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CLEVELAND BUSINESS

NEO’s top savings institutions Page 41

SPORTS BUSINESS

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

If Cleveland becomes a Say Yes to Education city, its students will have access to guaranteed scholarship funding and more coordinated, cohesive support services throughout their education.

A group including the city, the school district and major funders have been hard at work in recent months, trying to meet the organization’s requirements. And they’re making progress.

Say Yes to Education got its start in Philadelphia about 30 years ago. Today, the organization has communitywide chapters in New York and North Carolina, along with some smaller cohort chapters in other regions. Cleveland is trying to become the organization’s next communitywide chapter.

SEE SAY YES, PAGE 8

BUSINESS OF MUSIC

Mega-promoter rivalry worries smaller venues

By DOUGLAS J. GUTH clbfreelancer@crain.com Original image by Alex Farmer | @vinillafarmer

Competition for Cleveland’s concert dollars intensified this summer when AEG Presents spent more than $3 million to renovate the historic Agora Theatre & Ballroom. Live Nation, long the dominant music promoter in Northeast Ohio, harkening back to its roots as the iconic Belkin Productions, added its own major venue in July, taking over booking rights at the 2,200-capacity Masonic Temple.

Shawn Trell, the Los-Angeles-based chief operating officer of AEG, views the Agora renovation — and the promoter’s increased presence in Cleveland overall — as more business as usual than any direct challenge to Live Nation’s longtime grip on the regional music scene.

“I’m not focused on what Live Nation is doing at all,” Trell said. “I’m looking at what we’re doing and where we think we can do great things. What we did with the Agora is a perfect example of that. It’s one of the best venues in the market, not only in Cleveland and Ohio, but anywhere.”

SEE VENUES, PAGE 41

Entire contents © 2018

by Crain Communications Inc.

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2022 NBA showcase is main event on Cleveland’s star-studded calendar

WHAT IT COULD MEAN TO BE AN ALL-STAR TOWN

By KEVIN KLEPS kkleps@crain.com @KevinKleps

In the next six years, Cleveland will host the MLB All-Star Game, two rounds of the NCAA men’s basketball tournament, the NBA AllStar Game and the NCAA Women’s Final Four.

All are coveted events because of the out-of-town visitors they bring.

The marquee attraction, though, is the NBA All-Star Game — the 2022 version of which was awarded to Cleveland on Nov. 1.

“It really does live up to the hype,” said Kathryn Schloessman, the presi-

dent of the Los Angeles Sports and Entertainment Commission.

L.A. hosted the NBA’s All-Star festivities in February 2018, about 4½ months before LeBron James announced he was leaving the Cavs for the Lakers. Micronomics, an L.A.-based economic research and consulting firm, estimated that the event would produce $116 million in spending and 27,000 room nights at hotels, and bring in 110,000 visitors.

And while economists often question such figures, the impact of the NBA’s winter showcase is legit, Micronomics managing director Roy Weinstein said.

SEE ALL-STAR, PAGE 9

11/9/18 3:06 PM

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CRAIN’S CLEVELAND BUSINESS

New firm will take long view of PE model

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

A new long-hold company formed by a cofounder of Evolution Capital Partners will allow investors to keep their positions in smaller, scalable businesses longer than the private equity model typically provides.

Founder Brendan Anderson said that through ScaleCo, investors can become more ingrained with scaleup-grade companies and can help them grow over longer periods of time.

Scaleup companies typically are smaller businesses that are further along their life cycles than startups.

Think of it as the second rung in a startup’s evolution.

Smaller, second-stage businesses long have been the focus for Evolution, which specializes in the micro-buyout niche. The firm tends to invest in companies with at least $500,000 of earnings before interest, tax, depreciation and amortization (EBITDA). It has 10 companies in its portfolio today.

“But that is a traditional PE model,” said Anderson, who cofounded Evolution alongside managing partner Jeff Kadlic. “So unfortunately, when we get one of these companies that could be a true long-term scaleup, we have to sell it.”

A typical hold period in the private equity sector is between five and seven years.

“That’s not a bad thing,” he added.

“But having said that, if you own a

“The big difference with ScaleCo is forming a permanent capital company, so we could sell, but we don’t have to. We could hold on for 10, 15, 20 years if people like.”

— Brendan Anderson, founder of ScaleCo

Contributed photo

small company in a PE fund, when it gets really humming along, it’s probably time to sell. The big difference with ScaleCo is forming a permanent capital company, so we could sell, but we don’t have to. We could hold on for 10, 15, 20 years if people like.”

The formation of ScaleCo is partly influenced by the work that Anderson grew into in years past.

Formerly a banker in Chicago through the late ’80s and early ’90s, Anderson, who came to realize he didn’t want to be a banker forever, opted instead to become a business owner. So he bought a bankrupt industrial park in Sugar Grove, Ill., in a about through the deal he learned B:10.25” bank with support from colleagues T:10.25” who helped him develop his chops as

an entrepreneur.

When Evolution was formed several years later by him and Kadlic, an inspiration there was to move along efforts with helping other people get into or otherwise grow their own businesses — not unlike how Anderson was supported as an entrepreneur himself. The first two deals Evolution did were sourced by newspaper ads asking people if they wanted to buy out their boss.

Anderson and Kadlic connected in those early days with Paul Doman, president and CEO of Accurate Group, which offers appraisal and title services to nationwide real estate finance providers. Evolution bought a majority stake in that firm in February 2009, and that particularly scalable business grew significantly in the wake of the investment.

Anderson highlights Doman and that deal as the sort of dynamic he wants to continue replicating with scaleup-grade firms, but with the freedom of doing so outside a private equity model. A handful of Evolution’s investors encouraged Anderson to set up something like ScaleCo so they can stay involved with firms they really don’t want to part with that could turn into lucrative, longterm investments.

As Anderson shifts his focus to ScaleCo, Kadlic will be keeping involved with running the private equity business at Evolution. He’ll be launching Evolution Fund IV independently and seeing through platform investments made out of the prior two funds.

“We are in the process of expand-

ing our network of dedicated industry experts in order to further accelerate our partner companies’ revenue trajectories,” Kadlic said. “I am looking forward to continuing Evolution’s established tradition of inspiring entrepreneurs and their small businesses to grow and thrive.”

Anderson said he intends for ScaleCo to focus on companies in the Cleveland market or those within a reasonable drive of it. There’s no formal fund to work out of there like there would be in a private equity dynamic, but the firm will take controlling stakes in whatever it invests in, just as Evolution does today. Conversely, ScaleCo can cut smaller checks in investments than Evolution typically would. That’s because, in the private equity model, an investment has to be large enough to translate to the kinds of returns limited partners are promised.

The other benefit of ScaleCo is creating its own network of entrepreneurs who can support each other more generally, which is something important to Anderson as part of the mission to support small businesses.

After all, the purpose of ScaleCo is to provide general support in a company’s growth, not just providing an injection of capital.

Anderson said he already has a deal lined up for ScaleCo that could settle before the end of the month involving a firm in Detroit, which is on the fringes of the geographic area he’s focusing on.

“It’s moving a little faster than we expected,” he said, “but we’re excited.”

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Small biz sales pick up, but market is mixed

By JAY MILLER jmiller@crain.com @millerjh

A startup isn’t the only route to business ownership for would-be entrepreneurs.

In fact, the market for buying and selling small businesses these days appears quite active nationally, though the local picture may be a bit more mixed, but still active.

Transactions are buoyed by the large baby boomer generation of small business owners, for whom retirement often means selling their small plastic tubing maker, trucking company or restaurant. At the same time, attractive interest rates encourage buyers.

Lisa Rucker, vice president and SBA business development officer for PNC Bank in Northern Ohio, said the bank’s small business, change-of-ownership lending activity that she tracks is robust.

“It’s interesting, in a good way, that we’ve got the activity,” she said. “The economy is leading individuals with the entrepreneurial spirit to take some leaps of faith again because there was a point in time when people were keeping everything close to the vest.”

Rucker, who mostly sees buyers looking for financing, said retiring baby boomers influence the level of activity, but so does the strong economy.

“Retirement, yes, is one (factor),” she said. “But I also think people have more confidence that the businesses are looking better now than they have in years past.”

Michael Benson, principal of Empire Business Associates, a one-person business brokerage in Mayfield Village, said his business is strong, though not without its problems. He deals mostly in businesses in manufacturing, distribution and service businesses, rather than the more active markets in bars, restaurants and franchises.

“The economy is doing well in Cleveland, businesses are selling,” he said. “The problem is finding people that want to sell.”

He even uses a telemarketer, who spends 20 hours a week calling, looking for businesses for sale.

“There were some bad years, and now the economy is good and people want to hang on to the business as long as they can,” Benson said. “The day the economy falls apart, they’re going to call me and say, ‘I want to sell,’ but they will have waited too long.”

According to BizBuySell, an online marketplace for business buyers and sellers, small business transactions in 2017 were up 27% nationally over 2016, with deals showing stronger financials and faster sales. BizBuySell reported that sale prices of businesses sold in the third quarter of 2018 reached new highs.

“We’ve now had a few record-breaking years in a row in terms of transactions, and it appears 2018 will be no different” said Bob House, BizBuySell’s president, in a news release. “The fact that small businesses are selling for the highest price to date and demand hasn’t slowed shows how much confidence both sides have in today’s market.”

BizBuySell’s transactions for the Cleveland area, a small market for the company, has not kept up with the national pace, nor the activity seen by PNC. The online intermediary closed 29 transactions in the region in 2017, compared with 30 in 2016. By comparison, the website re-

P003_CL_20181112.indd 3

ports 54 transactions in the Columbus market and 46 in Pittsburgh in 2017, while it had 29 in Cincinnati.

Those numbers are dwarfed by many large metropolitan areas, which reported sales in the hundreds. BizBuySell had 237 sales in Boston, and an off-the-charts 1,025 for Tampa.

The median sale price for a Cleveland-area small business in BizBuySell’s universe was $224,500 in 2017.

That’s more than the $162,000 in Columbus, but less than Cincinnati’s $250,000 or Pittsburgh’s $339,750.

Transactions, and prices, are affected by the availability of financing, which is available either as a direct bank loan or a loan guaranteed by the U.S. Small Business Administration.

“Financing is not a problem. It’s

gone up a little bit, but the banks have been very good about financing deals,” Benson said. “If it’s priced right, the banks will finance it.”

Interest rates vary widely, with an interest rate range currently between about 3% and 10%.

Rucker said PNC makes both direct and SBA-guaranteed loans, which have a higher interest rate, to small businesses. Which business get which kind of loan, and what interest rate, depends on their down payment or collateral, as well as less tangible factors.

“A lot of the acquisitions have a lack of collateral, though they have a balance sheet with receivables, inventory and equipment,” Rucker said. “But the sale price also focuses on the intangibles, the brand the sell-

er has built up over the years. There is a value to that, but not a concrete collateral asset that is aligned with it. So, with a lack of collateral on a lot of acquisitions, we use SBA loans to get access to capital.”

Benson said it usually takes a year from the time a business goes on the market to the closing of the sale.

Finding a buyer who can follow through after examining the business’ place in the market and its financial strength, and then get financing, takes time, he said. And the intangibles, as well as a buyer’s strategic position, make a difference in how quickly a business sells.

Benson said he's working with a large, profitable business, with more than $1 billion in profits annually, about 15% of sales, that he’s having

trouble selling. At the same time, he has a business that does $2 million in annual sales but makes only $80,000 annually.

“You would not believe the activity we have on the one that makes only $80,000,” he said. “There are people who look at it and say while it’s doing $2 million they believe the owner has been running it poorly.”

The business also is attracting interest from what he calls “synergy” buyers.

“They can move it into their operation, eliminate some rent and other things, and get it for a good price,” he said. “Everything comes down to price.”

At the same time, trucking companies are a hard sell.

“You can’t find drivers,” he said.

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Channel Products’ new headquarters in Solon reflects the company culture that president and chief operating officer Teresa C. Hack has been working to instill.

There are inspirational sayings on the walls and an open workspace designed for collaboration. There’s a gym and a game room for employees. And outside every office, there’s a list of that employee’s strengths.

Hack believes in working to and leveraging employees’ strengths instead of focusing on their weaknesses.

“I feel like, if you get culture right, if you get people right, then everything else is right,” Hack said. “It comes together.”

Channel Products makes gas ignition components for products including gas grills, commercial and industrial appliances, and outdoor fire pits. Hack said the company does a lot of customization for its customers. In the last 18 months, it has filed for nine patents. For example, Channel Products designed a fire pit that can be controlled remotely by a phone app.

Hack has led Channel Products since 2012. The company was acquired by Weinberg Capital Group, where she had been working, in 2011.

Ronald Weinberg, chairman of Weinberg Capital, said his firm saw the potential for Channel Products' “growth and creativity” as an electronics manufacturer. But Weinberg Capital quickly realized the compa-

ny needed some improvements and that management changes would be necessary.

Hack met with the owners of Weinberg Capital as they started Hack the process.

“And one of the owners said, ‘OK great. I’ll start a search,’ ” Hack said.

“And I just stopped them and said, ‘Give it to me. I can do it. I can turn this company around.’ ” Weinberg called that a “dramatic moment of truth.” The firm decided to give her the chance to try. Weinberg said Hack has strong leadership skills and has been successful in recruiting other members of the team.

“It turned out to be the right decision. It turned out to be a decision we needed to make,” Weinberg said.

“I knew Teresa’s capability, although she’d never run a company like this.

But she learned and we’ve given her a lot of support, and now, of course, she’s really in many ways rebuilding it.”

It took some time, but Channel Products is growing. Hack declined to share specifics on annual revenue, but said that in recent years, revenue and profitability have grown significantly. The company has built a wholly owned plant in China, which allowed it to bring more of its manufacturing in-house.

And this fall, Channel Products started the move into its new headquarters at 30700 Solon Industrial Parkway in Solon, which should be complete this year. Overall, about

$2.3 million was invested in the buildout and furnishing of the Solon location.

Its old building in Chesterland was stuck in the past, Hack said, as was the company’s culture.

Hack said the company’s current culture revolves around four main pillars: Channel University, which is focused on training; Channel Me, which is centered on rewarding individual performance; Channel One, which puts a premium on making sure customers are satisfied; and Channel Cares, which encompasses the company’s philanthropic efforts.

The customer element is particularly important to Channel Products, and it extends to how they treat each other. The company has an external team and an internal team focused on what Hack called “customer thrill,” which aims to go beyond traditional customer service. For example, the company has set up an ice cream bar for customers’ employees. That’s on the external side.

On the internal side, Channel Products employees are expected to view one another as customers, and they should be trying to “thrill” each other, Hack said.

“I view everybody within the company as my customers, people that I have to thrill and take care of and nurture and grow,” Hack said.

Today, Channel Products has nearly 200 employees, 55 of whom are in Ohio. The rest are in China.

Hack said the values of the company extend to that plant, but local leaders are allowed to implement the culture in a way that works for them.

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PA G E 5

LIST ANALYSIS

Number of thrifts in region shrinks, but deposits still grow Savings institutions list: See the list of savings institutions ranked by Northeast Ohio deposits on Page 41

By CHUCK SODER csoder@crain.com @ChuckSoder

Our Savings Institutions list just keeps getting smaller.

Back in 2009, a total of 23 thrifts — an umbrella term for savings and loan associations and depositor-owned mutual banks — held deposits in Northeast Ohio.

Now only 13 remain on the list.

Last year, the list lost two thrifts that converted to commercial bank charters: Home Savings Bank in Youngstown and CFBank in Columbus.

This year, the list lost two more: Wayne Savings Community Bank in Wooster and Hometown Bank in Kent, both of which will now be eligible for our annual Banks list.

Home Savings, CFBank and Wayne Savings all converted for the same reason: to make more commercial loans (if you’re a savings and loan, 65% of your loan portfolio has to consist of mortgages).

Hometown Bank made the switch for a seemingly mundane reason that happened to be pretty important: The stock in its employee stock ownership plan was being undervalued by appraisers because they were determining the value by comparing Hometown Bank to other savings institutions, said CEO Howard T. Boyle II. This year, the appraised stock price jumped by about 15%, he noted.

“We were just being lumped in with institutions that we’re not all

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The 13 savings institutions on the list held $14.31 billion in deposits in Northeast Ohio as of June 30, up 2.2% from the previous year.

The new total got a big boost from First Federal Lakewood. Its local deposits rose 11.5% during that period.

Third Federal, No. 1 on the list by local deposits, saw its total climb 2.5%.

Local deposit growth for the 13 thrifts on the list has slightly outpaced inflation since 2009, according to data collected over the years from the Federal Deposit Insurance Corp.

But the story changes if you look at local deposits for all savings institutions over time — including those that changed their charters or got acquired by commercial banks. By that standard, the number of local dollars held by savings institutions has dropped by 20.1% — and that’s without accounting for inflation.

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The proposed redevelopment of the 21-story Union Trust Building, a landmark at 925 Euclid Ave. best known as the former Huntington Bank Building, is causing 100-yearold Virginia McMonagle to consider retiring.

That’s because the proprietor of Rickey C. Tanno Jewelers, a family owned fine jewelry and gift store in the nearly empty arcade on Union Trust’s lower level, has been told by the Cleveland-based Millennia Cos. to vacate by year’s end. The store’s closing is the latest sign of the proposed renovation of the property since Millennia bought the building for $40 million last year, along with other real estate moves downtown.

“Upset is not the word for how I feel about it,” McMonagle said of the status of the store opened in 1949 by her late husband, Rickey C. Tanno, who died in 1973.

Although the arcade — a labyrinth of glass and wood encased shops with marble floors — would have to be retained to keep the federal and state historic tax credits crucial to Millennia’s proposed $350 million project to put apartments, condominiums and restored offices in the structure, McMonagle and her son, Terry Tanno, say they have not been told they may return after the renovation. Or anything, they said.

The store has gotten its second notice to leave, Tanno said, from an attorney for Millennia he refused to identify.

Asked if they plan to relocate downtown, McMonagle defers to Tanno, who said he’s not making any plans. The store has a sale underway, but they do not characterize it as a going-out-of-business sale. Tanno adds that he also wouldn’t put McMonagle’s stated plan to retire in stone.

“This stuff is the culmination of a process that began two owners ago,”

Tanno said. “It’s in the category of things you can’t control.”

The shop sells Rolex watches, Waterford crystal and Mont Blanc pens and operates as a jewelry design and repair shop.

“It’s all for sale,” Tanno said. “We’re getting rid of it.”

The store itself is a gem, with wood paneled walls and a safe that McMonagle said was installed as the building was erected in the 1920s.

Her late husband bought the shop

“We were here when this building was absolutely No. 1.

Every major law firm and accounting firm was here.”

— Terry Tanno, proprietor of Rickey C. Tanno Jewelers

from the second jewelry store owner to operate in the space and moved his then-20-year-old business into it from across the street.

McMonagle points to a drawer in a cabinet on one of the shop’s walls and says when Terry Tanno was a baby she would pull it open and put him there for a nap.

“We were here when this building was absolutely No. 1,” Tanno said.

“Every major law firm and accounting firm was here.” It’s still an impressive list of former tenants, for the 1 million-square-foot building once housed the law firms now known as Jones Day and Squire Patton Boggs, as well as the EY accounting firm.

Tanno said the store closes in the late afternoon because it’s so quiet.

Longtime customers continue to find it, he said.

Where the prior two owners, who discussed but failed to proceed with renovation and adaptive reuse plans, told McMonagle they would be able to stay or return, she said they have not had that talk with Millennia or met with its owner, Frank Sinito.

Active here and elsewhere For his part, Sinito is a busy guy. Millennia has launched a massive renovation of the Statler building, a nearly 300-suite apartment building in a former hotel at 1127 Euclid, at the opposite end of the same block as Union Trust.

Legislation is pending before Cleveland City Council to authorize a tax increment financing plan for Statler, which allows property taxes to be used for renovation for 20 years.

Upgrades are planned for commercial areas in the building that largely were untouched when Statler was converted to apartments from offices in 2000, along with updates of rental suites.

While Millennia has been making multiple big moves in downtown Cleveland in apartments and offices, such as buying Key Center in 2016, where it established its office in part of the Key Tower office skyscraper, it remains active in its core low-income housing business.

Through Millennia Housing Development Ltd., Sinito late last month bought four low-income apartment buildings in Jacksonville, Fla., with 768 units for $51 million, according to the Jacksonville Daily Record. Millennia has been managing the troubled complexes since 2017, when the U.S. Department of Housing and Urban Development selected it to buy and renovate the properties.

A news release issued last Thursday, Nov. 8, by New York City-based sister companies R4 Capital and R4 Capital Funding, a national affordable housing tax-credit syndicator and mortgage lending firm, said it had arranged $41 million in equity funding and $82 million of tax-exempt funding for Millennia to buy, rehabilitate and rebrand the complexes.

The properties are known, for now, as Calloway Cove, Palmetto Glen, Valencia Way and The Weldon. All told, Millennia operates more than 30,000 units in 27 states.

Two calls and an email to Sinito’s assistant requesting comment were not answered by Friday morning, Nov. 9.

11/9/18 2:01 PM

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CRAIN’S CLEVELAND BUSINESS

SAY YES CITY | A CRAIN’S SERIES

SAY YES

About this series: Crain’s Cleveland Business is taking a closer look at the city’s efforts to become a Say Yes to Education chapter. Next week, we’ll examine the role the business community plays in those efforts.

CONTINUED FROM PAGE 1

When Say Yes initially vets a community, it’s looking for a commitment to its main pillars: post-secondary success, transparency, collaboration, sustainability and data-based decision-making, said Gene Chasin, president of Say Yes to Education. Cleveland passed the test and was named as the leading candidate to become a chapter in May 2017.

At that time, Say Yes estimated that a decision would be made within 12 to 18 months. Now, the end of that timeline is closing in. But it’s not a hard and fast deadline, and if Cleveland can’t meet its requirements by the end of the year, it doesn’t lose its chance. It’s just about meeting the milestones that form the foundation of the program, Chasin said, and he “absolutely” believes Cleveland is progressing well in its efforts to become a Say Yes chapter.

“It’s been terrific to see the level of commitment locally,” he said.

Cleveland has made strides toward improving its educational system in recent years, namely by implementing the broad “Cleveland’s Plan for Transforming Schools” in 2012. The plan aims to provide all students in the district with a high-quality school,

Say Yes to Education president Gene Chasin: Cleveland “absolutely” is progressing well in its efforts to become a Say Yes chapter. closing or replacing failing schools. If Cleveland becomes a Say Yes chapter, the services will support those efforts, not replace them. Say Yes isn’t about building supports from the ground up. It’s about identifying, connecting

Cleveland Metropolitan School District CEO Eric Gordon: The district is “right on track” to complete all of the Say Yes milestones by the end of the year. and scaling local support systems, Chasin said.

The milestones that Say Yes to Education expects communities to

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meet before being named a chapter include raising a significant amount of money for the local scholarship fund, creating a plan for the rollout of the support services and officially forming governance agreements among the relevant parties.

The pre-launch efforts are being conducted informally under the name Cleveland’s Path to Say Yes. The six convening partners were the city of Cleveland, Cuyahoga County, the Cleveland Metropolitan School District, the Cleveland Foundation, College Now Greater Cleveland and the United Way of Greater Cleveland.

Eric Gordon, CEO of the Cleveland Metropolitan School District, said the goal still is to complete all of the Say Yes milestones by the end of the year, so Cleveland could begin implementing the program in the spring. And he thinks they’re “right on track” to do so.

Cleveland has already worked through a number of milestones, Chasin said, creating data-sharing agreements and commissioning a series of analytics on post-secondary readiness throughout a student’s K-12 career. The analytics help identify “pinch points” where students are “falling off the pathway” toward post-secondary readiness, Chasin said. Those points, like kindergarten readiness, become areas of priority for the chapter that the wraparound services are designed to address.

The scholarship fund shows families in Say Yes chapters that college is a

possibility, Chasin said. But the wraparound supports that address the social and emotional challenges students face outside of the classroom are where the difference is made.

The governance agreement is well underway, too. So far, the Cleveland Metropolitan School District, the Cleveland Public Library, the Cleveland Teachers Union and the Cleveland Council of Administrators and Supervisors have all signed it, Ann Gynn of Cleveland’s Path to Say Yes said by email. The city of Cleveland and Cuyahoga County are expected to sign it in the coming weeks.

In Gordon’s eyes, there are three major milestones left for the group to meet.

The group needs to finish raising the money for the scholarship fund, which Gordon hopes to accomplish by the end of 2018. The total goal hasn’t been disclosed yet, but the group needs 60% of the total committed by the time the chapter is announced, Gynn said in an email. The Say Yes program is designed to provide scholarships to public post-secondary schools for students in its communities through locally raised funds. It also partners with a number of private schools to offer scholarships.

In Cleveland, the group also will have to identify an executive director, who could begin once the chapter is announced. Gordon said the posting closed recently; there were almost 100 applicants.

And the group must have a rollout plan of core services, with a plan to pay for all, and Gordon said there’s a group working on that. Core services include supports like mental health services and after-school programs.

The group would be allowed to use the $15 million Say Yes to Education would bring to the community if Cleveland is chosen as a chapter to implement these services, though the programs eventually would have to be self-sustaining.

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CRAIN’S CLEVELAND BUSINESS

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ALL-STAR

“People think it’s great we have the star power (the NBA All-Star Game brings), but also think about what it does for Cleveland.”

— David Gilbert, Greater Cleveland Sports Commission president and CEO

likely to approach Micronomics’ L.A. estimate of 27,000 room nights.

The tens of thousands of guests help to fill area restaurants, use transportation services, buy merchandise and other items, and pad the income of workers. It’s why Schloessman, despite L.A. hosting so many star-studded events, says of the NBA All-Star Game: “We die for that every time.”

There’s a cost, too The NBA All-Star festivities — the headliners of which run from Friday to Sunday and include a celebrity game, a Rising Stars contest, 3-point contest, slam dunk competition and Sunday’s main event — come with a considerable price tag.

Charlotte estimated it would need almost $6 million for the 2017 AllStar Game — $2.6 million of which stemmed from providing facilities (the Spectrum Center, Bojangles’ Coliseum and its convention center) to the league for events.

Gilbert said Destination Cleveland and the sports commission will be tasked with raising “millions” for the NBA All-Star Game. The money, he said, will be a combination of public and private funds, and some major corporations have already pledged their support.

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Send in the stars

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“I’m not interested in spending that would be engaged in by locals,” Weinstein said. “If you look at the report, you can see the increase in hotel revenue (more than $2 million per day, according to figures from the 2011 All-Star Game in L.A.). The impact is real with respect to the study I’ve done. It starts with people who are there who wouldn’t be there (otherwise).”

The Greater Cleveland Sports Commission is estimating that the 2022 NBA All-Star festivities will produce an economic impact of $100 million, which David Gilbert, the organization’s president and CEO, said is likely conservative. L.A.’s cost of living is considerably higher, he noted, but Cleveland is hosting the event four years after the event was held at Staples Center.

“Whether it’s an event that brings in half a million (dollars) or a hundred million, we try to be very conservative in how we estimate it and show the methodology behind it,” Gilbert said. “It doesn’t help any of us if the numbers are doubted.”

The league requires a block of 6,000 hotel rooms on peak nights, which would account for about 84% of the 7,103-room total for the segment of the Northeast Ohio market that includes downtown Cleveland and Independence. With, according to a source, four peak nights during All-Star week, Cleveland would seem

N O V E M B E R 12 - 18 , 2 018

In a five-year span that begins in June, Cleveland will host six sporting events that are projected to have an economic impact of at least $4 million.

June 22, 2019: CONCACAF Gold Cup — Estimated economic impact of $4 million July 9, 2019: MLB All-Star Game — $65 million Aug. 10-11, 2019: USA Triathlon Age Group Nationals — $6.5 million March 20 and 22, 2020: NCAA Division I men’s basketball tournament, first and second rounds — $8 million Feb. 20, 2022: NBA All-Star Game — $100 million April 5 and 7, 2024: NCAA Division I Women’s Final Four — $22 million Quicken Loans Arena, which has hosted a combined 10 NBA Finals games the last four years, will be the home of the 2022 All-Star Game. (Kevin Kleps)

“It’s part of what you commit to up front to say if you’re awarded (the game), these are things you’re going to do,” Gilbert said.

Mike Mulhall, the sports commission’s vice president of business development, said the Huntington Convention Center of Cleveland and the Wolstein Center will each host All-Star festivities that will be determined. The convention center would seem to be the likely choice for the league’s massive fan festival.

A source told Crain’s that, with the NBA controlling the vast majority of the ticketing inventory and the league taking over Quicken Loans Arena throughout the week, the Cavs would be happy if they broke even for their All-Star efforts.

The return on investment, though, is well worth it, Cleveland and L.A. officials told Crain’s.

The sports commission is projecting that the combined economic impact of the 2019 MLB All-Star Game, the 2022 NBA All-Star Game and the 2024 Women’s Final Four will be $187 million. That, Gilbert points out, is comparable to the $188.4 million impact that was estimated for the 2016 Republican National Convention.

“And we have to raise a lot less than that,” said Gilbert, who was an officer of an RNC host committee that raised $65.7 million.

Events can be ‘platform’ Schloessman, the president of L.A.’s sports and entertainment commission, said an overlooked component of major sporting events is the impact they can have on a community.

The NBA donated a respective $350,000 and $150,000 to L.A. organizations that were selected by the winning and losing teams of the 2018 All-Star Game. The league also organizes a series of community service projects during All-Star week.

“There are 25, 30 events going on the week of,” Schloessman said. “I tell people, don’t just focus on the game and the stuff in the arena. That obviously drives impact and gets media attention, but I’m more interested in stuff being done in the community by the NBA or things going on in the community because of the game.”

Cities, she added, “wouldn’t be spending money to get these events if they weren’t showing impact.”

Cleveland — which landed the NBA All-Star Game in large part because of The Q’s $185 million renovation ($115 of which the Cavs are funding) — is accustomed to being

on the big stage.

“People think it’s great we have the star power (the NBA All-Star Game brings), but also think about what it does for Cleveland,” Gilbert said.

In addition to raising funds, one of the next steps is figuring out how the upcoming events can “elevate” the region.

“How do we use them as a platform to advance other big community issues?” Gilbert said. “And I really believe our ability as a community to do that is above any other city in the country. That’s a big part of the reason why these (events) keep coming back.”

The busy docket also includes the

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Estimated impact of the events: $205.5 million

2019 returns of the CONCACAF Gold Cup and the USA Triathlon Age Group Nationals, and Gilbert and the Browns remain hopeful that Cleveland will be selected to host an upcoming NFL draft.

“It’s pretty cool stuff, and it’s all probably going to be in a four- or fiveyear period,” the sports commission president and CEO said.

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11/8/18 4:33 PM

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CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

Meet the newest members of the Crain’s staff

Editorial

Fast start Nationwide, Democrats made significant inroads in last week’s midterm elections, flipping more than 300 state legislative seats, winning some key gubernatorial races and claiming a majority of the nation’s attorney general offices.

None of that is the case in Ohio, which, increasingly, is losing its claim to be a swing state.

Republican Attorney General Mike DeWine won a solid (50.7%46.4%) victory over Democrat Richard Cordray, while the GOP took all the down-ballot races and held on to veto-proof majorities in the state House of Representatives and Senate — ensuring conservative policies will continue to govern the Buckeye State, in areas including tax cuts and business regulations.

DeWine will come to the governorship, then, under near-ideal circumstances, with a friendly Legislature, a good economy and a budget that doesn’t require a major overhaul, as now-Gov. John Kasich faced when he took office. But the governor-elect shouldn’t mistake those factors as a license for resting on GOP laurels.

Job growth in Ohio of late has been good but not exceptional, and we hope DeWine and the Legislature redouble efforts to create an environment in which companies can thrive in the state.

During the campaign, DeWine talked about bringing greater accountability at JobsOhio, the nonprofit economic development organization that’s funded with state money, though he offered few details. We hope to hear more on that soon, since JobsOhio is a key tool to improving the state’s economy. The organization reports it has helped secure commitments from companies to create nearly 140,000 jobs and $6.2 billion in payroll over the past six years, and to maintain more than 416,000 jobs and $24.3 billion in payroll across the state.

DeWine also talked about increasing job-training programs.

Among his ideas: funding 10,000 “nanodegrees,” or short-term job-training programs. That’s certainly an idea worth pursuing, and one we look forward to seeing DeWine flesh out as he takes office.

We didn’t endorse DeWine but have always considered him a smart, decent and dedicated public servant. Ohio needs him to lean on his experience and steadiness to keep making economic progress.

Big get bigger Cleveland’s bid for the Amazon HQ2 project was feeble and not remotely transparent. Turns out that pretty much describes the entire process.

The e-commerce giant has spent the past year looking for a second headquarters that would house 50,000 employees, but, in an apparent switch, now has decided it wants to put those people in two new locations. And those two places are, in all likelihood, New York and suburban Washington, D.C. — both of which already have substantial Amazon operations — though some reports indicate Dallas remains a possibility.

On Twitter, Mike Rosenberg, a reporter for the Seattle Times, in Amazon’s hometown, summarized the process of the company’s farcical “search” this way: 1. Amazon announces nationwide search for HQ2 2. Cities offer billions in taxpayer subsidies 3. Amazon leverages those offers to get hundreds of millions in subsidies from NY & DC areas, its biggest East Coast offices now 4. Amazon picks NY & DC ...

About 240 cities applied to be considered for HQ2; 20 were identified as finalists. But in the end, it looks like Amazon is making the choice, as Rosenberg put it, “to increase jobs by 0.2% in the N.Y. metro area & 0.8% in the D.C. area, two of the richest places on Earth.”

Or, as Vox’s Matthew Yglesias wrote, “High-end employers continue to try to pack in to already-expensive supply constrained cities ... not a great trend.”

Cleveland was never in the running to land the project. But that also was the case for just about every other city that participated in this sham, which underscored a central economic development truth for mid-tier cities: Instead of trying to hunt “the big one,” focus on talking with local companies about what they need to grow indigenous local industries?

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

CLEVELAND BUSINESS

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Managing Editor:

Scott Suttell (ssuttell@crain.com)

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Read Crain’s online: crainscleveland.com

We’ve been in hiring mode here at Crain’s Cleveland Business, and I’m pleased to announce the addition of three new staff members, plus the promotion of another.

Stephen Copley was named Crain’s sales manager last month. A native of Berea and a Kent State University graduate, Steve is an experienced B2B sales leader, having worked for Interblend Media, Grand View Media, North Coast Media, The Plain Dealer, Penton and Advanstar.

Steve will assist Crain’s Cleveland director of advertising sales Lisa Rudy.

Joining Steve on the sales team is Loren Breen, who brings a decade of print and digital media sales experience to Crain’s. Loren grew up in Lyndhurst and graduated from Wittenberg University.

Elizabeth He has worked for The Plain Dealer, McIntyre Cleveland.com, Grand View Media and a digital marketing company.

Both Loren and Steve bring strong track records of engaging the business community and strengthening the value of print and online content. And like Dawn Donegan and Laura Kulber Mintz, the other members of our team, they are smart, enthusiastic and creative sales people who know our business community and how to help them reach their customers.

On the newsroom side, experienced journalist Michael von Glahn has been hired as sections editor for Crain’s Cleveland. He will oversee the creation and production of our weekly special Focus editorial section, which is usually tied to a specific industry or sector, such as real estate, small businesses, health care or, as you can see in this issue, the business of music.

Michael also is a native of Northeast Ohio, having grown up in Bay Village, and he has decades of editing and writing experience. He’s worked for various publications in our area, including Northern Ohio Live, Small Business News and Cleveland Magazine. Most recently, he served as editor of the award-winning College Store Magazine, a trade publication for the National Association of College Stores, where I first worked with him. I found him to be a gifted storyteller and editor, and I’m excited to add such a talented journalist to our award-winning newsroom.

In another newsroom move, veteran Crain’s reporter and editor Chuck Soder has been promoted to the newly created position of senior data editor. In that role, Chuck will lead the data team across the four markets in which Crain Communications publishes a city paper and website: Cleveland, New York City, Chicago and Detroit. The data team’s goal under Chuck’s leadership is to make sure our lists and data products are indispensable — to print readers and to Data Members who download them online.

We at Crain’s Cleveland Business, and across Crain Communications, which we are proud to be a part of, are constantly looking for ways to continue to serve the business community, and support the important independent reporting our news staff does. We do that through advertising sales in print and digital, with events and with our custom content publishing. These additions to our staff will allow us to continue doing that at the high level our readers and advertisers deserve and expect.

And, as always, I’m happy to hear from you, whether it’s an advertising question, a news tip, a comment on the work we’re doing or just to say hello.

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

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

Please include a telephone number for verification purposes.

11/8/18 4:30 PM

CRAIN’S CLEVELAND BUSINESS

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PA G E 11

LAND FOR SALE: Beacon West Park in Westlake

ONLY 4 LOTS LEFT! Personal View

By ASHLEY BASILE OEKEN

Since its founding in 2012, Engage! Cleveland has been a catalyst for young professionals in the Greater Cleveland area. Engage is a community engagement organization for young professionals and business/ community leaders who are passionate about making Cleveland a lasting home for the next generation. Our goal is to attract, engage and retain young, diverse talent to Greater Cleveland by connecting young professionals to people, jobs, organizations and events.

To serve our audiences better, we decided to survey young professionals in the Greater Cleveland area about what they want and need from our region.

From there, Engage! Cleveland’s inaugural 2018 State of the Young Professional Community Survey was born. It aimed to better understand the professional, civic and personal lenses through which young professionals view our area and to provide insights into how those perceptions are driving their decisions and actions. The survey addressed three key areas of interest: 1. The reasons young professionals are choosing Cleveland to live, work and play.

2. The attributes that attract young professionals to particular jobs and/or employers.

3. The role civic engagement plays in the lives of young professionals.

For an inaugural survey, we were pleased to have 650 survey respondents representing a variety of ages, industries and more. The survey generated some terrific data that will help not only Engage, but the broader community that now seems focused on the next generation. Some key findings include: JJNinety-five percent of our survey respondents expressed a positive perception of quality of life, with our three greatest assets being: 1.

Cost of living Natural assets 2.

3.

Arts and culture

region’s largest challenges were noted as: 1.

Public transportation 2. Safety Economic development 3.

Friends and family are the No. 1 reason young professionals live here, and family and friends are the No. 1 job search method. This is unique data that isn’t found in other emerging cities such as Austin, Texas; Nashville, Tenn.; and Portland, Ore. When looking at the future, 56% of the young professionals believe employment opportunities are the best way to attract and retain young professionals.

We work with employers to engage and retain their current young professionals while focusing on helping them attract new top young talent. One of the ways we do this is through civic engagement. Eighty percent of respondents reported they are at least somewhat involved in the community. However, many would like to do more. They look to their employers and organizations like Engage! Cleveland to help.

The survey was promoted to nearly 40,000 individuals via our website, social media and e-newsletter list. We asked our employer members, board of directors and leadership council to share with their networks. Our survey partner, ERC, shared broadly to thousands via their website, social media and e-newsletter list as well. In addition, we reached out to more than 90 young professional organizations in Greater Cleveland and to more than 20 civic organizations, many of which focus their mission around diversity. Eighty-six percent of the respondents were white/Caucasian and 76% were female. In order for the survey to have a broader and more diverse sample, we will ensure additional outreach next year.

While all of the research we have obtained through this survey is valuable, we recognize that this was an inaugural effort and we certainly can and will do more and better in subsequent surveys.

In the meantime, we will work with the Greater Cleveland community to address the needs and wants of young professionals. This work needs to be a community-wide effort, and we look forward to collaboration. To all of the business and community leaders who are interested in supporting the next generation of talent, Engage! Cleveland stands ready to be your ally in making Cleveland a top destination for young professionals to live, work and play.

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Basile Oeken is the president of Engage! Cleveland, a nonprofit whose mission is to attract, engage and retain young, diverse talent in the Greater Cleveland area.

Letter to the Editor

Use same time interval for comparison I am writing about the Nov. 5 article “Leaders of Northeast Ohio cities, villages and townships bemoan rocky relationship with state” and the method of reporting statistics.

My business is in the Mentor section of Concord.

For 29 years, I was a Mentor resident and I have three children who graduated from Mentor schools. I have been pleased with the management of the city and the schools and the community as a whole.

I also understand that by law, the state must balance its budget and plan for downturns.

My concern with the article is the presentation of misleading statistics and my belief that good journalism means presenting an objective picture.

What I believe is misleading is the method of reporting the statistics where you report expenses and revenue using two time intervals for the same topic. Here is the example: (Mentor City Manager Kenneth) Filipiak was disappointed in the lack of cooperation between the state and its communities as well as among communities, as all communities have been hit by the reduction of state funding.

He said the cuts in the Local Government Fund have cost Mentor a total of $6 million over the last five years, a significant amount in a budget that was $65 million in 2018.

P011_CL_20181112.indd 11

Many people will compare $6 million to $65 million, or 9.2% — a big drop. A more accurate comparison is $6 million over five years, or $1.2 million a year. That’s compared to a $65 million budget and is about a 2% drop.

I believe many taxpayers will believe that it is not unreasonable for any government to adjust to a 2% belt tightening.

Our federal government through the Congressional Budget Office also often reports changes in revenue or expenses over 10-year intervals. This is needed for projecting income and expense. Journalists should enlighten the public to the need for this type of projection and explain what this means in annual dollars and make comparisons using the same time intervals.

So for this article, rather than present information that may lead many people to think the state is being unfair, promote collaboration by letting everyone know the adjustment is 2% per year.

And maybe it makes economic sense for smaller communities to merge and, if residents choose not to merge, they will have increased costs.

William C. Robertson President, Concord Benefits Planning Agency, Inc. Concord

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CRAIN’S CLEVELAND BUSINESS

SITE Centers eyes major redevelopments

By STAN BULLARD sbullard@crain.com @CrainRltywriter

In a dramatic departure from a decade of selling assets to survive with little new development underway, SITE Centers Corp. of Beachwood is embarking on a plan to invest $500 million in redevelopment efforts and acquisitions over the next five years.

David Lukes, CEO of SITE Centers, the company formerly known as DDR Corp., said of the plan, “We don’t want to just survive. We want to thrive.”

Lukes referred several times on the most recent conference call with analysts and investors Oct. 24 to the company’s “growth plan” that it unveiled at its Oct. 9 investor day.

Lukes said on the conference call that the investor presentation reflects the company’s posture on the changing retail business and ways it plans to continue to remain relevant, regardless of how its shopping center tenants change or even disappear.

Chris Kuiper, REIT analyst at CFRA Research in New York, wrote in an email that the presentation at SITE Centers’ investor day is the first time he has seen Lukes outline such goals for the company.

Kuiper said SITE Centers expects to spend about $100 million annually in the five-year plan. He noted that the company expects to spend about half of the budget on non-retail developments at some of its shopping centers, such as new multifamily

The $28 million remake of West Bay Plaza in Westlake is typical of improvements that SITE Centers Corp. plans to make to key properties in its trimmed-down portfolio. A Fresh Thyme Supermarket and four other tenants are setting up shop in a new building that replaced a 1970s-era Kmart on the property. (Stan Bullard)

properties, and the other half to improving returns with retenanting efforts.

A presentation by the company identified 10 shopping centers it expects to redevelop, among them the West Bay Plaza in Westlake. SITE Centers recently reopened the north end of the 1970s-vintage center as a row of shops, with tenants such as Fresh Thyme and Kirkland’s, where a Kmart and, for a time, a Sears Grand

store stood. SITE Centers recently won a lease with Chipotle for a prominent corner of another section of the plaza, which will move from nearby Crocker Park.

SITE Centers estimated it will spend $28 million on its Westlake property.

The two largest projects, costing upward of $75 million apiece, include a Shoppers World center in Boston that occupies 255 acres, and

Perimeter Pointe in Atlanta, which sits on 31 acres. Most of the projects incorporate adding apartment buildings for hotels, according to drawings the company shared with investors.

The company said it will fund the projects from its cash flow or from proceeds of the sale of shopping centers in Retail Value Inc., a separate publicly traded company it is using to shed properties it deemed unworthy of greater attention by a public com-

pany but attractive to private operators.

Lukes said on the conference call that SITE Centers expects that it will continue to lose retailers to bankruptcy in the course of the changing retail environment.

Hotels as well as apartments may be added to the sites, and Lukes said the company will make news in coming months as it seeks local municipal or other approvals to rebuild the properties.

Additionally, SITE Centers may form new joint ventures with other companies to enlist their expertise in other property types, such as hotels or multifamily rentals.

Ironically, such joint ventures fell out of favor with stock analysts before the Great Recession because they made it harder to evaluate the books of public companies. Moreover, while the plan may add more revenue to the company, it also will increase risk, especially as the nation continues to add new apartments at a breakneck pace.

However, don’t expect the plan to trigger much hiring at the company’s headquarters in Beachwood. Recent job postings for Beachwood have been for jobs in accounting.

High-profile jobs overseeing real estate development projects tend to be posted for assignment at the company’s executive office in New York.

When Lukes and two other executives joined SITE Centers in 2017, the company’s board allowed them to remain in New York City, where they were previously located.

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Tools and tips to help you grow wealth with purpose

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Selecting the perfect trustee

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Life insurance, a valuable gift planning option

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Charitable giving under the 2017 Tax Cuts and Jobs Act

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

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ESTATE PLANNING

S2 November 12, 2018

November 12, 2018

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A Prescription for Charitable Giving HOW A RETIRED HEALTHCARE INNOVATOR AND CEO IS FINDING PURPOSE IN PHILANTHROPY Values have always been a key part of Ed Rivalsky’s life and the way he ran his business: respect, excellence, accountability, communication and honesty. After 27 years at the helm of Clinical Specialties Inc. (CSI), a home IV infusion pharmacy and home health network he founded in 1988 and sold to a subsidiary of Walgreens in 2015, Rivalsky is finding he can apply the same principles to philanthropy.

complex care needs after discharge,” Rivalksy said. “Then we expanded services to offer payers a network of home health agencies, and this combination of desirable offerings allowed CSI to expand to six states.”

At its peak, the business was growing 20-30 percent year-over-year, managing contracts for 350 agencies and taking on 300 new patients a day, Rivalsky said.

“The sale was influenced by the The former hospital pharmacist market, the potential changes coming started the company as a provider down the road in healthcare, and my of IV infusion own limitations,” therapy services Rivalsky said. “I for the home had an illness in a f ter seeing 2010 that was a “My long-term goals the challenges awakening. are born out of where real patients faced I always held I think real value can a high level of w hen s e l fr e s p on s i bi l it y managing be delivered at the to our patients, c o m p l e x community level. customers, conditions My pillars are basic employees and the out side t he human services, region. As a result, hospital. He to ok on a education, healthcare the decision to was far from business partner and other community exit easy.” in 2009, and initiatives.” they worked Managing the sale Ed Rivalsky and keeping an together on IT solutions that eye on the day-tohelped build day quality and processes was complex a network of home health services and exhausting, Rivalsky said. So was to receive referrals from contracted adjusting to life after walking away hospitals and payers. The company from the business. provided value to the organizations “One day, you go from being the CEO and patients it served by providing an of a vibrant and dynamic organization alternative to extended hospital stays to suddenly being on the outside. and improving outcomes.

It’s humbling,” he said. “As the sale “We partnered with hospitals to occurred sooner than expected, I failed assist patients with various financial to plan the ‘next chapter.’ I explored working with nonprofit organizations and health insurance challenges and

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and advising start-up businesses. My desire was to align my giving with my passions, but I found this to be more challenging than anticipated.”

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His own advisors referred him to the Cleveland Foundation, where Rivalsky, his team, and foundation staff put together a customized, multi-faceted donor-advised fund and planned gift strategy.

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“My long-term goals are born out of where I think real value can be delivered at the community level,” he said. “My pillars are basic human services, education, healthcare and other community initiatives.”

With these values in mind, Rivalsky plans to keep his philanthropy in Cleveland, where he ran his business, and Youngstown, his hometown. He’s also involving his two children in charitable giving by establishing donor advised funds for them now and an estate gift that will help add additional funding down the road.

“I’m bringing them in, reinforcing that it’s their responsibility to be philanthropic,” he said of his children.

“Their causes will be different because of their exposures in life, and they may not always live in Cleveland, but one of my wishes is that at least half of their grants stay in Cleveland.”

Part of R ivalsky’s charitable investment also includes an unrestricted designation to the Cleveland Foundation.

“I’m aware that the world evolves, and I didn’t want to limit the opportunities for impact based only on what was true today,” Rivalsky said. “The Cleveland Foundation has a winning formula, and it’s constantly being refined and adjusted.”

In addition to his encore in philanthropy, Rivalsky is already working on his next business idea: a portal to help patients with chronic disease states learn about their conditions and better self-manage.

Downtown resident and retired pharmacist Ed Rivalsky is enjoying an encore career in philanthropy after 27 years as a healthcare entrepreneur and CEO.

Philanthropic Estate Planning Solutions Offered Through the Cleveland Foundation •

Bequest by Will: A bequest to the Cleveland Foundation is the simplest means for providing for the future of your community and your favorite charities.

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Life Insurance: Life insurance policies are a unique planning tool; you can name the Cleveland Foundation as a beneficiary of an existing policy or even create a new policy as you develop your philanthropic legacy.

•

IRA or Qualified Plan: Naming the Cleveland Foundation as the beneficiary of retirement assets is one of the most effective ways to include philanthropy in your estate plan.

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Charitable Gift Annuity: A charitable gift annuity allows you to receive income for your lifetime in exchange for a gift today that will provide future benefits to the charities of your choice.

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Charitable Remainder Trust: A charitable remainder trust allows you to provide for multiple beneficiaries and receive an income tax charitable deduction today and benefit your favorite nonprofits in the future.

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Charitable Lead Trust: Assets transferred to a lead trust pay income to the Cleveland Foundation annually, for a term of years or your lifetime, and the remainder is typically paid for the benefit of you or your heirs.

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To learn more about giving through the Cleveland Foundation, please call 877-554-5054.

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ESTATE PLANNING

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Estate Planning Council members can help you create a roadmap of wealth growth, preservation

By JULIE A. TAFT

T

he Estate Planning Council of Cleveland is pleased to once again partner with Crain’s Cleveland Business in presenting our annual estate planning special section.

The purpose of this section is to provide the community with timely information and valuable resources reflecting our multi-disciplinary approach to planning, including financial, insurance, business succession, and estate and charitable planning matters. The articles and commentary on the pages that follow have been provided by some of the region’s most experienced professionals in these fields. They may help you to address your financial and estate planning concerns, or spur further discussion with your team of advisors.

Estate planning is an often overlooked aspect of personal financial

management. Millions of Americans do not have a current estate plan and medical directives in place, leaving them vulnerable in the event of unexpected illness, accident or untimely death. Committing a modest amount of time to executing these important documents can save time, expense and hardship for families, loved ones and businesses.

Life can change at any time and we must Taft prepare ourselves and our families for that possibility.

2018 started out with a bang, with U.S. stocks hitting record highs and the implementation of significant changes to the tax code that were passed at the end of 2017. While many tax-planning strategies that were implemented for decades are now gone, many new opportunities have been created. As we

CONTENTS estate

planning

ret irement planning

insurance planning

charitable planning

MANAGING EDITOR, CUSTOM AND SPECIAL PROJECTS: Amy Ann Stoessel, astoessel@crain.com

approach the end of the first reporting cycle under the newly minted tax laws, it is important to meet with your advisors if you haven’t already.

With the ever-changing political and economic landscape, it is imperative that people protect and preserve the assets they have spent a lifetime building. It is wise to seek and rely upon the advice of experienced professionals who are familiar with income, gift and transfer tax laws and have expertise in making prudent financial and investment recommendations.

Plenty of such experienced professionals make up the membership of the Estate Planning Council of Cleveland.

They are prepared to help you evaluate how your personal financial goals could be affected by the changing tax, economic and legislative environment, as well as geopolitical risks.

These professionals will provide a wide array of planning services to ad-

dress the complexities of your financial life and guide you toward a path of financial independence. They will assist you in making sound financial decisions to propel you toward your estate and financial planning goals.

Perhaps you have family members with special needs. You may have a family business that you wish to transfer to a future generation or prepare for sale. Maybe you have charitable legacies that you wish to fulfill.

The members of the Estate Planning Council of Cleveland can help you with the advice, tools and techniques that will enable you to attain these and other goals.

Founded in the 1930s, the Estate Planning Council of Cleveland is composed of more than 400 members working in the Greater Cleveland area, including attorneys, accountants, bankers and trust officers, financial planners, insurance agents, appraisers

and representatives from charitable organizations.

Our members are committed to their clients and their community and are able to provide you with the assistance you will need to safeguard your financial future.

Our website, www.epccleveland.org, is a valuable resource that can help you to identify the professionals you will need to assist you with your unique situation.

We are pleased to present you with this special section in Crain’s Cleveland Business, which contains important insights and commentary on a variety of estate planning issues.

We hope that you will find it to be an indispensable resource as you work with your advisors to plan a sound financial future.

Julie A. taft is a partner at Mansour Gavin LpA. Contact her at 216-5231500 or jtaft@mggmlpa.com.

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Selecting the perfect trustee

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By JOSEPH M. MENTREK

T

he choice of a trustee is perhaps the most important, yet underappreciated component of formulating an effective estate plan.

Selection of an appropriate trustee to carry out the important duties of trust administration can significantly impact the experience of the trust beneficiary.

And anyone asked to serve as trustee must carefully weigh whether they want to assume the potential liability that comes with the “honor.”

Under Ohio statute, the trustee is charged with the overarching duty to administer the trust in good faith, in accordance with its terms and purposes and in the best interests of the beneficiaries. In defining the nature of the duty, the statute speaks to standards of loyalty, impartiality and prudence, as well as the duty to keep the current beneficiaries of the trust reasonably informed about the administration of the trust.

Essentially, the trustee is obligated not to place the interests of others above those of the beneficiaries.

Conflicts involving the duty of loyalty are more apt to arise when the trustee is also a beneficiary, friend, family member, or shareholder/employee of a related company.

Practical issues regarding impartial-

estate

planning ity occur most frequently in the context of relationships with beneficiaries, understanding that the trustee is dutybound to treat beneficiaries equitably, not necessarily equally.

A trustee satisfies his or her duty of prudence when exercising ordinary prudence as he or she would with his or her own property.

Perhaps the most fundamental duty of the trustee is to keep the current beneficiaries of the trust reasonably informed of the Mentrek administration of the trust and of the material facts necessary for them to protect their interests.

From a practical perspective, this means the trustee must make appropriate investments, plan and execute appropriate distributions on behalf of beneficiaries, prepare and provide proper trust accountings and file appropriate tax returns. Failure to do so exposes the trustee to liability for breach of fiduciary duty. Such a commitment is not to be taken lightly.

When selecting the trustee, the settlor must balance the degree of control to be imposed upon trust beneficiaries with the flexibility necessary for ease of administration, while at the same time understanding that the trustee is duty-bound and faces real potential liability. Significant controls might facilitate certainty regarding management, tax issues and creditor protection. Such controls, however, may tend to stymie the financial flexibility enjoyed by trust

beneficiaries. As one court expressed the issue, “the cost of holding onto the strings may prove to be a rope burn.”

The gating issue considered by most settlors when naming trustees and successor trustees is whether to enlist the services of an individual or those of an institutional trustee.

Many will opt to engage the services of a professional (institutional) trustee because of the complex nature of the role and their understanding of the nature and scope of liability involved with serving as trustee.

Often, trust companies, banks and attorneys are better suited to handle the investment and administrative duties and find it easier to manage beneficiaries’ expectations when it comes to distributions. Family members, on the other hand, have the unique advantage of knowing and caring about the beneficiary, and may be preferable despite the great burden of serving as a trustee imposes. It is incumbent upon the settlor to carefully choose the type of trustee most appropriate for the unique circumstances of his or her family.

And though it adds complexity and expense, in some instances, what is most appropriate is the appointment of co-trustees, including a family member and an institutional trustee, to achieve the benefits associated with each class of trustee.

Other important issues surrounding trustee selection include trustee succession and removal and replacement powers.

Appointing an unbroken line of succession is critically important when you consider the fact that a trust enjoys a life of its own and will continue its existence as long as the property is commended to the care of the trustee.

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ESTATE PLANNING

It is best to provide for a string of successors so that the trust is never left without a trustee. In such a case, the trust will be subject to the control of the probate court, and the court will appoint a successor, substituting its best judgment for that of the settlor. Such a course of action, obviously, can frustrate the settlor’s intent to control the narrative for as long as the assets remain in the trust, and can totally thwart the inherently private nature of a trust by thrusting the matter into the public eye.

In a similar vein, the settlor must carefully consider whether to give the beneficiaries the flexibility of allowing the ability to remove and replace their carefully selected trustee. Changed circumstances sometimes make such a power valuable to the beneficiaries, particularly if the well-meaning judgment of the settlor at the time the document was drafted results in an untenable situation.

Finally, it is important to mention the emerging notion of utilizing a directed trust. While tradition

vests investment, distribution and management powers in a singular trustee, a directed trust departs from tradition by granting certain powers over a trust to someone who is not the trustee. Such a person may be known by a variety of names including “trust protector,” “trust advisor,” “investment advisor,” or “special trustee.” If such a separation of the trustee’s duties is employed, it is important to note that both duty and liability can be shifted and shared among the multiple individuals fulfilling the role traditionally assumed by a single trustee.

The bottom line is to carefully contemplate decisions regarding the selection of trustees, understanding that the responsibilities and accountability inherent in the role must be carefully balanced to identify the parties responsible to protect and manage the well-being of loved ones.

Joseph M. Mentrek is a partner and chair of the estate and Succession planning practice group at Calfee, Halter & Griswold LLp. Contact him at 216-622-8866 or jmentrek@calfee.com.

november 12, 2018 S5

Five years later, legacy trusts remain vital for Ohio business owners

By KEN LAINO ANd KyLE MORdEW

estate

planning

I

t has been five years since Ohio positioned itself at the forefront of asset protection planning by passing the Ohio Legacy Trust Act. Legacy trusts under Ohio law allow the trust creator (settlor) to create a trust, place his or her own assets into the trust, and in doing so insulate those assets from personal judgments against the settlor. Prior to this law, Ohio residents could only try to get some degree of protection in some other select states or in offshore jurisdictions.

The requirements for a legacy trust are relatively simple: the trust must have a qualified trustee (Ohio resident other than the settlor), be irrevocable, be governed by Ohio law and have adequate spendthrift provisions applicable to all beneficiaries. Notably, the settlor can retain the ability to replace the

Laino

Mordew

independent trustee for any reason, thereby allowing the settlor to “watch” the independent trustee’s actions. This combination of asset protection, ease of creation and degree of settlor oversight makes legacy trusts an outstanding vehicle for asset protection.

While the benefits of a legacy trust are numerous, there is one important caveat that should not be overlooked. A settlor cannot transfer assets to a legacy trust after the

settlor has knowledge of a pending claim against herself or himself.

Ohio’s fraudulent transfer statute will unwind that transfer and subject the assets to the pending claim.

As a result, it is critical that Ohio business owners and other “atrisk” professionals, like physicians, act sooner rather than later in establishing a legacy trust. Indeed, creating a legacy trust will provide much greater odds that the assets in the trust pass to the settlor’s intended beneficiaries rather than being used to pay a settlement.

Ken Laino is a partner in the Business Law practice group at Schneider Smeltz Spieth Bell, LLp. Contact him at 216-696-4200 or klaino@sssb-law.com. Kyle Mordew is an associate in the trusts & estates practice group at Schneider Smeltz Spieth Bell, LLp. Contact him at 216-472-1128 or kmordew@sssb-law.com.

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By assisting with gifts to The Power of Every One Centennial Campaign, you are helping clients make an important investment in their own lives and the lives of Cleveland Clinic patients. Thank you.

Learn more at powerofeveryone.org or contact Stacey McKinley, Esq., mckinls@ccf.org or 216.445.8552.

Cleveland Clinic offers same-day appointments.

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ESTATE PLANNING

S6 November 12, 2018

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Incorporating the management of digital assets into your plan

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State laws vary on executor’s oversight

St co ta

By MARy EILEEN VITALE

M

ost people live through their electronic devices. E-mail, online financial statements and cloud storage are replacing hard copies. Although a virtual lifestyle is common, planning for the administration of digital assets is relatively new to estate administration.

State probate laws allow executors to represent the deceased owner, administering tangible assets. However, digital assets

are different. The privacy policies of custodians like Facebook, LinkedIn and Google do not grant executors automatic access. The Revised Uniform Fiduciary Access to Digital Assets Act has Vitale given states the opportunity to establish a solution for the administration of digital assets.

Under RUFADAA, the original user of a

The duties of a trustee

By LINDA M. OLEJKO

E

very irrevocable trust creates a legal relationship between the trustee and the beneficiaries of the trust. In this relationship, the trustee carries out the wishes of the trust’s grantor as those are set forth in the trust document. Choosing who will serve as trustee of your trust is an important decision that deserves careful consideration. The trustee you select must have the skill, perspective and judgment, as well as the

estate

planning digital asset must expressly grant access to its content. This can be given either through the custodian’s access-authorization tool or in a planning document, such as a last will and testament or general durable power of attorney. Without this express consent, the custodian’s terms-of-service agreement will determine whether the executor gets access.

Many states, including Ohio, have adopted the act. Therefore, it is important to

estate

time, to adequately perform a wide range of duties.

Simply stated, a trustee is obligated to follow two guiding principles: 1. The duty of care: to exercise the powers granted to the trustee in the trust document and to do so in good faith, efficiently and cost-effectively.

2. The duty of loyalty: to administer the trust solely in the interests of the beneficiaries.

A trust is, in many ways, similar to a per-

planning son. It is a separate legal entity that owns property and pays income taxes. All decisions made and actions taken by a trustee are guided by the terms of the trust and applicable law. Trusts require a variety of professional services due to the complexity of property ownership rules, income and transfer taxes, financial management and accounting requirements. Even if the services of related professionals are used, the responsibility for proper administra-

understand how you should plan for access to and administration of your digital assets.

First, consider whether you want to give your executor access to your digital assets. If you do, as noted above, you must expressly consent either through the custodian’s access-authorization tool or through your last will and testament. You may also grant an attorney-in-fact access to your digital assets through a power of attorney.

Access-authorization tools vary among custodians, and you should recognize that authorization given to one custodian would not apply to another. Create a list of account IP addresses that is updated regularly and

kept in a safe place.

Alternatively, if you decide to grant access through your last will and testament or a power of attorney, be sure to discuss these provisions specifically with your attorney. Some standard powers of attorney do not cover digital assets.

By understanding how to grant access to your digital assets, you can help ensure that your executor and your family are able to carry out your wishes as quickly and efficiently as possible.

tion of the trust rests with the trustee.

The trustee is accountable for all money, investments and other property transferred into the trust.

The trustee must keep Olejko the trust assets separate from their own, maintain records of assets, account for income and costs incurred and take care of the physical custody of the trust assets. It is an obligation of the trustee to invest trust funds so that they are productive. In many states, the individual trustee has the duty

to exercise that degree of care, skill and caution that a reasonably prudent person would exercise in dealing with his or her own property.

The specific details of a trustee’s duties and responsibilities often vary from state to state. Furthermore, many of the steps that a trustee must take in administering a trust depend on the provisions in the trust agreement and the composition of the assets comprising the trust.

Mary eileen Vitale is a principal at HW&Co. Contact her at 216-378-7210 or vitale@hwco.com.

Linda M. olejko, CFp®, CepA, is a managing director of Glenmede.

Contact her at 216-514-7876 or linda. olejko@glenmede.com.

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SLATs offer opportunity to save on estate taxes Strategy worth consideration given tax law changes

By JOSEPH M. FERRARO And SUSAn L. RACEy

I

t is easy to postpone (or even ignore) estate tax planning after the increase of the federal estate and gift tax exemption amount under the Tax Cuts and Jobs Act of 2017. The exemption increased from $5.49 million to $11.18 million. However, with the recent correction in the market and the temporary high exemption amounts, which are scheduled to expire after 2025, now may be the best time to implement estate tax planning strategies that preserve wealth and save significant amounts of estate taxes. Under these conditions, inaction may prove to be a missed opportunity.

A Spousal Lifetime Access Trust is a popular planning strategy that allows assets to be held in trust for a spouse while the property grows estate tax-free for the Ferraro benefit of children and later generations. The spouse, as beneficiary, is permitted to receive income and principal for certain purposes, such as health, support Racey and maintenance. If desired, children and later generations may also be permissible recipients of income and/or principal.

The spouse may also serve as trustee, allowing the spouse to control investment decisions and when distributions are made. Although the trust agreement must be irrevocable — as in, it cannot be amended, the spouse may be given the right to alter how property is distributed upon the spouse’s death, which may include decisions on the manner and amounts that children or later generations will inherit.

If structured and administered properly, property transferred to a SLAT, including the growth, will not be included in either spouse’s taxable estates upon death. The SLAT will also provide leverage against the impending reduction of the estate tax exemption after 2025, and potential further reduction as a result of an unpredictable future political climate.

As is the case with most estate tax planning strategies, transferring property that is anticipated to appreciate will provide families with the most bang for their buck. In addition to the tax benefits, property held in a SLAT may be protected from the creditors of either spouse. All of this is coupled with the fact that property transferred to a SLAT remains available for the spouse’s benefit if needed.

For married individuals, SLATs are

an opportunity worth taking advantage of.

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planning a flexible estate tax planning tool that can save a family millions of dollars while providing a high level of asset protection and permitting a spouse to control and benefit from the property.

Given the current market and high exemption amounts, creating a SLAT is

Joseph M. Ferraro is an associate in the tucker ellis estates, trusts & probate Group. Contact him at 216-696-5872 or joseph.ferraro@ tuckerellis.com. Susan L. racey is a partner in the tucker ellis estates, trusts & probate Group. Contact her at 216-696-3651 or susan.racey@ tuckerellis.com.

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ESTATE PLANNING

S8 November 12, 2018

SpoNSored CoNteNt

It’s rampant, invisible and lethal: the financial exploitation of the elderly

By DAVID P. MEyER

W

hile investment fraud is a concern for every individual investor, the risk is particularly troubling for the elderly because they are increasingly targeted as victims of financial exploitation. Exploiting the elderly has become so common that it is estimated that at least one in five elderly investors has been the subject of elder financial exploitation.

In light of this growing problem, it is critical that elderly investors are aware of the many different forms of senior investment fraud and know of steps to take, including estate planning, that minimize the risk of losing hard-earned money through financial exploitation.

Broadly defined, fraudulent exploitation is the unlawful act of using a senior’s resources for monetary or personal gain through intimidation, threat or deception. Senior investment fraud can be difficult to detect given that it takes many different forms and often involves a relative, close friend or a trusted advisor. For example, there are numerous cases involving Alzheimer’s patients having their finances exploited by their trusted financial advisors or close family members who take advantage of

the senior’s mental health condition.

Investors between the ages of about 50 to 64, who are facing imminent retirement, are also frequently targeted as victims of Ponzi schemes, investment scams and stockbroker misconduct. Preretirees may be more susceptible to this type of fraud as they may be concerned about the financial strain of upcoming retirement and might be more trusting if they are Meyer acquainted with the con-artist.

The growing concern of elder financial fraud is reprehensible, life threatening, and most importantly, invisible.

There are many steps that can help prevent seniors from falling victim to financial exploitation. The first is knowing what to look for.

With regard to family members taking advantage of their elders, red flags may include pressure from relatives to give loans, or finding that money has mysteriously disappeared.

Investment advisors may also target senior clients to earn high commission by soliciting high-risk investments that are unsuitable for retirees.

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planning Red flags of churning and stockbroker misconduct include unauthorized transactions and significant decline in investments. Rogue advisors and fraudsters may also target seniors for Ponzi schemes and investment fraud.

If the advisor is not returning phone calls, provides little information about the investments, promotes “private” or “special deals,” or offers side investments, these may all be signs to take caution.

One of the most effective measures in preventing senior investment fraud can also be the most difficult — recognizing vulnerability. Unfortunately, difficulty in making financial decisions coupled with an impaired ability to recognize deception can make seniors a natural target for investment fraud.

Signs that you or a loved one may be vulnerable to senior investment fraud include lack of confidence in making financial decisions, having trouble keeping up with bills due to confusion, giving gifts or loans that cannot be afforded and the inability to understand

investment advice. Fraudsters target these traits in seniors who are less likely to pick up on red flags. Acknowledging vulnerability may help increase awareness in identifying these signs.

Seeking the help of an estate planning professional can help ensure that a senior’s mental health will not jeopardize their finances or their estate. It is important to educate individual investors about the benefits of having a power of attorney, and encourage investors to share details of their financial affairs with estate lawyers and other professionals to help ensure that if the investor’s health deteriorates, their financial affairs will be properly handled.

On top of individual measures to prevent senior exploitation, there are a number of new legal initiatives aimed at attacking the problem. For instance, Ohio has broadened the definitions of neglect, exploitation and financial harm, and expands the list of persons required to report suspected abuse or exploitation.

Additionally, some states now require that certain individuals in the financial industry take specific training on how to recognize financial abuse of elder adults. These are simply a few examples among an extensive list of

G By

legislation aimed at protecting elders from financial exploitation.

Unfortunately, preventive measures and legal initiatives are not always enough to prevent senior exploitation.

The last method of fighting this problem is to file a claim to recover losses through the civil legal system.

Through injunctive relief, restraining orders and revocation of powers of attorney, filing a claim can stop the problem and prevent additional losses.

Additionally, seniors who have suffered financial exploitation may be able to recoup their losses.

If the individual behind the exploitation is a registered financial advisor, the brokerage firm where he or she is employed may be liable for losses caused by the misconduct of the broker. Financial exploitation can be devastating, particularly for senior citizens with limited income.

It is important that victims of financial exploitation seek the representation of legal counsel experienced in securities fraud. david p. Meyer, esq., is founding principal with Meyer Wilson Co. LpA. Contact him at 614-358-3283 or dmeyer@meyerwilson.com.

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november 12, 2018 S9

Getting double duty out of an IRA

By DIANE M. STRACHAN

S

o, the market has done well and your IRA has been building.

Income tax is now due on that money when you take withdrawals in retirement. You are age 70½ or older and are required to take a distribution, and if you don’t take a distribution, you could pay a 50% tax on the amount you should have withdrawn. You also have several favorite charities to which you are dedicated and support every year. Why not be really tax savvy and let your required minimum distribution do double duty by serving as both retirement income and a charitable gift?

So how exactly does this work?

If you meet the requirements: are age 70½, the amount of your required distribution is less than $100,000 and you do not need to take your entire distribution (partial distributions are allowable), you can mitigate the income tax on the required distribution if you make a qualified charitable donation from your IRA. If you donate

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more than the allowable amount (up to $100,000 or up to $200,000 for married couples), it is considered income and could be subject to income tax.

It pays to take a moment and calculate the tax break. A $100,000 charitable contribution from your IRA directly to a qualified charity could save you tens of thousands of dollars in taxes, depending on your tax rate. But you don’t have to make Strachan a huge donation to benefit with some significance. For a retiree in the 25% tax bracket, an IRA charitable contribution of $5,000 could reduce your income tax bill by $1,250. Even a $1,000 donation could save you $250 in taxes.

You don’t need to itemize your taxes to make an IRA charitable distribution.

However, you cannot additionally claim

a charitable contribution tax deduction on a charitable distribution from your IRA. You are not getting taxed on this money, so you don’t get to count it as a charitable deduction in addition.

Charitable contributions can only be made from IRAs, not 401(k)s or similar

types of retirement accounts. However, you could add your favorite charity as a beneficiary of your 401(k) in whole or in part as another tax-smart gifting strategy. Because charitable contributions can only be made from your IRA, you may need to roll over funds from a

401(k) to an IRA if you want to make tax-free charitable contributions from your retirement plan.

And finally, be sure to choose a qualified charity and ensure that you receive an acknowledgment for your donation if you don’t receive it automatically.

The most important step is to set up a direct transfer. Funds must be transferred directly from your IRA to an eligible charity by the IRA trustee to qualify for the tax break. If you withdraw the money from your IRA and later donate it, it will not qualify as a tax-free qualified charitable distribution.

You’ve worked hard to build your nest egg for retirement, but by thinking creatively about your overall financial plan, you can accomplish several goals with strategies like this, where the tax burden is lessened and you fulfill your philanthropic goals. diane M. Strachan, CFre, is director of development at the Cleveland Museum of Art. Contact her at 216-707-2585 or dstrachan@ clevelandart.org.

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Helping Clients Solve Complex Estate and Succession Planning Needs The attorneys in Calfee, Halter & Griswold LLP’s Estate and Succession Planning group can help you make some of the most important decisions of your life. With deep knowledge and experience in finance and the law, our professionals provide exceptional value to clients seeking: • Sophisticated estate, gift, and generation-skipping planning • Comprehensive estate and trust administration • Business succession planning • Asset protection planning • Complex probate and trust litigation Calfee’s Estate and Succession Planning Attorneys Joseph M. Mentrek, Practice Group Chair Amy K. Friedmann | Jean M. Hillman | Fran Mitchell Schaul | James A. Singler | Jaclyn M. Vary Cleveland | Columbus | Cincinnati | Washington, D.C. | Calfee.com | 216.622.8200 | info@calfee.com ©2018 Calfee, Halter & Griswold LLP. All Rights Reserved. 1405 East Sixth Street, Cleveland, OH 44114

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ESTATE PLANNING

S10 November 12, 2018

SpoNSored CoNteNt

Life insurance, a valuable gift planning option

By BRIAN M. TULLIO

I

n the world of charitable gift planning, gifts of life insurance offer a welcome degree of certainty and flexibility. Life insurance provides a host of benefits for both the donor and charity, including: ■ Substantial leverage; ■ An almost-certain policy benefit provided for the charity; ■ No erosion of the gift due to estate and/or income tax; ■ Ease of implementation and maintenance; and ■ Great flexibility in meeting donors’ philanthropic goals, regardless of their economic status.

All of these advantages make life insurance a desirable charitable giftplanning vehicle. As a result, advisors have used life insurance to structure

gifts in a variety of ways. In different situations, some options are better than others for the donor and the charity.

The easiest and simplest way to make a gift of life insurance is to name the charity as a beneficiary of an existing policy.

While no immediate income tax charitable deduction is provided, this gives donors flexibility, allowing them to retain control Tullio of the policy and its cash value. The donor can simply complete a change of beneficiary form provided by the policy carrier, which generally is found online.

However, a major drawback for the charity if this option is chosen is that because the donors could change their minds and perhaps name someone else as the beneficiary at a later date, the charity has difficulty relying on

insurance planning

the policy benefit.

A better option for both donor and charity might be to contribute a paidup policy directly to the charity. In this case, the donor would relinquish control by transferring ownership of the policy to the charity. The donor would receive an immediate income tax charitable deduction for the lesser of either the donor’s adjusted cost basis or the policy’s replacement cost. (Because this is a non-cash charitable contribution, likely in excess of $5,000, Section B of IRS Form 8283 should be filed to validate the charitable deduction.)

Another good option would be to establish a new insurance policy and, shortly afterward, transfer ownership

Your Charitable Back Office

to the charity. Then, the donor would pledge cash payments to assist the charity in covering the cost of the premiums. The donor would receive a charitable deduction for making the cash contributions to the charity. In turn, the charity would benefit from immediate control of the policy and its cash value, allowing it to rely on the policy benefit.

Finally, while more complex than these other gift options, premiumfinanced life insurance policies allow a donor to take full advantage of the leverage provided by life insurance for the purpose of establishing a large deferred gift. For a premium-financed life insurance gift, a donor would set up an irrevocable life insurance trust (“ILIT”) to serve as the owner of a single or joint life survivorship insurance policy.

The ILIT then would secure financing for a loan, normally renewed annually, covering the policy’s premium costs. To accomplish this, the trust will pledge the policy as collateral, and the donor may decide to post additional out-of-pocket collateral, as well. Premiums typically will continue for several years.

When the policy benefit is distributed to the trust, the trust will use a portion of the benefit to pay the loan principal and interest, while the remaining benefit will be distributed to the charity. Although no charitable income tax deduction

will be generated for the donor, the particular type of policy used for this (a modified endowment contract) will appreciate during the life of the donor.

This will generate a larger benefit than is produced by a conventional policy.

There are other variations of this strategy that can be used to maximize the policy benefit, reduce collateral requirements or provide for cash distributions. Therefore, although premium-financed policies can be very complex, the benefits for charities are substantial, making this an attractive option for them and for more affluent donors.

All of this information is only the tip of the iceberg when devising a charitable plan with life insurance.

These contributions also can be facilitated with gift annuities and charitable remainder trusts, whereby the income generated can be used to pay premiums on an insurance policy.

Also, incorporating life insurance into a blended gift provides for the charity both now and in the future. With this brief glimpse into charitable planning with life insurance, you can see the many ways in which such a flexible gift vehicle can help your clients meet and achieve their philanthropic goals.

Brian M. tullio, J.d., LL.M., is associate director of gift planning at Cleveland Clinic. Contact him at 216-442-5358 or tulliob@ccf.org.

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Be aware of your long-term care options

By JEFFREy WASSERMAN

G

iven current tax laws, fewer families are concerned about paying a large estate tax upon death. Because of this, the planning focus has shifted from estate tax planning to estate preservation.

november 12, 2018 S11

Technology can help expedite life insurance coverage process

By CHRISTINE MILLEN ANd RAyMONd NASH

insurance planning

L

ife insurance companies are working to improve an all too cumbersome process to help more people get the coverage they need in a much faster and streamlined way. Finally, it is getting easier for many people to acquire the life insurance they need to protect their families and their businesses.

Millen

Nash

Traditionally, to acquire a life insurance policy, life insurance buyers must complete a physical exam, and

life insurance advisors must track down years of medical records, regardless of the policy size or the age of the insured. This process takes time — a lot of time, as it can take a month or more to uncover the necessary

medical information.

No wonder there is a disparity between those who say they need life insurance, and those who have it. In fact, 52% of potential life insurance buyers said they would be more likely to purchase life insurance if they didn’t have to go through a physical exam, according to a 2018 study by LIMRA, a global financial services research firm.

Continued on next page

insurance planning

The cost of long-term care is skyrocketing, and with people living longer, the cost of care can be a drain on family wealth. A private room in a nursing home facility is projected to cost more than $170,000 per year in 20 years, which has many individuals in their 40s and 50s very concerned.

The traditional long-term care insurance policies that were available in the 1990s and 2000s did not have guaranteed premiums. Most people who bought these policies have seen premium increases of over 100%, which is why most insurance carriers have exited the long-term care market all together.

For those who are considering the purchase of longterm care insurance, there are a few things to know. First, if you are considering a traditional long-term care insurance policy, be aware: premiums Wasserman are not guaranteed and, like their predecessors, premiums can increase.

The second thing to know is that there are alternatives to traditional long-term care insurance that offer rates guaranteed to never increase.

One is life insurance with a longterm care rider. These are permanent life insurance policies that allow the insured to take an advance of the death benefit to pay for qualified longterm care expenses.

Another long-term insurance alternative acts more like an annuity in that a lump sum is placed with an insurance carrier. In return, the insured has a cash balance, a longterm care benefit and a death benefit that pays to the insured’s selected beneficiaries if the long-term care benefit is never used.

These newer hybrid long-term care products offer clients flexibility and other benefits that work well with traditional estate preservation or wealth transfer plans.

Jeffrey Wasserman is executive vice president and managing director, life insurance, at oswald Companies. Contact him at 216367-5996.

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ESTATE PLANNING

S12 November 12, 2018

CoNtINUed from prevIoUS paGe

Through significant investments in technology, life insurance carriers are finding ways to automate and optimize underwriting processes to remove barriers like insurance physical exams and the retrieval of medical records.

Eliminating these obstacles can take a process that used to take months down to a matter of weeks.

To take full advantage of the efficiencies available in an automated underwriting program, the insurance buyer needs to be in good health. Life insurance companies require the insured to complete a brief telephone interview to gather pertinent details about their health history before issuing a policy. This allows the insurance carrier to evaluate the risk at hand and, at their discretion, possibly divert from the streamlined course of action and request additional medical information, such as the completion of a physical exam.

Most insurance carriers limit the amount of coverage they are willing to issue through automated programs to $1 million, with a maximum issue age of 50 or 60 to limit their exposure. As more policies are issued and more data is collected, life insurance companies will likely increase the coverage they are willing to write and increase their maximum issue ages through their automated programs.

‘‘

finally, it is getting easier for many people to acquire the life insurance they need to protect their families and their businesses.

However, when it comes to large, complex needs for wealth transfer, asset allocation strategies and business planning purposes, automated underwriting programs likely won’t come into play anytime soon. The risks are just too great for the insurance companies to bear. For needs such as these, it is important to get the help of a trusted insurance advisor to navigate the life insurance landscape.

Knowing what approach to take is an art, not a science.

Christine millen is vice president at Heirmark. Contact her at 440630-9400 or cmillen@heirmark. com. raymond Nash is Ceo and principal at Heirmark. Contact him at 440-630-9400 or rnash@ heirmark.com.

SpoNSored CoNteNt

Charitable gift annuities accomplish financial and philanthropic goals

By JESSICA RUBIN GRASHOFF

E

ach year, thousands of caring and financially savvy individuals choose charitable gift annuities as a way to provide support to the charity most meaningful to them.

In many cases, charitable gift annuities have enabled individuals to make gifts that would not otherwise have been possible.

A CGA is a split gift — part charitable gift and part annuity. When Grashoff you fund a CGA, the charity agrees to pay a percentage of the gift amount on a regular basis to one or two beneficiaries for life. Approximately half of the gift supports the charity’s mission and half is paid back through annuity payments.

The amount of the annuity payment is based on the age of the beneficiary (either you or another beneficiary) and the amount or value of the gift. The older the beneficiary, the higher the

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payout rate. And with the American Council on Gift Annuities recently raising its suggested maximum payout rates, individuals can take advantage of even greater benefits than before.

CGAs are flexible as they can: ■ Be funded through a variety of assets such as cash and long-term appreciated property, including real estate; and ■ Provide a steady stream of income to you, you and your spouse, or to other family members or loved ones — for life.

Annuity payments can be made now or deferred to a later time. Deferred charitable gift annuities increase the annuity payment and charitable tax deduction while supplementing your retirement income.

CGAs are simple to establish. Often easier and less expensive to set up than charitable remainder trusts, CGAs do not require initial fees, and charities

usually require smaller minimum gifts.

Individuals may even set up multiple CGAs, rather than making a significant gift all at once, resulting in increased cash flow.

Since a CGA is a split gift, individuals can take advantage of important tax benefits such as: ■ Income tax savings through an immediate charitable deduction; ■ Secure, fixed income for life, a portion of which is tax free; and ■ Reduced capital gains tax when using appreciated assets to fund the CGA. A charitable gift annuity is a gift plan that can help you secure your future while making a meaningful, long-term impact on the charity most significant to you. CGAs truly provide an opportunity to make a difference in your life and in the lives of so many others.

Jessica rubin Grashoff, esq., is a gift planning officer in Institutional relations & development at University Hospitals. Contact her at 216-983-5143 or Jessica.Grashoff@ uhhospitals.org.

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Charles F. Adler, III Richard A. Ahrens DeAnna Alger Ronald S. Ambrogio William Ambrogio Thomas D. Anderson Graham T. Andrews Heather A. Archdeacon Gary S. Archdeacon Kemper D. Arnold James S. Aussem Charles J. Avarello Andrew G. Bacharach, Jr. Molly Balunek Peter Balunek Mary Lynne Baranek Kimberly J. Baranovich Lawrence C. Barrett Stephen Baumgarten Alexandra G. Beach Edward J. Bell Steven Berman H. William Beseth, III Mohammed J. Bidar Michelle M. Bizily Alane Boffa Tami M. Bolder Daniel L. Bonder Nicole K. Bornhorst David J. Bosak Jill A. Branthoover Sandra J. Brantley Herbert L. Braverman Christopher Paul Bray James R. Bright Don P. Brown C. Richard Brubaker Robert M. Brucken Bethany J. Bryant Martin J. Burke, Jr. Eileen M. Burkhart Samuel V. Butcher J. Donald Cairns Carl Camillo Peter Carfagna Leigh H. Carter William G. Caster Jennifer Chess James R. Chriszt Trevor R. Chuna Gina M. Ciani Mark A. Ciulla R. Michael Cole Katherine E. Collin Jeffrey P. Consolo Barbara J. Cottrell Greg S. Cowan Steven Cox Thomas H. Craft Joseph R. Crea Deborah P. Cugel M. Patricia Culler Tia Marie D’Aveta William Davis Elizabeth F. De Nitto Dana Marie DeCapite W. Edward Decker Thomas A. DeWerth Carina S. Diamond David S. Dickenson, II James G. Dickinson Sarah M. Dimling Nicholas P. DiSanto Mary Ann Doherty Lynda Doland Alex Doll Terry Ann Donner Timothy Doyle Therese Sweeney Drake Emily A. Drake Jill Dugovics William A. Duncan Carl J. Dyczek Howard B. Edelstein Elaine B. Eisner Michael E. Ernewein Erin C. Eurenius Christina D. Evans

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Susan M. Evans Todd M. Everson Frank Fantozzi Mario J. Fazio Charles E. Federanich Joseph M. Ferraro J. Paul Fidler Julie E. Firestone Mary Kay Flaherty Linda Fousek Amy K. Friedmann Patricia L. Fries Robert R. Galloway Naomi D. Ganoe Stephen H. Gariepy Rao K. Garuda James E. Gaydosh Kyle B. Gee Christopher Geiss

William E. Karnatz, Jr. ESTATE PLANNING Howard Kass Toby Kaye John D. Kedzior Marta L. Kelleher Jonathan M. Kesselman W. Todd Kiick Alexis Kim Elizabeth D. Klein Paul S. Klug Victor G. Kmetich Daniel R. Kohler James R. Komos Beth M. Korth Harvey Kotler Roy A. Krall Frank C. Krasovec, Jr. Thomas W. Krause Deviani Kuhar

Daniel A. McGowan Erica E. McGregor Daniel J. McGuire Jamie E. McHenry Sarah E. McIntosh Kevin R. McKinnis Catherine A. Mekker Ervis Mellani Joseph M. Mentrek Margaret M. Metzinger Lisa H. Michel Charles M. Miller William M. Mills Wayne D. Minich Ginger F. Mlakar M. Elizabeth Monihan Michael J. Monroe Robert C. Moore Kenneth R. Morgan

The esTaTe Planning CounCil of cleVeland

Thomas M. Genco Arthur E.Gibbs, III Thomas C. Gilchrist Caroline Gluek Ronald J. Gogul Scott A. Gohn Daniel M. Goldfarb James A. Goldsmith Susan S. Goldstein Benjamin M. Golsky Laura Joyce Gorretta Lawrence I. Gould David A. Grano Karen L. Greco Sally Gries Nancy Hancock Griffith Elizabeth C. Griffiths James P. Gruber Marie L. Gustavsson-Monago Amy M. Gyetko Ellen E. Halfon Patrick A. Hammer Sarah Hannibal Brian R. Hassett Dana G. Hastings Lawrence H. Hatch Janet W. Havener Albert G. Hehr, III Theodore N. Hellmuth Kimberly Heman James M. Henretta Jean M. Hillman Joanne Hindel Mark L. Hoffman Harold L. Hom James M. Horkey Brent R. Horvath Michael J. Horvitz Douglas Ingold Lynnette Jackson Paula Jagelewski Christopher P. Jakyma Barbara Bellin Janovitz Theodore T. Jones James O. Judd Matthew F. Kadish Stephen L. Kadish Matthew A. Kaliff Joseph W. Kampman Karen J. Kannenberg Lori L. Kaplan

President

Julie A. Taft Vice President

Peter Balunek secretary

Dana Marie DeCapite treasurer Elaine B. Eisner Program chair

Laura B. Springer immediate Past President

Emily Shacklett Craig A. Kukla Anthony C. Kure Kristen Kuzma Louis D. LaJoe Gary E. Lanzen Steven P. Larson Donald Laubacher Paul J. Lehman Maureen Leneghan Kevin J. Lenhard David M. Lenz Wendy S. Lewis Keith M. Lichtcsien David C. Ligan Dennis A. Linden James Lineweaver Jennifer R. Loan Ted S. Lorenzen Amy R. Lorius Janet L. Lowder Lisa K. Lowy Robert M. Lustig David S. Maher Stanley J. Majkrzak Chad Makuch Timothy Patrick Malloy Laura J. Malone Michelle Mancini Karen T. Manning Monique W. Marinakos Douglas Mathey Michael W. Matile Nancy McCann Karen M. McCarthy

Philip G. Moshier Michael J. Moss Joseph L. Motta Susan C. Murphy Hoyt C. Murray Norman T. Musial Christine A. Myers Raymond C. Nash Jodi Marie Nead Robert Nemeth Michael H. Novak Michael T. Novak Anthony J. Nuccio Eric A. Nye Michael J. O’Brien Lacie L. O’Daire Linda M. Olejko Matthew S. Olver Leslie A. O’Malley Robert J. O’Neil Richard M. Packer William A. Payne James B. Perrine Dominic V. Perry Ivan Petrovic Marla K. Petti Jennifer N. Pinkerton Douglas A. Piper Patrick M. Polomsky Rebecca Yingst Price Douglas Price Matthew M. Pullar Maria E. Quinn Susan L. Racey Joseph Radigan Uma M. Rajeshwar Timothy L. Ramsier Melissa Anne Register Linda M. Rich R. Andrew Richner Radd L. Riebe Elton H. Riemer Kathleen K. Riley Michael G. Riley Theodore J. Robbins Lisa Roberts-Mamone Julie K. Robie Kenneth L. Rogat Carrie A. Rosko Lisa J. Roth Debbie Rothschild

Larry Rothstein november 12, 2018 S13

David Rubis Alexander I. Rupert Kenneth J. Sable Patrick J. Saccogna Jennifer A. Savage Ronald S. Schickler Bradley Schlang Michele Schrock Jennifer B. Schwarz June A. Seech John S. Seich Doris A. Seifert-Day Emily Shacklett Stanley E. Shearer Douglas E. Shostek Roger L. Shumaker Michael A. Simmons Mary Jean Skutt Mark A. Skvoretz John M. Slivka Sondra L. Sofranko James Spallino, Jr. Richard T. Spotz, Jr. William L. Spring Laura B. Springer Zachary James Stanley Justin L. Stark Stacey Staub Daniel N. Steiger Kimberly Stein Laurie G. Steiner Saul Stephens E. Roger Stewart Beverly A. Stiegele Karin Maloney Stifler David J. Stokley Diane M. Strachan Thomas E. Stuckart John E. Sullivan, III Linda DelaCourt Summers Joseph T. Svete Scott E. Swartz Julie A. Taft Richard Tanner Barbara Theofilos Kurt M. Thomas James K. Thompson Donna Thrane Floyd A. Trouten, III Mark A. Trubiano Stephenie Truong Diann Vajskop Robert A. Valente Jaclyn L.M. Vary Missia H. Vaselaney Amy Vegh Catherine Veres Carmen M. Verhosek Mary Eileen Vitale Michael A. Walczak Kimberly A. K. Walrod Robert W. Wasacz Neil R. Waxman Ronald F. Wayne Julie A. Weagraff Michael L. Wear Stephen D. Webster David G. Weibel Jeffry L. Weiler Miles P. Welo Heather L. Welsh Katherine E. Wensink Elizabeth Wettach-Ganocy Terrence B. Whalen Frederick N. Widen Erica K. Williams Geoffrey B.C. Williams Scott A. Williams Teresa M. Wisniewski Nelson J. Wittenmyer Matthew D. Wojtowicz Carol F. Wolf Brenda L. Wolff James D. Yurman Michael J. Zeleznik David M. Zolt Gary A. Zwick Donald F. Zwilling

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ESTATE PLANNING

S14 November 12, 2018

SpoNSored CoNteNt

C

Supporting organizations maximize charitable resources on a grand scale

By KAyE M. RIDOLFI

F

or individuals and families with charitable resources exceeding $5 million, the supporting organization is a fantastic structure to help maximize philanthropic impact while minimizing overhead and other expenses that can be associated with private foundations. At the Cleveland Foundation, supporting organizations operate as “foundations within a foundation,” maintaining their own board of trustees and grantmaking identity while enjoying public charity status.

This special relationship with a public charity, such as the Cleveland Foundation, is the hallmark of supporting organizations, allowing tax-deductible gifts at a higher rate than private foundations.

A supporting organization may be established with a gift of cash or appreciated securities, and tax-deductible contributions may be added at any time. As such, there are many tax planning advantages of supporting or-

charitable planning

ganizations, and this structure is also useful in estate planning. Some donors establish a supporting organization during their lifetime and then augment it through their estate, thus laying the groundwork for family legacy planning and involving successive generations in philanthropy.

The board of directors of a supporting organization has full grantmaking and fiduciary authority. Ridolfi Typically, the board of a supporting organization is composed of five to nine members, including the donor family as well as members of the public whose expertise aligns with the supporting organization’s mission. At the Cleveland Foundation, our staff provides highlevel support with project research,

docket preparation and regulatory filings. The supporting organization benefits from the foundation’s century of grantmaking experience and community insight. In addition, foundation staff handle all back-office functions.

Because operational resources are maximized and not replicated, the donor and their family are saved the burden of hiring their own staff, securing office space and funding other operational expenses. In fact, the first supporting organization in the country was invented in 1973 by the Cleveland Foundation. The donor couple partnered with us in petitioning the IRS to formalize this model of philanthropy due to the efficiencies that could be gained by donors and the community alike. Today, there are more than 600 supporting organizations associated with community foundations nationwide, according to the Foundation Center.

In addition to conserving precious charitable dollars, the supporting or-

Spo

By

M

ganization model frees the donor and family from the details of day-to-day operations, allowing them more time to enjoy a focus on giving itself.

A supporting organization’s board selects its financial investment manager at the outset. We offer more than 20 investment options through the Cleveland Foundation, or a board may elect an outside investment manager. We share annual reviews with each supporting organization, and a board may

elect to change its investment manager at any time. As grants are made, supporting organization earnings help replenish the dollars available for community benefit. It’s gift — grant — earn — repeat!

Kaye M. ridolfi is senior vice president of advancement at Cleveland Foundation. Contact her at 216-685-2006 or kridolfi@ clevefdn.org.

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ESTATE PLANNING

SponSored Content

november 12, 2018 S15

Charitable giving under the 2017 Tax Cuts and Jobs Act

By HOWARD ESSNER

M

any individuals who itemized deductions on their federal tax returns will no longer do so because of the 2017 tax reform act, which increased the standard deduction and reduced the deductible amount of state and local taxes, among other changes.

Individuals who do not itemize receive no Essner tax benefit from their charitable contributions. Most people give without consideration to the tax benefit, but here are some ways to find some tax benefits even without itemization.

Use Your IRA Someone older than age 70½ who has a traditional IRA can have the custodian

charitable planning

make direct gifts to a charity in lieu of some or all of the required minimum distribution. The distribution to charity does not appear on the federal tax return as income, putting the taxpayer in the same (or better) position had they made a deductible contribution after taking the required distribution.

Bunch your contributions It may be advisable to consider bunching multiple years’ worth of contributions to a charity into a single year to allow itemization in that year followed by the use of the standard deductions in other years. Of course, the charity should be informed not to expect contributions in later years.

Use appreciated securities The tried and true approach of using appreciated long-term securities to fund your gifts remains valid even without itemization. By using appreciated stock, you avoid the capital gain tax on the sale, even if you do not get a deduction. This idea can also save state income taxes in states that use the federal taxable income as the starting point for state income tax (like Ohio).

Use a donor-advised fund The rationale behind this idea is the same as the one for bunching contributions, but now future donations are “prefunded” in a single year through a donoradvised fund (DAF). Many charities sponsor DAF programs and can provide more information on how they work.

Use a trust It may be possible to use a specialized trust to make charitable contributions in

a tax-efficient manner, while still preserving the corpus for the next generation. This topic is beyond the scope of this article and should be reviewed with a competent estate planning attorney.

Howard essner, Jd, is general counsel and a family wealth and retirement plan advisor at Ancora. Contact him at 216-8254000 or hessner@ancora.net.

Deciding to give Identify charities that align with your values, and prioritize giving accordingly

By JULIE A. WEAGRAFF

W

hy do people decide to give to charitable organizations?

The reasons range from having a personal connection to the charity or just simply being asked by a friend to give. Currently, there are more than 1 million nonprofit organizations in the U.S. That’s an overwhelming number of worthy organizations that are all looking for supporters to help advance their mission. Where do you start when you’re deciding where to give?

‘‘

Are there organizations where you have been asked to volunteer on a committee or a board of directors?

To choose a worthy charity to support, start by thinking about what is most important to you. Are there organizations that have helped you or your family in a time of need? Are there organizations whose missions align with your beliefs and values? Are there organizations where you are a member? Are there organizations where you have been asked to volunteer on a committee or a board of directors?

Think about these questions, and develop a list of organizations you could potentially support. Then think about how much you would like to contribute

P013_P028_CL_20181112.indd 27

charitable planning

annually to charity.

Review the list to determine which organizations are your priorities. You may have only one organization which is a priority, or Weagraff you may have more.

Reorganize the list to reflect your priority of giving.

You can revisit the list of organizations each year and edit it based on your circumstances and your priorities. You can engage your family members in this process and let them vote on which charity should be a priority. Even young children can be involved in this process. It teaches them about giving and how each of us can make an impact on the lives of others through our philanthropy. By sharing your decision-making with others, you have an opportunity to have meaningful discussions and educate the next generation about the benefits of giving.

Deciding to give doesn’t have to be a difficult process. It can be a rewarding experience for all involved. Giving can enrich your life as much as your giving enriches the lives of others. As Winston Churchill said, “we make a living by what we get but we make a life by what we give.”

Julie A. Weagraff, Mno, CFre, is director of fund development at Girl Scouts of north east ohio.

Contact her at 330-983-0399 or jweagraff@gsneo.org.

Your legacy helps create a healthier community.

Gifts to University Hospitals enable us to live our mission every day and continue the legacy of giving from generation to generation. With your support, we’ll continue advancing the science of health and the art of compassion for the benefit of our patients and our community. Join the many who are leaving their legacy.

To learn more, contact our Gift Planning Team: UHGiving.org | 216-983-2200

© 2018 University Hospitals

11/8/18 10:43 AM

S16 November 12, 2018

ESTATE PLANNING

SpoNSored CoNteNt

Not all donor-advised funds are created equal Community foundations can help shepherd meaningful investment

Join the Girl Scout Network!

It may have been years since you earned your first badge, but the skills you learn through Girl Scouts stay with you forever.

Follow us on LinkedIn to connect with other Girl Scout alums.

For more information, visit gsneo.org or call 330-983-0399.

Connect with us on LinkedIn: @GirlScoutsofNorthEastOhio and @GirlScoutNetwork

a fresh approach to content marketing

By COMMUNITy FOUNDATION OF LORAIN COUNTy STAFF

I

f your client is thinking about starting a private foundation, consider an endowed donor-advised fund as an excellent alternative. At the Community Foundation of Lorain County, endowment is fundamental to stewarding our assets, which include our donor-advised funds. This means that we invest the gifts received and use the interest earned to make grants, every year, forever.

A community foundation is dedicated to supporting local organizations; it also provides benefits to its donors that private foundations cannot. We share a special philanthropic partnership with donors. Philanthropic advisors thoughtfully engage, challenge, educate and support donors by matching the donors’ philanthropic passion(s) with grant requests for projects and programs in their local community.

Recently, the Community

charitable planning

Foundation of Lorain County worked with several private foundations to gift their assets to endowment funds, including endowed donor-advised funds. This decision will dramatically ease their administrative burden while maximizing their philanthropic potential. Here are some reasons why: An endowed donor-advised fund at a community foundation is easy and free to establish. A private foundation requires you to apply for tax-exempt status and pay annual taxes and expenses.

■

A gift of cash to a community foundation allows a deduction of up to 60% of your Adjusted Gross Income (AGI). A gift of cash to a private foundation only allows you to deduct up to 30% of AGI.

■

■

Funds grow tax free. No tax is

By KATHERINE E. WENSINK

T

MORE INFORMATION: Contact Amy Stoessel at 216.771.5155 or astoessel@crain.com.

P013_P028_CL_20181112.indd 28

Many community foundations charge a foundation support fee of less than 2%, inclusive of investment fees. This fee is taken from the interest earned.

■

Most donors to a community foundation may remain anonymous.

A private foundation must make available to the public the name and address of all substantial contributors.

■

■ There are few investment restrictions

for a community foundation. A private foundation may not make certain types of investments.

An endowed gift is unlike any other gift because it has permanence. Your client’s gift will continue to grow, make grants annually in their name and have lasting impact on their community forever.

For more information, please contact the Community Foundation of Lorain County at 440-984-7390.

Perpetuate generosity while deriving income advantages these trusts drive desire to give

Let Crain Content Studio — Cleveland, the content marketing division of Crain's Cleveland Business, bring the right content strategy to your marketing plan.

imposed on the investment income for a community foundation. A private foundation pays up to 2% federal excise tax on its net investment income and realized gain.

here is a certain balance to providing for charitable and non-charitable beneficiaries.

Charitable lead trusts (CLT) and charitable remainder trusts (CRT) are vehicles that provide for both, while mitigating income taxes.

A CLT is a trust that makes distributions to charity for a certain period and at the expiration of the period, the remainder is either Wensink returned to the donor or distributed to non-charitable beneficiaries. A portion of the CLT contribution may be taken as an income tax deduction, depending on the CLT structure.

For example, an athlete receiving a large signing bonus funds a 15-year CLT with $1 million. The athlete receives approximately $600,000

charitable planning

as an income tax deduction which offsets the signing bonus, and each year the charity receives $50,000. In this type of structure, the athlete also pays the income tax generated on the CLT income. At the end of 15 years, the athlete receives the remainder of approximately $400,000. This is a terrific technique to provide a return of principal when the athlete’s peak earning years are over. It also allows the athlete to witness the distributions fulfilling the charitable purpose.

A CRT is the opposite of a CLT in that the distributions over the CRT term are made to non-charitable beneficiaries.

At the end of the CRT term, the charity receives the remainder. Again, a calculation is made as to how much is deductible. CRTs are generally income tax exempt, so contribution of low

basis assets can generate additional tax savings.

For example, an individual wants to provide for her brother and brotherin-law at their retirement for the rest of their lives. She funds a CRT with $1 million of stock with $200,000 of basis. The CRT pays the beneficiaries $50,000 annually and terminates on the death of both beneficiaries. She receives approximately $300,000 as an income tax deduction, never pays tax on the $800,000 gain, and is treated as making a gift to the beneficiaries of approximately $700,000. The beneficiaries pay income tax on the $50,000 annual distribution, which may be at a lower rate than the donor. At their deaths, the remaining CRT assets are distributed to her favorite charity.

CLTs and CRTs are terrific ways to balance charities, individuals and tax deductions.

Katherine e. Wensink is an attorney with Mcdonald Hopkins LLC. Contact her at 216-348-5729 or kwensink@mcdonaldhopkins.com.

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NORTHEAST OHIO NOTABLE WOMEN IN TECHNOLOGY

Paving the way

Maria Bennett, SPR Therapeutics

Courtney DeOreo, Regional Information Technology Engagement Board

Brenda Kirk, Hyland Software

Micki Tubbs, Fit Technologies

NEO’s female tech leaders aim to serve as examples to next generation

By CHUCK SODER csoder@crain.com @ChuckSoder

The organizations that Janet Kavandi and Maria Bennett run aren’t all that similar, but the two women have at least a few things in common.

Kavandi, a former astronaut, is center director at NASA Glenn Research Center — a big organization that’s part of an even bigger government agency.

Bennett, on the other hand, is CEO of a small but growing medical device startup called SPR Therapeutics, which launched its first product just over a year ago.

But while growing up, both women had a knack for math and science.

Both had supportive teachers. And both had technically savvy fathers who nurtured their interests.

They also both understand that not every girl has those advantages.

For this Notable Women in Technology section, Crain’s talked to a handful of high-ranking local women in technical fields who said they feel a responsibility to do what they can to make sure girls and women see opportunities for themselves in hightech industries.

As of 2015, women filled only 24% of U.S. jobs in the science, technology, engineering and math fields, even though they held 47% of all U.S. jobs, according to a 2017 U.S. Department of Commerce Women in STEM report.

NASA Glenn’s top leadership ranks include a long list of women, and the top three executives — Kavandi, deputy director Marla Perez-Davis and associate director Janet Watkin — are all women.

Still, Kavandi knows what it’s like to be the only woman in the room — or on the space shuttle, for that matter.

But she said she’s never been uncomfortable in those situations, partly because she had a supportive family.

She noted that her father — a county health officer and amateur pilot — occasionally bought her toy medical kits and other science-heavy gifts.

“And I really liked those gifts!” she said with a laugh.

But kids also can benefit from having role models outside the family.

That’s one reason why Kavandi was planning to make the drive from NASA Glenn to Kent State University shortly after speaking to Crain’s on Thursday, Oct. 26. She wasn’t doing it just to give

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them information about opportunities at NASA and in other technical professions. She also wants to be a walking example of what they could become.

“The more visible that you have diverse leadership, the more that young girls see that there are options for them,” she said.

Bennett feels a similar responsibility.

She regularly speaks at schools and colleges to raise awareness about career opportunities at companies like SPR, which makes a device that uses electrical stimulation to treat pain. She also wants to promote the idea of women getting into high-tech fields.

To some degree, she’s seeing progress on that front. The Highland Hillsbased company has nearly 50 employees, and about 40% are women, she said. And the company hasn’t made any particular efforts to hire more women — it’s just getting a decent number of resumes from women.

“I have definitely seen a shift, and now it’s playing out in the workplace,” said Bennett, who in the early 1990s was one of only three women among the 20 to 30 students in the manufacturing engineering bachelor’s program at Miami University.

If the shift Bennett is seeing is indeed a trend, it isn’t playing out in every STEM field.

The total number of women in STEM fields did grow from 2009 to 2015 — but so did the total number of men. So the total proportion of women in the field has remained at 24%.

The percentage of jobs women fill in the life and physical sciences grew from 40% to 43% from 2009 to 2015, according to the Women in STEM report. But the percentage of women in engineering has remained at 14%, and the percentage in the computer science and math category fell from 27% to 26%.

Micki Tubbs certainly has faced challenges recruiting women for technical positions.

She and Michelle Tomallo founded Fit Technologies, an information technology services firm in Cleveland. The company has 73 employees, but only 16% are women. The percentage is lower in highly technical roles, Tubbs said.

“It’s a rare occasion where we have a woman apply for the network engineering jobs,” she noted.

Tubbs said she expected to see more female candidates for tech jobs by this point in her IT career, which started in 1999 when she and Tomallo founded the company as a software

business called SchoolOne. But they aren’t just waiting for that shift to happen.

For one, about 30% of Fit Technologies’ tech support employees are women, and the company aims to give those employees avenues to work their way up into other positions.

Tubbs also is chair of the Cleveland/Cuyahoga County Workforce Development Board, one of many or-

“The more visible that you have diverse leadership, the more that young girls see that there are options for them.” ­— Janet Kavandi, center director at NASA Glenn Research Center

ganizations involved in creating Workforce Connect, a new initiative that aims to make sure local employers can fill in-demand jobs in IT, health care and manufacturing.

A big goal of that effort is to make sure schools are exposing kids to those fields and properly preparing them. Tubbs said she thinks school programs that target boys and girls alike will help increase the ratio of women in IT and other areas where they’re underrepresented.

If girls get a sense of what IT careers really look like, they’ll understand that there are lots of jobs that appeal to people who don’t fit the IT stereotype — a caricature that usually takes the shape of an antisocial guy who’d rather stare at a computer than have a conversation.

“It’s full of collaboration. It’s also full of opportunities to do about 10 or 15 different things,” Tubbs said.

One organization she has commu-

nicated with is the Regional Information Technology Engagement Board, a group of local corporate IT executives who for several years have been working to increase the amount of IT talent in the region.

Recently the group has started thinking more about how to get more women into IT careers, according to Courtney DeOreo, director of the board.

That’s why the RITE Board will be targeting middle school students this spring, when it launches a pilot version of Tata Consultancy Services’ goIT student technology program.

“That’s when girls start getting turned off to STEM and IT in particular,” DeOreo said.

Brenda Kirk, who is chief product and strategy officer at Hyland Software in Westlake, said companies should “dedicate staff to making this shift a reality.” She noted that Hyland has “women’s groups, employee volunteers who teach coding in local schools, and what we call ‘Hy-Tech Camps’ for kids as young as middle school.”

“Despite these efforts, I can tell you our hallways, offices, meeting rooms and boardrooms need more perspective, more diversity,” she said in a written statement, noting that minorities need “a seat at the table” as well.

There’s a lot that individuals in the tech world can do as well, she added.

“For our girls, we need to get out there and mentor them, show them what’s possible and help them to develop curiosity in technology and confidence in their potential,” she said.

Profiles included in Northeast Ohio’s Notable Women in Technology represent women nominated by companies and organizations within Northeast Ohio. To be considered, completion of an extensive survey, including a letter of endorsement, was required. Stories included in this section are based on submitted survey information. Additional women were submitted for inclusion by an internal selection committee for purposes of a diverse and comprehensive list.

FOR MORE NOTABLE WOMEN IN NORTHEAST OHIO’S TECHNOLOGY INDUSTRY, SEE PAGES 30-34 11/8/18 9:50 AM

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NORTHEAST OHIO NOTABLE WOMEN IN TECHNOLOGY

Nichelle McCall Browne

Leah Brownlee

Xyla Foxlin

Of Counsel, Squire Patton Boggs

CEO, Bold Startups

Leah Brownlee is member of SPB’s Corporate Practice Group, where she advises corporate and securities law matters within the life sciences and tech sectors. Prior to rejoining Squire Patton Boggs in 2016, Brownlee held executive positions at the Cleveland Clinic spinoff Cleveland BioLabs Inc. and was chairman of its joint venture that targeted oncology drug development. At SPB, Brownlee has revitalized the life sciences and emerging companies practice, “which has grown into a multidisciplinary focus that combines our legal, policy, commercial and technical expertise,” Cleveland office managing partner Michele Connell said in the nomination.

Extending her reach and expertise outside the office, Lee helped orchestrate the formation of the Venture Law Meetup Series, which aims to equip executive officers and founders with the knowledge and tools needed to grow their ventures. She also has played a key role in SPB’s VeloSano fundraising efforts, this year not only by completing the 100-mile ride herself but by initiating the popular “Doughnuts for VelaSano” team fundraiser.

Executive Director and Vice President/ Treasurer of the Board of Directors, Beauty and the Bolt

Nichelle McCall Browne’s background as both a funder and business owner helps her understand the needs of entrepreneurs as they launch and scale their concepts. She has provided advice to thousands of entrepreneurs and startup business owners, many of whom have gone on to raise millions in early stage funding. Browne herself catapulted an idea, raising $500,000 in a little more than a year for her software company, Bold Guidance. Now as CEO of Bold Startups, Browne offers strategy consulting to early stage entrepreneurs. She also is director of SEA Change, a statewide social enterprise accelerator located in Cleveland and Columbus. Browne is a frequent speaker at local and national conferences.

“She is a tenacious, knowledgeable and a resilient leader,” said Jimeka Holloway, a colleague and Northeast Ohio area director of Mission Increase Foundation. “She uses her awareness and experience in the sector to help emerging entrepreneurs navigate the complexity of the tech industry.”

Xyla Foxlin hasn’t even officially graduated from college, yet this Case Western Reserve University engineer — expected to complete a bachelor of science in engineering degree this spring — has already made her mark on Cleveland’s technology scene. In 2015, Foxlin co-founded PariHug, a startup whose WiFi-enabled teddy bears enable loved ones to hug from afar. A year later and while running PariHug, she launched Beauty and the Bolt, a nonprofit that provides free online curricula for young students to explore engineering while supporting that curricula with open-source resources designed to lower the barrier of entry into science. Under Foxlin’s leadership earlier this year, Beauty and the Bolt became the first nonprofit to present at CES on the Hill, an invitation-only event at which members of U.S. Congress get a glimpse into the latest tech innovations. “Xyla has excelled as both a technology educator and innovator,” Beauty and the Bolt co-founder and chief operating officer Andrew Dupuis said in the nomination.

Congratulations, Amy Merlino, MD. 2018 Crain’s Notable Women in Technology Award Honoree

Stephanie Gillespie Senior Vice President and Business Technology Executive, KeyBank

Amy Merlino, MD Chief Medical Information Officer, Cleveland Clinic

Same-day appointments 216.444.CARE clevelandclinic.org

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Fourteen-year veteran Stephanie Gillespie is leading KeyBank’s charge to become a digitally focused bank. At Key, she is responsible for management and delivery of technology solutions in the mobile, online and wearables space. Under Gillespie’s leadership, Key launched a new online platform for business banking, resulting in the migration of more than 34,000 clients to its digital platform. Chief information officer Amy Brady cites Gillespie’s innovation thinking as key to the company’s digital strategy.

“She piloted squads and chapters for building an agile workforce,” Brady said in the nomination, “and was first in the organization to determine the best ways to build and align squads for maximum efficiency and output.” Gillespie also recently oversaw the integration of HelloWallet and led the launch of the bank’s first engineering lab. In her community, Gillespie holds a seat on Blessing House Board of Directors, a child crisis center, and is chair of its strategic planning committee.

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NORTHEAST OHIO NOTABLE WOMEN IN TECHNOLOGY

Patricia Capretto

Kathy Golden

Jessica Gritzan

Director of User Experience, MRI Software

Chief Technology Officer, OEC

Director of Sales Operations, Squirrels LLC

Patricia Capretto joined MRI Software, a Solon-based real estate software provider, in 2004 as a user experience designer. Today, she leads the effort to set and drive standards for a consistent and unified user experience across the company’s product lines. That role has been particularly critical in the last two years, as MRI made nine acquisitions worldwide, said Brian Zrimsek, industry principal at the firm. “Patricia’s continued contributions to our team and her commitment to the emerging and strategic nature of UI/UX have played an integral part in delivering a high-quality user experience across MRI’s acquired and existing products,” he said in the nomination. With significant contributions from Capretto and her team, MRI Software’s Platform X won an award for best software product in OHTec’s Best of Tech Awards. She is also a two-time participant in MRI’s Circle of Excellence, an internal award reserved for the top performers.

Kathy Golden’s impact at OEC is as much about the people as the technology. “She truly has a passion for people development and providing opportunities for others,” OEC director of applications William Fudge said in the nomination. With oversight of 375 technology employees globally, Golden develops teams and cultivates leaders, maintaining stability among the group members and their interaction. When OEC purchased a company in Europe in 2017, she integrated tech employees in different parts of the world. She made sure everyone clearly understood their responsibilities and reporting structure, and chose the best people for each position, regardless of the office in which they worked. On the tech side, Golden championed the company’s conversion to agile methodologies, matured its quality practices and formed a risk and compliance department, among others. Her passion for promoting diversity in technology extends outside the Richfield company as a board member of Regional Information Technology Engagement Board, or RITE.

Jessica Gritzan boomeranged back to Northeast Ohio in 2013, moving from Atlanta-based Lockheed Martin to North Canton-based Squirrels. Gritzan started as Squirrels’ sole sales coordinator and during the last six years has built out a multi-person sales and business intelligence division that she oversees. Gritzan led the software company’s implementation and customization of Salesforce for operations. She assisted in the implementation of HubSpot for marketing intelligence and FreshDesk, a support ticketing and communication tool. She communicates daily with the partner group, advising them of all relevant market activity and trends, and steers product direction and customer communication. In the nomination, partner Sidney Keith said Gritzan, an engineer by training, is especially skilled at analyzing data and communicating complex technical processes. “She has the unique ability to translate customer requests into tangible requirements of products,” Keith said, “and she can translate from development teams back to customers with ease.”

Congratulations to

Kelly Zelesnik on being named one of Crain’s Notable Women in Technology!

On behalf of the LCCC Board of Trustees, faculty, staff and students, thank you for your leadership in developing Ohio’s first bachelor’s of applied science degree in microelectronic manufacturing.

LCCC students now have a complete industry-tailored academic pathway that leads to a high-demand career in microelectronic manufacturing.

Kelly Zelesnik , Dean, Engineering, Business and Information Technologies division at Lorain County Community College

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NORTHEAST OHIO NOTABLE WOMEN IN TECHNOLOGY

Mel McGee

Nicole Ponstingle

Amy Merlino

CEO & Founder, We Can Code IT

Chief Operating Officer and Partner, Pandata

Chief Medical Information Officer, Cleveland Clinic

Seven years ago, Nicole Ponstingle reinvented her career by moving from direct marketing to cloud-computing firm BlueBridge Networks. She advanced from account executive to marketing director before assuming a senior leadership role at Pandata, a Lakewood-based data analytics consulting firm. Ponstingle manages the sales, marketing and professional development activities across the startup’s team of six. “Nicole never steps away from a challenge,” partner Cal Al-Dhubaib said in the nomination. “Being the lone non-techy in a very techfocused firm, she is constantly looking for ways to build bridges between our work and what the market needs.” Among her contributions, she developed and initiated financial incentives to manage accounts receivable and to prompt clients to pay sooner and purchase more, as well as implemented a human resources system that ensures employees receive proper training. Outside the office, Ponstingle is marketing chair of the RITE Board and coordinates its Passport to IT Careers event, which exposes high school students to tech professions.

As a part-time OB/GYN and the most senior female IT executive at the Cleveland Clinic, Dr. Amy Merlino has a deep understanding of the relationship between technology and medicine. Merlino directs a team of seven physicians who have dual appointments in clinical practice and technology. Specific leadership initiatives include the optimization of electronic records, which has provided a platform for evidence-based best practices to be shared and spread throughout the health care organization. “Her efforts have resulted in significant improvement in providing our clinicians the most up-to-date technology while standardizing tools that allow our organization to expand globally,” said chief of staff Dr. Herbert Wiedemann in the nomination. Recently, Merlino helped lead the development of the Cleveland Clinic’s digital strategy, which will integrate mobile, analytics, voice and virtual reality into patient care. She is active in the community, most notably as a board member of Achievement Centers for Children, which empowers children with disabilities.

After 20 years in technology roles from software developer to CIO, Mel McGee created We Can Code IT in 2014. The boot camp is dedicated to creating equity through technology. In 2017 alone, We Can Code IT gave over $296,000 in grants and scholarships to women, people of color and people in low-income families, providing them opportunities to move from under- or unemployed situations to careers in web and software development. Eighty percent of the boot camp’s students are women, people of color or low-income adults. “ ‘Diversity’ and ‘inclusion’ are more than just buzzwords for Mel,” said Lauren Holloway, student success program manager at We Can Code IT, in the nomination. “They are a way to build a better future for this world, for the tech industry, for everyone.” With knowledge in more than 20 programming languages, McGee is a pioneer in wearable computing and augmented reality as well as an educator.

CONGRATULATIONS TRACIE SCHURR-DIPIETRO Executive Vice President, Product Management, OnShift

Charu Ramanathan Co-founder , Vitalxchange and Lokyata

High-five to Tracie and all of the honorees in this year’s class of Notable Women in Technology!

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Vitalxchange and Lokyata are the latest iterations of Charu Ramanathan’s entrepreneurial career, which began with an unexpected lurch of a PhD thesis into a medical device company that was sold for nearly $100 million. Ramanathan’s charge as a Case Western Reserve University biomedical engineering graduate student was to conceptualize a non-invasive cardiac imaging technology that eventually formed the basis for her company, CardioInsight, which was sold in 2015 to Medtronic. Ramanathan spent the following two years shepherding the technology’s integration, before co-founding vitalxchange, a social media platform that promotes the exchange of personalized care through patient-to-patient interactions. Lokyata offers credit scoring and other solutions for vulnerable populations worldwide, thereby promoting global financial inclusion. “Charu’s combination of technical prowess and business acumen make her part of a rare breed of entrepreneurs successfully working to solve difficult problems through technology,” said Ketal Patel, co-founder at Lokyata Global Inc. “After her success at leading CardioInsight, Charu is now pursuing technology that takes aim at alleviating global poverty and empowering all individuals to make informed health care decisions.”

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NORTHEAST OHIO NOTABLE WOMEN IN TECHNOLOGY

Megan Varney Director of Product Development, Banyan Technology Megan Varney’s leadership is critical in developing the features and functionality for Westlake-based Banyan Technology’s logistics tools, according to Will Lazzaro, senior vice president of technology, development and strategic initiatives. “As a member of the executive team, Megan is seen as a leader who drives the Banyan product to the next level of success,” he said in the nomination. “She leads the alignment of business and technical deliverables.” Varney joined Banyan in 2017, bringing with her more than 16 years of product management experience acquired at companies such as Safeguard Properties and Revol Wireless. Overseeing a team of four at Banyan, Varney supported the development of a secure second-generation product line, driving current and prospective customer needs. She also collaborates with developers to articulate customer challenges and requirements, assessing security concerns and justifying the need for security features when applicable. She has also been instrumental in the adoption of blockchain technology for Banyan.

Tracie Schurr-DiPietro

Gloria Ware

Executive Vice President, Product Agility, OnShift

Founding Director, KeyBank Center for Technology, Innovation and Inclusive Growth

Tracie Schurr-DiPietro joined OnShift in 2015, bringing to that software development company more than 15 years of expertise as a product manager for digital and web-based products. In three short years, she has rebuilt the Cleveland-based software company’s product management function from the ground up, transforming an organization that launched only a couple of products in its early years into a business with a sustainable product development process. During her tenure, OnShift has launched four new products, with a fifth under development. By working closely with customers to understand their problems and determine the best solutions, Schurr-DiPietro has driven significant innovation — both in the marketplace where OnShift sells its suite of workforce management software products and in the technology the company uses to deliver them. “She excels at vetting ideas in the real world, with actual users, in order to optimize the use of development resources and ensure that the end result meets customer expectations,” COO Teri Hembree said in the nomination.

Gloria Ware has nearly three decades of experience in providing strategic guidance, funding, business development and growth to startups, small businesses, nonprofits and educational institutions.

She is a champion for tech inclusion, reflected in her current role as a partner at JumpStart Inc. and director of its KeyBank Center, an initiative of the KeyBank Boost & Build program. That effort aims to accelerate the success of women and people of color as entrepreneurs of high-growth firms, as well as to connect rural communities to opportunities within globally competitive small businesses. “As a subject-matter expert on diversity and inclusion best practices in the innovation economy, she consistently works as an advocate with a holistic approach to supporting diverse tech entrepreneurs and individuals interested in careers in technology by giving a voice to those who need it most,” said Erin Horne McKinney, managing partner of inclusion at JumpStart. Among her community engagements, Ware serves on the boards of MidTown Cleveland and Youngstown Minority Business Assistance Center.

REGIONAL INFORMATION TECHNOLOGY ENGAGEMEN T

RITE congratulates all the Notable Women omen in Technology echnology

Jodi Tims Professor and Chair of the Department of Computer Science and Engineering, Baldwin Wallace University Jodi Tims is among an elite few when it comes to female representation among technology academic department chair positions. Her leadership stretches far beyond the Berea higher education institution’s campus as chair of the international ACM Council on Women in Computing (ACM-W). Tims joined BW in 2002. She led the development in 2012 of its software engineering major, at the time the region’s only such degree, and is currently assisting in the creation of interdisciplinary programs in informatics, business information systems and risk management. In her role as ACM-W chair, Tims is already increasing the organization’s global involvement, connecting it to large-scale international projects on gender in STEM and spreading ACM-W programs into new geographic areas. “This is volunteer work on which Jodi spends many hours outside of her ‘day job,’ bringing to it deep commitment to increasing the number of women in computing and improving the overall climate in tech,” Valerie Barr, past ACM-W chair, said in the nomination.

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s this year and especially the following women who recognized by Crain’s are long-time Board Members of RITE. Thanks for your leadership and dedication to your field and to helping inspire the next generation of women in technology!

Katherine Golden

Jodi Tims

Chief Technology Officer OEC

Chair and Professor, Computer Science and Engineering Department Baldwin-Wallace University

Nicole Ponstingle

Kelly Zelesnik

Chief Operating Officer, Partner Pandata LLC

Dean, Engineering, Business and Information Technologies Lorain County Community College

RITE is the leading industry-driven workforce alliance dedicated to developing diverse, highly skilled IT talent needed by Northeast Ohio employers. To learn more about RITE, visit www.OhioRITE.com!

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NORTHEAST OHIO NOTABLE WOMEN IN TECHNOLOGY

Lindsay Watson

Sheryl Wilson

Kelly Zelesnik

Lauren Zink

Founder and CEO, Augment Therapy

President, Bay Pointe Tech Services

After 16 years as a physical therapist, Lindsay Watson formed Augment Therapy in 2016. The Chagrin Falls startup is developing the first pediatric physical therapy telerehabilitation, which uses augmented reality to facilitate pediatric therapy remotely. While other solutions are focused on wearables, Watson has created a “digital mirror therapy” experience that simultaneously collects, stores and forwards data to the corresponding therapist for that child without the need for augmented reality goggles. As a clinician first, Watson “only sees opportunity, and the user experience is everything to her,” Youngstown Business Incubator entrepreneur-in-residence Gene Groys said in the nomination. “She knows exactly how the end solution needs to function and the exact problems it needs to solve; therefore, she isn’t preoccupied by the inevitable development obstacles in her path.” Augment Therapy won the Innovation Fund of America/GLIDE A and B awards and recently became the only Cleveland-based company accepted into the Plug and Play health program.

Among her many talents, Sheryl Wilson has a keen ability to “break down complicated technical jargon to a level that is understandable for those outside of the industry,” according to nominator Krista Gesaman, of Canal Fulton-based Aeration Septic, which utilized the Richfield technology services provider’s free cyber threat assessment program. “For those in business who do not have a good understanding of technology, her services are critical for us to continue to grow and advance.” Wilson oversees a team of 13 at Bay Pointe Tech Services and has been instrumental in growing Bay Pointe by attracting and retaining talent, expanding the scope of its services and offering cutting-edge technology solutions. Outside of the office, Wilson is president of the Richfield Chamber of Commerce and a member of the Women Presidents’ Organization. Most recently, she has leveraged her passion for education and technology to become actively involved in the E-Rate, a federal program to help schools and libraries obtain affordable Internet.

Dean of Engineering, Business and IT, Lorain County Community College

Manager, Security Awareness, AmTrust Financial Services, Inc.

Kelly Zelesnik’s passion for developing academic programs in collaboration with technology industry is “a hallmark” of her work at Lorain County Community College, president Marcia Ballinger said in the nomination. Among her recent accomplishments, Zelesnik secured approval for the Elyriabased college’s applied bachelor’s in microelectronic manufacturing, the first program of its kind at a community college. She also facilitated the redesign of the Patsie C. and Dolores Jenee Campana Center for Ideation and Invention, including expanding the LCCC Fab Lab, another community college first.

She led development of associate degree programs in digital fabrication, cybersecurity and digital forensics. “By working directly with employers, Zelesnik ensures students are ready to meet the needs of employers in all sectors,” Ballinger said. In addition, many girls and young women get their first taste of opportunities in STEM fields through programs under Zelesnik’s leadership, including LCCC’s chapter of the Society of Women Engineers, its mobile fab lab and The Building IT Futures program.

Lauren Zink started her technology career as an entry-level analyst with Diebold Nixdorf Inc. in 2011, while also teaching as an adjunct instructor. About every two years, she was promoted to roles of greater responsibility at the Canton-based ATM maker and built a reputation as an effective security educator and leader. Last year, Zink caught the attention of the chief security officer at AmTrust Financial, who personally recruited her to strengthen security awareness among its employees. Since joining AmTrust, Zink already has a number of visible wins, including branding the security department, surveying employees on their current knowledge and testing employees through a phishing test.

At Diebold, she was responsible for developing and coordinating all activities within the security organization. She implemented processes and programs that won Zink the Cyber Educator of the Year Award in 2018 from the Women’s Society of Cyberjutsu and an invitation to be a cybersecurity LinkedIn Learning Author.

Bravo Dr. Tims!

You’re not only leading the field of computer science, you are transforming the way we prepare the next generation of tech leaders at Baldwin Wallace.

Proud to say, you are BW! Jodi L. Tims, Ph.D. Join Dr. Tims as we build the future of Computer Science at BW.

www.bw.edu

Chair and Professor, Computer Science and Engineering Baldwin Wallace University Baldwin Wallace University does not discriminate on the basis of race, creed, age, disability, national origin, gender or sexual orientation in the administration of any policies or programs.

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Focus BUSINESS OF MUSIC

SOUNDS LIKE RENOVATION

With three production studios and an event space, Superior Sound is an important addition to Cleveland’s Superior Arts District. (Hanson Photographic)

Local music makers vibe in newish Superior Sound space

By JUDY STRINGER clbfreelancer@crain.com

When Superior Arts District redeveloper GBX Group approached Tragic Hero Music Group’s Randy Chase in late 2015 about moving Crushtone Studios and two co-located music producers across the street and down a block from their fifthfloor home in the Empire Improvement — a.k.a. “Daffy Dan” — building, he was admittedly nervous.

“We didn’t know them, and they wanted the building that we controlled two floors of,” Chase said.

“But (GBX CEO) Drew Sparacia pitched me on us being the linchpins of the next phase of development for Superior Avenue, and I was like, ‘Wow, that would be cool.’ … And it just made sense to put it all together once we had the opportunity to create a new place.”

Eighteen months and $930,000 later, in April 2017, the newly formed Superior Sound opened its doors at 2230 Superior Ave. GBX renovated 13,000 square feet in the Heller building’s first floor to create a unique offering where an office and three music production studios flank an open, 2,500-square-foot main hall that doubles as a rentable event space.

The studios currently house California transplant Jim Wirt’s Crushtone Studios, Cleveland producer Jim Stewart’s JSR Studio and Vuture Studios with video and audio rooms run

by Jon Richey and Bill DeMarco, respectively — all of whom used to

P035_CL_20181112.indd 35

Tragic Hero Music Group’s Randy Chase says Superior Sound is a “onestop destination for recording artists who need help.” (Contributed photo)

Superior Sound launched in recently renovated space in the Heller building near Cleveland State. (Hanson Photographic)

share space on Daffy Dan’s fifth floor.

The office is the home of Tragic Hero’s Cleveland operations. The Raleigh, N.C.-based company includes several record labels distributed by Warner Music, according to Chase, as well as a promotions arm and part-ownership in Crushtone Studio.

Before Superior Sound, Chase, who is Tragic Hero’s vice president, conducted much of the company’s business out of a site in Bedford Heights, but envisioned a day when that part of Tragic Hero would work alongside its downtown production studio.

“What we wanted to do was make a one-stop destination for recording artists who need help, whether it be

making records or recording songs or packaging up products or getting photographs or whatever,” he said.

Some parts of the vision are still coming together. Chase said that Columbus-based Substream Magazine, which caters to a young adult audience and covers music, film and culture, also had relocated into the Superior Sound offices but recently moved back to the state capital, where owner Jason McMahon resides. And although Chase hinted at forthcoming announcements about more music-related ventures joining the site, he declined to comment yet on what those may be.

SEE SOUNDS, PAGE 38

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BUSINESS OF MUSIC

Stella’s stakes its place in a crowded market

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

Michael Zweig, native Clevelander and bassist for local band Disconnected, wants to believe that if you build it — in this case, an independent music venue a stone’s throw from the Rock & Roll Hall of Fame — fans will come.

“That’s the question I intend to have answered 12 months from Aug. 3, 2018, when I opened this place,” said Zweig, owner of the threemonth-old Stella’s Concert Club.

Since opening in downtown Cleveland across from Progressive Field, business at Stella’s has been up and down. The space, which currently opens on Thursday, Friday and Saturday nights and can hold 250-300 people, has expectedly had its share of big crowds and frustratingly sparse ones.

“The big nights are mind-blowing,” Zweig said. “On the days we’re slow, though, I do scratch my head.”

That experience reflects the challenges any new indie concert club faces, especially one in a market rife with competition from giant promoters such as AEG Presents and Live Nation, which are battling for market share here, not to mention a bevy of established smaller venues dotted across Northeast Ohio from Lakewood to Cleveland Heights to Akron.

But Zweig said he’s emboldened by the city’s rock history and optimistic that a steady flow of patrons will soon be the norm.

“The assumption is in a city where the Rock & Roll Hall of Fame is located and the term ‘rock and roll’ was coined, you would think a community like that could support as many ven-

Stella’s Concert Club general manager Matthew Jarrell works the bar at a show. “The big nights are mind-blowing,” owner Michael Zweig said.

ues as you can produce,” Zweig said.

By day, Zweig, a financial adviser, serves as managing director of The Zweig Group. Alongside partners Megan Savransky, who works in dental software by day, and Chris Barone, who’s also in finance and a drummer for the cover band The Goods, opened Stella’s shortly after Zweig was inspired to plug into the local music scene as a capitalist instead of just a musician.

And it all started when Zweig was called on to get his band back together.

For musicians, by musicians Ahead of his 2014 class reunion, Zweig was asked to get his high school band Disconnected together for a pre-reunion show — which he excitedly undertook.

Everything snowballed from there.

A Clear Channel Communications

Stella’s Concert Club owner Michael Zweig. (Contributed photos)

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rep hooked the band up with a show ahead of a college football game, a crowd Zweig estimated at 10,000 people.

Freshly inspired by that, his group set up a studio in Chagrin Falls with a recording board. They wrote new songs, working with platinum producer Jim Wirt of Superior Sound Studios, and booked other shows from there, playing one-off gigs from New York to California. They never intended to tour, though.

“I’m not going to be a rock star,” Zweig said. “Those cows have left the barn. But I thought, ‘What the (hell).’”

It was after he returned to Cleveland from a show in Los Angeles that his beloved pug of 16 years, Stella, died. That loss pulled a lot of different feelings into convergence.

Zweig was loving playing again and felt an intrinsic call to support local music now that he was once again part of the scene. He was also devastated by losing Stella. Those combined forces culminated in the formation of Stella’s Concert Club, where the late Stella is the face of the brand.

The idea was to build something akin to storied American concert venues like The Whiskey A-Go-Go in Hollywood, New Jersey’s Stone Pony and New York’s Arlene’s Grocery. All are popular, small clubs designed with premium sound and venue-provided equipment that allows bands to simply show up, plug in and play. The benefit of that model is being able to squeeze in more bands in a given night because of the time saved by not having to tear down and set up after each act.

As Zweig sought locations, the spot at 2217 E. Ninth St., across from Progressive Field, was available and seemed like a workable if imperfect fit.

“I hate the stadium. I’m not in love

with this location,” Zweig said, “but I wanted to be on East Ninth Street because that’s the street the Rock & Roll Hall of Fame and Museum is on.”

The space was “camera-ready,” Zweig added, and didn’t require much work. More than $100,000 was pumped into a proper sound system, though.

Zweig describes it as a venue for musicians, by musicians. The strategy is to draw top local acts and touring bands alike with the premium sound, but to focus as much as possible on showcasing local talent.

And if the bands come, he believes the crowds will follow. Stella’s first show on Aug. 3, before its official public opening Aug. 11, featured Arizona-based rock outfit The Black Moods.

The need for popular, mainstream bands isn’t as important as having a reputation for quality local acts and stellar sound, said Zweig, whose passion for music is apparent in how he raves about Cleveland bands (not just his own).

“I just need a venue that people know,” he said. “That’s the point. If I build a great club, and they know they’re going to hear a great band when they come, and they know the sound is going to be epic, shouldn’t that be enough?”

Where the fish are Kathy Blackman, who founded the Grog Shop in 1992, said opening a concert club is inherently tough, let alone in a seemingly crowded market such as Cleveland’s.

“Obviously, any business is going to have its ups and downs, and I don’t think anyone expects to make money right off the bat,” she said.

SEE STELLA’S, PAGE 38

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BUSINESS OF MUSIC

Q&A: Teddy Eisenberg Co-founder, Sixth City Sounds

DJ Alan Freed popularized the phrase “Rock and Roll” on his Moondog Rock and Roll Radio Hour here in the 1950s, but the city’s musical roots extend well beyond rock, noted self-described Cleveland music evangelist Teddy Eisenberg. ¶ “We have fostered and birthed entire genres with artists from Cleveland,” he said.

“We have an incredibly forward-thinking artist population and consumer base that supports it.” ¶ A favorite example: “The Velvet Underground, actually before they got big performing in New York, would round old venues in Cleveland in the late 1960s because no one in New York got them yet. We got them.” ¶ Eisenberg is a South Euclid native and 2016 graduate of Case Western Reserve University, where he is public relations director for WRUW-FM 91.1 and hosts a weekly music show. He recently teamed up with Sofar Sounds Cleveland founder Jeanette Sangston and Seafair singer Chayla Hope to form the nonprofit Sixth City Sounds to support the local music scene. — Judy Stringer Sixth City Sounds launched more than a year ago. What is its mission?

Sixth City Sounds was formed to bring together the interests of the arts and culture community along with business and local government to rally around that idea that music, Cleveland music in particular, is something that has a tangible economic impact on our region. Music is a tool for the attraction and retention of talent, combating the brain drain that Cleveland, like so many other Rust Belt cities, has experienced in the past several decades. It really is something that adds to our quality of life much more than people realize and much, much more than they give it credit for. Music is more than just something people enjoy. It is a livelihood for some, and it brings people to the city as tourists and residents. We just felt there needed to be an organization to push forward strategic goals around those points.

What have been some of the early outcomes from the organization?

Our biggest story is our website, which we are working on updating right now.

Not only is it an introduction to Sixth City as an organization, it serves as a resource database for artists. They can go on and search a pretty robust list of anything they would need to connect with the local music scene.

However, it’s not just meant for artists who are just starting out. It’s for those who may have been around for decades, and bands or musicians who are on tour and need to look up a venue or a place to print T-shirts or a record store or a place to get their guitar fixed — all that is available on this site, and it is collaborative. We invite people to submit resources that we may have missed or did not know about with the idea that information is power to lots of these musicians.

CLE Music Shelves, which display local music for purchase, have been popping up in different retailers throughout the city. What is the impetus behind this Sixth City Sounds project?

We lovingly called it the Starbucks model. The idea being that people love drinking local coffee, shopping at local stores, eating at local restaurants, etc., but might not venture into a record store or local gig. It meets the consumers where they are, in spaces where they are already spending their money, and allows them to interact with local music, when they perhaps might not otherwise.

PfifitfififiWfiightfiififipfifiufifitfifiwfififfififififi fifififiyfiMffifiufifififi,fiMfittfiAfibfififififi fifififiBfififififihfififififififiwfifififififfiifitfififiififi thfifififififififififififififififififififfiffiffiffi

Why has Cleveland struggled to gain recognition for its music scene?

I think one of the biggest problems has been that we didn’t have a formal organization that is the main point for the industry, pushing musicians to the forefront, pushing local government to focus on their issues, advocating for policies that will help them be successful. Nashville has had the Arts and Entertainment Commission for more than 40 years.

That is certainly a jump-start. And Austin has had a music commission, which has had a seat at their local government table for decades. Not to say that is a panacea to a lot of the issues plaguing local musicians, but it definitely goes a long way to making music more central to a city’s identity.

What is the business community’s role in cultivating arts and culture, especially music?

The business community can play a supportive role in providing spaces for musicians to perform. ... The people that are coming to work in the health-tech corridor at Cleveland Clinic or University Hospitals or at a corporate headquarters like American Greetings want to punch out and go see what the city has to offer. So it is to the employers’ benefit to invest in programs that support music. It ultimately will help draw talent to work for those companies in our region.

List making companies will be highlighted in a special publication that will be published by Crain’s Cleveland Business in May 2019.

PROUDLY PRESENTED BY:

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STELLA’S

CONTINUED FROM PAGE 36

The Grog Shop was tweaked several times before finding its identity in the market, and it’s still evolving.

It used to be open all day and had a small food menu, for example. Now, there’s no grub and the space only opens for shows in the latter half of the day. Blackman even books more comedy shows today as one way to diversify the acts and keep up a steady flow of customer traffic.

That continual tweaking is how Grog Shop has been able to survive not just the down times, but the early hurdles any new business is sure to face.

Zweig wants Stella’s draw to be its sound and superb local acts. Even with those strengths, getting people in the door can be a challenge. Besides the usual marketing, the club has been offering ticket giveaways for popular shows such as Elton John and Panic! at the Disco to guests participating in full band karaoke on Thursdays, among other promotions.

Given time, Zweig expects the venue will become its own draw.

He’s also putting his money where his mouth is by investing in the local music scene. On Dec. 12, he plans to launch his own label, Stella Records, the occasion marked with a show at the venue featuring at least one local act and a couple others from outside the area that Zweig is encouraging to move here.

Living in Cleveland isn’t mandatory to get on the new label, he said, but it is heavily encouraged.

As far as drawing in patrons, Zweig feels that rests squarely on getting the word out. Competition from other clubs and big companies like AEG doesn’t concern him — quite the contrary, in fact.

“I’m an avid fly fisherman. When I walk into a river, if I look to the right and I don’t see any people, then I look to my left and see 10 guys, I’m going to the left because that’s probably where the fish are,” Zweig said.

“I feel even more comfortable with this competition,” he added, citing AEG and Live Nation’s investments in Cleveland. “There’s people fishing here, so there’s got to be fish.”

SOUNDS

CONTINUED FROM PAGE 35

For now, Chase said he and the music veterans under Superior Sound’s umbrella are “more than happy” with how the space has turned out. While the studios enjoyed the creative synergy of a shared location in the Daffy Dan building, that office lacked proper soundproofing, meaning the producers sometimes had to work around each other’s recording sessions, which Chase said “could be a little frustrating for them.”

GBX, its architects and contractor, The Krill Co., collaborated with Chase and the music studios to design a space where errant sound — or rather vibration — is no longer an issue. “No room touches another room and so there is no vibration traveling from room to room,” he said. “Even the floors are built on rubber cups; they are called floating floors. Everything floats, nothing touches.

“It is pretty awesome when it’s buzzing out there, when the three studios are recording at once. It’s like ‘How did this happen?’ It’s kind of a weird dream

come true. … If we can continue to develop the offering of what we do here and continue to execute on what we are offering, I think we can be an important part of the music community.”

Mark Lammon, executive director of the Campus District Inc., the community development organization serving neighborhoods east of downtown, said that Superior Sound is already an important part of Cleveland’s oldest arts community.

Roughly 150 artists live and/or work in the Superior Arts District, according to Lammon.

“We are excited they decided to remain in the district and put a sizable investment here,” he said. “If you look at the evolution of the neighborhood, they fit in perfectly because it’s not just the traditional arts that the district is housing. It’s creative arts. It’s sound.

It’s industrial arts. It’s this makers’ district that is starting to form and Superior Sound fits into that very nicely.”

Silver lining Superior Sound is hitting its stride just as Chase enters his 25th year in the music business. The Cleveland

native had a record label in the early ’90s called Fishhead Records, which promoted local singer-songwriter Anne Cochran and helped relaunch Big Apple guitarist Sylvain Sylvain.

“I just got hooked on the business side of music and the good feelings you get when you are actually able to help an artist get to another level,” he said.

About 10 years ago, Chase began working with Wirt, who was already a platinum producer with such credits as Incubus, Hoobastank, Jack’s Mannequin and Fiona Apple. Eventually, Chase coaxed Wirt into leaving Santa Monica and its high rents to become part of Superior’s fledgling artist colony.

Chase said when Tragic Hero, Crushtone and “musical partners” JSR and Vuture moved into the new Superior Sound office, they did so quietly, much as they have operated over the last five to six years.

“All of these businesses were already working well and we did not really make a lot of noise about it.

We just sort of did a soft open and got to work,” he said. “This is kind of what we preach to recording artists: ‘Let’s just work hard and let it grow organically.’”

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P038_CL_20181112.indd 38

11/8/18 2:43 PM

SPONSORED CONTENT

November 12, 2018

aSk ThE PROfESSiONal

a holistic approach to selling your business Insights from a wealth management industry leader

S

elling a business is an emotional decision — one that can overwhelm even the most seasoned business owner. This reality will resonate particularly over the next decade. According to the Association for Corporate Growth Cleveland, about 94% of the businesses in the U.S. have sales of less than $5 million and 71% are expected to transition to new owners within the next 10 years.

Indeed, business owners understand the importance of gathering a team of professional advisors to support in selling their company.

This team of advisors ensures the business is positioned to get the best price from the right buyer while protecting them from an unknown liability.

The same care and thoughtful planning must also be applied in preparing the business owner’s family for the sale, says Ron Ambrogio, president of BNY Mellon Wealth Management’s Ohio Region.

“It is never too early to begin having a discussion with the family and their team of advisors, especially if some of the family members are employees,” said Ambrogio, who is responsible for the firm’s regional investment management, trust administration, business development and private banking business.

Ambrogio has more than 35 years in the wealth management industry and can attest to the various considerations and situations associated with a family’s stake in the sale of a business. He shares with Crain Content Studio — Cleveland his thoughts on how to prepare for and execute a thoughtful selling strategy.

Why is preparing your family for the sale of a business important?

Your team of advisors needs to know how involved family will be in the transaction and if they will personally benefit. If so, are they ready for the responsibility? Should a governance plan be put in place to protect your family from this wealth? What coaching and education have you provided your family to help them prepare?

Approximately 70% of families lose their inherited wealth by the end of the second generation, according to Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values

by Roy Williams and Vic Preisser.

Among those families, the biggest factor is lack of communication and trust among family members. The second-

most common reason is heirs who were not prepared to handle the windfall.

What are some basic approaches for helping families prepare for a company sale?

Annual or semiannual family meetings should be held to discuss a number of issues as they pertain to the sale, which include the family’s history, values and mission. Personality tests and exercises can improve communication skills within the family.

It is important the family understand the sale’s implications from a financial and estate planning standpoint as well. Topics such as cash flow, risk versus conservative investments, how to read an investment statement, how to balance a checkbook, wills, trusts,

“

Family meetings provide a forum where impactful decisions can be made together, ensuring a lasting legacy. One of the best ways to foster family unity is through philanthropy.”

— Ron ambrogio, president, BNY Mellon Wealth Management’s Ohio Region

health care directives and tax deferrals are matters that should be addressed.

A team of advisors — which may include an investment advisor, attorney, accountant, insurance agent and a representative from a nonprofit — can help with family financial and estate planning education.

Family meetings provide a forum where impactful decisions can be made together, ensuring a lasting legacy. One of the best ways to foster family unity is through philanthropy.

There are many excellent approaches involving philanthropy that promote both individual and family values.

dation is to ease into the market by using a dollar-cost averaging strategy and investing a smaller fixed amount on a regular schedule over a certain period of time. This will reduce the impact of volatility.

BNY Mellon Wealth Management works with many families who are in the process of selling their business. What is the value in working with a team

of wealth management professionals?

At BNY Mellon Wealth Management, your team of advisors — a wealth strategist, wealth manager and private banker — understand that this money represents your life’s work.

The skills the seller has and the importance of surrounding themselves with a team of specialists and professionals need to be used in managing their wealth going forward.

There are no hard-and-fast rules on what to do with the wealth from a business sale — it’s more of an art than a science. We work with our clients to create a plan tailored to meet their unique situations and caution them to resist the urge to take swift action.

Proceeding slowly and judiciously ensures that both the financial side and the family side of the deal are sorted out, before any changes are made. We have found this to be a key to success for our clients after the sale of a business.

is there a general approach your team recommends for the business owner that is transitioning from entrepreneur to investor?

Entrepreneurs are often better at making money than managing it, so assembling a team of experienced wealth advisors could be critical. Your advisors can help evaluate future wealth needs for subsequent generations and develop a clear plan that will support the families’ future lifestyle and legacy. As part of our advice-led model, we recognize that a business owner’s financial goals are intertwined with their personal ones. We look at every aspect of their lives, and this approach allows us to address these combined needs in a holistic way.

A common approach is to divide the investment portfolio into two accounts.

One account can support a lifestyle that will be more conservative in nature.

This account will have goals of wealth preservation, principal protection, stability, liquidity and income generation.

The second account will be focused more long term for the family’s legacy and wealth transfer. This account can fund new ventures, private equity and generally provide growth of principal for future generations. This account may also allow the second and third generations to have a voice on how to invest the funds.

One additional general recommen-

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

P039_CL_20181112.indd 39

11/7/18 10:22 AM

PA G E 4 0

N O V E M B E R 12 - 18 , 2 018 |

|

CRAIN’S CLEVELAND BUSINESS

AKRON

Giving ex-inmates skills for success in work, life

By DAN SHINGLER

GSB_LoanAd_Craines_4x6.indd 1

4/10/18 VOL. 39, NO. 16

April 16-22, 2018

Sponsored Content

Acquisition helps keep Ramco on growth track VOL. 39, NO. 16

Sponsored Content

April 16-22, 2018

Acquisition helps keep Ramco on growth track

VOL. 39, NO. 32

AUGUST 6 - 12, 2018

CRAIN’S 2018

ARCHER AWARDS

HR TEAM OF THE YEAR (PUBLIC) WINNER

People Analytics, KeyBank Aware that would-be and current employees must take priority, KeyBank has simplified its recruiting process and utilized data to reduce worker turnover.

Key’s information-driven efforts were led by Amanda Cruz, digital recruiting and analytics consultant, and initiative development manager Jeannie Fanning, the nomination stated. By taking a collaborative approach backed by detailed research, Key’s HR organization cut attrition in the company’s contact center by half over the previous year, reduced the number of pages in its applications by 40%, and estimate that candidates will spend 20% to 50% less time in completing an application.

According to the nomination, the team is also nearing completion of a candidate-centric Key career site redesign, providing additional trans-

parency around the information sought by applicants and eliminateliminat ing corporate speak and complex navigation.

Meanwhile, a comprehensive approach to “human capital” decision-making is at the core of Key’s People Analytics Community of Practice, a group of HR professionals who meet biweekly to discuss best practices in driving data-based HR decisions.

“The predictive modeling approach is being adopted by other groups, from redefining onboarding for new hires, to streamlining the training modules that impact perper formance, to prioritizing workload for compensation reviews,” the nomination stated. “Candidate exex perience work will result in more quality candidates in our recruiters’ pipelines and improve our employ-

Cruz

Fanning

er brand, conveying to candidates that Key is fast, efficient and tech savvy.”

In performing this undertaking, Key’s HR division helps meet longterm company priorities in developing a talented workforce, catalyzing employee engagement, and improving organizational effectiveness, the nomination said.

— Douglas J. Guth

gan to focus more on engineering

By DAN SHINGLER and less on producing common, low-priced parts like simple nuts. dshingler@crain.com “That’s a race to the bottom,” @DanShingler Melick said of the highly commodHudson-based Ramco Specialties itized realm of simple nuts and bolts, where foreign and domestic suppliis on an automotive roll.

VOL. 39, NO. 16 April 16-22, 2018 Sponsored Content After building and moving into a ers most often compete primarily on 185,000-square-foot headquarters and price and the cheapest part wins.

The company has found OEM more on engineering gan toitsfocus main plant a little over two years ago,

By DAN SHINGLER and less their on big producing common, the company has increased its size automaker customers,and with Ramlow-priced parts like simple nuts. with the acquisition of Michigan-based suppliers, willing to work dshingler@crain.com co’s engineers earlier in“That’s their own a race to the bottom,” Copa Tool earlier this month. @DanShingler allows Melick saidthe of the highly commodGrowth in Ramco’s automotive design processes. That to offer fastening systems itized realm of simple nuts and bolts, business, by far its largest Hudson-based end market, company Ramco Specialties can be integrated intoforeign other and domestic suppliwhere is fueling it all, Jeff Melick, Ramco’s di- thatroll. is on an automotive which can themost entireoften au- compete primarily on rector of sales and marketing, Aftersaid. building parts, and moving intomake a ers manufacturing process the cheapest part wins.

“This year, we’re up185,000-square-foot about 15%,” tomotive headquarters and price and Specialties’ 185,000-square-foot headquarters and main plant has andyears moreago, efficient.

Plus, they Ramco The company has found its focus OEM more on engineering gan to Melick said, adding that theplant compamain a littlefaster over two of warehouse room, too. (Dan Shingler for Crain’s) DAN SHINGLER notBydepend whollyautomaker on price customers, to plentyand and their less big on producing common, ny has been experiencing a similar hasdoincreased the company its size sales, Melick said.suppliers, willing to work with Ramlow-priced parts like simple nuts. growth rate since about 2008, when gain with the acquisition of Michigan-based dshingler@crain.com growing faster overall must be working, because while earlier co’s engineers in“That’s their than own a race todomestic the bottom,If ” the state’s automotive compait began focusing onCopa more Toolengiearlier thisItmonth. @DanShingler growth onlycommoddo nies as a whole can fare that well, it some other companiesdesign are alsoprocesses. find- production That allows theofrates Melick said the can highly neered products than a simple Growthnut. in Ramco’s automotive would be a good thing for Ohio, in two ways: They are either a bolts, growth inmarket, automotive, the induscompany to offersofastening systems itized realm of simple nutson and Copa Tool is a significant pickup business, by far itsing largest end Hudson-based Ramco Specialties which still has a huge automotive small where number of hotand products or asupplias is a whole has onroll. a downthat can be integrated into foreign other domestic for Ramco. Its $14 million in annual is fueling it all, Jefftry Melick, Ramco’s di-been on an automotive according to the Ohio number of where a industry, trend, said Edward “Ned” Hill, parts, which can make the entireoften au-products most compete primarily on sales will be added torector Ramco’s an-andward of sales marketing, Aftersaid. building and moving intolarger a ers few are picking marketpart share. a well-known Ohio economist and tomotive manufacturing process price and theupcheapest wins. Manufacturers’ Association. nual revenues of about $100 million.

“This year, we’re up185,000-square-foot about 15%,” headquarters and Specialties’ 185,000-square-foot headquarters a huge partand main plant has Seeing that the overall Ramco tide bouncprofessor public administration faster and years moreago, efficient.

Plus, they The company has is found its OEM“Auto supply remains Copa’s 40 employees bring Ramco’s Melick said, adding that theofcompamain plant a little over two warehouse room, too.

(Dan Shingler for Crain’s) enormous manufacturing ing around dead to low plenty … theyof either and city regional atits size doplanning not depend wholly on price automaker customers, and their of bigOhio’s headcount to about ny 175 haspeople, been experiencing a similar the and company has increased sector. State data has shown increasgood boatwilling or have Ohio State University’s gain sales,John Melickhave said.asuppliers, toattached work witha RamMelick said. growth rate sincethe about 2008, when with the acquisition of Michigan-based ingoverall investment among all decent boatengineers towhile a goodearlier motor.”

Glenn College ofearlier Publicthis Affairs. growing domestic If transporthe state’s automotive compaIt month. must be working, because co’s infaster theirthan own The acquisition brings things that it began focusing onCopa more engiTool tation Ramco is not at allows least Asked whether Ramco or any sinproduction growth rates equipment can only do manufacturers, nies as a whole can fare that well, it some other companies are also find-unique, design processes.

That the might be more important than just than neered products a simple nut.in Growth Ramco’s automotive and are jobeither growth been steady amongcompany Northeast supplicompany’s recent in aube a good thing for Ohio, soauto in two ways: They on ahas would ing growth inmarket, automotive, the industo Ohio offer fastening systems sales, too, such as increased CopamanuTool is agle significant pickup business, by far itsgrowth largest end transportation equipment ers.

Some report they are also other tomotive is annual due to Jeff a rising or has still has a huge automotive small number ofamong hot products or a which try as atide, whole onothers acan downthat be integrated into facturing capacity. While forRamco Ramco.traIts $14 million in is fueling it all, Melick, Ramco’s di-been manufacturers, employwell. just to a well-run boat, Hill hadtrend, a ready according to the Ohio number products wherepresently a industry, ward said Edward “Ned” Hill,canlarger parts, which make the entireofauditionally has focused sales on thewill female be added Ramco’s an- and rector of sales marketing, said.doing ing 125,000 OMA Association.

Adler, president of Cuyahoga “It’smillion. the boat.”

Manufacturers’ few are picking up over market share. Ohioans,” a well-known OhioBill economist and tomotive manufacturing process end of fasteners — nuts and related of answer: nual revenues about $100 “This year, we’re up about 15%,” Ramco Specialties’ 185,000-square-foot headquarters spokesman Augsburger Heights-based Products, Overall, domestic auto production “Autosaid. supply remains a huge partand main plant has thatPlus, the overall tide is Ryan bouncprofessor public administration faster andStripmatic more Seeing efficient. they threaded assemblies Copa’s — Copa has 40 employees bring Ramco’s Melick said, adding that theofcompaplenty warehouse room, for Crain’s) For… itsthey part,of Ramco expects itstoo. re-(Dan Shingler also sells heavily thearound automohas been in apeople, slump, Hill said.

He and notof Ohio’s enormous manufacturing dead to low either and city regional planning atintoing do not depend wholly on price high-volume screw machines headcountthat to about 175 ny has been experiencing a similar growth to continue and isState worktive industry, supplying a range data from Federal Reserve data has shown increashave a goodof boatcent or have attached a sector. the Ohio State University’s John gain sales, Melick said. can produce bolts and othersaid. small ed thatgrowth Melick ratethe since about 2008, when ing hard to earn its place supplying parts.

He, too, said Bank of Louisthat shows thaton U.S. auto- engiing overall investment among all decent boat towhile a good motor.” growing faster than domestic If transporthe state’s automotive compaGlenn College ofsmall, Public tubular Affairs.

It must be working, because precision parts Ramco does curcur The not acquisition brings things it St. began focusing more parts for up-and-coming vehicles, business is any good as of late. makersneered went from about tation equipment Ramco is not unique, at least nies as a whole can fare that well, it production growth rates can only do manufacturers, Asked whether Ramco or sinsome other companies are also findrently make, Melick said. might be more important than just making products than a simple nut.

Melick said.

Copa’s and on has “Stripmatic is at 15% over ourindus350,000 automobiles month be-pickup and are job either growth been steady among Northeast Ohiosoauto supplibe a good thing for Ohio, in two ways: presence They a would company’s recent growth in auing growth inleast automotive, the presAnd it never hurts tosales, havetoo, a pres such as increased manumanu Copa Tool is per agle significant added connections and around first-quarter and last year’s tween 2013 and tra2016 totomotive now making transportation equipment ers.been Some reportsmall they are also in still has a huge automotive number ofamong hot products or a which is to a rising or has try as tide, aforecast whole onothers a downence in the metropolitan Detroit facturing capacity.

While Ramco tra for Ramco.

Its $14 million in due annual Detroitlarger should only of help, since where it presently sales,” Adler “The short-term abouton 250,000 units month. manufacturers, employdoing well. according to the Ohio number products a industry, just atowell-run Hill hadtrend, a said. ready ward said Edward “Ned” Hill, area, where Copa is based, alongside ditionally has focused thewill female sales be per added Ramco’sboat, anputs few Ramco toshare.Ohioans,” backlog through June looks prettypresident other words, company isthe boat.” over 125,000 OMA Association.

Billeconomist Adler, of Cuyahoga Manufacturers’ are physically pickinging upcloser market “It’smillion. a well-known Ohio and domestic automakers end and ofmany of —In fasteners nuts andrevenues related ifofaanswer: nual about $100 many Seeing of itsProducts, big customers, hetide added. solid as well.” growing, they40 must be doing somespokesman Augsburger Heights-based Stripmatic “Autosaid. supply remains a huge part that the overall isRyan bouncOverall, domestic auto production professor of public administration their suppliers that arethreaded all potential assemblies — Copa has Copa’s employees bring Ramco’s “Ouring product development who said hisregional products most thingmachines right.

For … its engipart, either Ramco expects itsenormous realso sells heavily at into the automoof Ohio’s manufacturing they around dead low has been in apeople, slump,Adler, Hilland said.

He notcity and planning Ramco customers, he noted. high-volume screw thatto about headcount 175 neers have area very excited to able to theirState waytive into pickups, supplying a supplier is from a typically growth to continue and isState work-data has shown increasindustry, range ofboatcent a good orbe have attached a sector. ed that data the Federal Reserve thefind Ohio University’s John Ramco hopes to bring bear itsbolts “How cantoproduce andMelick other small performs said. offer He, domestically SUVs and heavy commercial function of not which itofisSt.things suping hard to earn its place tubular too,boat saidto amanufactured ing supplying investment among all transpordecent good motor.”

Bank Louis that shows that U.S. autoGlenn College ofsmall, Publictrucks, Affairs. parts. chief strength to Copa’sprecision existing cuscus parts Ramco does curcurvehicles The acquisition brings engineered assemblies and compothinks new taxabout laws and a reduction plying and how those important vehicles went sell,” for up-and-coming vehicles, business is good as of late. equipment manufacturers, Ramco is notparts unique, at least tation makers making Asked whether Ramco or any sintomer base, Melickrently said.make, That Melick said. might be more thanfrom just nents quickly toour our Tier 1 automoof regulations are having a big posi-in Hill to said intoo, email corresponMelick said.suppliCopa’s presence “Stripmatic is at leastamong 15% over and job and growth has been steady Northeast Ohio auto 350,000 automobiles per beglemonth company’s recent growth austrength is engineering, And he said.

AfAf hurts presit never have a an pres sales, such as increased manutive Melickadded said. connections tive impact sales. dence.facturing “An Detroit auto supplier that is 2016 and around forecast and year’s transportation equipment ers.last Some others report they are also inamong tween 2013 and totomotive now on making is duefirst-quarter to a rising tide, or customers,” ter the Great Recession, Ramco bebe metropolitan ence in the capacity.

While Ramco traDetroit should only help, since it presently employsales,” Adler said.

“The short-term manufacturers, doing well. about 250,000 units per month. just a well-run boat, Hill had a ready area, where Copa is based, alongside ditionally has focused on the female puts Ramco physically to prettypresident ing closer over 125,000 Ohioans,” OMA Bill Adler, of Cuyahoga other company “It’sisthe backlog boat.” through June looks domestic automakers end and of many of —Innuts fasteners andwords, relatedif aanswer: Reprinted with permission from the Crain’s Cleveland Business. ©be 2018 CrainsomeCommunications Inc. All Rights reserved. many of itsProducts, big customers, he added. solidauto as well.” spokesman Ryan Augsburger said.

Heights-based Stripmatic growing, doing Overall, domestic production their suppliers that arethreaded all potential assemblies — they Copamust has Visit Further duplication without permission www.crainscleveland.com. #CC117 “Ourthe product development Adler, whoHe said his products For itsengipart, Ramco expects its realso sellsmost heavily into automothing right.is prohibited.

Hill said. notRamco customers, he noted. high-volume screw machines that has been in a slump, neers areavery excited to begrowth able toto continue and is work findReserve their waytive into industry, pickups, supplying workrange of cent a supplier is from a typically ed that data the Federal Ramco hopes to bring bear its bolts“How cantoproduce and other small performs offer He, domestically SUVs and commercial ing hard to earn its place supplying small, trucks, tubular parts. too, said manufactured function of which vehicles supBankitofisSt. Louis shows that heavy U.S. autochief strength to Copa’sprecision existing cuscus parts Ramco does not curand compothinksmaking new taxabout laws and a reduction for up-and-coming vehicles, business is goodengineered as of late. assembliesparts plying sell,” from makers went tomer base, Melick rently said.make, ThatMelick said.and how those vehicles nents to our our Tier 1 automoof regulations arebehaving“Stripmatic a big posi- is at Melick said. Copa’s presence and leastquickly 15% over Hill to said in aan email350,000 corresponautomobiles per month strength is engineering, he said.

AfAf hurts And it never have prestive customers,” Melickadded said. connections in and around tive impact sales. first-quarter forecast and last year’s dence. “An Detroit auto supplier is 2016 tween that 2013 and to nowon making ter the Great Recession, Ramco bebe metropolitan ence in the sales,” Adler said. “The short-term Detroit should only help, since it area, where Copa is based, alongside about 250,000 units per month.

In other words, if a company is backlog through June looks pretty puts Ramco physically closer to domestic automakers and many of Reprinted with permission from the Crain’s Cleveland Business. © 2018 Crain Communications Inc. All Rights reserved. many of its big customers, he added. their suppliers that are all potential growing, they must be doing some- solid as well.”

Further duplication without permission is prohibited. Visit www.crainscleveland.com. #CC117 “Our product development engiAdler, who said his products most thing right.

Ramco customers, he noted. neers are very excited to be able to typically find their way into pickups, “How a supplier performs is a Ramco hopes to bring to bear its chief strength to Copa’s existing cus- function of which vehicles it is sup- SUVs and heavy commercial trucks, offer domestically manufactured tomer base, Melick said. That plying and how those vehicles sell,” thinks new tax laws and a reduction engineered assemblies and compoHill said in an email correspon- of regulations are having a big posi- nents quickly to our Tier 1 automoAf strength is engineering, he said. Aftive customers,” Melick said. ter the Great Recession, Ramco be- dence. “An auto supplier that is tive impact on sales.

Acquisition helps keep Ramco on growth track

PROMOTE. Why not?

Reprinted with permission from the Crain’s Cleveland Business. © 2018 Crain Communications Inc. All Rights reserved.

Further duplication without permission is prohibited. Visit www.crainscleveland.com. #CC117

Reprinted with permission from the Crain’s Cleveland Business. © 2018 Crain Communications Inc. All Rights reserved.

Further duplication without permission is prohibited. Visit www.crainscleveland.com. #CC142

Laura Picariello, Reprints Sales Manager Phone: (732) 723-0569 • Fax (888) 299-2205 Email: lpicariello@crain.com

Foundation — among others, Clark said.

It’s also worked with the Summit dshingler@crain.com County Land Bank to obtain and @DanShingler work on dilapidated properties in Depending on whose figures you and around Akron. Teaching his cliuse, the recidivism rate for those re- ents trades in construction is a linchleased from prison in the U.S. is be- pin of TRY’s work, Clark said.

Today, TRY has eight houses in Aktween 40% and 70%.

Perry Clark said he’s gotten that ron, with a total of 28 beds occupied down to 1% for participants in his Ak- by former inmates. TRY owns all of the houses — rehabbing is also part ron program.

Clark started the nonprofit Truly of it’s mission — and clients must be Reaching You (TRY) in 1999 after he residents to participate in the profinished a 10-year sentence for gram. Residents get up and go to work in the morning — or to church, drug-related crimes.

The program teaches life skills — or to a support session, or some sort everything from how to manage per- of schooling. Clark doesn’t believe in sonal finances to what employers ex- letting vulnerable men fall back into pect and how to deliver — along with trouble on autopilot. There are no skills such as landscaping, carpentry, drugs, no drinking.

Folks are taking note, too. Jerry Fiplumbing, electrical, and heating and ventilation work, Clark said. Cli- ume, who founded and heads SVN ents start out working in lower-skilled Summit Commercial Real Estate Group, jobs, like demolition, and work their pointed to developer Tony Troppe’s way up into more advanced posi- United Building during a recent walk through downtown Akron. It’s being tions.

Participants also get peer support converted into a boutique hotel.

“The guys in there doing the demo with addiction issues, mentoring and other support mechanisms that are vital are former inmates,” said Fiume, who volunteers as a member of Clark’s to their long-term success, Clark said.

Then, Clark meets with prospec- board of directors.

Fiume continued, “Perry’s doing tive employers, including many who have hired previous clients, to match some amazing work. … He’s helping candidates to jobs and shepherd pro- to rebuild downtown.”

Troppe refers to TRY’s work as “regram 11:11 AM participants through the interview, hiring and ultimately the be- demptive” and said he’s used the program’s crews on several buildings ginnings of the job.

Clark began by trying to help three with success.

“I’m just impressed by the way men he knew. Today, he’s not sure how many he’s helped — “around they follow solid direction and then have a complete and thorough fol110 or 120,” he said.

CRAIN’S CLEVELAND BUSINESS | He doesn’t have to think about low-through,” Troppe said.

But when it comes to TRY’s prohow many fell back.

“Only one has gone back to prison gram participants, it’s slow work. … He wasn’t ready. I should have And it has to be, Clark said.

He has found jobs for most of the known,” Clark said.

TRY has found support from Unit- men who have gone through his proed Way of Summit County, Gov. John gram and many have found work on Kasich’s Faith Based and Community their own, he said. They usually work Initiatives, Cuyahoga Falls’ JAH at local landscaping companies, conFoundation and Hudson’s PEGS struction firms and local manufac-

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P040_CL_20181112.indd 40

turers, but getting them ready for employment takes time.

Learning hard job skills or even a trade is often the easy part, Clark said. It’s changing a person’s lifestyle that takes time.

“We did not get stuck in our addictions, whether it’s drugs or alcohol or whatever, overnight,” Clark said. “So why would you think you’re going to change overnight?”

Clark starts working with clients months before they are released.

They may be in the TRY program for months or even years. Clark said he currently has three men who have been in TRY for three years. He doesn’t want them to leave until they’re ready to work. Until then, TRY employs the men itself to work on and expand its housing network, while training and preparing them for outside work.

The pace of Clark’s work doesn’t surprise Vickie Miller, director of the Columbus-based Training Assessment Placement Project (TAPP), which places former prisoners into jobs in the plastics and steel industries.

Her 3-year-old program has placed 55 former inmates into jobs, she said, with a rate of recidivism close to TRY’s.

She works with clients for between 10 days and a month. But TAPP’s clients have to be fairly close to ready to work on release, with housing and a driver’s license.

“On any given month, I probably screen more than 100 people — and I don’t even get 10%,” Miller said.

TRY, on the other hand, is working to get its clients to that stage from the S E P T E M B E R 3 - 9 , 2 018 | PA G E 4 0 start, Clark said.

But when it succeeds, it’s finding an increasingly accepting job market.

Both Clark and Miller said placing clients has gotten easier, especially in the past year or two because demand for workers is high and many employers realize that employment is the best way to keep people from returning to prison.

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

BUSINESS FOR SALE

BUSINESS FOR SALE

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DOOR AND GATE INSTALLATION COMPANY FOR SALE Long-time NE Ohio garage door and gate firm for sale. Owners looking to retirement, but willing to stay to assist with transition to new owners. Sale includes all assets including receivables, inventory, vehicles, etc.

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11/9/18 2:03 PM

CRAIN’S CLEVELAND BUSINESS

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N O V E M B E R 12 - 18 , 2 018

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PA G E 41

THE LIST

Savings Institutions

Ranked by Northeast Ohio deposits LOCAL DEPOSITS (MILLIONS) THIS BANK NAME YEAR MAIN LOCAL OFFICE

6-30-2018

6-30-2017

% CHANGE

2018 LOCAL MARKET SHARE %

TOTAL DEPOSITS/ ASSETS (MILLIONS)

FULL-TIME EQUIVALENT STAFF COMPANYWIDE 6-30-2018

TOP LOCAL EXECUTIVE

1

Third Federal Savings & Loan 7007 Broadway Ave., Cleveland 44105 (800) 844-7333/thirdfederal.com

$6,118.4

$5,970.1

2.5%

5.9%

$8,497.3 $13,900.2

1,040

Marc A. Stefanski chairman, president, CEO

2

Ohio Savings Bank, a division of New York Community Bank 1801 E. 9th St., Cleveland 44114 (216) 588-4100/mynycb.com

$2,190.3

$2,182.6

0.4%

2.1%

$26,911.6 $47,095.9

1,617

Anthony Donatelli executive vice president

3

Dollar Bank FSB 1301 E. 9th St., Cleveland 44114 (216) 736-8934/dollar.bank

$1,943.8

$1,921.2

1.2%

1.9%

$6,671.9 $8,391.4

1,345

William M. Elliott Jr. executive vice president

4

First Federal Lakewood 14806 Detroit Ave., Lakewood 44107 (216) 529-2700/ffl.net

$1,480.3

$1,328.0

11.5%

1.4%

$1,480.3 $1,907.0

372

Timothy E. Phillips president, CEO

5

Westfield Bank FSB Two Park Circle, Westfield Center 44251 (800) 368-8930/westfield-bank.com

$1,039.2

$1,028.0

1.1%

1.0%

$1,039.2 $1,396.1

181

Jon W. Park chairman, CEO

6

Northwest Bank 457 Broadway Ave., Lorain 44052 (440) 244-8014/northwest.bank

$896.8

$909.9

-1.4%

0.9%

$8,198.0 $9,641.1

2,118

Kevin Nelson president, Ohio region

7

First Federal Savings and Loan Association of Lorain 3721 Oberlin Ave., Lorain 44053 (440) 282-6188/fflorain.bank

$319.1

$327.9

-2.7%

0.3%

$343.3 $423.1

96

Michael E. Brosky president

8

Geauga Savings Bank 10800 Kinsman Road, Newbury 44065 (440) 564-9441/geaugasavings.com

$181.7

$198.3

-8.4%

0.2%

$181.7 $264.2

47

James E. Kleinfelter president, CEO

9

Conneaut Savings Bank 305 Main St., Conneaut 44030 (440) 599-8121 /conneautsavings.com

$59.1

$60.4

-2.1%

0.1%

$62.1 $77.2

20

Jim Greenfield president, CEO

10

Home Federal Savings & Loan Association of Niles 55 N. Main St., Niles 44446 (330) 652-2539/homefedniles.com

$58.7

$59.2

-0.7%

0.1%

$58.7 $100.4

12

Daniel E. Csontos president

11

Pioneer Savings Bank 6701 Detroit Ave., Cleveland 44102 (216) 961-0422/psb1922.com

$19.6

$18.3

7.5%

0.0%

$19.6 $37.0

6

Virginia C. Barsan president, CEO

12

First Federal Bank of Ohio 140 N. Columbus St., Galion 44833 (419) 468-1518/firstfederalbankofohio.com

$4.3

$4.5

-3.5%

0.0%

$187.2 $235.5

64

David B. Beach president, CEO

13

Beal Bank SSB 3311 Richmond Road, Suite 100, Beachwood 44122 (216) 245-4222/bealbank.com

$0.3

$0.2

26.9%

0.0%

$1,000.8 $1,920.6

251

NA

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 Source for financial data: FDIC. Numbers are as of June 30, 2018 unless otherwise noted. Includes deposits in Ashland, Ashtabula, Cuyahoga, Erie, Geauga, Huron, Lake, Lorain, Mahoning, Medina, Portage, Stark, Summit, Trumbull and Wayne counties. Send feedback to Chuck Soder: csoder@crain.com.

VENUES

with the Masonic Temple — and AEG allow partner shows, independent owners will be hard-pressed to maintain any real foothold at those spaces.

“At the 1,000-capacity level, those venues are going to be controlled by the big promoters,” said Blackman.

“Top dollars go to top shows, so it’s more competitive for the sheer entertainment dollar.”

CONTINUED FROM PAGE 1

While having two promotional giants in town ostensibly gives fans options, the local scene’s smaller players question whether there are enough ticket-buying dollars to go around, particularly in a market already oversaturated with clubs.

“There’s lots of music venues of all sizes throughout Northeast Ohio, including Akron,” said Cindy Barber, co-owner with Mark Leddy of the Beachland Ballroom & Tavern. “The problem is we have as many shows every day as Chicago with a (much smaller) population.”

Barber and Leddy can’t predict with confidence how a face-off between the world’s two biggest concert promoters might ultimately shake out. However, they are putting more dollars toward marketing their North Collinwood club as a hipper alternative to corporate rock.

“We’re anxious, but we’ll continue to do what we do and present acts in a more intimate environment,” Leddy said. “We’re trying to make ourselves stand out as being independent. You can come out for three shows at Beachland for the price of one show at a bigger venue.”

Playing with the big boys Beachland books 50 shows monthly, either in its 148-capacity tavern or 500-person ballroom space. Its own-

P041_CL_20181112.indd 41

Return of ‘a center for music’

The Grog Shop owner Kathy Blackman is concerned that mega-promoters erode the relationship between young bands like Neon Indian, shown playing in The Grog Shop, and small venues. (Contributed photo)

ers mostly bring in local and touring bands, also acting as a launching pad for national acts needing a place to start. Beachland “graduated” The White Stripes from its ballroom to a larger venue at The Odeon, enjoying a similar relationship with The Black Keys when steering the Akron rock duo to the Agora.

Although splitting promoter profits comprises just 5% of revenue, Leddy said it’s at least a means for Beachland — and other independent spaces in similar circumstances — to make a bit of money once an act grows to a bigger room. AEG and Live

Nation have the finances to book a band for an entire tour, locking out Beachland and its peers from any piece of the action.

“It’s too early to know what’s going to happen, but I don’t know if there’s enough ticket buyers to support that fight in the long run,” Barber said.

Kathy Blackman, owner of The Grog Shop in Cleveland Heights, said mega-promoter buyout power erodes a host venue’s relationship with the band it had previously been nurturing. And while Live Nation — which books Blossom, the House of Blues and Jacobs Pavilion, along

Denny Young of Elevation Group has partnered with both Live Nation and AEG for shows, with an Elevation Group-managed band called The Blue Stones playing AEG’s inaugural InCuya Music Festival in downtown Cleveland last summer.

Young, whose business includes several additional clients and management of the LaureLive music fest, said competition between industry behemoths could lift Cleveland in the eyes of artists only able to schedule limited dates within particular markets.

“As a center for music, Cleveland is much better off having a number of great promoters on all levels,” said Young. “(Live Nation and AEG) don’t change how we do business. I view it as a positive. If there’s more good promoters and top-notch venues, all of us together make Cleveland a robust concert town. That’s good for everybody.”

Competition is certainly a boost for agents and bands, but any rivalry

pitting deep-pocketed promoters against one another won’t negatively impact Young’s day-to-day for the simple fact that Elevation Group and other independents are not operating on the same level.

“Any day of the week those guys are going to have more money to pay for artists,” Young said. “It’s not sexy or glamorous, but an artist’s manager is going to meet us at the intersection of what’s best for their artist.”

With Columbus and other burgeoning metros sharing the market, Cleveland’s self-professed standing as the nation’s rock ’n’ roll capital has deteriorated in the last decade, and Grog Shop owner Blackman doesn’t know what difference another major promoter will make in attracting additional shows.

“You need to have people living here who are going to see music,” she said. “With both of these promotions in town, it could bring in big arena tours. I just don’t know if it’s going to do much for us at this level.

It just makes things a little more difficult.”

Beachland is doing its utmost to bring Cleveland back as the top music market in the country, said co-owner Leddy. No matter the shakeout of the city’s big-ticket promotional clash, staging shows outside mainstream artists will remain the club’s approach.

“I hope these agents remember that they need to keep places like us going to get their acts to the next level,” Leddy said.

11/9/18 2:29 PM

PA G E 4 2

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N O V E M B E R 12 - 18 , 2 018 |

CRAIN’S CLEVELAND BUSINESS

Advertising Section

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

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Cleveland Museum of Natural History

IRG Realty Advisors

Gallagher Sharp is pleased to announce that Craig A. McClelland has joined Gallagher Sharp as an Associate. Craig defends businesses, insurance carriers, and individuals against claims for personal injury, property damage, and wrongful death.

He is a member of the firm’s General Litigation Practice Group. Craig received his law degree from Cleveland-Marshall College of Law, where he attended evening classes while working full-time as a paralegal.

See www.gallaghersharp.com.

Cleveland Museum of Natural History The Cleveland Museum of Natural History appointed Meenakshi Sharma as Chief Strategy Officer.

Sharma comes to the Museum from Case Western Reserve University, Weatherhead School of Management. She held positions at the University of Maryland, the American Pain Foundation and UNICEF in New Delhi. She holds an Executive MBA from Case Western Reserve University, Program Management and Community Organization degree from the University of Maryland and a Biology degree from the University of Delhi.

The Cleveland Museum of Natural History appointed Tim Martin as Chief Financial Officer.

Martin joins the Museum from Cleveland State University, where he served as Director of Fiscal Operations.

He previously held executive positions at the University of New Mexico, Kent State University, Case Western Reserve University and University Hospitals of Cleveland. He holds an MBA from The University of Akron and a BBA in Accounting from Kent State University.

Mark Miley has been named Chief Operating Officer for IRG Realty Advisors.

He will also continue his work as Chief Financial Officer. Miley has more than 17 years with the company and 23 years of commercial real estate experience. He is a C.P.A., R.P.A. and is a licensed Real Estate Salesperson in the State of Ohio.

He is also a member of BOMA in Cleveland.

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Hipp has more than 13 years of service at IRG RA and 20 years of overall industry experience.

He is a licensed Real Estate Broker in the State of Ohio. Hipp also holds an M.B.A.

11/7/18 12:16 PM

CRAIN’S CLEVELAND BUSINESS

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N O V E M B E R 12 - 18 , 2 018

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PA G E 4 3

SOURCE LUNCH

David Krock Director,

CLEVELAND BUSINESS

OHM Advisors, Northeast Ohio Sit down with David Krock and one of the first things you’re likely to notice is how easily he connects and engages in conversation. You probably wouldn’t guess you were talking to an engineer if you didn’t know ahead of time. He takes civil engineering to a new level. ¶ Hailing from near Toledo, working on infrastructure was in Krock’s blood — his great-grandfather graduated from Ohio State University as a mining engineer and his father was a planner at Toledo Edison. ¶ Krock’s taken it a step or two further, though. As director of OHM Advisors in Akron and Cleveland, he works on and manages infrastructure projects large and small.

Often, they’re critical projects for cities in Ohio that aren’t big enough to have their own civil engineering departments, but are big enough to have engineering challenges. ¶ He lives in New Franklin, south of Akron, where the suburbs turn farmlike and there’s room for wife Tiffany’s passion for horse riding. His daughter, Ellie, attends Manchester High School and his son, Mitch, attends the University of Cincinnati. — Dan Shingler

The Krock file Favorite thing to watch on TV Ohio State football

Favorite baseball pitcher, all time Tom Seaver

Favorite weekend activity “Sporting events, whether it’s the Indians, Buckeyes or whatever.”

Favorite thing about his job “The communities and the people we get to work with.”

Lunch spot Shula’s 2 Steak and Sports 6200 Quarry Lane, Independence 216-901-7852

The meal Fish and chips, a grilled chicken salad, iced tea and coffee.

The vibe Inside the Doubletree Hotel, Shula’s is half sports bar and half a businesslunch gathering spot. It’s a relaxed place to get a steak, or just a beer.

The bill $39.88, plus tip

You’re running offices in Cleveland and Akron, and you live just outside Akron. But where are you from exactly?

Toledo — Oregon, right outside of Toledo. The east side, right along the lake.

And what were you like growing up?

What was high school Dave like?

High school Dave was certainly into sports. Baseball, basketball. I played in the band a little while, but I didn’t last there. I had a little too much fun. … It’s high school, you enjoy your friends!

You help people build things. So are you really an architect or an engineer?

I’m a civil engineer — an Ohio State graduate.

What sort of things do civil engineers do in Northeast Ohio?

In our world, at least with our firm OHM, a civil engineer could be doing wastewater treatment, highway work, bridge work, working in communities on other infrastructure, or they could be doing development work. Anything that has to do with earth and infrastructure is civil engineering.

So, a lot of stuff you do goes underground. People don’t get to see it?

That’s true. I joke that we’re so proud of our work, we bury it!

Would you recommend civil engineering to a young person today?

Absolutely. If you like working with people and making life better for people, it’s a great place to be.

Does the nature of your work mean that most of it is for government at some level?

Most of our clients here are communities. We call ourselves a community advancement firm, and we work with 11 different cities here. We help them find money, help evaluate their systems and really just things that help improve the viability of their cities and the lives of residents.

What are some communities you work with, where we’ve probably driven over some of your work?

Our Cuyahoga (County) communities are Garfield Heights, Newburgh Heights and East Cleveland. In Summit County, we work with Reminderville, Boston Heights and Clinton. And we also work in Massillon, in Stark County and the city of Huron out west. We have a few smaller ones, too. It’s really the core of our business (working with small cities). … It’s typically a city that doesn’t have its own civil engineering department.

You recently moved your Akron office to downtown, and the city is working on a sewer project costing more than $1 billion. Are you hoping to work with them?

We just moved down there in April, and we’d love to work with the city.

They’re somebody we think we can do a great job for. But another reason we’re downtown is that talent is so important. … The younger engineers and kids out of school love working downtown.

Do you like being in downtown Akron?

Love it — it’s fantastic. The city has really done a great job downtown

and is transforming it. I can walk to meet clients, whether it’s lunch or a beer after work. It’s great being downtown. … And we feel very strongly about investing in the communities in which we work.

When did you start thinking about becoming a civil engineer?

I was always the kid who loved to play in the dirt. I loved Tonka trunks. But engineering goes back in my family to my great-grandfather, who was a mining engineer out of Ohio State.

Now, you’re a CEO, too?

I’m the director of our Northeast Ohio office, so I’m in charge of Cleveland and Akron for OHM. Do you miss engineering?

Ha! How did you know? It is funny. I do get excited now when I get time to brainstorm on a project or I get to walk out on a construction site and get my shoes dirty.

You merged your firm Krock Esser Engineering with OHM in 2015.

Has that been a good move?

Yes. In a 20-person firm, it’s hard to find the right kind of talent. Now, as a 500-person multidisciplinary firm, we can, and it’s great to be able to find the kind of talent you need.

How many in your two offices?

We have 26 in Akron, and we have 18 in Cleveland.

You played baseball in high school and were a pretty good pitcher.

Any regrets you didn’t pursue baseball?

That’s funny, but nah. I wasn’t going anywhere anyway.

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

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THE WEEK GOP stays strong

wordmark, and in so doing, they’re going to be back in blue.

The team’s new City edition uniforms, which were unveiled Nov. 8, are orange and blue — a throwback to the gear worn in the 1980s and ’90s.

The Cavs will debut the City editions — along with an orange and blue court — on Tuesday, Nov. 13, when they play the Charlotte Hornets at Quicken Loans Arena.

Republican Attorney General Mike DeWine defeated Democrat Richard Cordray in the Ohio gubernatorial race, holding GOP control of the executive branch. Republicans swept the four down-ticket races, too, and they retained a veto-proof majority in the state Legislature.

The brightest spot for Ohio Democrats in the Nov. 6 midterms was Sen. Sherrod Brown winning a third term by defeating Rep. Jim Renacci of Wadsworth. That victory prompted speculation about Brown’s viability as a presidential or vice presidential candidate in 2020.

This is the end

Those colors!

The Cavaliers are replacing “The Land” with the script “Cleveland”

P043_CL_20181112.indd 43

From left, Tristan Thompson, Kevin Love and Larry Nance Jr. model the Cavs’ new City edition uniforms. (Contributed photo)

ATM maker Diebold Nixdorf Inc. is pursuing a “final, important milestone” in its 2016 acquisition of German company Wincor Nixdorf AG. North Canton-based Diebold Nixdorf on Nov. 7 launched the process of merging its German subsidiary, Diebold Nixdorf AG, into Diebold Nixdorf Holding Germany Inc. & Co.

KGaA. That business is a wholly owned subsidiary of Diebold Nixdorf Inc. The process includes a “squeezeout” of the remaining minority shareholders of Diebold Nixdorf AG, which will be eliminated as a separate corporate entity.

Victory in sight Victory Capital Holdings Inc., the parent of Brooklyn-based Victory Capital Management, said it will acquire San Antonio-based USAA Asset Management Co., the mutual fund and ETF business of insurer USAA, in a debt-and-cash deal worth $850 million.

The acquisition is expected to close in the second quarter of 2019. USAA reported $69.2 billion in assets under management as of Sept. 30. Victory reported AUM of $63.6 billion.

11/9/18 2:13 PM

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