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Longtime Shaker Heights shopping center is getting a drastic transformation in $70M project — P. 4 The Greater Cleveland Sports Commission’s 79-member board has a new leader, same mission — P. 5
Hopkins can soar again Litigators Traffic is down 17% since United departure, but rebound ‘takes time’ By JAY MILLER jmiller@crain.com
05
Air service from Cleveland Hopkins International Airport hasn’t returned to the level it was a year ago, before United Airlines closed its hub in Cleveland. Between November 2013 and November 2014, passenger traffic through Cleveland Hopkins International Airport has fallen more than 17%, according to tabulations by the city of Cleveland-run airport. The United flights that accounted for much of that decline, which carried many travelers flying into Cleveland only so they could change planes for their ultimate destination, will never return. But since United’s announcement on Feb. 2, 2014, three new airlines have begun service out of Hopkins to a number of cities where United formerly offered nonstop service, and more may be on the way. That, passengers have reason to hope, should lead to lower fares. Also, the loss of United’s hub is prompting airport planners to re-evaluate the terminal configuration to make a better experience for travelers. United was the sole airline to use the airport’s D concourse. That concourse was designed for service handled by short-haul, regional jets that flew flights that have been cut. And Europe may be easier to reach. Cleveland Airport System director Ricky Smith acknowledged in an interview in his office at Cleveland Hopkins that losing a hub is a “shocking, devastating experience” for any city. “Losing the hub was not one of the prouder moments for this community or this airport,” he said. “But I thought the loss of the United hub was more a blow to the community’s ego than we will learn it to be on the community’s economy or our air travel in the years to come.” But he believes that in the long run losing the hub may be for the best for his airport. Smith said he is meeting with leaders from the Greater Cleveland Partnership and its Air Service Demand Task Force to talk about what new service to attract.
By JEREMY NOBILE jnobile@crain.com
Smith said he has two airlines he is hoping to attract, though he would not divulge their names while negotiations are continuing. He also said that he’s reviving an effort to attract international service to Cleveland Hopkins, always a priority for the area’s major corporations. That effort has been dormant for several years, after airport officials in 2009 said they were in contact with Lufthansa Airlines — which had a marketing relationship with United predecessor Continental Airlines — about service to Frankfort, Germany. “We’re now looking at other carriers to determine where we might attract service — somewhere in Europe,” he said. “Wherever we focus it will be where (our companies) want to go; I’m not sure that Frankfort is the most preferred destination.” Industry observers, including Sixel,
Cleveland-area litigators are imploring Cuyahoga County Common Pleas Court General Division judges to reconsider a decision to eliminate the county’s generally popular and effective commercial docket. But whether the court — dedicated to the resolution of often complex business-to-business cases like liquidations, trade secret disputes, noncompete contracts and shareholder disagreements — will be restored or remain on the cutting room floor in Cuyahoga County is unclear. Originally proposed in Ohio by the late Chief Justice Thomas Moyer and championed by litigators, the commercial docket was the result of a July 2008 decision by the Ohio Supreme Court to test out the business court in Cuyahoga, Franklin, Hamilton, Lucas and Montgomery counties. The commercial docket was formally adopted in Cuyahoga County in 2013 following a three-year pilot program. The niche docket is intended to make the region more receptive to businesses by creating a court specifically for cases between corporations and heard by a dedicated bench of judges — most recently, in Cleveland’s case, four. However, following a Jan. 21 vote by Cuyahoga County Common Pleas Court General Division judges to disband the court, administrative and presiding Judge John J. Russo said commercial cases will once again be randomly assigned to the court’s 34 judges. The move to end the docket followed a Jan. 6 report by the chairman of the Supreme Court’s Commercial Docket Subcommittee that said Judge Cassandra Collier-Williams was unqualified to preside over specialized and complex commercial cases,
See HOPKINS, page 21
See COURT, page 20
Reaching for the skies
Targets include Portland, Ore., San Diego and Seattle. He said he expects that by the fourth quarter of 2015, the airport will begin seeing year-over-year growth in air service. “There is life after de-hubbing,” said Benét Wilson, co-editor in chief of AirwaysNews.com and a former airline
Local lawyers unhappy with dropping of commercial docket
6
ALSO INSIDE: NEWSPAPER
74470 01032 0
communications executive. “But it takes time.” Cleveland may be recovering from its “de-hubbing” faster than some other cities, said one air service consultant. “Cleveland’s done a really good transformation from a hub downsizing to attracting a lot of low-cost carriers into the market with Frontier and Spirit and jetBlue,” said Mark Sixel, president of Sixel Consulting Group Inc. of Eugene, Ore. ”They’ve probably been one of the most active airports in the country at recruiting new service in the last couple years,” Sixel said. “A lot of the other places like Cincinnati and Memphis, hubs that got downsized with all the (airline) mergers, are struggling quite a bit more than Cleveland. I can’t even think of another non-hub market that’s done as well as Cleveland.” Sixel’s firm, which has not worked with Cleveland Hopkins, has helped communities from Portland, Ore., to Ft. Lauderdale, Fla., add service. In 2010, Sixel helped Toledo Express Airport map out a new air service development plan.
are uniting to dispute court’s call
ENTREPRENEURS What’s it take to start a business? We look at some essential qualities ■ Pages 15-17 PLUS: NEO’S STARTUP SCENE ■ SUCCESS STORIES ■ & MORE
Entire contents © 2015 by Crain Communications Inc. Vol. 36, No. 5
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Small Business Matters i Want more information and resources on this week's topics, ideas and events? Go to www.cose.org/smallbizmatters.
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February 2
aligned with what you do, research it well, HUK Z[HY[ ^VYRPUN VU H SLUN[O` WPLJL š There are proven rationales for why SLUN[O` JHU IL ILULÄJPHS ^OLU P[ JVTLZ [V VUSPUL JVU[LU[ ¸( SVUNLY HY[PJSL ^PSS WYV]PKL TVYL PUMVYTH[PVU MVY ZLHYJO LUNPULZ 0[ gives readers more opportunity to see and \UKLYZ[HUK `V\Y L_WLY[PZL 0[ ILJVTLZ [OL kind of piece that people bookmark and ZOHYL 0M [OL [VWPJ PZ ZVTL^OH[ L]LYNYLLU (as opposed to something relating to a short-lived news story or event), it will work MVY `V\ MVY `LHYZ š HK]PZLZ *HTWILSS ¸(Z H thought leaders, you won’t get there by YLHKLY VUJL [VSK TL HIV\[ SLUN[O º0M 0T UV[ KLSP]LYPUN ZOVY[ JVU[LU[ HSS [OL [PTL 0U [OPZ interested in the topic, even 400 words is context, long content is an article of roughly [VV SVUN 0M 0T PU[LYLZ[LK PU H [VWPJ [OLU ^VYKZ VY TVYL :V WPJR H [VWPJ [OH[ PZ ^VYKZ PZU[ SVUN LUV\NO š i
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“How can I be more effective in closing a deal?â€? -PYZ[ VɈ P[ÂťZ PTWVY[HU[ [V \UKLYZ[HUK [OH[ JSVZPUN [OL KLHS ILNPUZ ^H` ILMVYL [OL Ă„UHS OHUKZOHRL HUK JVTWSL[LK VYKLY MVYT 6UL VM the biggest mistakes a salesperson can make is to believe that there is a magical closing line that you can pull out of your hip pocket at the end of a sales event that will seal the KLHS +HUNSPUN H KLHKSPUL VY VɈLYPUN [V OVSK a price in exchange for signing that day are tactics that go against the grain of the sales [LJOUPX\LZ [OH[ ^L MVZ[LY +L]LSVWPUN H T\[\HSS` ILULĂ„JPHS YLSH[PVUZOPW ^P[O WV[LU[PHS JSPLU[Z PZ LZZLU[PHS PU ZHSLZ 0 HS^H`Z ZH` ¸>L KVUÂť[ ZLSS [OL WYVZWLJ[ I\`Z š -VSSV^PUN HYL H ML^ L_HTWSLZ VM ILZ[ WYHJ[PJLZ [OH[ ZOV\SK KLĂ„UL `V\Y ZHSLZ WYVJLZZ! Set proper expectations. The most critical part of the sales process is how you structure a ZLSSPUN L]LU[ 0[ÂťZ PTWVY[HU[ [V SH` KV^U NYV\UK
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FEBRUARY 2 - 8, 2015
Longtime Shaker shopping center being transformed
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Former Van Aken plaza will be redeveloped as part of $70 million project By STAN BULLARD sbullard@crain.com
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When real estate developers and railroad magnates Oris P. and Mantis J. Van Sweringen planned Shaker Heights after 1905, sales literature promised a residential area “without commercial invasion.� With retail and related uses relegated to three districts that form just 7% of the suburb east of Cleveland, the result was touted as a “garden city� that also became a bedroom community shy of a center of town or downtown core. The idea behind a looming $70 million redevelopment of the former Van Aken Shopping Center by RMS Investment Corp. of Cleveland and the city of Shaker Heights is to fix that — and spur additional investment in older commercial properties nearby. “We are in a huge reset,� said Jon Ratner, a member of the Ratner family that shares ownership of the Van Aken center with the Miller and Shafran families. RMS maintains a separate local portfolio from the other venture the partners produced that is now Forest City Enterprises Inc., the giant real estate developer and owner. “The goal is to produce a walkable, bikeable area that will become a place for people in Shaker and the region to gather and enjoy,� Ratner said. “We have office and retail and apartments in a new development that is unique on the East Side because of its train station.� The plan recasts significantly the site of Van Aken Plaza, a 100,000square-foot plaza dating from 1956 that was the first shopping center built by Ratner’s uncle, Albert Ratner, Forest City co-chairman emeritus. The plaza, long a profitable shopping center, now has substantial vacancy. With a dollop of second floor office space on one corner, Ratner said, the property is so old “we can’t continue to work with it.� Replacing the center could have been accomplished in a simpler fashion than the proposed Van Aken District. Luke Palmisano, president of RMS Investment, said that could have been accomplished by demolishing the center and replacing the vast parking lot between the center and the Van AkenWarrensville Rapid Station with sites for freestanding restaurants. However, Tania Menesse, Shaker economic development director, said the city, which is contributing a parcel to the plan, sought more. “We want to create a sense of place, which requires more density,� she said. The design also incorporates a courtyard as a community gathering place. “The city did not want an incremental plan. They wanted a transformation,� Ratner said.
“The city did not want an incremental plan. They wanted a transformation.� – Jon Ratner part-owner of the former Van Aken center in Shaker Heights
Road work sets the table The project also capitalizes on the city’s dramatic remaking of the nearby intersection of Van Aken, Chagrin Boulevard, Warrensville Center and Northfield Road — where some 45,000 cars pass through daily — into a typical intersection friendlier to pedestrians. That will allow Van Aken to feel more connected to community amenities such as Thornton Park and its pool, ice arena and skate park. The $20 million redo shifts traffic from Northfield Road south to a new marginal road ending at Warrensville, along with other changes. The only part of the current Van Aken plaza that will remain intact is the Fresh Market grocer, which is less than a decade old. The remaining ground will be recast into a combination of 80,000 square feet of retail and restaurant space, 60,000 square feet of office space and 95 apartments. Retail will go in on the first floor of the buildings and either offices or residences above them. The plan incorporates a parking garage of almost 400 spaces, a quarter of them reserved for office tenants. On one level, the plan replaces older, outsized retail space with new retail space and incorporates apartments, the most popular type of current real estate development. The new aspect — and the challenge — are adding 60,000 square feet of office space. That is a substantial amount, as much as is in the typical suburban office building, and office development has slowed dramatically the past decade. Moreover, Shaker’s last big multitenant office development was the Tower East office building, which launched suburban office development in Cleveland when it opened in 1968. A recently completed NGKF office market survey shows an 18% vacancy rate in the east suburbs, which is an 8 million-square-foot market. However, most of that space is older, and the last two new east suburban multitenant office buildings, finished seven years ago, promptly filled up. Bob Nosal, executive managing director of NGKF, said the Van Aken District plays off the ability of the rapid to allow residents or office
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tenants to easily reach downtown Cleveland. “That area has not had the strongest (office demand),� Nosal said. “To get the high rents that construction requires, they have to emphasize the efficiency of new spaces. The idea of office above retail space has also been established in the market.�
Finding the right balance Kevin Piunno, senior vice president of office leasing at the Independence-based Cushman & Wakefield Cresco brokerage, said he’s optimistic about the project. “It has to be pristine, and the retail has to be there at the outset to attract office tenants� Piunno said. The challenge, Beachwoodbased office broker Steve Egar said, will be finding local office tenants willing to pay top-of-market rents, which will range from $20 to $30 a square foot at Van Aken. However, given the project’s scale, Egar believes 60,000 square feet is doable, although 100,000 square feet of office “would be looking for trouble.� Ratner said discussions are underway with tenants he would not identify that could occupy half the office space. He said the design of the buildings will be such that smaller tenants will be able to benefit from prominent signage. The plan calls for a mix of conventional Class A office space, 5,000 square feet of it first-floor office/retail space and the remainder open office space. “We’ll be able to accommodate a variety of different office users who want different environments,� Ratner said.
A true mix Menesse, Shaker’s economic development director, said the city sees likely tenants as information technology, accounting, dental or medical firms often run by Shaker residents. The focus for the retail, Palmisano said, is neighborhood services, from restaurants, food and beverage providers to fitness centers. Menesse said the plan eschews destination retailers found in other east suburban shopping centers. Instead, it builds on the market offer by the population of 107,000 people within a 10-minute drive time with $92,720 in average income. On workdays, the population swells to 300,000. Ratner, who lives in Shaker, said he sees his family as typical customers for the center, a handy place to ride a bike for a meal or other outing. He expects the reshaped district to be a reality by late 2016.
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FEBRUARY 2 - 8, 2015
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
5
Sports commission has ‘new blood,’ same vision
NEOSA is no longer: It’s now OHTech
Growing organization’s large board has changed chairmen, but not its optimistic view of work
Organization has revamped approach and expanded its focus to the entire state By CHUCK SODER csoder@crain.com
By KEVIN KLEPS kkleps@crain.com
As the president and CEO of the Greater Cleveland Sports Commission, David Gilbert and his staff of 12 full-time employees take instructions, advice and criticism from a 79member board of trustees. There are prominent executives from the Browns, Cavaliers and Indians on the board, as well as the owner of the Akron RubberDucks (Ken Babby) and some of the most prominent members of the Northeast Ohio business community. “He answers to two boards,” said Fred DiSanto, the chairman of the sports commission from 2009-14, of Gilbert, who has also served as president and CEO of Destination Cleveland (the city’s newly named convention and visitors bureau) since 2011. “That’s gotta be hard.” Gilbert, whose organization boasts that it has hosted or attracted 160 events since its relaunch in 2000, isn’t going to say it’s easy. But the board — whose principals admit is much larger than a typical nonprofit leadership group — is very beneficial, said the sports commission’s longtime CEO. “We try to get different individuals and different points of view to get different feedback and values,” Gilbert
MARK STAHL
Fred DiSanto, above, was the chairman of the Greater Cleveland Sports Commission’s board of trustees from 2009-14. Carl Grassi, right, is the new board chairman. David Gilbert, above center, has been the president and CEO since the sports commission’s relaunch in 2000. said of the board of trustees. “It’s very important for us to understand they’re our bosses. They’re very helpful, but it’s important to seek out and take their advice.” Beginning in 2015, the board has a new chairman — Carl Grassi, firm president of McDonald Hopkins LLC, a Cleveland-based business advisory and advocacy law firm. It also has term limits for the first time. Grassi, who has been on the board since 2007, can serve up to four years (a pair of two-year terms) before giving way to a new chairman. It’s the sports commission’s way of getting “new blood,” as DiSanto put it, at the top, while ensuring that its core mission — bringing top-notch, economically beneficial events to the region — stays the same. DiSanto, for example, is now the vice chairman, assuring that the 14-year board member remains in one of the sports commission’s key positions. “The real truth of it is Carl was trying to get me out,” DiSanto said, joking about his
friend of 20-plus years.
Where it’s been When Gilbert left his position as director of community affairs for the Convention & Visitors Bureau of Greater Cleveland to lead the sports commission in 2000, he had a staff of two — himself and Rob Maron, who left the organization in 2011. Fifteen years later, there are 13 full-timers, a pair of part-time contractors and six regular interns. Grassi estimates that the board of trustees was in the “27 to 30” range when DiSanto replaced former IMG co-CEO Bob Kain as chairman six years ago. “The organization, what Fred has done as chairman and where we are today is incredible, quite frankly, from where we started,” Grassi said. “And I think it’s just the beginning. We are well-known. The See SPORTS, page 19
The 2015 Greater Cleveland Sports Awards again drew a sellout crowd. SCOTT THEUS
NEOSA is making big changes. So big that it needed a new name. The Northeast Ohio Software Association is now OHTech. First, notice that “Northeast Ohio” is gone. The organization — which spent much of the past year revamping its lineup of services — is becoming more of a statewide group. It’s forming partnerships with tech associations in Cincinnati and Dayton, and it’s evaluating whether it could expand into other “underserved” regions, according to chairman Gabriel Torok, who also is CEO of PreEmptive Solutions, a software company in Mayfield Village. Torok cited Columbus as a place where the group could expand. Becoming a statewide group would allow OHTech to serve as a voice for information technology companies across the state. Ohio doesn’t have such an organization, but lots of other states do, which makes it easier for them to advocate for issues that matter to tech companies, according to Brad Nellis, president of OHTech. What issues is OHTech interested in? Workforce development is the big one, given that tech companies are constantly talking about how they can’t find enough good employees — especially software developers. And who knows what other issues will come up at the state or federal level. Nellis gave a hypothetical example: “If suddenly they decided web design projects have to be taxed at 50%, we want to be able to respond to that.” The word “Software” is gone from the name, too. That’s because about 40% of the group’s members are IT services companies — not software companies. Plus, Torok said OHTech is looking at how it could provide more services to nontech companies “using software as a secret sauce.” He described how software is a key ingredient in medical devices, cars and even soap dispensers. The new name is just “the next step” in a series of changes that have been going on at the organization since it began a strategic planning process in 2013, Nellis said. Consider the tech talent problem. The organization — which is part of the Council of Smaller Enterprises in Cleveland — recently hired Patrick Antos as manager of talent services. Now OHTech has two full-time employees, though it also gets support from COSE and dozens of volunteers. Antos is working as a talent coach for local tech companies, and he’s tasked with creating events, blog posts and other content designed to help them figure out how to find and keep good employees. Antos also is building partnerships: He’s talking to local colleges to figure out how they could offer continuing education programs for people in the tech community. And a few OHTech members are now able to post open positions on a national job board called TechFetch, through a pilot See NEOSA, page 20
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FEBRUARY 2 - 8, 2015
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Two big-league local businesses — Brennan Holdings LLC of Akron and Ray Fogg Corporate Properties of Brooklyn Heights — are teaming up to develop a business park in Stow with a 108,000-square-foot office/warehouse building they expect to construct this year. The combination is a classic case of one partner having the land and the other having the expertise. Joseph Weber, chief financial officer of Brennan Holdings, said Akron lawyer, real estate developer and entrepreneur David Brennan wanted to develop about 200 acres he has owned for several decades through BH Ohio Leasing at State Route 8 and Seasons Road, where an interchange was added during the Great Recession. “We started looking a year-anda-half ago to find the best partner to help us in all aspects of the job,” Weber said. The firm selected Fogg as a partner after considering multiple local and national developers. Brennan has industrial construction and development expertise, and Weber said the firm was impressed by the building Fogg finished last year at Bluestone Business Park in Euclid.
On the other side of the table, Ray Fogg Jr., president of Ray Fogg, said his firm was “instantly interested” when contacted by Brennan’s staff. “David Brennan has a storied career,” Fogg said. “They understand real estate development so you are not dealing with a novice and explaining everything.” Fogg also prized the site that Brennan wants to develop initially, a 45-acre parcel on the southeast corner of Seasons and Route 8. “This fills a void in our portfolio,” Fogg said. “The nearest building we have is in Macedonia.” Moreover, he said, the Seasons Road area is a part of northern Summit County that is in the path of development from southeast Cuyahoga County. The partners plan to develop the first phase of the park with a building facing Seasons Road with ceilings 32 feet high, fire sprinkler systems and multiple truck docks. Fogg said plans call for installing a road that will open all 45 acres up to development at the same time as the new warehouse goes up. Brennan and Fogg will sell sites for companies that want to own their own buildings or have additional rental buildings, Fogg said. The partnership plans to seek its
first city approval within a month and hopes to finish the building this year, Fogg said. After a seven-year hiatus before and following the recession, the project is the third multitenant office/warehouse project of scale to surface within the last year. Terry Coyne, executive managing director and head of the Newmark Grubb Knight Frank’s Cleveland industrial unit, called the project “a good move.” His only caution is that he wonders if Fogg and Brennan are being conservative and might be planning too small a structure. “I think there’s a ton of demand out there,” Coyne said. For his part, Fogg said, “We’re bullish about the market. The industrial market is the healthiest property market in Northeast Ohio.” Fogg should know. He said the first building in Euclid that his firm finished last year is now full. Weber said Brennan and Fogg are undertaking a 50-50 joint venture in the project’s first phase. Constructing a building of the size Brennan and Fogg are planning, as well as a road to open the first 45 acres to development, will cost about $7 million, according to industry estimates.
Crain’s 2015 program nominations Nominations are now open for all of Crain’s Cleveland Business’ 2015 programs. Deadlines for each of the programs are: ■ Health Care Heroes — Nomination deadline: Feb. 27 ■ Women of Note — Nomination deadline: March 30 ■ Archer Awards — Nomination deadline: May 1 ■ Who to Watch in Technology — Nomination deadline: May 18 (noon) ■ Forty Under 40 — Nomination deadline: June 1 ■ Crain’s 52 — Nomination deadline: June 22
■ CFO of the Year Awards — Nomination deadline: July 10 ■ General & In-House Counsel Awards — Nomination deadline: Aug. 21 ■ Who to Watch in Manufacturing — Nomination deadline: Aug. 24 ■ Who to Watch in Marketing/Creativity — Nomination deadline: Oct. 26 For more information on how to submit your recommendations for each of the programs, go to: www.crainscleveland.com/nominations.
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Critics take aim at tax plan Lake Health partnering Some local business leaders believe cuts don’t go deep enough
with major employers
By JAY MILLER jmiller@crain.com
By TIMOTHY MAGAW tmagaw@crain.com
It’s no secret that Gov. John Kasich would like to see the state personal income tax zeroed out. His last budget proposal was a step in that direction, even though the state Legislature didn’t cut it back as far as he would have liked. Business groups generally support income tax cuts, but the governor’s current plan is not being met with enthusiasm. The tax cut for small businesses caught the Greater Cleveland Partnership, which early this month unveiled its advocacy plans for the next two years, off guard. GCP is the regional chamber of commerce with more than 10,000 members. “We share common goals with the governor but need to see the whole package before commenting,” said GCP president and CEO Joe Roman in an emailed statement. “Our evaluation will be consistent with our public policy agenda, and we plan to weigh in strongly for the benefit of all employers.” The Tax Foundation, which currently ranks Ohio a dismal 44th on its list of State Business Tax Climate Index, doesn’t need more time. Cutting the income tax on the smallest businesses, said Scott Drenkard, economist and manager
of state projects for the Tax Foundation’s Center for State Tax Policy, “is base narrowing, which can be very bad for revenues while not giving a good amount of growth.” During a speech last Thursday, Jan. 29, to the Ohio Association of Community Action Agencies’ winter conference, Kasich gave attendees a peek into his tax reform plan, which he is expected to unveil this week.
But Drenkard said this approach mimics the failed approach of Kansas Gov. Sam Brownback. A 2013 Kansas tax cut pushed through by Brownback has not stimulated job creation. Drenkard said that’s because it is poor tax policy since the savings to these smallest of businesses are generally too small to create jobs. Job growth in Kansas was faster than only 12 other states since the tax cuts took effect in January 2013, according to an analysis published Jan. 24 by The Kansas City Star. Drenkard said the Tax Foundation would prefer a modest reduction in taxes for all taxpayers rather than this targeted approach. He also pointed out that if he lived in Ohio, he’d see if he could change his arrangement with the Tax Foundation so he would be a contractor, and not an employee, because that would eliminate his state income tax obligation. Ohio doesn’t fare well in the foundation’s business tax climate rankings for several reasons, including its use of the commercial activities tax, or CAT, and its complex municipal tax system. “The problems in Ohio are much more numerous and complicated than a lot of other states, and in some cases are the worst in the
“The problems in Ohio are much more numerous and complicated than a lot of other states, and in some cases are the worst in the country.” – Scott Drenkard Manager of state projects, Center for State Tax Policy He said his plan for a personal income tax cut would include eliminating state income taxes for one million small businesses — sole proprietorships and other businesses with gross receipts of less than $2 million annually. The Columbus Dispatch, reporting on the governor’s speech, said the administration estimates that will cut income tax revenue by $696 million and stimulate job creation.
See PLAN, page 20
Population health and accountable care are hot topics in the rapidly evolving health care industry, but Lake Health — one of the few independent hospital systems left in Northeast Ohio — believes it’s taking those concepts to the next level with an experimental project involving three of the region’s major self-insured employers. Lubrizol Corp., Progressive Corp. and the Lake County Schools Council have teamed up with the health system to provide coordinated, patient-centered care for employees who receive care from one of 300 of Lake Health’s primary care and specialty physicians. Also, as part of the arrangement, the employers are paying a monthly fee per member to Lake Health to manage their employees’ care. The idea is that a more hands-on, proactive approach — a team approach, really — to health care will nip chronic diseases in the bud. Moreover, Lake Health by midyear promises to have all of its primary care sites certified as patient-centered medical homes — a weighty designation that recognizes medical practices organized in a way that focuses on keeping patients well, rather than only treating them
when sick. “This wasn’t a huge change for us philosophically, but it formalized the things we had been doing,” said Rick Cicero, Lake Health’s senior vice president for business development. “The biggest difference is that we’re working directly with employers who have a clear focus on helping their employees stay healthy and get healthier. This is really one of the first collaborations that creates a real partnership with employers.” The pilot project, which covers about 2,500 lives, is different than other care management programs in the region given that the health system is working directly with the employers, which means no insurance companies are acting as the middle man. Other so-called accountable care organizations — like those at University Hospitals and Summa Health System — deal with Medicare patients or the hospitals’ own employees. UH, too, has some accountable care arrangements with commercial health insurers, such as Anthem Blue Cross and Blue Shield and Cigna, but none directly with employers. “For us, the dialogue with the provider community is very helpful,” said Dr. Tim Kowalski, Progressive’s chief medical officer. See LAKE HEALTH, page 20
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TimkenSteel’s $200M caster off to hot start By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com
Three months in, about 10% to 15% of the steel made at Cantonbased TimkenSteel Corp.’s Faircrest plant is running through the company’s new continuous jumbo bloom vertical caster. The caster is still in the hot commissioning phase, but by the end of the year, it will handle about 60% of the plant’s melt, said Nicholas Valentine, who will become the Faircrest plant manager as of March 1. By 2017, the plant plans to run 85% of its melt through the caster, spokesman Joe Milicia said in an email. The rest will be run through an ingot pour. If the caster was running at full capacity, it would have the potential to increase the plant’s shippable capacity by 25%, or 165,000 tons per year. That steel will be cleaner, and of a higher quality, said Valentine, who
has been serving as the company’s manager of operations and processes for the Faircrest caster project. TimkenSteel invested about $200 million into the continuous vertical bloom caster, which it extols as the largest in the world and the only one of its kind in North America. Ground broke on the caster in April 2012, and the first heat was produced on Oct. 21, 2014. At a total 270 feet — 180 feet above ground and 90 below — the caster does create a striking image. Most of these types of casters are curved, Valentine said, but TimkenSteel’s caster is unique because it is completely vertical. The molten steel is extracted slowly from the tundish — a holding container into which the metal is poured — at the top and split into three strands. When the steel reaches the bottom, it’s cut into blooms. The blooms don’t create scrap, like ingots do, Valentine said, so the process is far more efficient.
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GOING PLACES 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383, Fax: (216) 694-4264, www.crainscleveland.com
JOB CHANGES ARCHITECTURE CBLH: Scott Weaver to project planner; Meagan Reynolds to project designer; Brian Hennies to project architect.
CONSTRUCTION
Reynolds
Miller
McNamara
Dunstan
WELTY BUILDING CO.: Paul Miller to vice president, preconstruction.
FINANCIAL SERVICE OMEGA PENSIONS INC.: William McNamara to associate vice president. WESTERN RESERVE PARTNERS: David Dunstan to president.
INSURANCE
Smith
Lambert
Blower
Wade
Hamilton
Delgros
McCain
INSURANCE PARTNERS AGENCY INC.: Chris Smith to vice president, commercial insurance.
LEGAL BAKERHOSTETLER: Jeffrey R. Vlasek to partner. BROUSE MCDOWELL: P. Wesley Lambert, Lucas M. Blower, Michael G. Craig, Michael G. VanBuren and Anastasia J. Wade to partners. FAY SHARPE LLP: John Zanghi and Robert Sieg to equity partners; George Huang and Tom Kocovsky to non-equity partners; Phil Moy, Steve Haas and Sandra Koenig to Management Committee. FAUVER, KEYSE-WALKER & DONOVAN LPA: David A. Myers to of counsel. HICKMAN & LOWDER CO. LPA: David S. Banas, Linda M. Gorczynski and Lauren K. Hamilton to associates. MARSHALL DENNEHEY WARNER COLEMAN & GOGGIN: Stacy Ragon Delgros to shareholder; Kenneth W. McCain to associate. WESTON HURD LLP: Paul M. Shipp to partner.
MANUFACTURING BUYERS PRODUCTS CO.: Peter C. Parker to marketing manager. GOODYEAR TIRE & RUBBER CO.: John T. Lucas to senior vice president, chief human resources officer.
NONPROFIT CLEVELAND ORCHESTRA: Justin J. Holden to director of public relations.
REAL ESTATE CUSHMAN & WAKEFIELD/CRESCO REAL ESTATE: Jim Krivanek to senior associate; Jason Griffith to sales associate.
SERVICE PROFESSIONAL TRAVEL INC.: Jill Dolfi and David Wood to regional sales managers.
STAFFING ANDERSON | BIRO EXECUTIVE SEARCH: Kenny Natterer to data specialist.
Gorczynski
technology; Brent McLean to director of technology; Vern Baker to director of support; Frank McGee to vice president, sales; Larry Yoder to director of operations.
BOARDS ADOPTION NETWORK CLEVELAND: Anita Miller (Progressive Insurance) to chair; Lisa Buescher to first vice chair; Marissa Beechuk to second vice chair; Ted Grabowski to treasurer; Thomas Dent to secretary. CLEVELAND ANIMAL PROTECTIVE LEAGUE: David Mayo (Benesch Friedlander Coplan & Aronoff LLP) to chair. FEDERAL RESERVE BANK OF CLEVELAND: Christopher M. Connor (Sherwin-Williams Co.) to chair; John P. Surma to deputy chairman. NAIOP NORTHERN OHIO CHAPTER: Alex Russo (Cushman & Wakefield/Cresco Real Estate) to president; Michael J. Sikora III to president-elect; Jeff Wherry to secretary; Gabe Adler to treasurer; Mark Panzica to immediate past president.
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SOUTH ASIAN BAR ASSOCIATION OF OHIO: Neil Bhagat (Buckingham, Doolittle & Burroughs LLC) to president; Anjali Chavan to president-elect; Aanchal Soni to vice president; Ruchi Asher to secretary; Annal Vyas to treasurer; Richik Sarkar to immediate past president. YOUTH CHALLENGE: Colleen C. Murnane (Frantz Ward LLP) to president; Christopher J. Carney to vice president; Charles A. Koch to secretary; Darren J. Hilliard to assistant treasurer; Stephen J. Nock to at large; Ernest E. Vargo to past president.
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PUBLISHER:
John Campanelli (jcampanelli@crain.com) EDITOR:
Elizabeth McIntyre (emcintyre@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
An appeal Since 2009, Cuyahoga County has had a popular business court that has handled complex commercial cases that involved such matters as liquidations, non-compete contracts, trade secrets and shareholder disputes. One look at the numbers shows you how successful the commercial docket has been: 3,325 cases were filed on the commercial docket, and 2,966 (89%) of those were resolved or disposed of, according to caseload data from March 2009 to August 2014. That’s an average of about 50 cases filed and nearly 45 disposed of per month. But Cuyahoga County’s 34 elected judges recently decided to disband this successful enterprise. Objection! Their ill-conceived decision means cases will no longer be assigned to an exclusive docket managed by four judges dedicated to those cases. Instead, the work will be randomly assigned to the 34 judges in common pleas court. That means these complex commercial cases will be added to dockets already heavy with other civil and criminal cases. Or these cases will be filed once again in federal court, which hasn’t operated as efficiently as the county’s commercial court. Here’s a question we, like many others in the business community, are left asking: How, exactly, did Cuyahoga County’s commercial docket seemingly go from boom to bust overnight? Less than four months ago, Crain’s reporter Jeremy Nobile wrote about efforts to evaluate and improve on the business court’s success. Judge John Russo, the court’s administrative and presiding judge, said in the October article, “This is about access to justice.” Russo is correct. This is about access to justice. The court’s move to disband the commercial docket, though, has made that access more difficult. Businesses have the right to have their cases decided by judges who understand the complexities of commercial disputes. They have the right to have disagreements settled in a timely manner, win or lose, so that they can get back to business. And beyond the impact of these timely resolutions on individual businesses is the benefit it confers to all businesses. Commercial courts that speed the resolution of business cases help to make the state — and with this particular docket, our region — a more attractive place to do business. That’s good for the business we already have and for the ones we hope to attract. Why this particular avenue of access has been eliminated confounds us. If the problem is political among the judges, they need to get over it. The complexity of business cases demands a certain level of expertise. Spreading the cases across the dockets of nearly three dozen judges only invites criticism and inadequate results. And if the issue is that some elected judges aren’t qualified to hear these kinds of cases, so be it. Create a pool of judges who are and tap them for extended terms presiding over the commercial docket. We join the chorus of others in this community, from the Cleveland Metropolitan Bar Association to the Greater Cleveland Partnership, in urging the Cuyahoga County Common Pleas Court to reconsider its decision to terminate the commercial docket. Judges, we implore you, hear our appeal.
FROM THE PUBLISHER
Staying afloat in a sea of email I just checked my phone, and as I type steady drop in the expected response this, I have 272 unopened emails. time to email. Almost all of those are junk: rental-car A reply to a work-related message is offers, Groupons for gun ranges and now apparently expected in minutes inLinkedIn requests from unstead of hours. usually attractive young proNot only that, Paganini fessionals in Eastern Europe. I added that thanks to device also get a steady stream of independency (the ability to messages from political parjump from your desktop to ties, candidates and PR profesyour tablet to your phone and sionals. (One press release arcontinue working) we are rived last year with the subject nearing the death of the autoline “Are selfies causing head matic “out of office” email relice infestations among ply. Turns out that these days, teens?” I read that one.) we are never “out of the ofOf course, some of those JOHN fice,” just out of our minds. emails are not junk. They are CAMPANELLI I understand that there are meeting requests, questions crisis emails and customerfrom colleagues, feedback from readers, service messages that need to be anlinks to good articles from friends. I try to swered immediately, day or night. And I read and respond as soon as possible. understand (grudgingly, maybe) that we But sometimes I can’t get to them for all probably need to scan our email at several hours or even days. least once a day while on vacation. But we are creeping into dangerous territory Holding off on answering every mes— destructive, unhealthy territory. sage is apparently becoming unusual. Sending a non-urgent email at midI was chatting recently with Joe Panight or 4 a.m. may show the recipient ganini, CEO of Cornerstone IT in Menhow devoted you are to your job, but it tor, about the trends he’s seeing in tech. also trains your recipient to expect reOne of the things he mentioned was that sponses at ungodly hours. Pretty soon, the business world continues to see a
the assumption will be that we all should be checking and responding to email as we dunk our bedtime Oreos. But even during business hours, the inbox can be a productivity killer. The biggest distraction at my desk is not online shopping or small talk with colleagues or Candy Crush Saga. It’s the ping my computer sings to me when I get a new email. If I follow that ping, any momentum, creativity or focus I had rolling … gone. It’s like I voluntarily pushed the emergency stop button on my brain’s assembly line. And of course it takes time — wasted time — to get idea production back up and running. Time-management experts advise checking your email only once or twice a day, working through the inbox en masse and then not touching it. That’s easier said than done, of course, and I’m sure as heck not there yet. But it sounds like a wonderful system — for productivity and sanity. I’d love to hear your email advice and how you deal with your inbox (mine’s now at 305 unread messages). Please send me a message, and I’ll get back to you … in a few days.
TALK ON THE WEB Re: Adding STEM jobs in Cleveland Advantages to Cleveland: The Cleveland Clinic and Case Western Reserve University. Disadvantages: The rest of Cleveland … unless some serious gentrification starts to occur. Cleveland is a super hard sell (for young STEM workers). And I am saying this as someone who spent a lot of time as a child in the area, who has no animosity toward Cleveland/Akron/Canton. — boboadobo
Re: Fairmount Properties’ joint-venture project in Chicago As a Clevelander with strong business and family ties in Chicago, I am glad to see for once that a Chicago group decides to partner with a Cleveland outfit. We are finally competing with the
big boys!!!
— Neil Dick
Re: Commercial foreclosures pick up Given that the developers won’t have to feel this pain, I guess that leaves the taxpayers and the communities on the hook. Thanks, job creators!! — Glkanter
Farmer put them there. This latest hire of an offensive coordinator who has never held that title before is inexplicable and mind-boggling. I presume the whole staff will be sent packing after the 2015 season and the Browns will rebuild again and again and again and again. — Jim Danilof
Re: That 2014 Browns draft
Re: Fighting at GrafTech International
GM Ray Farmer absolutely, positively, unequivocally blew the 2014 draft. His first two choices have turned out hideously. One never bothered to study a playbook, missed therapy, repeatedly lied to the fans, and created unrest with the team, and the first draft choice is buried deep on the depth chart. Farmer is much more a failure than the two draft choices because they did not choose to be on the Browns’ roster.
It’s very sad that one shareholder, Nathan Milikowsky, has this much power over a corporation the size of Graftech. The company has underperformed since this dictator pushed aside the prior CEO and took control. He clearly has no clue what he is doing and now he wants to fire the president he put in power and yield even more control with the board of directors. — Rob York
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PERSONAL VIEW
State must account for oil decline By DAVID McCLOUGH
The recent decline in global oil prices benefits Ohio drivers and will continue to do so for the near future. However, the governor and state legislators need to now acknowledge how dependency on tax revenue derived from oil production leaves the state of Ohio susceptible to international political and economic forces that it cannot control. Any budget dependent on a severance tax on “fracking” will be vulnerable to the capricious, if not whimsical, vagaries of the global oil market. If “fracking” is to alter the fiscal landscape of Ohio, politicians need to understand that the revenue stream is neither constant nor guaranteed. Pooling severance tax revenue in a trust fund creates a revenue stream that will serve the residents of Ohio long after the shale is depleted of the black gold many have come to see as salvation. Global oil prices are in decline for many reasons, none of which anyone in Columbus affects. The effect of a surging U.S. dollar reduces the price of oil, which is priced in dollars. When the dollar appreciates, U.S. dollars buy more foreign goods. The most notable import is oil. So while Americans are enjoying the benefits of cheaper oil and gasoline, the rest of the world is paying more. There are many explanations for the improving dollar, but all that matters here is that no one in Columbus is able to affect global currency markets. In addition to a stronger dollar,
McClough is an associate professor of economics at Ohio Northern University. global demand for oil is in retreat. More efficient cars in the United States permit Americans to use less gasoline, which adversely affects demand for oil. Economic weakness in Europe and China further reduces demand and dampens the price of oil. Again, I see no way that politicians in Ohio can affect these powerful determinants of global oil demand. To be sure, politics is involved in lower oil prices, albeit not domestic politics. No, the federal government did not release oil from the strategic reserves to cajole voters shortly before the November elections, and it is unlikely that the U.S. government is able to influence a particularly major oil producer to ramp up production to flood the market to suppress the price. Saudi Arabia controls the oil market. If the Saudis want the price to rise, production would be reduced until the desired price is achieved. While the United States deploys ships, planes, drones and troops to affect global events, the Saudis manipulate oil prices. I contend that the Saudis are using oil to adversely impact oil-producing countries with interests opposed to Saudi Arabia. Both Russia and Iran depend on oil revenue to finance political unrest and wars. ISIS sells oil to generate revenue to wage its war. Saudi Arabia reduces the ability of these actors to wage their battles by limiting access to
essential financial resources. Instead of bombs and bullets, the Saudis turn off the faucet. Saudi Arabia is flush with reserves and able to withstand a long period of low oil prices. In contrast, Putin, Iran and ISIS need the proceeds of oil sales. Again, Columbus has little influence in crafting foreign policy in Saudi Arabia. In contrast to consumers, oil producers are harmed by lower prices. If the price falls below the cost of production, producers will shut off the wells. No production, no severance tax revenue. If Ohio’s budget is dependent on severance tax revenue, then the state will find itself facing a deficit. As unpopular as raising taxes is, raising taxes and reducing spending is less popular. The solution is to apply common sense. Rather than pretend that oil production is predictable and that severance tax revenue will exist forever, representatives of the citizens of Oho (and their progeny) can establish a trust fund into which the sporadic revenue stream resulting from “fracking” is deposited. Conservative investment of the funds can generate income long after the oil and gas are gone and regardless of the price of oil. At issue is whether to seize the opportunity to create a mechanism to fund state government in perpetuity. Fiscal stability is predicated on the reliability of tax collections. Oil production is not reliable. Pretending that severance tax revenues will always be available is not just ignorant, it is irresponsible. Ohioans deserve better.
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Foreclosure crisis is far from finished I read with interest the “Foreclosure activity is picking up” article in the Jan. 26 edition of Crain’s knowing that it was not talking about residential foreclosures. The article talked about balloon payments, loans coming due before the principal was paid off, difficulty to access refinancing capital, lenders not wanting to renegotiate deals that were contractually agreed upon — all things that we, as housing-industry professionals, have been say-
ing for some time. But what are the typical responses to our concerns? “The government did this.” “Deadbeats need to meet their obligations.” “They shouldn’t have overstretched, living outside their means.” And so many other blame game aspects. The Great Recession has taken its toll on residential, commercial and industrial stakeholders alike. From the residential perspective, it is estimated that more than 7,000
TALK ON THE WEB (CONTINUED) Re: Disbanding the commercial docket
oiled machine.
The commercial docket in Cuyahoga County was an excellent venue for the specific genre of cases it handled. Disbanding it is a mistake. The judges were all well-versed in the issues, the decisions rendered in a timely manner and predictable. It was running as a well-
The process by which this happened was also a mistake: no notice to the public or the bar, no public debate or discussion, and no accountability in the form of identifying which judges voted which way. That’s not the way it’s supposed to work in a democracy. — Anonymous Lawyer
— Zak Burkons
residential foreclosures will be filed this year, 50% off the highest yearly rate, but still 3.5 times the norm before the crisis hit. It’s not over. It’s time that we ALL worked together to address the economic situation we are trying to improve — to keep people working, healthy and housed. — Lou Tisler Executive director of Neighborhood Housing Services of Greater Cleveland
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TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.
LIENS FILED Abramo LLC 5131 Wiltshire Road, North Royalton ID: 45-4762361 Date filed: Dec. 3, 2014 Type: Employer’s withholding Amount: $47,726 30676 Detroit LLC 30676 Detroit Road, Westlake ID: 46-2074946 Date filed: Dec. 2, 2014 Type: Employer’s withholding Amount: $40,574 Flexible Staffing Corp. 6521 Lorain Ave., Cleveland ID: 04-3712760 Date filed: Dec. 2, 2014 Type: Employer’s withholding, unemployment Amount: $36,573 Bruce D. Taubman LPA 55 Public Square, Suite 160, Cleveland ID: 34-1316049 Date filed: Dec. 30, 2014 Type: Employer’s withholding Amount: $35,258 Flexible Staffing Corp. 6521 Lorain Ave., Cleveland ID: 04-3712760 Date filed: Dec. 30, 2014 Type: Employer’s withholding
Amount: $34,826 Ohio Express Inc. P.O. Box 44501, Cleveland ID: 30-0638700 Date filed: Dec. 3, 2014 Type: Employer’s withholding Amount: $34,294 Ronald Frederick & Associates 1370 Ontario St., Suite 1240, Cleveland ID: 76-0811012 Date filed: Dec. 30, 2014 Type: Employer’s withholding Amount: $33,488 Petty Group LLC 550 Harvard Ave., Newburgh Heights ID: 20-1749244 Date filed: Dec. 30, 2014 Type: Employer’s withholding, unemployment Amount: $28,849 Lakeside Building Services Inc. 2122 St. Clair Ave. NE, Cleveland ID: 51-0585756 Date filed: Dec. 30, 2014 Type: Employer’s withholding Amount: $28,477 C & D Truck & Equipment Service Inc. 4015 Jennings Road, Cleveland ID: 34-1187767 Date filed: Dec. 30, 2014 Type: Employer’s withholding Amount: $27,486 Manorbrook Homes Inc. 481 Greenhaven Drive, Chagrin Falls ID: 341-1515006 Date filed: Dec. 3, 2014 Type: Unemployment, corporate income Amount: $26,878 Quality Data Management Inc. 4015 E. Royalton Road, Broadview Heights ID: 34-1839449
Date filed: Dec. 2, 2014 Type: Employer’s withholding Amount: $26,832 NRC Ohio LTD 100 N. Main St., Chagrin Falls ID: 45-4209129 Date filed: Dec. 30, 2014 Type: Employer’s withholding, unemployment Amount: $26,507 Cleveland Granite & Marble LLC 42121 Carnegie Ave., Cleveland ID: 30-0340405 Date filed: Dec. 3, 2014 Type: Employer’s withholding Amount: $26,059 Flexible Staffing Corp. 6521 Lorain Ave., Cleveland ID: 04-3712760 Date filed: Dec. 2, 2014 Type: Employer’s withholding Amount: $25,898 Pinnacle Auto Transport LLC 3681 Green Road, Suite 306, Beachwood ID: 20-3745304 Date filed: Dec. 30, 2014 Type: Employer’s withholding Amount: $21,536 Real Time Intelligence Inc. 37305 Chagrin Blvd., Suite 20, Moreland Hills ID: 20-0708861 Date filed: Dec. 2, 2014 Type: Employer’s withholding Amount: $21,485 Great Northern Management Inc. 6430 Eastland Road, Cleveland ID: 34-1317120 Date filed: Dec. 3, 2014 Type: Employer’s withholding Amount: $20,514 Lindsay Soul Cuisine Inc. 16906 Harvard Ave., Cleveland
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Guarantee Product Specialties Inc. 21693 Drake Road, Strongsville ID: 45-0673710 Date filed: Dec. 3, 2014 Type: Employer’s withholding Amount: $19,704
Medicare Transport Inc. 6100 Oak Tree Blvd., Suite 200, Independence ID: 26-4552200 Date filed: Dec. 3, 2014 Type: Employer’s annual federal tax return Amount: $16,898
11637 Clifton Inc. Diner on Clifton 1260 Smith Court, Rocky River ID: 34-1893960 Date filed: Dec. 3, 2014 Type: Employer’s withholding Amount: $19,389
Mindlin Consulting Group Inc. 14837 Detroit Ave., Lakewood ID: 34-1941325 Date filed: Dec. 8, 2014 Type: Employer’s withholding, corporate income Amount: $15,302
Room to Grow Learning Center Inc. 87A Northfield Road, Bedford ID: 76-0807542 Date filed: Dec. 2, 2014 Type: Employer’s withholding Amount: $18,711 Tetzlaf Construction Co. 8156 Riverview Road, Brecksville ID: 34-1462253 Date filed: Dec. 30, 2014 Type: Employer’s withholding Amount: $18,681 Blue Room Ltd. 4783 Wethersfield Court, Richmond Heights ID: 27-3003670 Date filed: Dec. 30, 2014 Type: Employer’s withholding, unemployment, partnership income Amount: $18,608 Legend Truck & Equipment Inc. 711 W. Bagley Road, Berea ID: 34-1741156 Date filed: Dec. 1, 2014
Scoreboard Haircuts LLC 1855 Meadow Drive, Hinckley ID: 27-2069697 Date filed: Dec. 8, 2014 Type: Employer’s withholding Amount: $15,135 Five Star Partners LLC 3618 Shannon Road, Cleveland Heights ID: 45-4129185 Date filed: Dec. 30, 2014 Type: Employer’s withholding Amount: $14,874 Little Hands Daycare 1 Inc. 763 E. 152 St., Cleveland ID: 20-3576762 Date filed: Dec. 30, 2014 Type: Employer’s withholding, unemployment Amount: $13,788
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MRSO Elite LLC Elite Answering Services 20800 Center Ridge Road, Suite 205, Rocky River ID: 27-0472298 Date filed: Dec. 30, 2014 Type: Partnership income Amount: $16,956
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CRAIN’S BUSINESS DIVERSITY COUNCIL Last year, Crain’s Cleveland Business formed an 11-member minority advisory board to provide objective, constructive input on minority-based issues for Crain’s. The Crain’s Business Diversity Council has met regularly since April. This is the last in a series of profiles of its members.
SAMIR GAUTAM Financial adviser, Caritas Financial In the late 1980s, shortly after Samir Gautam’s arrival in America, he was working at a shop at Mayfield and Coventry roads when a young black customer came in, looked at him inquisitively and asked, “What are you?” Gautam found the question peculiar, but obliged. “I’m Indian,” he replied. “What tribe?,” the man followed up. Being from India, and not a Native American, Gautam was caught off guard, surprised his customer wasn’t savvy to the differences that he otherwise assumed were common knowledge. He wondered: Is it common for Americans to be so culturally disconnected? All people, regardless of color, creed or ethnicity, can be guilty of living within their own circles, Gautam said, and many may be out of tune with the diverse makeup of their own communities as a result, hindering their capacity to relate to peers and understand the greater world. Gautam’s experience in the convenience store happened 30 years ago. But, regardless of the many factors, a lack of cultural connectivity persists today. And as a society, he said, we still have room to grow, learn, empathize and foster inclusion and understanding among all people — something he aims to further through his role on the Crain’s Diversity Council. “We need to bring people a more global perspective,” he said. “When you look at the melting pot Cleveland is, I don’t think there’s one ethnic group not present here. We need to mitigate this lack of understanding by engaging the broader community in all these ethnic groups.” Gautam, who grew up in New Delhi and finished his high school education in London, lives in Solon and is a financial adviser at Caritas Financial. He is a trustee and chair of the development committee at The Presidents’ Council Foundation and participates with the Cleveland Council on World Affairs and Kent State University’s office of diversity and inclusion. He wants to improve the climate for businesses operated by women and minorities by turning the spotlight on them and the issues and challenges they face as entrepreneurs. Connecting everyone together and creating opportunities for minorities to articulate their own experiences, struggles and successes could create a better business atmosphere for everyone. “The goal is to show everyone that Cleveland is a very inclusive social and business community,” he said. “Our way of highlighting minorityowned business in the area is in the hopes to help them grow and, perhaps to a certain degree, attract minority business and encourage more to get into entrepreneurship in general.” Gautam said he hopes to help create new opportunities for education and mentoring for small business owners and engage both the greater
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business community and younger people to begin instilling in them the importance of inclusion. That could come in partnerships with the surrounding colleges and universities, Gautam said, which include large populations of foreign students. “I’m a firm believer in taking tiny steps toward the ultimate goal,” Gautam said. “This is a work in progress. Once we bring everyone together and insert some of those smaller pieces, the bigger picture will begin to form on its own.” — Jeremy Nobile
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Rubber company rewards new leader for dedication By MIKE McNULTY Rubber & Plastics News
When Donald Chaplin started working at Grand River Rubber & Plastics Co. in 1992, he simply was looking for a way to support himself and his future wife, Tiffany. A long-term career wasn’t in the picture. He was 19, just out of high school and lacking in experience. He initially landed a position in Grand River’s cure room. Fast forward almost 22 years on a twisting career road, and Chaplin now sits in the top spot of the Ashtabula-based manufacturer of flat belts, cut washers and tubular gaskets. He was named president of the company Jan. 1, replacing Richard D. Selip, who helped form the firm in 1976 with two partners and has held the presidency since 1987. Co-owners Selip and Joseph A. Misinec, vice president of the firm, plan to retire in March. It doesn’t happen very often when someone starts at the bottom of a company and climbs all the way to the top when he reaches his early 40s, but Chaplin is proof it actually can happen.
Finding his way Chaplin grew up on Cleveland’s West Side. After completing high school, he moved to Conneaut, near Ashtabula, in 1990. “At the age of 19, I was just looking to find my way and support myself and my wife-to-be,” he recalled. The couple wanted to get married, but his future father-in-
law explained firmly he needed steady, full-time employment before that could happen. “As fate would have it, my fatherin-law knew John Rettger, the plant manager of Ashtabula-based Grand River,” Chaplin said. “He (Rettger) ended up also knowing my parents some 20 years prior to that. He thought I was worth a chance and hired me.” Chaplin was brought on board to work in the company’s cure room in May and was married in December 1992. Today, the couple has three children: Cooper, Shania and Isabella. He said he went about his job assignments as he did everything, including sports throughout his youth: totally focused on doing his best no matter which department he was assigned to or what position he held. After two years, that strong work ethic led to a promotion to the firm’s finishing department. He eventually ascended to the shipping department, where he demonstrated his true potential. “There were several opportunities for improvement and growth in the position,” he said. Selip began to notice the intelligent, hard-working employee. Chaplin eventually became the head shipper, Selip said. “In that position, he interacted more with office personnel and sales,” Selip said. “That is a position that allowed for some creativity and professional growth. It was also a place where a person can be noticed by being on top of what is going on and meeting customer needs.”
Chaplin and Selip started to develop a strong work relationship when Chaplin moved from shipping into manufacturing as a supervisor. That’s when it became apparent “he was a bright, driven young man who was meant to do much more with his life,” according to Selip.
Major decision In 2001, Chaplin faced the biggest decision of his career. “I had a serious job opportunity with another company,” he said. “I had a discussion with Ric Selip, and due to our relationship and how well I had been treated at Grand River, I committed to him to stay as long as he did, at that point having no idea what the future holds.” Selip recalls a couple of times when Chaplin had a chance to move on “and we talked about what was possible at GRRP.” “It wasn’t so much keeping him from a better opportunity but more about the opportunity at hand,” Selip said. “If I feel an employee is moving onto a position where he will improve his lot in life, I will do everything in my power to help the person succeed. But if I’m not convinced that life will be better elsewhere, I will fight to keep them.” Later, Chaplin began expanding his knowledge of the business world by enrolling in a program at Baldwin Wallace University in Berea. He earned an Executive MBA, with a focus on executive leadership, in May 2013. His previous position with Grand River was senior vice president, where he was charged with man-
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Donald Chaplin agement of the entire organization, reporting directly to Selip and Misinec. Now, as president, he’s faced with the challenge of leading the employee-owned company into a new era. His biggest advantage, he said, is that the firm has a solid foundation created by the efforts and philosophy of the co-owners, who, although they plan to retire from Grand River in March, will remain with the company on the board of directors. They had sold their shares to an employee stock ownership plan trust, which holds the firm’s shares on behalf of Grand River’s employees, in January 2011. The transaction was completed without bank debt. Misinec and Selip hold the note, and four of the six payments will have been made
by the time they officially retire in March. Chaplin said initially the company’s focus will be on building Grand River’s bottom line via its continuous improvement programs. “Having just bought out Ric and Joe and completed three acquisitions in three years, our 2015 strategic plan focuses on several internal endeavors that will help us build the bottom line and be prepared for additional acquisitions or other opportunities for growth,” he said. He noted the firm is actively pursuing accounts in two new market segments that fit with its core operations. Selip feels completely confident Chaplin “will be a great leader, and the future of the company is secure. It’s obviously very important to me. I don’t care about my legacy. I care about the legacy of Grand River Rubber & Plastics.” Chaplin will do well as president because of his ability to view issues from all sides, Selip said. Because his career at Grand River has covered virtually all the firm’s departments, including the manufacturing floor, he continued, the experience “has given him an appreciation for what it takes to get the job done. “The other strength, and it takes most of us a long time to develop this skill, is the ability to listen. It is amazing what people will tell you if you just sit and listen.” (McNulty is a senior reporter with Rubber & Plastics News, a sister publication of Crain’s Cleveland Business.)
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ENTREPRENEURIAL EXCELLENCE
Above are some of the responses we received when we asked that question via social media. What qualities do business insiders think are essential? Find that and more inside.
FOTOLIA
WHAT’S IT TAKE TO BE AN ENTREPRENEUR?
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REKA BARABAS Director, Bad Girl Ventures Cleveland The journey of a new business very often starts with the entrepreneur identifying a problem or a pain point. They say, “I saw an opportunity,” or “I saw a need.” Call it being observant or being a good listener: Looking at the world with a discerning eye and an open mind, while not enough by itself, can be a powerful part of the mix of qualities an entrepreneur needs to be successful. As they start working on the solution, they have to listen to their customers to figure out how to create a strong value proposition and set the right price point. However, feedback sessions and surveys often make customers too conscious and can deliver biased or skewed results. When interpreting that data, it helps to stay observant and note how customers actually behave. It is part of how some companies seem to know what customers want even before they do. People said they wanted faster horses, but Henry Ford knew they really needed a car. Being tuned into the world around us will help an entrepreneur in the later stages of the business, as well. The context of how we do business and how customers behave is constantly changing. Keeping your finger on the pulse of it will help any entrepreneur not only anticipate changes but hopefully shape them, as well.
ETHAN COHEN Team leader Bizdom Cleveland The word “HEROIC” comes to mind when I think of the diverse range of skills required of successful entrepreneurs. Below are the six critical attributes that I associate with being HEROIC: ■ H — Honest: Entrepreneurs face many difficult decisions. Others must trust they have the honesty and integrity to tell the truth and do what is right. ■ E — Engaged: Others will only follow and invest in entrepreneurs who are engaged and passionate about their ideas. Entrepreneurs also need this attribute to overcome the setbacks and challenges that they will inevitably face. ■ R — Receptive: No one knows everything. To be successful, entrepreneurs must be receptive to feedback from others, even if this feedback contradicts the entrepreneur’s own beliefs. ■ O — Objective: Gut instincts will only get a business so far. Entrepreneurs need to proactively gather data and use it to make objective and informed decisions. ■ I — Improving: Continuous improvement and pivoting is an inevitable part of the startup process. Entrepreneurs should always strive to do better. Additionally, they must be open to redesigning their business model if the facts indicate that their original plan will fail. ■ C — Communicator: Entrepreneurs have to effectively communicate with multiple constituencies, including investors, employees and customers. Of course, nobody excels at everything. Accordingly, entrepreneurs should objectively assess their strengths and weaknesses, and seek advisers and employees with complementary skills.
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WHAT QUALITIES ARE ESSENTIAL TO BEING A SUCCESSFUL ENTREPRENEUR AND WHY? HAVE A DIFFERENT OPINION? LET US KNOW. @CRAINSCLEVELAND FACEBOOK.COM/ CRAINSCLEVELAND
FEBRUARY 2 - 8, 2015
MICHAEL OBI CEO, Spectrum Global Solutions LLC Anyone can literally start a business by logging into the Secretary of State website and paying the required $125. However, the key question is what makes that entrepreneur successful? Here are five essential qualities: ■ Own it: Successful entrepreneurs take the responsibility of owning the idea, taking the risks and eventual rewards that come with the business. When people see you taking ownership of the venture, they are more likely to become part of its success. I call these people, “supporters” — bankers, investors, customers, advisers, mentors, contractors and employees. ■ Share it: Successful entrepreneurs are always willing to share in the fruits of the labor. They pay people to do things for them. Entrepreneurs who always do everything by themselves instead of paying experts who can do them better risk burnout and lack of excellence in the final output. ■ Pay for performance: When you create a mindset to engage others in the advancement of your mission, you must have a culture of clarity in performance expectation. Reward those who exceed performance goals and take corrective actions on those who do not. Salary is for doing your job. Bonus is for going the extra mile. ■ Decisive: Make it a point to practice making decisions very quickly. The longer you take to say no or yes to an opportunity, the higher the opportunity cost of things that lie ahead. ■ Innovate: In today’s ever-changing environment, successful entrepreneurs are always looking for more efficient and cost-effective ways to get things done.
KIP MARLOW Host, Entrepreneurs Club Radio on WINT 1130 AM Founder, Marlow Surgical Technologies; Author, “The Entrepreneurs: Success and Sacrifice” After interviewing hundreds of entrepreneurs on a radio show and being a “recovering” entrepreneur, I’ve discovered three essential qualities needed to succeed: Passion; being a continuous learner; and recognizing your “moments of destiny.” ■ Let’s take passion first. Steve Jobs was quoted as saying that “being an entrepreneur is hard work, and if you don’t have a passion for what you do, you won’t make it.” Every successful entrepreneur has a passion for what she does, and that may be the true secret to success. ■ Being a continuous learner is vital. Successful people read all kinds of business books, have mentors, or even have a group of advisers. One of my favorite quotes is by John Wooden, the famous college basketball coach. “It’s what you learn after you know it all that counts.” Successful entrepreneurs are always learning. ■ Grasp your “moments of destiny.” Many entrepreneurs have gotten fired or laid off, and it sent a message that it’s time to start something on their own. I know one entrepreneur who learned she was laid off while watching CNN, and according to her, “It was the door that opened wide.” She didn’t turn lemons into lemonade, she turned them into gold. Another acquaintance was fired at the company picnic, co-founded a business and changed the world of medicine. There are many more qualities to being successful, but adhering to these three could change a life forever.
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Regional startup momentum is providing broad path for diverse set of entrepreneurs By JUDY STRINGER clbfreelancer@crain.com
Entrepreneurs often are heralded as heroic figures, risk-takers who put it all on the line to live out the dream of starting their own business. To be sure, there is some degree of risk in any new venture. Yet, what makes an individual entrepreneurial has less to do with courage and more to do with creativity and conviction, according to local company founders, funders and business insiders. And, they said, there is no lack of either in Northeast Ohio. “All the ingredients are here,” said Mark Hauserman, director of John Carroll’s Muldoon Center for Entrepreneurship, “the educational institutions, a great group of successful entrepreneurs who are willing to counsel and mentor, and organizations, incubators and accelerators, which help support and develop entrepreneurs, all over the place.” Like his colleagues, Hauserman described entrepreneurs as people who pioneer creative ways of solving problems and marshal the resources to develop their solutions. He also echoed the sentiment that Northeast Ohio entrepreneurs are difficult to pigeonhole. Some are “momprenuers” seeking to blend flexibility with professional growth, or recent retirees wanting to reinvent themselves. Many are mid-career professionals looking to launch something of their own. Still others
are millennials fresh out of college — or even high school — aiming to be the next Mark Zuckerberg. Categories aside, there are just plain more of them, said Charles Stack, co-founder and CEO of Flashstarts, a Cleveland-based business startup accelerator and venture fund. “In the mid-1980s, entrepreneur get-togethers in Cleveland were pretty lonely events,” he said. “That’s not true today. Two years ago, Paul McAvinchey started holding a quarterly entrepreneur get-together called TechPint. Every time he runs one, more people show up. I went to his event last week at Beachland Ballroom and there were probably 400 people there.”
Youth movement If the TechPint crowd and the stream of aspiring entrepreneurs who come through his door are good indicators, Stack sees the millennial component as the fastest-growing segment of self-starters. Agility is their main advantage, since recent grads often lack the weighty financial and time commitments common among more established professionals. “We see a lot more young people because they are more willing to take the risk. They don’t have much to lose, no family, no house,” said Reka Barabas, director of Bad Girl Ventures Cleveland, an incubator devoted to women-owned businesses.
Academic programs are stoking the fire as well. A 2008 research report by the Kauffman Foundation found that the number of entrepreneurship programs at U.S. colleges and universities surged from roughly 100 in 1975 to more than 5,000 in just over 30 years. There are an increasing number of programs at the high school level too, according to Barabas. She helps University School students launch businesses through its Young Entrepreneur Marketplace. Shaker Heightsbased LaunchHouse partners in a highschool accelerator program called LEAP. Chris Sklarin, president of the Ohio Venture Association, cited programs at Hawken School and Gilmore Academy, just to name a few. “If kids see examples of (entrepreneurship), they are more likely to think that is something they can do,” Sklarin said.
‘Catching up’ Women and mid-career professionals are two other fast-growing cohorts in the local entrepreneurial scene. Female-centric programs like Bad Girl Ventures are partly to thank for the spread of women-owned businesses. Equally important is the support from fellow trailblazers, said Shelley Fasulko, owner of Tremont culinary startup Brewnuts. “It’s funny because sometimes women get a bad rap for being exclusionary. In my experience in small business, we are so hugely supportive of each other. Off the top of my
head, I can think of five to 10 women who own a business whom I can reach out to at any time,” Fasulko said. Meanwhile, mid-career professionals, or recent retirees for that matter, bring to the table not only insight into their given field and its “pains,” but a wealth of contacts that can get them in their customers’ doors. “If you can easily get into a company and have that conversation about how you can help, that is a big win for any entrepreneur,” LaunchHouse CEO Todd Goldstein said. Corporate partnerships and quick sales are especially important in a market like Cleveland, said George Buzzy, where second and third venture rounds don’t flow as easily as seed capital. Buzzy, former entrepreneur-inresidence for JumpStart, recently joined Glass Slate Digital to help commercialize the Canal Fulton firm’s holograph technology. Whatever their demographic background, the influx of Northeast Ohio entrepreneurs shows no sign of waning. Industry watchers said Third Frontier’s recent announcement that it will devote the $350 million it has left to entrepreneurial programs statewide, and Cleveland-based JumpStart’s new $1.7 million small business loan program will help sustain the current momentum. At this point, Stack said, Northeast Ohio may still lag behind other regions when it comes to starting new companies and raising capital, but its trajectory is much steeper. “We are catching up,” he said.
MEET SOME OF NE OHIO’S ENTREPRENEURS ... RICHARD RODMAN CEO, co-founder, Crowdentials
SCOTT HUFF Founder, partner; Your e folio
Rich Rodman admits that many of his business contacts may not realize he is only 23. But for his part, Rodman views youth as an asset. “Starting a company is something you really have to have the tenacity for, and being young, I think, is more of an advantage than a disadvantage,” he said. Crowdentials is not Rodman’s first foray into entrepreneurship. As a student at Ohio University, the Cleveland native co-founded FlashCrop, a mobile app that creates flashcards from pictures. “We won every competition that the school had to offer, participated in an accelerator program and brought on a couple of employees there,” Rodman said. Just before graduation, he returned to Cleveland and started Crowdentials with co-founders Max Heckel and Rohan Kusre. The company offers software to help crowdfunding platforms automate compliance requirements for their customers. The fledgling company has more than 30 distributors nationwide and has
Good things can come from bad events, Scott Huff said of his nascent Your e folio company. It was while helping his mother locate and sort through financial statements, insurance documents, a will and other far-flung paper and electronic records following his father’s death that Huff decided there must be a better way. “It’s a rough time for anybody without having to face the prospect of locating life insurance policies and other critical documents,” he said. With business partner Sanjay Bhargava — Bhargava is CEO of Independence-based JK Investment Group, where Huff is a financial adviser — Huff developed Your e folio, software that helps financial planners create a comprehensive inventory of all of their client’s important docu-
raised $475,000 in seed funding in its first 18 months. The biggest challenge, Rodman said, is time management. “At any point, there are a million things I have to do from selling to customers, bringing investors on board, servicing existing products and building new products, because customers always want more.”
NATALIE BAUMAN Founder, CEO; The Digital Mosaic After many years in professional video production, Natalie Bauman knows how much equipment and technical expertise it takes to produce a video. She also knows how important it is to capture the stories of cherished loved ones, especially grandparents, parents, aunts and uncles, while they are still around to share them. “I wanted to empower families to tell their own stories using the technology they carry around in their own pocket,” Bauman said. Digital Mosaic’s storytelling app is designed to help families and communities create, curate and share digital narratives by allowing people to record short video
clips using smart phones. It is being used in assisted living facilities, including Montefiore in Beachwood. She hopes to have the app cleared by digital storefronts this summer. Bauman, a Bad Girl Ventures finalist in 2014, took home $5,000 in COSE’s business pitch competition. She sees the app being used in businesses and churches as well as for family mini-documentary projects. For now, she is pleased it has found a home in nursing facilities, to record moments family members might otherwise miss. “It is the coolest thing to know you have created something driven by a need,” she said.
ments and accounts. Bhargava said the software also is enhanced with macros and tools that can tell advisers when a client’s homeowners insurance is inadequate, for example. Since the partners have been practicing advisers for years, finding people to help them design and test the product has been a cinch. The same will be true when they begin selling it. “We know all the players,” Huff said. “Our feet are already in the door.”
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SPORTS continued from page 5
notoriety that we have across the country — we are asked to bid on certain things. I don’t think there’s a limit to what we can do.” The sports commission has accomplished quite a bit since its humble beginnings. The GCSC says the 160-plus events it has attracted in the last 15 years have resulted in more than $450 million in economic activity. The NCAA Women’s Final Four was held in Cleveland in 2007, and the National Senior Games provided an estimated $36.1 million boost in 2013. This March, the NCAA men’s basketball Sweet 16 and Elite Eight will be held in Cleveland for the first time, the Transplant Games and NCAA Division I wrestling championships are on tap in 2016 and 2018, respectively, and the sports commission and the Cavs are awaiting word on their bid to host the 2018 NBA All-Star game. And as the sports commission has grown, its board of trustees has multiplied like its events calendar. DiSanto said “a number of organizations” pay $5,000 to have one of their executives sit on the board, and Grassi added that “sometimes” the fee is “much higher.” DiSanto said Ancora Advisors, a Cleveland investment firm for which he serves as chairman and CEO, pays $5,000 for his board position, then contributes about $7,500 for a table at
the Greater Cleveland Sports Awards — the sports commission’s largest annual fundraiser. In its 2012 federal tax return, nearly $1.7 million of the sports commission’s $4.4 million in revenues came from gifts and grants, a total that was $656,000 more than it received in government grants. Fees from board members only account for a small portion of that, but DiSanto and Grassi said there are other notable gains that result from having so many trustees giving their two cents. “The biggest areas they contribute are if we need reach or contacts, there will be somebody on that board who has a relationship (with that person),” Grassi said. “They all care about Northeast Ohio. They really want to create an economic impact. Tying it with sports I think is the fun part of it, but when we sit down as a board, it’s all about economic impact for Northeast Ohio.” Grassi said BVU: The Center for Nonprofit Excellence did an assessment of the sports commission’s board a few years ago. The Cleveland organization’s analysis, according to the GCSC’s new chairman: “You have a very large board for a not-for-profit,” but “it works.”
the organization can sustain its success because its growth has given it the ability to handle everything that goes into hosting a marquee event, from logistics to marketing, sponsorships and community programming. The beefed-up organization has formed committees that are able to concentrate on specific focuses, such as attracting new events and running the massive, and sports commission-owned, Continental Cup. “Our business model from Day 1, and it’s gotten easier as we’ve gotten bigger, was to try to offer more services than these events are getting from other communities in any other city,” Gilbert said. USA Wrestling executive director Rich Bender, whose organization has worked with the sports commission on numerous events, including the Cadet & University National Championships that are held annually in Akron, said the GCSC’s claims aren’t just marketing chatter. USA Wrestling hosts “just north of 2,000 events a year,” Bender said, and it’s worked with dozens of sports commissions over the years.
“They’re without question one of the top sports commissions in the country,” Bender said of the GCSC. “They’re really aggressive about bringing stuff to the area.” Cleveland has one of the nation’s largest sports commissions in terms of size, events managed and estimated economic impact, a fact the board of trustees attributes to the work of Gilbert and his staff, and the support it’s received from community and government leaders. “If you take a look at the strength of our board and the leadership we have in the organization, it has grown into an organization that I believe has sustainability,” DiSanto said. “Ten years ago, I don’t know how sustainable it was. But today, it’s clearly sustainable.” Gilbert said he’s grateful that the board has allowed him to run both the sports commission and Destination Cleveland, and he said he delegates much more than he used to, thanks to what he calls a “phenomenal” staff. The board — which meets as a whole three times per year and has an executive committee of about 16 that gathers every other month —
holds Gilbert and his colleagues “accountable for their performance every month,” DiSanto said. The former board chairman said his only concern with Gilbert is he is in such high demand that he worries the sports commission and Destination Cleveland CEO will one day receive an offer that’s too good to turn down. “He could have gone anywhere he wanted to go,” DiSanto said of Gilbert. “People have asked him, believe me, because of his reputation. And there’s only so many hours in a day that David has. So a big push that we — I think we’re very tough on him — had was to get a good, quality staff to alleviate some of the stuff on his plate.” The board believes that’s been accomplished, and Gilbert said there shouldn’t be any concern about him going elsewhere. “There have been times I’ve been approached about other positions,” said Gilbert, who lives in Solon with his wife, Faith, and two children. “I’m fortunate that I love what I do. This is my home. I think if I did this job in another city, it would be a job and not a passion.”
Where it’s going Gilbert and the sports commission’s leadership committee believe
Sports commission: By the numbers ■ 2 — Employees the Greater Cleveland Sports Commission had when it relaunched in 2000 — David Gilbert and Rob Maron. ■ 21 — Employees it has now, counting its stable of interns. There are 13 full-time workers, two part-time contractors and six regular interns. ■ 160 — Events the sports commission has attracted to Northeast Ohio in the last 15 years. ■ $450 million — The estimated economic impact of those events, according to studies done for the sports commission.
SIGNATURE EVENTS 2007 NCAA Division I Women’s Final Four, which had an estimated economic impact of $22 million 2013 National Senior Games, which had an estimated economic impact of $36.1 million The Continental Cup, an annual event that is owned by the sports commission. ON THE CALENDAR 2015 NCAA Division I men’s basketball Sweet 16 and Elite Eight 2016 Transplant Games 2018 D-I wrestling championships
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citing limited experience with commercial litigation and case management, The Plain Dealer reported. Russo — who is staying mum on how he sided and the majority vote tally — asserts all judges are qualified to hear any cases in their jurisdiction, and Collier-Williams, like all other judges, could still hear commercial cases now that the docket is eliminated. The judge, who stressed that politics were not at play in the decision, said he is declining to discuss other details until minutes are approved in February at the Common Pleas Court’s next regular meeting. Discussions about how and if the docket might be restored also are ongoing with the Cleveland Metropolitan Bar Association, which has vocalized its dismay with the decision on behalf of Cleveland-area litigators. “My hope is after the February meeting we have an opportunity to sit with judges, litigants and the bar to talk, which I think is important,� he said. “It’s been voted down, and my job is to (ask), ‘What’s best for Cuyahoga County, the court and the people we serve?’�
How it happened Following the disqualification of Collier-Williams, the Cuyahoga County court intended during a Jan. 21 meeting to move a discussion about the commercial docket to committee. Common Pleas Court Judge John Sutula, who said he’s “always� been against the commercial docket, then requested a vote to disband it. “(Lawyers) want the right to choose judges; they want the right to a limited number of judges and
to control everything,� Sutula said. “It’s a solution looking for a problem.� Sutula said he takes exception to the idea that commercial lawyers believe they “deserve some sort of priority over anybody else’s cases� and exclusive judges via the docket. “That’s probably the most galling thing,� he said. As far as offering an expedited route for business cases, Sutula suggests there’s no significant benefit. Sutula said he personally manages his cases at a pace comparable to that achieved by judges in the commercial docket. According to caseload data from between March 2009 and August 2014, 3,325 cases had been filed in the commercial court, and 2,966 (89%) had been resolved or disposed of. That equals about 50 cases filed and nearly 45 cases disposed of on average per month. Sutula also suggests that lawyers prefer the dedicated docket because it’s “easier to mold four judges to your way of thinking than someone you haven’t seen in a while.� Having a bench with 34 judges creates a more “level playing field,� he said. Sutula added that he also disagrees with the notion that some judges are better qualified to hear commercial cases than another. “You’re elected to become judge on common pleas court, you’re qualified to handle these cases,� he said.
‘The best reform ‌ in 40 years’ Meanwhile, Cleveland lawyers are uniformly upset with the decision and maintain hope the docket will be reinstated. Litigators say
they appreciate the predictability offered by a small group of dedicated judges and fast case turnover. “The commercial docket was the best reform move, the best thing we’ve done in our county in the 40 years I’ve been practicing in this county,� said David Mayo, a partner at Benesch and an outspoken advocate of the court. “This is a very disappointing announcement and a huge setback for litigants and lawyers who have business disputes in Cuyahoga County.� Bruce Hearey, president of the Cleveland Metropolitan Bar Association, said he’s not aware of any lawyer who didn’t like the docket. The bar association and Greater Cleveland Partnership have both urged the court to reconsider the decision. “It sure seemed to us this was a definite step in the right direction,� said Joe Roman, president and CEO of the Greater Cleveland Partnership. “We want to talk about it, and we want to know what the reasoning was and if we can correct the change.� Roman said he heard law firms would plug the court to companies they worked with, encouraging them to file cases specifically in Cuyahoga County to take advantage of the commercial docket. While hard to track, it’s believed the docket was one of many factors considered by and promoted to entities considering doing business here. “Anything that can reduce regulations, that can speed up permitting, make lawsuits and the time surrounding them more efficient and effective, all those things reduce the costs of doing business,� Roman said. “For a community who can do this, it’s an advantage.�
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project OHTech is doing with help from the Technology Councils of North America. “It’s such a huge need,� Nellis said. “Everybody’s hiring.� OHTech wants to expand in other ways, too. The group plans to start holding regular networking events in Akron in conjunction with networking events going on at the same time in Cleveland. If there’s a speaker or a panel discussion at one event, it will be broadcast live at the other event. Will people show up for a networking event where they watch speakers on a screen? Nellis isn’t sure, but he thinks there’s potential. “It’s going to take a while to get it off the ground, because it’s something new,� he said. The group also will work with other tech associations — such as The Circuit in Cincinnati and Technology First in Dayton — to run joint events. Plus, they’ll share content such as blogs and podcasts on topics that tech companies care about.
If OHTech’s expansion plans work, they could help the group reverse an ongoing decline in its membership. Roughly 700 tech companies belong to the organization today. Two years ago, the group had roughly 800 members — and it had about 930 five years ago. The recession drove away some members and put others out of business, Nellis said. But he noted that membership started going down after the federal government passed the Patient Protection and Affordable Care Act, also known as Obamacare. Why does that matter to OHTech? Businesses that join can buy health insurance through COSE. That insurance had been the organization’s most popular benefit for years, because it allowed small businesses to buy insurance through a larger group. But the health reform law gave individuals and small businesses more ways to buy health insurance, which reduced demand for COSE’s insurance program.
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“Regardless of how well intended the insurance companies are, they often have national interests in mind. They’re not directly influencing your demographics and your people’s problems.� The Lake Health project is being facilitated by the Health Action Council, a Cleveland-based nonprofit that’s made up of large, selfinsured employers. The council’s representatives said it’s possible that other employers could join in on the pilot, and many are waiting to see whether the effort actually improves health and lowers costs. “Our employers have always been keenly interested in better outcomes, better health and better patient satisfaction,� said Lisa Kaiser, who oversees the council’s quality
initiatives. “They want more value.� A distinguishing factor of this care management product is that its outcomes will be publicly reported and analyzed by a third party, perhaps even yearly. The collective tapped Better Health Greater Cleveland, which describes itself as a health care improvement collaborative, to analyze the outcomes data, particularly in the areas of diabetes, blood pressure and heart failure. The idea is that the best practices that emerge from the pilot will be shared with other employers and health care providers throughout the region. “Lake Health will lose business if they don’t do it right, and employers care about getting their employees the best care possible,� Better Health president Dr. Randall Cebul said. “It’s a good experience.�
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country,� Drenkard said. “Gross receipts tax like the CAT tax are 18th century taxes. In Spain, it contributed to the collapse of the Spanish Empire.� Drenkard and the Tax Foundation call the CAT a pyramiding tax. It’s like a sales tax, but instead of applying only to the final sale to consumers, it taxes intermediate business-to-business purchases of raw materials and equipment, adding a
tax at every stage of production. Marty McGann, GCP’s senior vice president for advocacy, believes that Kasich isn’t a fan of the CAT, which his group supports. He added that the organization wants to support a cut in the state income tax as long as the lost revenue isn’t recovered by raising other taxes on business, particularly the CAT. “Our members support a personal income tax reduction, but at what cost?,� McGann asked.
YOU CAN WATCH US, TOO Look for Crain’s Weekly Report webcast, which will hit your inbox Friday afternoon. To sign up, go to: crainscleveland.com/register.
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said new, more fuel-efficient aircraft are making secondary U.S. airports more attractive to some European airlines. “European carriers, such as IcelandAir and Norwegian Airlines, are looking at places other than New York and Chicago to be flying to,” he said, adding that Smith “could be talking to one of those.” To move that effort along, Smith said the airport will use incentives. He said if an airline commits to offer air service to a market that Clevelanders now can’t reach on a non-stop flight for a negotiated period of time, the airport might waive landing fees for those flights for a year. Landing fees are assessed on the weight of a landing (or taking off) aircraft. They are based on an airport’s cost to build and maintain its runways and other pavement. Because of the amount of debt being carried and the relatively low number of takeoffs and landings at Hopkins, its landing fees are higher than many other airports in the region. Attracting new airlines, Wilson said, should be easier for Hopkins now that United is less dominant and less interested in competing on many routes. “It’s terrible that Cleveland got dehubbed, but it’s a good opportunity for (Cleveland) to get new service or expanded service,” Wilson said. It’s likely, though, that the growth will come from low-cost carriers, not the more established airlines, called legacy carriers, that cater to business travelers. United, and the other remaining legacy carriers, American and Delta airlines, used business- and firstclass seating, frequent-flier programs and airport lounges to lure road warriors.
All’s fare … Because of its dominance, United could keep fares high. So the compensation may come in lower fares. Fares at Cleveland Hopkins, according to the U.S. Department of
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Transportation, have been among the highest in the nation, in large part because of United’s ability to control the market. In 2013, the airline accounted for 73% of all flights in and out of Cleveland Hopkins, according to data tracked by Airports Council International/North America, an airport industry trade group. Smith said he estimates that share has dropped to closer to 50% and should drop further in the future. But Smith noted that while passenger traffic may have dropped 17% overall, the airport’s O&D service, the service to passengers whose travel originates or ends in Cleveland, is off by only 8%. He added, though, that United’s cuts in service cost the airport $20 million in income last year. The airport was expected to have total revenue of nearly $140 million in 2014, according to Mayor Frank Jackson’s budget. Hopkins average fare was the ninth-highest of the 100 largest airports tracked by the federal transportation department at $465.09. That compares with a 100-airport average of $395.62. But how satisfied are business travelers? The end of the hub disappointed many business travelers, said Rob Turk, senior vice president of Professional Travel Inc., a North Olmsted travel agency that assists the business travelers of more than 300 companies. “It required a lot of adjustment,” he said. “I think you still have some customers who are legacy-carrier supportive because of the frequent-flier programs and the other privileges they get. “A lot of business travelers are still reluctant to travel on the lowcost carriers because it is a different experience.” Those low-cost carriers usually lack roomier business or first-class seats, may not have assigned seats and skimp on food service. But that doesn’t appear to have deterred business travel. “We’ve seen a solid trend of spend increases over the last couple of years,” Turk said. “Some of the short-haul markets
have been affected, those within in a four- or five-hour drive time.”
Repositioning for growth To make the airport more attractive to travelers, Smith and his staff have begun to look at ways to spruce up the terminal and reconfigure the concourses, where the airlines process passengers onto aircraft. Last spring, the airport announced a $20 million plan to make over the terminal’s exterior, ticketing lobby and baggage claim area. Beyond that, though, Smith told Crain’s that he has begun a terminal utilization study that could end up moving gates of the various airlines and even closing an existing concourse. The airport has four concourses — A, B, C and D — and the airlines rent gates on the concourses. United uses most of Concourse C and it used all of Concourse D, which has closed because of the reduction in United’s flight schedule, though United continues to have a financial responsibility for much of that space. Smith said he will be talking to United about reconfiguring its operations and, perhaps, relinquishing some gates. He also left open the possibility that Concourse D could be reopened and another concourse closed. “There will be some reshuffling,” he said. “I can’t tell you that Concourse D will remain closed” or if another concourse will be closed and D reopened. That will depend on what space the new airlines want and what space United might be willing to give up. It may also depend on making access to Concourse D easier. It now can be reached only by an underground tunnel that splits off Concourse C. “In some cases, airlines are looking at United, which has the best space in the building and they see this as an opportunity to get some of that preferred space,” Smith said. “We have an opportunity to position our carriers that are growing in a way that allows them to grow.”
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But what about getting to the convention in 2016? Before the Republicans can start convening (and partying) in downtown Cleveland in summer 2016, most of the 40,000 convention delegates, guests and media will have to pass through Cleveland Hopkins International Airport. So the city of Cleveland, which owns the facility, already is thinking about how to be ready for the assault. And Ricky Smith, the director of Cleveland Hopkins and Burke Lakefront Airport, said he intends to make the facility a showcase that he hopes will attract more air service to the airport. Actually the airport’s planners began mapping out a refurbishing before the Republicans decided to bring their 2016 presidential nominating convention to the city on July 18, 2016, for a four-day stay. But the completion of a $20 million redo of the terminal exterior, the ticketing lobby and the baggage claim area has been moved up, Smith said. Burke also is getting a little bit of an upgrade. “They (the conventiongoers) will be one of the first groups to see a newly renovated terminal,” Smith said. “The (coming of the Republicans will) be an opportunity to showcase the airport — it will be the cleanest facility you could find. There won’t be a person in this airport who touches a passenger who doesn’t have an understanding of good customer service. The signage will be welcoming.” Not ready for the conventioneers, though, will be a new hotel. The airport’s long-term master plan envisions a hotel that would be built just east of the roadway that
passengers use to reach the terminal. Smith said the city needs to figure out what it will take to attract an operator. He said the city could follow the lead of Cuyahoga County, which owns the under-construction hotel adjacent to the Cleveland Convention Center and the Global Center for Health Innovation. The airport also still needs to figure out how to handle convention traffic on the ground. The airlines are likely to add flights to accommodate the surge into Cleveland, Smith said, and he and convention organizers will have to work out logistics for the ground transportation that will be needed to handle that surge. “The airlines are better at this than we are, because they do it for the conventions, the Super Bowl, the NBA All-Star game,” Smith said. “We have to work with the organizers on issues of transportation so we’ll probably have to come up with some arrangement that will be unique to them to keep them out of the way of normal passengers.” At Burke, Landmark Aviation is about to start construction of a hangar and terminal to serve its private and business aviation customers. Landmark is spending at least $6 million on the facility, which is expected to be ready by the first quarter of 2016. Houston-based Landmark runs what’s called a fixed-base operation, or FBO, at the downtown airport. It provides fuel, hangar space, aircraft maintenance and related services to private aircraft, which some convention delegates are likely to use since it is so close to the convention — Jay Miller action.
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Former Onosys execs back in biz Two of its founders launched Scout RFP, a software firm that just raised $2.75M By CHUCK SODER csoder@crain.com
Two of the guys who sold Onosys to LivingSocial are running another software company that just raised a few million dollars. It’s unclear whether Scout RFP will grow in Northeast Ohio: The company’s small staff is scattered across the United States, and its leaders, Stan Garber and Alex Yakubovic, are spending a lot of time in San Francisco these days. But it will grow somewhere. The company, which aims to improve the way businesses buy goods and services, just raised $2.75 million in venture capital. The company has one developer in Northeast Ohio, but Garber just moved to San Francisco and Yakubovic said he’s spending much of his time there as well. They’ve leased a two-bedroom condo in the city for seven months. But they still have deep ties to Northeast Ohio, said Yakubovic, CEO of Scout RFP. “We’re not selling our homes anytime soon,” he said. The biggest investment came from New Enterprise Associates, which has an office in Silicon Valley. Google Ventures chipped in, too, as did Tim O’Shaughnessy, the former CEO of LivingSocial. He has a strong tie to Garber and Yakubovic: Three years ago, LivingSocial — a Washington, D.C.-based company that offers daily deals via the Internet to roughly 62 million subscribers — bought their previous company, Onosys, which provides online food ordering systems to restaurants. Investors encouraged the Scout RFP team to rent a place in the Silicon Valley area, but they didn’t require it, Yakubovic said.
Contact: Phone: Fax: E-mail:
A few local investors got in on the deal, too. One of them is Zapis Capital, which invested in Onosys in 2008, back when it was called O-Web Technologies. Garber, Yakubovich and Oleg Fridman — who now runs a local custom software development company called Prototype1 — started the company as a web development firm in 2003, while they were students at Case Western Reserve University. Scout RFP’s roots go back to Case Western as well. That’s where Garber and Yakubovich met Andrew Durlak and Chris Crane, two of the company’s three founding partners. First, Garber and Yakubovich invested in their friends’ company. Then, in September, Garber became president and Yakubovich became CEO. They learned to hate the request-for-proposal process at Onosys. It’s extremely labor intensive and involves sending a lot of emails back and forth and compiling data manually, often in Excel spreadsheets, Yakubovich said. Scout RFP aims to streamline that process and give buyers a way to compare all proposals side-byside. More than 600 people use the company’s software today. Many of them work for large companies, which buy lots of stuff through formal RFP processes, Yakubovich said. The restaurants that bought software from Onosys often fell into that category. “We could’ve been best friends and having dinner with the CEO the night before, but we’d still have to go through the RFP process,” he said.
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THE WEEK JANUARY 26 - FEBRUARY 1 The big story: Continental AG of Germany closed its acquisition of Fairlawn-based rubber company Veyance Technologies Inc. The transaction is valued at about $1.6 billion. Veyance will be integrated into the company’s ContiTech division. Veyance, a spinoff of Goodyear Tire & Rubber Co., had sales of about $2 billion in 2013 and employed approximately 9,000 at its 27 plants. Veyance’s office in Fairlawn, which employs about 200, will serve as the regional home office for ContiTech in North America. It’s too early to say whether employment at the Fairlawn office will be affected, said vice president of global human resources Bruce Kendrick.
Lip service: Bonne Bell Co. sold some of its brands, including the iconic Lip Smacker lip gloss, and plans to lay off more than 90 workers in Westlake. The company plans to close manufacturing and distribution operations at its location at 1006 Crocker Road in Westlake, resulting in the permanent layoffs of 91 employees. Bonne Bell reached an agreement to sell the Lip Smacker lip gloss and Bonne Bell cosmetic brands to Markwins International Corp. Bonne Bell will change its name to the Bell Family Brands. The company still owns the Formula 10.0.6 skin care brand. Its distribution affiliate, Aspire Brands, will continue to distribute Lip Smackers in Europe, Australia and Asia.
On the up and up: The Cleveland Browns are raising ticket prices for the first time since 2008. Team president Alec Scheiner said that, after six consecutive years of keeping prices flat, they had gotten “out of whack” with the Scheiner rest of the NFL. Season-ticket memberships for non-club seats will cost between $25 and $110 per game in 2015, the Browns said. In 2014, the range was $19 to $85. The Browns, according to Team Marketing Report, had the league’s cheapest average seat at $54.20 in 2014. In 2015, some non-club seats will increase as much as $25 — from $85 to $110 — along the sidelines, and $50 Dawg Pound seats went up to $65.
Office work: University Hospitals created the executive office of innovation and appointed Dr. Marco A. Costa as vice president and chief innovation officer of the health system. In the new role, Costa will lead a team focused on “initiatives related to innovation to maximize quality, patient experience and performance,” UH said. Costa most recently served as director of the Interventional Cardiovascular Center and director of the Research and Innovation Center at the UH Harrington Heart & Vascular Institute. Bloom is off: Cliffs Natural Resources Inc. is seeking creditor protection for the Bloom Lake iron ore mine in eastern Canada. Clevelandbased Cliffs said Bloom Lake General Partner Ltd. launched restructuring proceedings in Montreal under the Companies’ Creditors Arrangement Act of Canada. The Bloom Lake partnership recently suspended operations and for months has been exploring options to sell some Canadian assets. Cliffs said the bankruptcy “will address the Bloom Lake Group’s immediate liquidity issues and permit the Bloom Lake Group to preserve and protect its assets for the benefit of all stakeholders while restructuring and sale options are explored.” Come together:
Farmers National Banc Corp., the holding company for Farmers National Bank of Canfield, agreed to buy National Bancshares Corp., the parent of First National Bank of Orrville, for about $74 million. Under the agreement, each shareholder of National Bancshares will be entitled to elect to receive either $32.15 per share in cash or 4.034 shares of Farmers’ common stock. The deal is expected to close in the first half of 2015.
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REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
A towering real estate move might be in the offing “Tower City Shops LLC” is the head-turning name of a foreign corporation registered Jan. 9 with the Ohio Secretary of State’s office. The moniker immediately brings to mind The Avenue at Tower City Center, the downtown shopping center that Cleveland-based Forest City Enterprises Inc. came close to selling last summer. Adding to the intrigue: The filing was by lawyer Howard N. Luckoff of Detroit, whose name also appears on legal documents associated with property deals that Cleveland Cavaliers owner Dan Gilbert’s Rock Gaming has executed for Horseshoe Cleveland Casino. Principals on both sides of a potential Tower City retail deal say they don’t comment on rumors or speculation. Robin Schwartz, spokeswoman for Bedrock Real Estate Services, the firm that manages Gilbert’s vast holdings helping rejuvenate his home town, referred Crain’s to Luckoff. Luckoff was identified in an August 2011 story in Crain’s Detroit Business as part of Gilbert’s “infrastructure” of friends and business associates remaking downtown Detroit. In a phone interview on Thursday, Jan. 29, Luckoff said that as an attorney, he does not discuss work he does for any of his clients. There is also the chance — slim though that might be — that Tower City Shops might be used for some other property in Ohio. One thing is clear: The massive shopping
MILESTONE
center at the heart of Forest City’s Public Square office complex remains on the market. David Browning, executive managing director of CBRE Group Inc., said his firm has gotten multiple calls from investors and Gilbert real estate developers doing homework on the property. Browning would identify none of those parties. — Stan Bullard
The Clinic’s bottom line: $12 per hour for workers Cleveland Clinic CEO Dr. Toby Cosgrove promised not to pay any of the health system’s employees less than $12 an hour. Cosgrove announced the changes in his year-end letter to the Clinic’s staff. He noted that more details would be provided this year. He also said the Clinic would increase the amount it sets aside for its Employee Hardship Fund, which provides assistance to Clinic caregivers facing “extraordinary financial challenges.” “We will continue to invest in our caregivers,” Cosgrove said in the letter. “Cleveland Clinic has always paid a competitive wage, including annual merit increases through our yearly performance management process.” The Clinic boasts 34,658 full-time equivalent local employees as of last summer, according to data compiled by Crain’s Cleveland Business. That figure makes it the region’s largest employer.
You are what you eat
The provider of window film technology is celebrating four decades in business. Suntrol is an Eastman Chemical Co.-certified window film business. John Hansen, Suntrol’s owner and president, started Rainbow Window Tinting in 1975 (he was 15 years old then) and bought Suntrol Custom Tint in 1986, incorporating under that name. Now with a dozen employees, Suntrol serves residential customers across the state and commercial clientele across the region. “We’ve seen huge growth in high-tech, impact-resistant security film for use in schools, airports, government buildings, libraries, museums, banks and more,” Hansen said in a statement. “Homeowners are choosing window film as a cost and energy efficient alternative to replacement windows. Commercial building owners choose film solutions to protect from UV light and infrared heat, increase energy efficiency, reduce glare and enhance privacy. And, architects and designers use film to produce one-of-a-kind design elements.” Suntrol’s list of clients includes the Frank Lloyd Wright Penfield House; Cleveland Clinic; the Cleveland Museum of Art; Ohio State University; FirstEnergy Stadium; and the Horseshoe Casino Cleveland and Hard Rock Rocksino. For information, visit www.suntrol.com.
Engineering Society looks to build something positive The Cleveland Engineering Society wants to teach engineers to create more efficient construction plans, starting with a focus on plumbing. The society is working with the Cleveland Plumbing Industry to offer a set of nine classes between Feb. 18 and July 28 on topics like storm water drainage systems, hospital plumbing systems and systems for natural and medical gas. The sessions will give engineers and others in construction the plumbers’ perspective, said Susan Davis, executive director of the Cleveland Engineering Society. And they might give people advanced design ideas or ideas for how to do a project more cost effectively before they get on site. This is the first program of this kind the society is hosting, but Davis said she sees opportunities for classes in other areas like bricklaying, electrical or carpentry. All of the classes will be designed to make the construction site “more efficient and cost effective,” she said. The classes will be held at the Cleveland Plumbing Industry’s training center at 950 Keynote Circle in Brooklyn Heights. Participants don’t have to sign up for all of the offered classes. More information is available on the Cleveland Engineering Society’s website, www.cesnet.org. — Rachel Abbey McCafferty
BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com.
COMPANY: Suntrol, Cleveland OCCASION: Its 40th anniversary
At the start of the year, the state also increased its minimum wage by 15 cents to $8.10. The national minimum wage is $7.25. — Timothy Magaw
Still keeping up with that New Year’s resolution to lose weight? Good work. But if you need some help, a recent MarketWatch.com story, featuring comments from Kristin Kirkpatrick, manager of wellness nutrition services at the Cleveland Clinic Wellness Institute, might do the trick. She has four diet suggestions: 1. Eat palm-sized portions. 2. Eat five colors a day, to help ensure you get a good balance of nutrients. 3. Be consistent. (Kirkpatrick doesn’t believe in “cheat days,” a diet strategy where you’re allowed to eat whatever you want one day a week, which some think makes a diet more sustainable.) 4. Get adequate sleep. You might as well throw all the above tips out the window if you’re getting less than six hours of sleep a night, she says.
Getting real Hawken School was featured prominently in a Wall Street Journal story about efforts by businesspeople and educators to find ways to teach students to be more entrepreneurial. “The latest initiatives often play down traditional tasks like creating a business plan in favor of preparing participants for broader challenges, such as how to get feedback from customers and knowing when to adapt products or business models,” The Journal reported. These efforts come as the proportion of young adults owning a business “has fallen to the lowest level in at least 24 years,” the newspaper noted. The Journal said Hawken introduced a semester-long class two years ago in which high schoolers spend nine weeks solving the real problems facing three local busi-
ness owners. “For one project, Olivia Marino, an 18year-old senior, conducted market research for an Indian restaurant looking to define its target market and growth strategy,” according to the story. For their final project, Marino’s team “created a baking service that sent ingredients and a recipe each month so that families with young children could cook together,” The Journal reported. The class “made me think differently about all the things that go into maintaining and starting a small business,” Marino said. Doris Korda, a Hawken administrator and former entrepreneur who created the program, told The Journal, “The secret sauce in terms of the kid engagement is that it’s real world.”
A tale of two types of cities Cleveland is among the 60% of U.S. cities that have not recovered to their pre-recession levels, according to the Brookings Institution’s new MetroMonitor report, which ranks the economic health of 300 cities in the world. CNNMoney.com reported that the country now is “a tale of two economies: cities focused on tech and energy are thriving while some regions, like the so-called Rust Belt, continue to lag behind.” Several U.S. cities in the Great Lakes region ranked in the bottom 50 cities worldwide for growth. Cleveland, Syracuse and Dayton had either flat or negative growth in 2014, according to Brookings. These “Struggle City” economies “relied heavily on manufacturing jobs in the past and were severely hit with large layoffs during the recession,” CNNMoney.com said. “Now they’re trying to reform their economies, but their populations are dwindling, which challenges the value of their housing markets.”
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NOTHING BUT NET WORTH
86% Management $433,250 Average Household Income $2.1 million Average Net Worth $617,000 Annual Corporate Buying Power
(If only our sports teams had such great stats.)
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