinced it’s likely after decades of thinking such a scenario was all but impossible.

“My view is colored by my knowledge of the Sullivan family and their strong entrepreneurial spirit. In that respect, I am surprised. However, they no longer had a controlling interest in the company, and (stuff ) happens when you go public and expose yourself to the open stock market and the denizens that prowl it.

They were performing somewhat sluggishly and a Gordon Gecko type surfaced to ‘HELP’ them,” Ridenour said via email.

He also said he thinks the early retirement of the poison pill provision has meaning in the case of RPM. “The fact is that someone on the board had to raise the topic, move that it be removed, there was a discussion and the board voted to remove it,” Ridenour wrote to Crain’s.

“In this instance, it is another indica-

tor that RPM will be sold after the leading shareholder upgrades its profitability.”

Schlang agrees that RPM likely didn’t take the action on a whim, but instead for some purpose. He also was surprised, though he’s not in favor of poison pills. He said they tend to protect poor managers, and he doesn’t think RPM ever needed to do that.

“I never would have guessed that, given the culture of the Sullivans, they would be removing the poison pill, as much as I think they should be removed,” Schlang said.

Schlang won’t go as far as to predict a sale anytime soon. He likes the stock for more fundamental reasons. But he said he now also thinks an acquisition of RPM is “conceivable” for the first time. As an investor, he’s happy for the premium the stock gets from thoughts of a takeout, he said.

“The (elimination of ) the poison pill is just another positive,” Schlang said.

If a sale happens, Ridenour predicts it will be done all at once, because he thinks RPM is worth more as a single company than it would be if it were broken into pieces — pieces the Sullivan family took decades to assemble.

Unlike A. Schulman, which Ridenour said recently sold itself from a position of relative weakness with at least one underperforming business unit, RPM is a healthy company that only needs to trim some costs. Ridenour thinks it will not have to do much house cleaning if it decides to sell.

RPM has built itself up over the decades by being the acquiring company, and that’s left it with a mix of subsidiaries and brands. Rustoleum paints, DAP caulks and sealants, Tremco roofing and Carboline corrosion-prevention coatings are among the hundreds of brand-name products the company sells to residential, industrial and specialty markets.

“I know of no business unit within RPM that is an ugly, underperforming, slow stepchild of the parent company. But there may be one hidden below their line of financial reporting. … In contrast to the Schulman sale, their value-added content is higher and their exposure to resin price fluctuations is less because they are truly a small collection of independent businesses that have a variety of business risks and variables associated with them,” Ridenour said.

Reuben Gobezie, M.D. Founding Director Cleveland Shoulder Institute, GO Ortho, Regen Orthopedics

“We work shoulder-to-shoulder with . ......................................... ........................................... .............................

Mayor Martin S. Horwitz •Mayor@BeachwoodOhio.com •216.292.1901

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8/24/18 1:57 PM

CRAIN’S CLEVELAND BUSINESS

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PA G E 7

At the Table

Fat Head’s makes big splash with massive new site “Now THIS is something,” I thought to myself.

Every so often, it’s fun to share a firsthand impression of a new business. After repeatedly passing Fat Head’s newly anointed beer hall and production facility, long under construction along I-71 in Middleburg Heights, I’ve wanted an opportunity to explore. A couple of days after the dedication ceremonies for Northeast Ohio’s latest drinking and dining destination, I dove in.

Just driving up to Fat Head’s Brewery, Beer Hall and Restaurant feels like an event. The 75,000-square-foot, $13 million complex is impressive — like approaching an Ikea, without quite that awesome a footprint (though almost as many cars filling the surrounding lots, it seemed).

When you enter, the beer hall’s sheer magnitude hits you: Soaring ceilings, painted matte industrial black, reach far above. Warm brown beams, suspended from chains, visually lower the eyeline yet lend heft.

Meanwhile, a wall of massive windows — most of which are garage-style doors that open onto a still-under-construction, 75-seat patio — flood the space with natural light.

It’s loud. Very loud. Boisterous talkers and general revelry abound. No surprise, this is a place for parties big and small, generating a kind of garrulous conviviality that seems to spill from table to table. Concrete, wood and glass bounce every sound. (If

your goal is an intimate tete-atete, this isn’t your place.)

You can barely squeeze through the bar. For that matter, you can barely land one of the restauJoe Crea rant’s 260 seats.

My wife and I arrived just past 4 p.m., earning us a 45-minute wait, every last minute spent on a bench near the doorway, which we were grateful to claim.

There’s plenty to see and do while you wait for a table in this undeniably impressive destination. Sidle up to the bar, where 20 of the 30 taps draw Fat Head’s products.

One wall is covered in bright white clouds on a field of blue sky, another an expanse composed of exposed tree stumps. Seating is high and low, a mix of communal and two-tops. A mix of woods — including ash, teak, oak and maple — add subtle textures.

And then there’s the self-guided tour of the brewery operation. If you’re a hops head, or at least possess a jot of curiosity, grab a beer and start walking. Strolling the corridor beyond the bar, you’ll gaze into a working factory where storage tanks loom.

Wall-mounted placards explain what’s going on. There’s the barrel aging room that promises succulent sipping somewhere down the line. (Up to

The main dining room at Fat Head’s Middleburg Heights complex mixes low and high tables, with the bar as a backdrop. (Joe Crea for Crain’s)

70 guests can dine among the barrels.)

Grain mills and the hops room give pause. And yet another massive space, dedicated to warehousing and shipping Fat Head’s prize-winning IPAs and ales, stopped me dead as I gawked at a towering wall of canned Head Hunter IPAs. That soon drew me back to my table, and my eternally patient mate.

Sipping a 16-ouncer of citrusy, tropical fruit-scented Sunshine Daydream Session IPA ($5.75), I settled in for what turned out to be extremely satisfying, very tasty bar food.

A hint of woodsmoke wafting through the space portends good eats, and executive chef Derek Wilson and

his team come through with a barbecue-forward menu with live-fire fare such as house-smoked wings, lots of burgers, XXL “Headwiches” and stone-oven pizzas. Plus lots of apps, salads, sandwiches and munchies.

Good house-made bar chips and excellent onion rings ($6 and $9, respectively) were the first to arrive. I’m rarely a fan of house chips (to me, they typically run leathery, soggy and dead-tasting), but these were thick enough to have substance, yet light and crisp. The beer-battered rings were downright airy, with only the slightest trace of grease.

My wife’s burger, the Kinda Blue ($13), was downright succulent.

Grilled red onion and arugula were tasty, but the green and red stuff were mere counterpoints to that succulent stack of beef, blue cheese and mildly spicy bacon-and-pepper jam. Wow. If you’re up for a full meal, check out the menu’s offer of “Smokehouse Specialties.” Half- and full racks of St. Louis ribs ($15 and $23, respectively) and a smoked 12-ounce pork chop ($14) are options, but I settled on the smoked half chicken dinner.

At $12, it was a very good choice.

Though the bird had barely gotten through adolescence (the portion was roughly the size of my full hand), it was cooked to perfection: handsomely smoked, crisp and tender, flowing luscious juices the moment my knife separated thigh from breast. Two sides come with it; I doted on the heartily spiced baked beans and a crock of the tasty but dry mac and cheese.

(Please bear in mind that those critical comments are based on a single visit. Here’s hoping the kitchen manages to hit things out of the park on a consistent basis.)

I’ve happily driven across town to join friends for a burger and beers at Fat Head’s Brewery and Saloon in North Olmsted, and I’ll be happy to bend an elbow with the neighbors at the nearby installation. A destination is born. If you’re up to top-of-thevoice conversations and top-decibel sound, and, one hopes, continued good chow, this a great addition to Greater Cleveland’s party scene.

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8/23/18 3:17 PM

PA G E 8

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CRAIN’S CLEVELAND BUSINESS

Opinion Personal View

Becoming a startup hub is hard. We need to do it anyway

By RAY LEACH

Editorial

Medicaid’s marvel An Ohio Legislature-mandated report released last week confirmed what many of us already knew: Ohio’s Medicaid expansion — a move made possible by the Affordable Care Act — was a good deal for the Buckeye State.

At this point, any calls to claw back this critical program offering health insurance to low-income Ohioans should be considered nothing more than ill-considered political opportunism that has the potential to inflict pain on thousands. Today, 653,000 Ohioans are covered through the Medicaid expansion.

Ohio Attorney General Mike DeWine, the Republican nominee for governor, ultimately even cozied up to the program after years of walking in step with many from his own party eager to unwind former President Barack Obama’s signature domestic achievement. Ohio Gov. John Kasich courageously defied his own party and, with some legislative ingenuity, made the expansion a reality.

The report supports the notion the Medicaid expansion isn’t serving as a handout. Instead, Medicaid is now acting as critical economic support for Ohioans who are, for example, between jobs, in school, suffering from addiction or other health challenges or serving as a household’s primary caretaker. In fact, fewer people are on the program than when it went live.

The most common reason for leaving Medicaid was finding employment. Moreover, emergency room utilization is down, primary care utilization is up and health is improving.

Going forward, the debate over Medicaid will certainly shift toward whether the state of Ohio can afford to pay for larger portions of the program despite the still-considerable support from the federal government. That said, any suggestions to trim eligibility should be shut down immediately. The health of many, after all, hangs in the balance.

Stumbling along

Back when Kasich was more focused on the job he had than the next job he wanted, he was fond of saying that Ohio’s gov-

ernment should move “at the speed of business.”

It was a snappy line that made sense to most people and appealed in particular to business owners frustrated by the slow, sometimes incomprehensible government bureaucracy. For the most part over its eight years, the Kasich administration has indeed made it easier to do business in the state.

And that makes the stumbling rollout of the updated Ohio Business Gateway all the more frustrating.

The site, a one-stop location for business transactions with the state, has been plagued by glitches since its new version went live in July. As Crain’s Jay Miller reported last week, the executive director of the Ohio Municipal League on Aug. 10 sent a letter to legislators complaining about the site’s “disgraceful failure … to collect and remit municipal tax revenues” on a timely basis.

Business owners are similarly frustrated. James Coco, an accountant in Medina with about 75 clients using tax sites in multiple states, told The Columbus Dispatch that the Ohio Business Gateway is “the worst tax site I’ve ever seen.” Erica Wolf, owner of Business Solutions in Wayne County, told the newspaper that tasks that once took five minutes to do in the old system now take 20 to 30 minutes with the new site. It’s difficult even to get started by updating logins and passwords.

The state acknowledges that the site has caused problems for users and is bulking up staffing of help desks to speed their navigation of it. Joe Testa, director of the Ohio Department of Taxation, has pledged that users struggling to file or pay a tax obligation on time will not be charged a penalty or additional interest, provided they formally open a case over the gateway.

Those are good starts, but ultimately, the gateway update — a project that to date has spent $15 million of an allocation budget of $22 million, according to The Dispatch — has to be fixed to work much smoother and faster for its users.

Otherwise, companies will continue to lose valuable time and suffer productivity losses as they get stuck in a morass of the state’s making.

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

CLEVELAND BUSINESS

CLEVELAND BUSINESS P008_CL_20180827.indd 8

Managing Editor:

Scott Suttell (ssuttell@crain.com)

Sections Editor:

Timothy Magaw (tmagaw@crain.com)

Contact Crain’s:

216-522-1383

Right now, Greater Cleveland is doing some very appropriate economic soul-searching. We’re asking ourselves some hard questions about what it’s really going to take to “win the future.”

This soul-searching extends to our startup ecosystem, which is why our absence from the list of rising startup hubs in a recent Center for American Entrepreneurship study made headlines in Crain’s Cleveland Business.

Not being included on this list might confuse some, since there are many statistics and success stories showing how far this startup ecosystem has come since the early 2000s — when it barely had a pulse. But we’re not the only ones who have spent the last decade-plus growing. In fact, some of our peer regions have grown much faster in the same amount of time.

To improve, we must understand why that is. And to do that, we need to reexamine what makes world-class startup ecosystems tick. Because, while these ecosystems are stubbornly complex and difficult to build, their fundamentals are well-documented.

When you boil it down, you can see three key elements working together. The first two are the critical ingredients startups need to survive: JJRisk capital — Meaningful amounts of equity capital to give local startups the runway they need to start and quickly scale their operation.

JJEntrepreneurial talent — The presence of, and support for, the kinds of experienced founders and talented team members who build fast-scaling startups.

The third element is the required outcome of the first two: JJSignificant profits — Large financial returns for founders, team members and private-sector investors (larger than they could generate by taking on less risky endeavors such as working for an established company or investing in the S&P 500).

Of course, there are many important subsets within these larger elements, especially when it comes to supporting entrepreneurial talent (mentorship, marketing, strong talent pipelines, connections to customers and corporate partners, etc.).

Much of our daily work at JumpStart involves some of these subsets, but it all builds up to one of the three key elements above, none of which work in a vacuum. They are codependent — like fuel, air and oil in a car’s engine. Blending them consistently over time, and at scale, is what generates the momentum that will guide more entrepreneurs, talent and capital into the ecosystem, making it self-sustaining.

This is simple enough to understand, but very difficult to control in the real world, where regions like ours face a historical myriad of economic challenges and more established startup ecosystems maintain a huge advantage because of the forward-momentum they have already built up.

In truth, there are only a small handful of U.S. regions that have managed to consistently blend all three of these elements over time to create truly self-sustaining startup ecosystems. Most other regions are still trying to balance one or more of the three key elements. Here in Cleveland, I believe our most significant challenge continues to be the shortage of risk capital. As it stands now, our collective venture capital firms would need to stretch to reach $300 million in assets under management.

Compare this to Columbus, where venture capital firms have assets under management totaling more than $700 million.

SEE STARTUP, PAGE 9

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.

8/23/18 4:33 PM

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PA G E 9

REDEFINING CORPORATE HOSPITALITY Personal View

Icy feelings about offshore wind project are misguided

By TED AUCH

Yiddish writer Leo Rosten once defined chutzpah as “that quality enshrined in a man who, having killed his mother and father, throws himself on the mercy of the court because he is an orphan.”

It is clear to me that the opponents to the proposed Icebreaker offshore wind project in Lake Erie are intent on redefining this phrase. This vital, six-turbine project — which would be the first built in fresh water in North America — is prudent and past due. The opponents are feckless and suffer from Not In My Back Yard (NIMBY) syndrome that their language and objections do a horrible job of disguising.

This is not to say there can’t and shouldn’t be a healthy debate as to the merits of offshore wind energy or even wind writ large. But the opposition seems to have no problem sweeping their dependence upon far more destructive sources of energy — in such exotic places as Belmont and Carroll counties — under the rug.

I know of what I speak, having worked for nearly six years investigating and photographing the impacts of high volume hydraulic fracturing (HVHF, aka fracking) on Appalachian communities. Cleveland Yacht Club members, boat associations and some birders point to the potential negative effects of this project on their interests. I would just say that kind of advocacy would be welcomed in Appalachia, where the natural gas and coal we have all used for decades has had a profound impact on the Appalachian forests and the species that depend upon them, such as pileated woodpeckers, and threatened or endangered species like the hellbender salamander, woodland box turtle, Indiana bat and northern long-eared bat. These forests are sometimes compared to the equatorial rainforests with respect to species diversity and richness.

Opponents to this wind project are apparently fine with fossil fuel energy generation as long as it is taking place in the poor and rural southeastern part of the state. Hearing yacht club members complain about wind energy when they likely rely heavily on natural gas and oil from the fracking process, or worse yet have invested in such companies, and on coal from mountaintop removal and strip mines, is tough to take, having seen the devastation caused by extracting these energy sources. If their objections were shared with Appalachian Ohio, I am quite sure those communities would wonder what all the fuss over wind power is about. As I told Justin Nobel writing in Belt Magazine this past May, “Frankly, I don’t really have tolerance for urban people

STARTUP CONTINUED FROM PAGE 8

This should take nothing away from the many regional investors (including JumpStart) who work hard to ensure that we do have some material capital to work with. However, we clearly still lack the amount needed to make significant progress when measured against other successful regional startup ecosystems.

JumpStart alone invested a record amount of $8 million in tech startups over the last year, and recently hit $50 million in total capital invested since 2004. Of course, we are proud of this activity, but Greater Cleveland’s ecosystem needs to be investing at least $30 million per year into startup companies in the future if we hope to build a truly self-sustaining ecosystem.

Otherwise, we get fits and starts in our ecosystem, as local investors get involved, then have to hold back from making more investments since they are out of risk capital, leaving entrepreneurs and their teams to work day-to-day in an under-resourced environment.

We know we have strong entrepreneurial talent in Greater Cleveland, and we know this talent can generate significant financial returns for investors. Cover-

P009_CL_20180827.indd 9

scolding Appalachia for fracking or coal, yet don’t want to push hard for wind or solar in their own communities.” We have spent centuries in this country extracting resources from rural areas to fuel urban growth. It is time for the urban centers of this country to start generating some of their own energy, rather than simply expropriating natural resources from the rural “other” and foisting the effects of that extraction onto the men, women and children of Appalachia.

There have been no oil spills at wind farms. However, oil spills have been common in the Appalachian gas fields since the mid-2000s. These communities are struggling with nearly monthly black swan events such as pipeline and well-pad explosions and/or spills, including the massive Exxon pad explosion in Belmont County this past winter. Waste production and disposal from fracking has caused myriad environmental and health costs that have wreaked havoc on the region’s water supplies. They have also caused low magnitude and relatively frequent earthquakes, which have significantly impacted real-estate valuations and infrastructure from Ashtabula County to Washington County.

Building an offshore wind industry in the Great Lakes will help to revitalize the manufacturing sector and will create jobs in the region. By contrast, very few of the jobs in the Appalachian shale fields, or pipeline construction sector, go to Ohioans, let alone union members. The oil and gas industry prefers instead to import labor from the shale fields of Oklahoma, Texas and Colorado, much like migrant workers follow the fruits and vegetables industry in California. Furthermore, hiring union members is anathema to the fracking industry with many of their CEOs and talking shops actively supporting “right-to-work” legislation across multiple states.

The Icebreaker proposal may not be the panacea for all that ails Northeast Ohio or the country. But we must dramatically reduce per capita energy demand and dramatically increase reliance on cleaner energy sources. We cannot let a minority of shorefront property owners and boaters dictate the terms of use when it comes to something as benign as a half-dozen wind turbines in Lake Erie.

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Auch is the Shaker Heights-based Great Lakes program coordinator and lead researcher at the FracTracker Alliance, which studies, maps and communicates the risks of oil and gas development and supports a renewable energy transformation.

MyMeds, CardioInsight, Explorys, TOA and many others have proven this. But like any engine, our startup ecosystem won’t run correctly unless we provide it with fuel — and that fuel is risk capital.

I’ll leave you with this quote from the author of the study mentioned above. “The establishment of startup hubs must be thought of in terms of decades, not years.”

As we enter the second decade of our journey, it’s important to remember our ultimate outcome will not be determined by some other region, or some abstract macroeconomic force outside our control. It will be determined by how well we aggregate the three key elements that power all successful startup ecosystems.

At the end of the day, we must find a way to aggregate enough capital to invest substantially more local funding into Greater Cleveland startups if we hope to build the forward momentum required to break out from our peer regions in the next 10 years.

That’s why I hope you will join JumpStart and myself in the coming months to find new ways to address this challenge and provide our startup ecosystem with the key elements it needs to be successful and self-sustaining — today, tomorrow and for generations to come.

Leach is CEO of JumpStart Inc.

8/23/18 2:54 PM

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CRAIN’S CLEVELAND BUSINESS

Focus SPORTS BUSINESS

JW Johnson’s expanded role is key piece of the Haslams’ bigger picture

By KEVIN KLEPS kkleps@crain.com @KevinKleps

When Ross Johnson came home from a Cleveland Indians game last spring, Dee Haslam was pleasantly surprised by her grandson’s new attire.

“He comes home literally head to toe in Indians gear, and I said, ‘Ross, what happened?’ ” Haslam said.

Johnson had been a New York Yankees fan, but — much to his grandparents’ delight — he had added another Cleveland sports team to his list of favorites.

Another move — this one a bit more serious than a 6-year-old’s sports fandom — was announced by the Browns not long after Ross’ trip to Progressive Field.

James Wood Johnson III — Ross’ father and sonin-law of Browns owners Dee and Jimmy Haslam — would be moving his family to Northeast Ohio and joining the club on a full-time basis July 1.

The move, which was made official almost eight months after CBS Sports reported that JW Johnson had become more involved with the Browns, was hardly a surprise. Still, it was significant, since it signaled the Haslams — 64-year-old Knoxville, Tenn., natives who purchased the Browns from Randy Lerner in 2012 — had a succession plan in place.

That’s a sensible decision for any business, let alone an NFL franchise that Forbes estimates is worth $1.95 billion. It’s an action, however, that all too often isn’t made, said Keven P. Prather, a partner and financial planner with Cleveland-based Skylight Financial Group.

“Most people with extreme wealth don’t have effective estate planning in place,” Prather said.

“You hear about dozens of examples every year.”

In just the last few years, the NFL, which bans corporate ownership, has had succession plans that were marred by family drama (the dispute between late New Orleans Saints owner Tom Benson’s third wife, Gayle, and Tom’s daughter, granddaughter and grandson), an unclear transition (Denver Broncos owner Pat Bowlen, prior to his health declining, said each of his seven children would get an equal share of the team upon his death) and Susie Adams Smith attempting to sell her one-third stake in the Tennessee Titans.

Then there are the Carolina Panthers, whose former owner, Jerry Richardson, forced his feuding sons to resign from the team in 2009, then announced he was selling the franchise in 2017, after being accused by several current and former employees of sexual harassment.

It’s not as if the Browns, with eight head coaches and nine general managers since returning in 1999, have been a textbook example of stability.

But the Haslams believe that John Dorsey, their fourth GM in six years, is the right person to finally get the franchise on track — and that sentiment is shared by many around the league.

The owners took care of another critical piece of business when they officially brought Johnson into the fold. Johnson is married to Whitney Haslam Johnson, the oldest of the Haslams’ two daughters and the chief experience officer at their other family business, Pilot Flying J. “Jimmy and I have always been a part of family businesses,” Dee Haslam told Crain’s in June.

“Most NFL teams are family businesses, so it’s very normal to do that.”

A succession plan, Haslam said, is “just something you do.”

During an interview with the media at Browns training camp July 28, Jimmy Haslam said JW John-

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BROWNS’ SUCCESSION PLAN: ALL IN THE FAMILY Illustration by Michael Hogue for Crain’s

8/23/18 2:42 PM

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SPORTS BUSINESS son “will be here 100% of the time. We are here a lot of the time, but not all the time, as you all know.”

Johnson spent 15 years as a director and producer for CBS Sports, then had tenures at Pilot Flying J and RIVR Media. In April, Dee Haslam stepped down as the CEO of Knoxville-based RIVR (she remains a partner and executive producer) — a step she said was necessitated by all of the time she is spending in Northeast Ohio.

Johnson also founded 3 Sons Media, a Nashville-based marketing and advertising agency.

His bio on the Browns’ website says he “works closely with chief operating officer David Jenkins in leading the business side of the organization.”

The earlier, the better Prather, the Skylight Financial Group partner and financial planner, said about 70% of family businesses fail or are sold before the second generation gets a chance to assume control. He applauds the Haslams for putting a succession plan in place so soon.

“Sixty is not too early,” Prather said.

An NFL owners guide that was compiled by MMQB in July identified likely successors for 13 of the league’s 31 privately held teams. (The Green Bay Packers are the only publicly owned, not-forprofit major sports team that is based in the U.S.) The Browns weren’t among the 13, though their 64-year-old owners are well below the ages of many of their peers in the league.

Ten of the 31 privately held teams have owners who are 75 and up, and 14 are at least 70.

That doesn’t include the Broncos, who are being run by longtime club president and CEO Joe Ellis until the Bowlen family trust selects a family member to take charge.

Seventeen clubs have owners who are older than the Haslams, and three others (the Buffalo Bills, New York Giants and San Francisco Giants) have at least one member of their primary ownership group in their late 60s.

Dee Haslam said the day-to-day production aspect of RIVR is “what eats you alive.” She said scaling back those duties at the production company she owns with partners Rob Lundgren and Lori Golden-Stryer occurred at the “perfect” time.

“Being part of the Browns is something I want to do for a long time,” Haslam told Crain’s.

Haslam then brought up Martha Firestone Ford, the 92-year-old owner and chairman of the Detroit Lions.

“She’s fantastic,” Dee Haslam said. “Don’t say I’m going to do this until I’m 90, but I hope I’m able to do this for a while. I really enjoy it.

And I think we’re making progress.”

Haslam, whose father, Ross Bagwell Sr., is a cable television industry pioneer, is among eight women with a primary NFL ownership stake, according to the MMQB’s analysis. She was appointed to the NFL’s conduct committee in December 2014 and serves on the league’s legislative committee. Jimmy Haslam was named to the league’s social justice committee in January and is part of the league’s business ventures, media and Hall of Fame committees.

Dee, who as a child “learned production at the kitchen table,” and Jimmy Haslam have taken a crash course in NFL ownership.

They “made every mistake in the book, and you learn from that,” Dee said in June.

It’s much too soon to know if the latest reboot will be as effective as the Haslams and others in and outside the organization believe. Another key plan — one that goes well beyond the playing career of rookie quarterback Baker Mayfield — is also in motion.

“We’re really fortunate that JW and Whitney wanted to move up here and be part of something that’s so special,” Dee Haslam said.

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PA G E 12

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Oh yeah. The equation in season tickets is you enter a year with a season-ticket base, you want to renew as many as you can — let’s get people to come back, let’s keep our customers — and then you want to sell more. We are on track to outperform last year. We’re showing growth, and that’s a tribute to our fan fever and belief that we’re heading in the right direction.

In May, the Cleveland Browns put David Jenkins — easily their longest-tenured executive — in charge of their business operations. Entering his 15th season with the franchise, Jenkins, previously the club’s executive vice president and chief financial officer, has seen quite a bit of bad football in his tenure. What he hasn't witnessed is a Browns playoff team (hey, the 2007 club was close).

And though his optimism has proven to be wrong before, Jenkins, like many fans of the team, is a believer that the latest shakeup, which put John Dorsey in charge of the football operations, has the Browns poised for success. — Kevin Kleps I’m sure there are plenty of times when you thought this is the regime that is going to get it right. Why do you think this one is different?

I think there are two lessons that I’ve taken away from these guys that really apply probably across any industry. One is the relationship that Hue (Jackson, the team’s head coach) has with his players. When you have those types of relationships, you can weather a whole lot. I think he’s proven that, and that translates to business. The other lesson I’ve taken away is just how fast the conviction that John (Dorsey, the new general manager) has brought in to bring change to our roster. If you have a plan, whether you’re in business or in football, and you’re surrounded by some really good people, like he’s brought with him and some guys that were here, you can bring a whole lot of change.

Those are two great lessons from my

perspective, and that’s why it feels so exciting as a coworker, compared to the past.

Fans get excited about draft picks and salary-cap space, but to me, Dorsey is the one who seems to instill a lot of faith. Do you hear that and sense that from fans?

Yeah, absolutely. John has a tremendous respect for tradition — tradition in brands like the Browns.

He understands what fans mean to the organization, and like he says, let’s awaken the sleeping beast. He knows it’s been tough. The credibility he brings in what he did in Kansas City or the two decades in Green Bay, even going back to him being a player, it relates to a whole lot of constituents or stakeholders, whether it’s the players or our front office, the coaching staff, our fans, our business side — people believe in that.

The Haslams have been pretty outspoken in saying they’ve made mistakes and they want to turn this around. Do you think fans have responded to that because that message has been pretty direct?

Yeah, I think it takes a pretty strong person to say, “Look, we had to learn how to be NFL owners. It takes some time to learn how to do that.”

When you’re honest and objective, I think people appreciate that. And then you start to establish credibility. Look, we talk a lot in the organization about establishing trust in the community, with our partners, with government leaders and civic leaders, so the more we’re honest and open, I think that creates credibility with the fan base. And they respond — training camp attendance is up 20% this year, season tickets are selling well, there’s a buzz around our brand and our organization. It starts at the top.

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SPORTS BUSINESS

New hire has high hopes for Spire hoops

By KEVIN KLEPS kkleps@crain.com @KevinKleps

Jermaine Jackson played for five teams in a five-year NBA career.

The 42-year-old has the look and feel of a pro — “I can still go out there right now and show the kids that I played on that level,” he says — and isn’t shy about his plan to develop NBA prospects in Ashtabula County.

“When they announce his name (on draft night), everybody in Europe, all those countries that are watching the NBA draft, just heard Spire Academy,” Jackson said.

The Detroit native was announced as Spire’s new head basketball coach in late June. He’s part of a new three-person team — which includes Tony Tucker, the executive director of academy and basketball operations, and associate academy director Justin Brantley — that hopes to build on the heights the hoops program reached under former coach Bobby Bossman.

For Spire Institute, a Geneva athletic complex with more than 750,000 square feet of enclosed space and 160 total acres, the basketball program is a critical source of revenue, since the high school and postgrad teams account for the majority of the academy’s enrollment total.

In 2017-18, about two-thirds of the academy’s 60 students were basketball players, Spire chief operating of-

ficer Jeff Orloff said. Full room and board for high school students ranges from $52,000 to $58,000, and postgrad students are charged $40,000 to $45,000. (Scholarships are available.)

Orloff said enrollment for the academy, which launched in fall 2012, likely will rise in 2018-19. Students can attend Saint John School in Ashtabula or Grand River Academy in Austinburg, and online classes are available.

Bumping up the boarding academy’s numbers would help the massive institute fill its 50,000 square feet of unused space, but the push is much more about quality than quantity, said Orloff, a former IMG senior vice president who joined Spire in 2010.

“Let’s be realistic,” the Spire COO said. “What’s the percentage of kids that are going to go to the NBA? And even if they do, we need to put the things in place that they need to succeed on and off the court. I think these guys all understand and want that.”

Jackson, who wasn’t drafted after a stellar career at the University of Detroit Mercy, is on board with Orloff ’s plan. The coach says the COO is his personality twin — “We fight all the time,” Jackson said — and Orloff says Jackson, more than any previous hire, is “holding us accountable.”

But that doesn’t mean the 1999 Horizon League Player of the Year — a former point guard who calls Kevin Durant a friend and Larry Brown a close friend and mentor — is going to curtail his oncourt expectations.

Jermaine Jackson file NBA career: Jackson appeared in a combined 135 games in five seasons with the Toronto Raptors (48 games), Milwaukee Bucks (30), Atlanta Hawks (29), New York Knicks (21) and Detroit Pistons (seven).

NBA claim to fame: He was part of the Oct. 4, 2005, trade between the New York Knicks and Chicago Bulls that featured Tim Thomas, Eddy Curry and Antonio Davis. Picks included in the deal were later used to select LaMarcus Aldridge, Joakim Noah and Wilson Chandler.

He points to Oak Hill Academy — a Mouth of Wilson, Va., boarding school that has produced the likes of Carmelo Anthony, Jerry Stackhouse, Rod Strickland and Rajon Rondo — as an example of what Spire can be.

Jackson said he has asked Brantley, the academy’s new associate director, to add Oak Hill to Spire’s schedule.

“They might beat our ass,” Jackson said. “At the end of the day, it’s a winwin for us. Now, when you’re recruiting a kid — ‘Damn, y’all played Oak Hill, Coach?’ ‘Oh, y’all only lost by nine?’ Or, ‘Damn, y’all beat Oak Hill

by three?’ Now it’s a different story.

Now you have kids calling you.”

‘Championship movement’ Spire gained national attention in January, when The Washington Post wrote a feature story on Robert Bobroczkyi, a 7-foot-7 Romanian who is entering his junior season at the academy. But its hoops clubs have gained their fair share of attention the last few years, via national prep school rankings and Spire’s list of eight to 10 NCAA Division I recruits each season.

Orloff believes Tucker, a former head basketball coach at IMG Academy, Jackson and Brantley can take the hoops program “to that next level.”

During Spire’s search for a basketball coach, Jackson urged Orloff to call Brown, whom the former guard met during a training camp stay with the Philadelphia 76ers, then coached

by Brown, in 2000. Brown sang Jackson’s praises to the Spire COO, and the legendary coach is a friend with whom Jackson will talk basketball for hours on any given day.

Jackson also was coached by former Cavs boss Lenny Wilkens (during a 48-game stint with the Toronto Raptors in 2001-02 and ’02-03), and his lengthy international career included guidance from Ettore Messina, a San Antonio Spurs assistant who has four Euroleague championships on his résumé.

Along the way, Jackson, who in

2018 completed a three-year run as an assistant at Detroit Mercy, said one of the many things he’s learned is the importance of “having a championship movement.

“What I mean by movement,” he said, “is championship conversations every day. When you go into a coaches’ meeting, that’s a championship conversation. When you go into practice, that’s a championship movement. In the weight room, off the court, when we go to picnics together, because we’ll do a lot of things as a family, as a movement — that’s the biggest thing to me.”

Managing the many personalities of a 40-plus-player roster doesn’t excite Jackson. Instead, what gets him going is the getting the chance to know each athlete. As a point guard, he said he had to be aware “that my shooter loves butter pecan ice cream.”

That’s part of being a leader, Jackson emphasized, and he hopes to “build every kid up before we even get serious on the basketball court.”

The latter will come soon enough.

“To be a pro, every day is a lifestyle,” Jackson said. “It’s your body, your mindset, it’s everything.”

When a visitor expresses skepticism that Spire, a FINA-sanctioned, Olympic-level training facility for swimmers, can become a prep basketball power on the level of Oak Hill, Jackson responds with the authority of Brown and the quick release of a Durant dagger.

“I don’t think. I know,” he said.

“But it takes a group effort.”

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8/23/18 3:05 PM

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CRAIN’S CLEVELAND BUSINESS

SPORTS BUSINESS

Q&A

CONTINUED FROM PAGE 12 Have you guys noticed anything yet from the new tax law, since companies might not be able to make the same business entertainment deductions they used to?

We’ve definitely had those conversations in working with not only our partners, but the league office as well. What’s the right approach? But it has not inhibited or prevented people from spending and engaging with us.

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Is there anything new regarding the efforts to bring the NFL draft to Northeast Ohio?

We’re still working through it. The draft in ’19 was awarded to Nashville. That left four cities in the running for 2020. Denver, I believe, had to pull out because of date availability, so that leaves Kansas City, Las Vegas and us. We still feel good about our bid. I think there are

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some logistical challenges in our bid that the league would have to work through with a multi-site bid between us and Canton. How do you move the draft to Canton for Day 3?

So we have to think long term about is that the best bid to put forth or not?

Have you talked to the mayor (Cleveland’s Frank Jackson) about this?

We have not had any real fruitful discussions about long-term planning, other than there seems to be a mutual interest. We want to be here, obviously.

Is there anything new on the future of FirstEnergy Stadium?

We are definitely thinking long term.

We have to be. We lease this facility from the city of Berea, we lease the stadium from the city of Cleveland.

We essentially operate them on a daily basis. As we think long term, there’s not a lot to update on, but our major priority — we’ve said in the past, we’ll continue to say it — is what’s best for this community. It’s a broader community discussion about what do they want in their facilities, what do they want their facilities to be, and we’ll just plan accordingly.

We’ll work with the city and other civic leaders to determine what’s best. We’re committed to this.

All options are still on the table then — a new stadium, a renovated stadium, a dome?

Whatever the option is that the community wants is on the table. So yeah. That could be a renovation of the existing stadium that contemplates no roof or a roof. It could be construction of a new stadium that contemplates those same elements as well. The challenge becomes is, if it’s a new stadium, site selection, remediation, stadium design, construction — that’s a longer time frame than being able to say, “Hey, we’re going to stay in this building and renovate.” So we just have to be really well-planned and operate with some sense of urgency.

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THE LIST

Highest-Paid Athletes

Ranked by base salary for current or most recent season

TEAM

BASE SALARY

TOTAL SALARY (SIGNING BONUS AMORTIZED) (1)

TOTAL CONTRACT VALUE

CONTRACT LENGTH (YEARS)

CONTRACT EXPIRES (2)

POSITION

SEASONS IN LEAGUE (3) COLLEGE

Kevin Love, 29

Cavaliers

$24,119,025

$24,119,025

$113,211,750

5

2019

forward/center

10

UCLA

George Hill, 31

Cavaliers

$19,000,000

$19,000,000

$57,000,000

3

2010

guard

10

Indiana University-Purdue University Indianapolis

Tristan Thompson, 26

Cavaliers

$17,469,565

$17,469,565

$82,000,000

5

2020

center

7

University of Texas

Edwin Encarnacion, 34

Indians

$17,000,000

$18,666,666

$60,000,000

3

2019

designated hitter

14

NA

J.R. Smith, 32

Cavaliers

$14,720,000

$14,720,000

$57,000,000

4

2020

guard

14

NA

Jason Kipnis, 30

Indians

$13,500,000

$13,666,666

$52,500,000

6

2019

second baseman

8

Arizona State University

Jordan Clarkson, 25

Cavaliers

$12,500,000

$12,500,000

$50,000,000

4

2020

guard

4

University of Missouri

Michael Brantley, 30

Indians

$12,000,000

$12,000,000

$36,000,000

5

2018

left fielder

10

NA

Jamie Collins Sr., 28

Browns

$10,650,000

$12,150,000

$50,000,000

4

2020

linebacker

5

University of Southern Mississippi

Cody Allen, 29

Indians

$10,575,000

$10,575,000

$10,575,000

1

2018

pitcher

7

High Point University

Corey Kluber, 31

Indians

$10,500,000

$10,700,000

$38,500,000

5

2019

pitcher

8

Stetson University

Kevin Zeitler, 27

Browns

$10,000,000

$12,400,000

$60,000,000

5

2021

guard

6

University of Wisconsin

Tyrod Taylor, 28

Browns

$10,000,000

$16,000,000

$30,500,000

2

2018

quarterback

7

Virginia Tech

Andrew Miller, 32

Indians

$9,000,000

$9,000,000

$36,000,000

4

2018

pitcher

13

University of North Carolina

Carlos Carrasco, 30

Indians

$8,000,000

$8,000,000

$22,000,000

4

2018

pitcher

10

NA

Kyle Korver, 36

Cavaliers

$7,560,000

$7,560,000

$22,060,000

3

2020

guard

15

Creighton University

Yonder Alonso, 30

Indians

$7,000,000

$7,000,000

$16,000,000

2

2019

first baseman

9

University of Miami

Trevor Bauer, 26

Indians

$6,525,000

$6,525,000

$6,525,000

1

2018

pitcher

7

UCLA

Yan Gomes, 30

Indians

$5,950,000

$6,033,333

$23,000,000

6

2019

catcher

7

University of Tennessee

Lonnie Chisenhall, 29

Indians

$5,587,500

$5,587,500

$5,587,500

1

2018

right fielder

8

South Carolina/Pitt Community College

Joel Bitonio, 26

Browns

$5,500,000

$6,000,000

$51,164,777

6

2022

guard

4

University of Nevada

Christian Kirksey, 25

Browns

$5,000,000

$6,200,000

$38,000,000

4

2021

linebacker

4

University of Iowa

J.C. Tretter, 26

Browns

$5,000,000

$6,750,000

$16,750,000

3

2019

center

5

Cornell University

Danny Salazar, 27

Indians

$5,000,000

$5,000,000

$5,000,000

1

2018

pitcher

6

NA

Collin Sexton, 18

Cavaliers

$4,068,600

$4,068,600

$8,833,560

2

2020

guard

0

University of Alabama

Jarvis Landry, 25

Browns

$3,500,000

$15,500,000

$75,500,000

5

2022

wide receiver

4

Louisiana State University

Brad Hand, 27

Indians

$3,500,000

$3,500,000

$19,750,000

3

2020

pitcher

8

NA

Rodney Hood, 25

Cavaliers

$3,472,888 (4)

$3,472,888

$3,472,888 (4)

1 (4)

2019 (4)

guard

4

Duke University

Josh Tomlin, 33

Indians

$3,000,000

$3,000,000

$5,500,000

3

2018

pitcher

9

Texas Tech

Cedi Osman, 22

Cavaliers

$2,775,000

$2,775,000

$8,317,064

3

2020

forward

1

NA

Sam Dekker, 23

Cavaliers

$2,760,095

$2,760,095

$7,921,655

4

2019

forward

3

University of Wisconsin

Brandon Guyer, 31

Indians

$2,750,000

$2,750,000

$5,000,000

2

2018

right fielder

8

University of Virginia

Britton Colquitt, 32

Browns

$2,550,000

$2,550,000

$11,200,000

4

2020

punter

8

University of Tennessee

Chris Hubbard, 26

Browns

$2,500,000

$5,800,000

$36,500,000

5

2022

tackle

4

University of Alabama at Birmingham

Jose Ramirez, 25

Indians

$2,428,600

$2,828,600

$26,000,000

4

2021

third baseman

6

NA

Channing Frye, 34

Cavaliers

$2,393,887

$2,393,887

$2,393,887

1

2019

forward

12

University of Arizona

Larry Nance Jr., 24

Cavaliers

$2,272,391

$2,272,391

$6,107,053

4

2019

forward

3

University of Wyoming

T.J. Carrie, 27

Browns

$2,000,000

$5,300,000

$31,000,000

4

2021

cornerback

4

Ohio University

Ante Zizic, 20

Cavaliers

$1,952,760

$1,952,760

$3,597,960

2

2019

center

1

NA

Jamie Meder, 26

Browns

$1,907,000

$1,907,000

$1,907,000

1

2018

defensive end

4

Ashland University

Myles Garrett, 22

Browns

$1,847,375

$6,911,876

$30,412,255

4

2020

defensive end

1

Texas A&M University

E.J. Gaines, 25

Browns

$1,750,000

$3,865,625

$4,000,000

1

2018

cornerback

4

University of Missouri

Rajai Davis, 37

Indians

$1,750,000

$1,750,000

$1,750,000

1

2018

center fielder

13

University of Connecticut-Avery Point

Oliver Perez, 36

Indians

$1,750,000

$1,750,000

$1,750,000

1

2018

pitcher

17

NA

Leonys Martin, 29

Indians

$1,750,000

$1,750,000

$1,750,000

1

2018

center fielder

8

NA

Isaiah Taylor, 23

Cavaliers

$1,512,601 (5)

$1,512,601

$1,512,601 (5)

1

2019

guard

2

University of Texas

Carlos Hyde, 27

Browns

$1,500,000

$3,166,666

$15,250,000

3

2020

running back

4

Ohio State University

Terrance Mitchell, 25

Browns

$1,500,000

$2,666,666

$10,000,000

3

2020

cornerback

4

University of Oregon

Roberto Perez, 29

Indians

$1,500,000

$1,625,000

$9,000,000

4

2020

catcher

5

Florida Gateway College

Mychal Kendricks, 27

Browns

$1,400,000

$2,228,125

$2,250,000

1

2018

linebacker

6

University of California

THIS YEAR NAME, AGE

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 43 43 46 47 48 49 50

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 Numerical data from spotrac.com. Additional information from espn.com and team websites. Crain's does not independently verify the information and there is no guarantee these listings are complete or accurate. Send questions, corrections and suggestions to Chuck Soder: csoder@crain.com.

(1) Total salary figures include only a portion of signing bonuses, which are typically amortized over multiple years for the purpose of calculating salary caps. (2) Represents the final season the player is under contract. NFL contracts technically don't expire until March of the following year. (3) Excludes the 2018 Browns season, which starts Sept. 9, and the 2018-2019 Cavaliers season, which starts Oct. 17. (4) Qualifying offer (5) Nonguaranteed

P015_CL_20180827.indd 15

8/24/18 9:26 AM

PA G E 16

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A U G U S T 2 7 - S E P T E M B E R 2 , 2 018 |

CRAIN’S CLEVELAND BUSINESS

AKRON

Neighborhood Watch

Sprawling Ellet is Akron’s suburb inside the city With strong schools and in-demand housing, the area now might get a business boost with airport development

By DAN SHINGLER

About this series

dshingler@crain.com @DanShingler

We thought we knew a fair amount about Akron, which is the hometown of some of us at Crain’s. That is, until we started driving around with Akron planning director Jason Segedy, who agreed to take part in an ongoing series to show us his knowledge and passion for the city — one neighborhood at a time. This month, we look at Ellet, where good schools and a strong housing market have given the neighborhood its identity.

To be sure, Ellet is part of Akron, but the neighborhood has its own identity and a suburban feel unlike other neighborhoods within just a few miles of downtown.

It was late to the party in terms of being developed and late to feel the full impact of the city’s crash when the rubber factory jobs left in the 1970s and ’80s. Many Ellet residents worked in aerospace or chemical facilities, as well as tire plants, and several of those jobs were affected later than the tire jobs. And many still remain.

Ellet is also huge.

“It’s a big neighborhood. It’s physically the biggest neighborhood in the city,” said Jason Segedy, Akron’s director of planning and urban development, as he began a tour of Ellet.

He started from the neighborhood’s main business district on Canton Road, where we caught up with him at one of Ellet’s most popular new businesses, Artisan Coffee.

Ellet is fairly white bread in character, and almost exclusively white in its demographic makeup, Segedy noted. Its 20,000 or so residents have been physically insulated from many of the problems that have affected more urban Akron neighborhoods over the years.

It’s as close or closer to downtown as Highland Square and Wallhaven, but Ellet, situated to the southeast of the city center, has physical barriers between it and most of the rest of Akron.

The biggest is the city-owned Akron Executive Airport (up until earlier this month known as Akron Fulton International Airport), which takes up nearly 1,200 acres on Ellet’s southwest side. Most of the rest of the neighborhood’s west side is blocked from East Akron by industrial properties, including Goodyear Tire & Rubber Co.’s test track, headquarters and facilities. To the north, I-76 and the Little Cuyahoga River separate Ellet and Goodyear Heights like a wall and a moat, with Goodyear Heights Metro Park largely completing the two neighborhood’s estrangement.

While some may lament the community’s lack of urban life, it doesn’t

When Tim and Emily Bechtel opened Artisan Coffee in Ellet, they “wanted to create an environment locally where people could have good conversations and form relationships.” (Shane Wynn for Crain’s)

seem to have hurt Ellet. Its newer housing — about 75% of its more than 9,600 homes were built after 1950, according to city data — and good schools have sustained it, Segedy said.

“It’s all those things,” he said. “The housing is newer, so there’s more demand for it. Ellet High School is well regarded, so it’s a magnet for people, and the housing is kept up better here — all of those things work together.

“The housing values here are more stable than any other part of the city, except maybe the northwest quadrant.”

The neighborhood also has benefited from a strong sense of identity, Segedy said. And if you’ve ever met anyone from Ellet, it’s likely they told you where they were from. Many of the folks who live in the houses built in the 1980s and ’90s — some of the most expensive and largest in the neighborhood — already had been Ellet residents.

“As blue-collar people here moved up, they often stayed right in the neighborhood,” Segedy said.

Ellet’s City Councilman, Bob Hoch, said you can count him as one of those intra-Ellet transplants.

Randy Theken purchased the old Akron Fulton International Airport terminal building, restored it and now uses it to house the headquarters for his medical device companies. (Dan Shingler)

P016_017_CL_20180827.indd 16

“My family has lived in the Ellet area since 1959, so we’ve been around a couple of years,” Hoch said.

He moved as far away as neighboring Tallmadge and Mogadore for a few years, but moved back to the Eastgate Commons development.

“My wife and I both grew up in Ellet, and we wanted the kids to go to Ellet High School,” Hoch said.

Schools are critically important to Ellet, he said, and the neighborhood is getting a brand new high school after its middle and elementary schools were rebuilt in recent years.

“That’s the last one in the Ellet cluster we needed to finish, Ellet High School. But all the schools in the Ellet cluster have been rebuilt recently,” Hoch said.

None of Ellet’s schools were closed in recent years, unlike in some other parts of town. That’s because Ellet has not seen the population loss or a decline in enrollment like other places, Segedy said.

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Artisan Coffee gives folks in Ellet a place to gather. The spot even offers a conference room for rent. (Shane Wynn for Crain’s)

Ellet residents have a lot of pride in the neighborhood, which has a strong housing market. (Dan Shingler)

Ellet has a pretty strong economy, and it might soon get a boost with airport development.

Akron Executive Airport has long been an anchor for industry. Though they’ve had significant layoffs in recent years, Meggitt Aircraft Braking Systems and Lockheed Martin both maintain operations at the airport.

The historic Goodyear Airdock is also on the site.

In recent years, the airport has attracted some new business. Local entrepreneur Randy Theken purchased the old airport terminal building, restored it and now uses it to house the headquarters for his medical device companies.

“I can fly customers right to my door,” Theken told Crain’s, noting that the airport helps his business because he needs to fly in surgeons who use his spine and joint implants.

Now the city is preparing to invest more money into the airport’s infrastructure and reconfigure the site so more land is available for development. Officials plan to market it in the hopes of attracting more businesses like Theken’s.

If the plan succeeds, Ellet likely will benefit, and that’s just fine, according to airport backers such as longtime Akron businessman Phil Maynard, who led a recent study about the airport’s economic development potential. He’s also a former Ellet resident who has owned businesses in the neighborhood.

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AKRON ties for jobs in the area,” Maynard said. “There’s a strong work ethic there.”

The airport, and Ellet, will also likely benefit from the razing of the Rubber Bowl — something Hoch describes as “both a good thing and a bad thing” because it needs to go to make development easier, but will take a lot of cherished memories along with it.

Adjacent to the airport, Akron’s Derby Downs — say it together Akronites: “Home of the All-American Soap Box Derby” — also has become a big center of activity in Ellet, Hoch said. The Derby Downs has added a lot of events in recent years.

A lot, as in about 70, International Soap Box Derby CEO Mark Gerberich said. The facility has opened itself up to the community in recent years and continues to expand its activities as it hosts school groups, family event days and veterans days, with about 10,000 people now going down the track each year, he said.

“It used to be the only time that people could be on the track was during the world championships. It was sacred ground, if you will. Now, we have more than 70 events a year,” Gerberich said.

A place to meet What Ellet might lack, though, are places residents can walk to or hang out in, with the glaring exception of Artisan Coffee. Hoch, Segedy and others say Artisan Coffee has been a godsend to the neighborhood, which was sort of the intention of its founders, Tim and Emily Bechtel.

“We wanted to create an environment locally where people could have good conversations and form relationships,” Tim Bechtel said. “We

The demolition of the Rubber Bowl has been a long time coming and should make development in Ellet easier. (Shane Wynn for Crain’s)

drove by this building, and it was for sale, but there had been like five different things here, so I wasn’t sure …

But it’s been great.”

Mission accomplished in terms of creating a neighborhood meeting spot.

Hoch and Segedy both said it’s their go-to place when meeting anyone in Ellet. There’s even a small conference room that the Bechtels loan out for $5 an hour, but it can be tough to get on short notice, they say.

The Bechtels considered other neighborhoods, including downtown, but they have roots in Ellet, so it was their first choice.

“We actually do live about five minutes from our shop now,” Tim Bechtel said. “Initially, we had looked at a downtown location, but we decided we wanted to be more of a community shop rather than geared toward the business crowd.”

The place is also an economic driver. The shop so far employs 20 people, many of them from Ellet, he said.

The fact that Artisan Coffee roasts its own beans, makes its own syrups and does a lot of other stuff on site and by hand necessitates having a few more employees, but it pays off in sales, Bechtel said.

Bechtel likes Ellet a lot, and though it does need a few changes, he thinks it’s moving in the right direction, he said.

“I definitely think there could be some new things that could go in,” he said. “The plaza that’s right next to us and the one up by Acme, those could probably be refreshed at some point.

But housing is relatively cheap here still, and I know quite a few young families that have moved in. I feel like Ellet’s transitioning. The old Goodyear employees are retiring and being replaced by younger people.”

To place your listing in Crain’s Cleveland Classifieds Contact Kate Rozek at 216-771-5276 or email CLBClassified@crain.com

REAL ESTATE

CRAIN'S CLEVELAND BUSINESS

Segedy said the trend of young people moving into Akron’s neighborhoods is one the city wants to continue as it seeks to rebuild its population. He’s hoping that some of the city’s new programs — such as tax abatement for residential development and rehab, or money to help businesses fix up their facades — will be put to use in Ellet.

The city has targeted the neighborhood for growth, too.

Executive Property,

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PAGE 37

“This is one of our Great Streets areas,” Segedy said of Canton Road.

“Hopefully, some of the new programs can help businesses like this.”

The Great Street program brings infrastructure investments to improve the streetscape. Segedy noted that Artisan Coffee would likely be eligible for some of the city’s new grants for facade improvement.

“We think Ellet has a lot of potential,” Segedy said.

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8/24/18 4:49 2:41 PM PM 8/22/18

PA G E 18

|

A U G U S T 2 7 - S E P T E M B E R 2 , 2 018 |

CRAIN’S CLEVELAND BUSINESS

ADVERTISING SECTION

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.

BANKING

MBA

WEATHERHEAD SCHOOL OF MANAGEMENT

BANKING

weatherhead.case.edu

ENGINEERING & CONSULTING

ACCOUNTING Carol Wang

Mandisa Gosa

Assurance Manager

Senior Interior Designer

RSM US LLP

Ernie Manuel

Kiley Smith

Scott J. Piazza

Senior VP, Regional Business Development Leader

VP, Senior Commercial Relationship Manager

Roadway Project Manager

Home Savings Bank

KS Associates, Inc. welcomes Scott J. Piazza, P.E. to our Transportation Group. As Roadway Project Manager, Scott leads design teams to successful project completion, serving clients that construct, own, and maintain roadways.

Scott has 16 years of experience in roadway design including new and rehabilitated roadways, safety studies, maintenance of traffic, traffic control, signals, lighting, and bicycle facilities.

Scott is a licensed Professional Engineer in Ohio, Illinois, and West Virginia.

Fifth Third Bank Fifth Third Bank has named Ernie Manuel as Senior Vice President, Regional Business Development Leader. In this role, Ernie is responsible for driving the Bank’s growth in the commercial middle market space within Northeast Ohio.

He has more than 30 years of commercial banking experience specializing in the areas of asset-based lending, investment banking and capital markets services.

Home Savings is pleased to announce the promotion of Kiley Smith to Vice President, Senior Commercial Relationship Manager serving the Cleveland market. Smith joined Home Savings in December of 2010 as Vice President, Commercial Relationship Manager. Today her core responsibility is to manage current commercial customers and bring in new customers to the Bank.

KS Associates, Inc.

We are pleased to announce that Carol Wang has been promoted to Assurance Manager.

She has approximately seven years of experience in public accounting, providing professional services and business advice to a diversified base of clientele, including manufacturers and distributors, not-for profit organizations and employee benefit plans. She also has experience in auditing business combinations and group audits reporting to foreign parents.

ACCOUNTING

C O N TAC T

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

P018_CL_20180827.indd 18

ThenDesign Architecture (TDA) is proud to welcome Mandisa Gosa to the firm as a Senior Interior Designer. With over 14 years of experience, she brings expertise in all aspects of the design process including schematic design through project completion. Outside of the office, Mandisa enjoys spending time with her husband and three sons.

LAW John Ramsey

Assurance Senior Manager

Partner

RSM US LLP RSM is pleased to announce that Keri Bove has been promoted to Assurance Senior Manager. Keri has been with RSM for approximately 10 years, and has been a part of the Cleveland office for the last two years. She serves clients primarily in the manufacturing, retail, service, and employee benefit plan groups in Ohio.

ARCHITECTURE

Kohrman Jackson & Krantz Kohrman Jackson & Krantz welcomes John Ramsey as a Partner in the Domestic Relations & Family Law Practice Group. John brings more than 10 years of legal and litigation experience to the firm. He serves clients in such matters as divorce and dissolution, child custody, alimony, child support, prenuptial agreements and more. John is also skilled in alternatives to litigation, such as collaborative and cooperative divorce processes. John is a graduate of the University of Akron School of Law.

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McCarthy, Lebit, Crystal & Liffman McCarthy, Lebit, Crystal & Liffman Co., LPA is pleased to announce that 14 of the firm’s attorneys have been named to the 2019 edition of The Best Lawyers in America®. Ann-Marie Ahern, Larry Crystal, Robert T. Glickman, Tobias J. Hirshman, Charles I. Kampinski, Kimon P. Karas, Robert R. Kracht, Kenneth B. Liffman, David A. Lum, Christian R. Patno, Andrew S. Perry, Richard A. Rabb, Charles P. Royer and David A. Schaefer are the McCarthy Lebit attorneys named in the 2019 edition.

8/23/18 4:09 PM

CRAIN’S CLEVELAND BUSINESS

Source Lunch Chris Horne

Publisher, The Devil Strip When Georgia native Chris Horne was lured to Akron — partly by a job opportunity for his wife and partly by a cool “Akron, OH” T-shirt he spied at a Black Keys concert — he saw a void in local news coverage, “namely telling stories about the things that make you want to live somewhere.” So in 2015, at a time when magazines were disappearing, Horne decided to start one: The Devil Strip, an arts and culture monthly. But it wasn’t just local journalism Horne wanted to produce. It was local journalism with a mission. “What good is the work we do if it’s not there to make our community better?” he asked. Now, Horne is off to Stanford University for 10 months as a John S. Knight Journalism Fellow (he’s hired two editors to run The Devil Strip while he’s gone). There, he will focus on creating a sustainable business model for local news outlets. He thinks the answer is to create news co-ops, where those in the community invest in memberships, essentially making the outlet community-owned. “There is no storyteller in any community as powerful as its local news media,” he said. — Sue Walton

Five things What’s your car radio tuned to?

“If not podcasts, it’s WKSU or WAKR.”

Favorite book?

“Breakfast of Champions,” by Kurt Vonnegut Jr.

Hidden superpower?

“Surrounding myself with people who are smarter, more talented and more creative than I am.”

What’s the best advice you’ve gotten?

“If money is your only problem, you don’t have much of a problem.”

— From his mom

What’s the worst?

“Don’t start a print magazine in 2015!” — From more than a couple people

Lunch spot Primo’s Deli 1707 Vernon Odom Blvd.

Akron 330-745-9056

The meal A spicy Italian sub, olive salad, chips and water; a four-cheese grilled cheese with bacon, chips and Diet Coke.

The vibe With its vast selection of brews, Primo’s is more like “a beer cooler with a deli inside it,” Horne said. The sandwiches are consistently voted among Akron’s best.

The bill $ 23.66 with tip

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Was the idea, at first, to make the publication for-profit?

To be frank, I’m lazy about certain things and it was just easier to get started as a for-profit. I’d sold ads before, so I believed I could get enough businesses and nonprofits together to support the concept that way. And there was something I really liked about having to earn my supper. If I started out as a nonprofit, not only would I have all this paper and money spent for the 501(c)3 application, but I’d also have to hope foundations and donors would think that starting a local print magazine in 2015 was as good an idea as I thought it was. I could prove my gut was right with a for-profit.

Tell me about your upcoming fellowship.

I only applied on a whim because I was a fellow in last year’s National Arts Strategies Creative Community Fellowship. They changed my life by changing the way I think about a lot of things. It made me hungry for another experience, but one that was more directly in my field. Everyone in the JSK Journalism Fellowship is pursuing the answers to a question that falls into one of a few categories.

I’m on the local news team, but there are also fellows working on issues around trust in news media and diversity in journalism. So I expect there’ll be a fair amount of cross-pollinating. My question is about how we create local news platforms that enrich communities by thinking beyond crime and courts reporting, and how we make replicable models that can sustain that financially. I think there are flaws in both the for-profit and nonprofit model that can be addressed effectively by adapting the multi-shareholder co-op model for local news, so communities can own the media that cover them.

Exactly where is The Devil Strip in the process of shifting to a nonprofit or co-op?

It’s all transitional. We have a fiscal sponsor. So we’re receiving grants …

We’re going to form a board. We’re probably not ever going to be a formal 501(c)(3), just because that’s a pain in the butt and I think when I get back I’m going to want to move into the co-op. …

But this is also a nice test for us. After a year of doing this, if we’re really comfortable as a nonprofit, then we’ll go ahead and become a 501(c)(3). ... I

still think the co-op model works better. … The nonprofit is mission oriented, but the problem is there is also a lack of access because people who make the rules are the board of directors. And how do you usually pick a board of directors? (It’s) who can raise you money. Then you get in the same icky place with money as you do as a for-profit, which is, “Where is my next paycheck coming from?” A co-op is a nice blend where we can be mission oriented and the people we’re serving are the people we should be serving.

Can money still be made in newspapers?

I absolutely think there’s money to be made in newspapers, but I don’t see how you can expect both quality publications and the kind of double-digit profit margins from the heyday of Jack and Jim Knight. The reason I’m ditching the for-profit model isn’t because I don’t think it’ll work, but that I’m afraid it will. If The Devil Strip succeeds, what happens if I get hit by a bus or another owner takes over and isn’t so Akron-minded? It’s really hard for the community to keep a private for-profit in check. You can say people vote with their pocketbooks or their feet, but we’ve already seen what happens when people abandon a product: It gets worse. The folks in charge don’t always recognize why it was failing, why people left, and sometimes — as in the case of local news, I think — they compound the inciting problem.

The Devil Strip says it’s “nakedly pro-Akron.” Does being a cheerleader pose a risk of, perhaps, clouding objectivity or news judgment?

If we were only willing to be a cheerleader, I think the “nakedly pro-Akron” thing would be a horrible idea. But we take a tough love mindset to being pro-Akron. We have a host of problems, but just as we think there’s more to the city than that, we also know that cheerleading doesn’t fix those problems. There’s a time to rally behind your city with the pompoms, and there’s a time to get out front with your shovel and start digging. The reason I wanted to declare our stance is because I want people to trust us. If you know where we’re coming from, that we’re nakedly pro-Akron, you won’t have to wonder. We side with the people who make this city unique. That is the basis of our news judgment.

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