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VOL. 37, NO. 17
APRIL 25 - MAY 1, 2016
CLEVELAND BUSINESS
Entire contents © 2016 by Crain Communications Inc.
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z APRIL 25 - MAY 1, 2016 z CRAIN’S CLEVELAND BUSINESS
Lorain’s steel industry is almost at standstill
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If there’s a city that encompasses the repercussions of the steel downturn, it’s Lorain. The city is home to two large steel plants, one of which is currently shut down. The other is only running one of its three mills, according to the union. Both have left hundreds without jobs and will contribute to a likely budget shortfall for the city. The issues plaguing the plants aren’t unique. The steel industry has been facing oversupply globally; domestically, producers have also been struggling with a strong dollar and low oil prices driving down demand for drilling-related products. “It’s going to be a rough couple years,” said Brian Sealy, staff representative for the United Steelworkers. Sealy, who worked in the Lorain plants for about 20 years before joining the USW staff, said he hasn’t seen a downturn like this since at least 2009, when the entire economy took a dive. Even then, both mills “limped along” instead of shutting down, he said. Canton-based Republic Steel shut its Lorain plant at the end of March and is just keeping security and a few people on site to protect its assets. Pittsburgh-based United States Steel Corp. is operating its Lorain plant on a limited basis. Neither company would comment beyond confirming the status of the operations. Sealy estimated that more than 300 people are currently laid off at U.S. Steel; another 550 are out at Republic. And Republic’s parent company offered settlements or buyouts to its workers, he said. Sealy said more than 300 took them, which means that companies will have a hard time staffing their local mills if and when they get them running again. But Sealy doesn’t expect that to
happen any time soon. He said he doesn’t think the mills will restart until next year at the earliest. “I mean, they’re struggling, really struggling, now,” he said. And that struggle extends beyond the plants and workers directly affected. Lorain Mayor Chase Ritenauer said he’s expecting $2 million to $3 million less in tax collections from the companies because of their diminished workloads. The city’s total general fund is about $28 million to $30 million, so a loss like that can be “catastrophic,” he said.
“It’s been longer and deeper than we can withstand without making sizable cuts on our own.” — Chase Ritenauer Lorain Mayor Police and fire make up about 65% of the budget, he said. The police and fire departments have offered concessions, but the city is still waiting to see if it gets a federal SAFER grant to cover the rest. If not, Ritenauer said, there will be layoffs. The city’s other departments will have layoffs and furloughs, and capital projects without a dedicated revenue source, like street repairs, are on hold. This is a stark change for Ritenauer, who entered office in 2012. 2014 was a “banner” year, he said, with hundreds of thousands of dollars of income tax coming in above budget. The layoff notices started in 2015. “It’s been longer and deeper than we can withstand without making sizable cuts on our own,” Ritenauer said.
Root causes Sealy pointed to the downturn in the energy market and the low-cost dumping of foreign steel as the major factors contributing to the current environment, and he believes the Trans-Pacific Partnership trade deal will make things worse by allowing even more foreign goods to be sold in the U.S. The solution has to start at the top with the government, he said. Companies currently have to show damages before tariffs can be applied — and by the time action is taken, employees, like those in Lorain, are already out of work. Companies and politicians alike have been striving recently to get this issue addressed. At the global level, United States officials on April 18 met in Brussels with representatives from the European Union, as well as from countries like Japan and Mexico, to discuss steps governments could take to deal with the overcapacity. The week before, the Office of the U.S. Trade Representative and the Department of Commerce held a hearing on the state of the steel industry. U.S. Sens. Rob Portman, RCincinnati, and Sherrod Brown, DCleveland, were two of the politicians who testified. Portman’s testimony focused on creating a “level playing field” for U.S. steelworkers, noting that record amounts of foreign steel entered the United States last year while domestic exports declined. Brown said in a call after the hearing that he follows the steel industry closely, because it is in many ways still the “foundation of manufacturing.” He wants to see the government renegotiate the Trans-Pacific Partnership to address dumping of products from countries such as China and Korea. “When steel stumbles, so much of the rest of the economy is hurt,” Brown said.
CORRECTION In an April 18 story on Page 17, Dara Perrin’s name was misspelled in the headline. Perrin is the owner of Interstate Freight Carriers in Solon.
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Quicken Loans is headed to Higbee BY STAN BULLARD sbullard@crain.com @CrainRltywriter
Look for more lights to go on at the Higbee Building at 100 Public Square in downtown Cleveland, in addition to those of Jack Cleveland Casino and KeyCorp. Construction workers are renovating four floors of the 13-story building. Two of those floors are destined to become a new home for the Quicken Loans web center workers in downtown who are relocating from Post Office Plaza, 300 West Huron, according to three people familiar with the situation who asked not to be identified because they are not official spokesmen for the companies. How the other two floors will be used is unknown. The move — just 750 feet door to door between Post Office Plaza and Higbee — is not a big one for the downtown office market. But it is significant given the common threads of the ownership of Jack Entertainment and Quicken Loans, the Detroit-based Dan Gilbert and partners in the concerns. The 400-some employees would be exiting for a Gilbert-controlled property from the Post Office Plaza, one of two parts of the Tower City Center complex that Gilbert does not own. Forest City Realty Trust Inc. of Cleveland owns Post Office Plaza, although it recently sold the Avenue Shops to an affiliate of Gilbert’s Bedrock Real Estate Services. It’s also a natural time to make such a move: The Quicken Loans lease on about 55,000 square feet for 10 years on the top floor of Post Office Plaza will expire in June, according to online realty data provider CoStar. Such a move is no surprise, said Kevin Piunno, senior vice president of the Cushman & Wakefield Cresco brokerage and a veteran of the downtown office market. “I don’t have any proof they are doing it, but it makes all the sense in the world,” Piunno said. “If I own a building connected to all of the same amenities with all the same quality office space, why wouldn’t I do it? Why leave them in a building I don’t own? I’ve wondered why they did not move over there earlier.” Piunno added that empty floors of the Higbee have not been listed with a broker or offered to the market since Forest City sold the building to the casino. The landmark department store is getting additional improvements beyond those Jack announced as part of rebranding the casino following Jack Entertainment’s separation from Caesars Entertainment Corp. of Las Vegas. Those changes also included obtaining full ownership of the 100 Public Square landmark in November 2015 from Caesars. The city of Cleveland last Wednesday, April 20, issued a building permit for installation of offices on floors four, five, 10 and 11 of 100 Public Square. A copy of the permit obtained by Crain’s Cleveland Business through a public records request authorizes a change of occupancy to office in those floors, replacing windows and other changes. The permit notes additional work such as electrical will
require different permits, but put the estimated cost of the work at $19 million. The exit stands to compound Forest City’s growing vacancy problem at Post Office Plaza. CBRE Group is marketing almost 270,000 square feet at the 434,491-square-foot building for Forest City, including 55,000 square feet on the fifth floor of the structure. Quicken occupies almost 45,000 square feet on that floor of the one-time main post office of Cleveland, according to CoStar. Asked if CBRE is marketing space Quicken will vacate, David Browning, CBRE Group managing director
for its Cleveland office, declined comment. Forest City spokesman Jeff Linton said the company never comments on individual properties or tenants as a matter of policy. The companies in the portfolio of investments for the casino owner and operator also hold their cards close to the vest on this question. Jordan Fylonenko, Quicken public relations manager, said in an email, “We don’t comment on rumors or speculation.” KeyCorp also has a major presence in the building, as it occupies three floors with back-office operations.
Quicken Loans’ current Cleveland office is at Post Office Plaza. (Stan Bullard)
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z APRIL 25 - MAY 1, 2016 z CRAIN’S CLEVELAND BUSINESS
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A five-inch patch on LeBron James’ jersey could be worth well over seven figures a year for the Cleveland Cavaliers. But at this point, more than a week after the NBA finally approved placing ads on jerseys, one of the few certainties is the size of the patch — a 2½-inch-by-2½-inch square. When the league, four years after an effort to begin selling the jersey patches was tabled by its owners, announced a three-year pilot program beginning in 2017-18, commissioner Adam Silver estimated it could be worth $100 million a year. Eric Smallwood, managing partner of Apex Marketing Group, a sports sponsorship and analytics firm in St. Clair, Mich., thinks Silver’s estimate is a little low. Smallwood, echoing the opinions of other analysts, believes the league could pull in $125 million to $150 million annually from the jersey patches. He thinks the Cavs’ haul, predictably, will depend on LeBron James still being on the roster after next season. “Let’s just say everything stays consistent and LeBron stays,” Smallwood said. “I think you’re looking at as high as $5 million (a year) for Cleveland. I would couch that and say there’s a good range — $2 million to $5 million is probably the range. That’s a wide range.” The uncertainty, however, is more attributable to the complications involved in any potential deal, and not because of a fear of James leaving town a second time or his play dramatically declining. There have been no signs of either for a team that’s a heavy favorite to advance to its second consecutive NBA Finals. Instead, the sticking points will stem from the NBA’s already wideranging collection of lucrative partnerships. The same goes for its star players. “There are a lot of components that are going into this,” said Smallwood, who has done a study on the value of jersey ads. “The relationships a team has with sponsors — are they exclusive? Are they prohibited from selling against exclusivities?” A Cavs source told Crain’s the team has a “limited” number of exclusive agreements. The team, though, has more than a handful of seven-figure partnerships. The Cavs, for example, might be hesitant to field an offer from an automotive company — or be prevented from it, depending on the contract language — because the team and James (and the NBA, for that matter) have lucrative deals with Kia. And the Cavs certainly wouldn’t strike a deal with a mortgage company, unless Dan Gilbert’s Quicken Loans wants its logo attached to the Wine and Gold. “First of all, we’re going to be very thoughtful in our process and approach that we ultimately look to do this right and find the right partner as well,” Cavs CEO Len Komoroski said. “We will take those things into consideration as we approach the marketplace.”
LeBron James and the 2016 NBA All-Stars had Kia patches on their jerseys for the first time. (Getty Images)
Uncertainty abounds
‘Unique connection’
The potential complications increase for a star-laden team such as the Cavs. The Big Three of James, Kyrie Irving and Kevin Love have a wideranging endorsement portfolio that includes such industry giants as Nike, Coca-Cola, Pepsi, Samsung, State Farm and Foot Locker. Would James, a longtime Coke endorser, or his representatives want to steer away from a Pepsi ad on the Cavs’ jerseys? Questions such as that are why Silver admitted there was “enormous uncertainty” surrounding the jersey patches. Hence the ads being implemented on a three-year trial basis. “Are we going to see deals that are determined and benchmarked on player contracts? It really could happen,” Smallwood said. “No other ad deal is necessarily trying to tie into a benchmark on that (a player staying or leaving). This is a direct ad on the player. “If I’m a brand, I’m asking for those benchmarks. I want certain guarantees and certain restrictions. If I’m spending $2.5 million, $3 million, I want to know if I’m getting the value in Year 3, Year 4.” But it’s not as if this is the first time there’s the chance of an endorsement conflict involving an NBA uniform. Michael Jordan, Magic Johnson and Charles Barkley — Converse (Johnson) and Nike endorsers (Jordan and Barkley) — famously covered up a Reebok patch with an American flag when the 1992 Dream Team was awarded with Olympic gold medals in Barcelona. And James, who in December agreed to a lifetime deal with Nike that reportedly is worth more than $30 million a year, has been wearing Adidas uniforms and warmups for the last decade. The 2017-18 debut of the jersey ads, probably not coincidentally, lines up with Nike taking over the production and design of the league’s uniforms. The swoosh will be located on the upper right of each jersey, and the ads on the upper left.
The high cost of the uniform patches could limit the number of local sponsors on team jerseys. Smallwood said his initial study four years ago estimated that teams could fetch from $1.5 million to $7.5 million for the jersey ads. The money will be counted as basketball-related income, which means the players should get an even cut. Komoroski said the Cavs are viewing the jersey ads “on a broader scale” because of the franchise’s wide-ranging reach. The Cavs are in the NBA top 10 in social media followers, with more than 8.7 million combined on Facebook, Instagram and Twitter, and the franchise’s digital properties have a rapidly-growing international audience that is among the largest in the game. “We’re certainly not at this juncture going to limit ourselves,” Komoroski said when asked about the breadth of a potential jersey deal. “We’re very fortunate to be part of a global game. It does create some unique opportunities and broadens the scope of a potential partnership.” Smallwood, surprisingly, said he thinks the Cavs are in the middle of the NBA pack when it comes to the value of an ad on their jerseys. “If you take LeBron out, they may move closer to the lower end,” he said. But that seems very unlikely by the time the jersey patches are worn for the first time in the regular season. (A Kia ad appeared on the 2016 NBA All-Star jerseys.) More definite is the approach teams will take in pursuing jersey partnerships. Komoroski, the Cavs’ CEO, went into salesman mode when discussing the jersey ads, which will be the first worn by a major U.S. sports league. Major League Soccer and the WNBA already have ads on the front of their uniforms, but the NFL, Major League Baseball and the NHL do not. “It’s a great opportunity for perspective partners to create a truly unique connection to our team,” Komoroski said. “That’s one of the points of separation versus many other opportunities that a partner can engage with.”
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z APRIL 25 - MAY 1, 2016 z CRAIN’S CLEVELAND BUSINESS
ABB scoping out new home BY STAN BULLARD sbullard@crain.com @CrainRltywriter
A long-term site search by Zurichbased ABB Inc. to replace the facility housing its 500-person power generation unit in Wickliffe may be coming in soon for a landing. Better known in Northeast Ohio as the one-time Bailey Controls Co., ABB is searching for a new location in Northeast Ohio for its research and development, engineering, service and “customer experience” operations in Wickliffe, according to Melissa London Zingle, North America media relations director for ABB, which has its U.S. headquarters in Cary, N.C. ABB’s power generation unit’s site search has surfaced for a portion of the Chagrin Highlands corporate center complex in Highland Hills. Robert Nash, Highland Hills mayor, said he has discussed a location in the village with ABB, which is now negotiating a price for a site with Chagrin Highlands developer Jacobs Real Estate Services Inc. of Westlake. The proposed location is part of Highland Hills that was only recent-
ly included in a joint development agreement with the city of Cleveland for the property. Nash said he signed the agreement, pending for 20 years, because he has been assured Jacobs Group will not use the land for a shopping center development. The agreement provides for income tax sharing and other provisions for the Cleveland-owned site that Jacobs has been developing in the east suburbs since the 1980s. Chagrin Highlands, which incorporates 600 acres, houses Eaton Corp.’s U.S. campus, the headquarters of Omnova Solutions Inc. and two multitenant office buildings in Beachwood and a shopping center and Marriott Corp. hotel in Warrensville Heights. ABB’s operation, which includes a training center and is visited by customers from around the globe, is currently in a 500,000-square-foot property built in 1955 at 29801 Euclid Ave., according to Lake County public records. Portions of the complex are vacant as the company stopped manufacturing operations there years ago, and insiders say it is in the market for land for a 150,000square-foot property. Zingle said in an email she has no
information on the current status of the site search, and the company would announce its decision when it makes one. The city of Wickliffe has presented options to allow ABB to remain there, said Mark Rantala, executive director of the Lake County Ohio Port and Economic Development Authority. “We’re disappointed by ABB’s interest in Chagrin Highlands,” Rantala said. “We are trying to find ABB other locations in Lake County.” He refused to identify alternative locations being offered to ABB. Mayor William Margalis of Wickliffe said in an email, “We have been in discussions with ABB but have no further comments at this time.” Wickliffe is home to ABB’s current technologies building on businesses stemming from the one-time Bailey Meter Co., which moved to Cleveland from Boston in 1919 and was a major supplier of boiler meters and controls for U.S. Navy ships in World War II, according to the Encyclopedia of Cleveland History. At different times part of General Electric and Babcock & Wilcox, the company was bought by Elsag Group of Italy in 1989, when it had 1,177 workers, and merged with ABB in 1998.
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ABB’s Zingle did not respond to a question about whether the multinational is considering moving the operation to the Cary area. Companies often introduce the risk of out-of-state moves to secure Ohio incentives and local government incentives to keep them here. ABB is a high-profile operation in the Cary and Raleigh areas, heavily involved in local university research and technology education efforts. The Ohio Development Services Agency said it has no applications for aid from ABB. Both Team NEO and Greater Cleveland Partnership, which handle, respectively, elements of the area’s company recruitment or retention efforts, declined comment on ABB’s site search. Doug Miller, Jacobs president and CEO, did not return two messages asking about the ABB talks by Friday, April 22. Constructing a 150,000-squarefoot complex would require about 16 acres, according to development industry estimates. The Wickliffe unit is part of a publicly traded company with diverse technology oriented solutions for a wide range of industrial and power users with 135,000 employees around the globe.
Kent researchers land $1M-plus in project grants Two researchers from Kent State University’s College of Arts and Sciences received a total of more than $1 million in federal grants for their separate projects on Alzheimer’s disease and climate change. Gemma Casadesus-Smith in the university’s department of biological sciences was awarded a three-year, $444,000 grant from the National Institutes of Health’s National Institute on Aging to study the effects of the synthetic hormone Pramlintide on Alzheimer’s disease. The university said in a news release that Pramlintide is a synthetic version of the natural hormone amylin, which helps process glucose and has shown benefits in Alzheimer’s models when “systemically or directly” placed in the hippocampus. Casadesus-Smith said many researchers have begun looking at Alzheimer’s as “type3 diabetes, because the brain becomes bad at using glucose.” The other grant went to Scott Sheridan in the department of geography. Sheridan received a three-year, $565,000 grant from NASA to study climate change through models of water clarity in the Great Lakes. Sheridan previously received a NASA grant in 2013 for related research on water clarity in the Gulf Coast. His work uses NASA satellite imaging systems to study climate change indicators. — Rachel Abbey McCafferty
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covers the Midwest for PNC Financial Services Group, agrees with Mester but also sees a future of employment growth in other sectors. “Layoffs in the steel industry will restrain employment growth in manufacturing,” he wrote. “Health care, finance and professional services will add to the area’s economic growth.” PNC forecasts employment growth in Northeast Ohio at 1% for 2016 and 1.1% for 2017. Longer term, PNC’s economist sees opportunity for greater growth. “Though still only in their early development stages, manufacturing hubs for the machinery of new energy technologies and transportation equipment hold great promise for those regions that can attract and cultivate them,” Teshome wrote. “The (Northeast Ohio) region’s lower costs and availability of underutilized assets will be an important tool in attracting new industries and opportunities into the region in the years ahead.” — Jay Miller
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Opinion From the Publisher / Editor
Golf memories seem vivid, but time off distant
Editorial
Get talking Despite the relative little distance between the two cities, the historical disconnect between Cleveland and Akron is startling. Look no further than LeBron James, who in the past would have quickly corrected anyone who would have mistakenly said the basketball phenom hailed from Cleveland instead of the Rubber City. Or Don Plusquellic, the former Akron mayor and no stranger to hyperbole, who once in a major address likened the interest of Cleveland’s health care giants in his city’s hospitals to “the blue coats and the gray coats, with the result that we become a Gettysburg of health care.” Conversely, Cleveland might have viewed its southern neighbor as its less-impressive little sibling. Even Crain’s struggled to cover Akron properly until we deployed resources to do so. But as Cleveland and Akron continue to rebound from the throes of the Great Recession, it appears that competitive — or, perhaps, antagonistic — attitude is thawing. As we reported in this week’s special report — “Rebuilding Cleveland and Akron” — Akron’s newly minted mayor, Dan Horrigan, and Cleveland mayor Frank Jackson are scheduled to meet next month. A stunning development? Not on its face, but it will mark the first time in recent memory the mayors of the two cities sit down one-on-one. For too long, Akron and Cleveland have operated in their own respective silos. It’s encouraging that the city’s leaders are sitting down for a heart-to-heart, and we hope it’s the start of a dialogue to find regional solutions to our regional problems. Jackson’s chief of staff, Ken Silliman, recently told Crain’s that his boss believes “all of us in the region have a shared in-
terest in maintaining existing employers and in attracting new employers to the region, and we should not be tripping over each other or getting in the way of making an arrangement to keep a major employer or attract a new one by sparring with each other.” Our public schools still need improving, our infrastructure in many cases is crumbling and, most importantly, far too many Northeast Ohioans are living in poverty. They aren’t problems unique to Akron or Cleveland, and the solutions to those issues should be developed through a regional lens — not from city hall on out. However, that regional disconnect hasn’t been just because our leaders aren’t talking. Northeast Ohioans often aren’t exploring their own backyards. West Side versus East Side, Akron against Cleveland — those trite rivalries of past generations are starting to fade, and it can’t happen soon enough. Of course, regionalism isn’t a new buzzword. There have been countless efforts to promote a regional economy, but some of those even rubbed people the wrong way. Many of Akron’s civic leaders, for example, bristled at the “Cleveland Plus” marketing campaign launched in 2007 designed to drum up economic development in Northeast Ohio. It’s almost as if we’ve subconsciously fought collaboration, despite holding press conferences and developing slogans saying we support it. This summer, thousands of visitors will descend upon Northeast Ohio — not just Cleveland — for the Republican National Convention. It appears we’re putting our best foot forward and ready to show how far we come. It would be a shame if we didn’t present ourselves as a region with much to offer rather than two Rust Belt cities fighting separately for a little bit of the spotlight.
PUBLISHER AND EDITOR: Elizabeth McIntyre (emcintyre@crain.com)
CLEVELAND BUSINESS
MANAGING EDITOR: Scott Suttell (ssuttell@crain.com) SECTIONS EDITOR: Timothy Magaw (tmagaw@crain.com)
I remember the dew melting as the sun rose. The long shadows as I made my practice swing. More than anything, I remember the smell of freshly cut grass on the back nine. Those morning memories of walking the links are book-ended by mid-summer evenings played on hardpan fairways. The sun melting into the horizon as I swatted away mosquitoes, several hours after making the mad dash from the office for my league tee times. I loved my golfing days for many reasons. Some were sensory. Others competitive. But most were about relationships. The conversations with good friends, loved ones and complete strangers who felt like friends hours later. Those days are gone now. I never decided to give up golf. I don’t even remember when I played my last round. I know it happened some time after my second child was born. I was working an increasingly demanding full-time job, coupled with raising two young kids with my husband. My two golf leagues became one, and then none. Elizabeth My regular trips to the driving range ended. A McIntyre year or two later, I was playing in an outing or two a summer. It’s probably been 10 years now since I last swung a club. No longer could I devote five hours on a weekend to play and countless hours practicing if I wanted to play well. Turns out, I’m not alone. The National Golf Foundation’s annual report shows that the number of golfers age 6 and up dipped 600,000 in 2015 to 24.1 million, down from its peak of 30 million in 2005. Crain’s Kevin Kleps has reported over the past several years on the challenges the game is having in attracting people to pick up the sport — and keep playing it. He wrote earlier this year about the decision to close Hawthorne Valley, a 90-year-old semi-private club in Solon. In Akron, a Blue Ribbon Task Force recommended that the city should save cash by dumping its two money-losing golf courses, possibly shopping them to the Summit Metro Parks. That’s what happened in Lyndhurst in 2012, when the Cleveland Metroparks purchased and converted the former Acacia Country Club into the 155-acre reservation. Fewer people are golfing, and that’s really a shame because golf has intangible values. The course is where business relationships can be solidified, where friendships can flourish and where a daughter can grow even closer — if that’s at all possible — to her dad. My father was an avid golfer. His long game, I came to realize as I took up his sport in my 20s, was not his strength. He hit it straight, but not long off the tee. His short game, however, was killer. From the fringe or on the green, he was gold, and he schooled me. Many times, I’d approach the seventh or eighth hole feeling pretty good about my play against him, thinking I might actually win a round, and then checked the scorecard to find he had me by plenty. One-putts will do that for you. Golf has been absent from my life for a decade. Some day I hope to get back to it. Dad had to hang up his bag, and not by choice. At 81, his legs aren’t what they used to be. He always walked and carried his own bag. My theory is that after years of ball hawking and carrying a bag weighed down with 70-plus found Top Flites and Titleists, his legs had enough. I hope some day soon we both have a chance for one last round together. I hope to add that memory to the memories of all of the quiet rounds we played, the conversations, the gentle instructions and the compliments — “Nice ball!” “Good save!” “Draino!” Thanks, Dad. And thanks, golf.
WRITE US: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Cleveland Business, 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113, or by emailing letters@crain.com. Please include your complete name and city from which you are writing, and a telephone number for fact-checking purposes.
SOUND OFF: Send a Personal View for the opinion page to emcintyre@crain.com. Please include a telephone number for verification purposes.
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Web Talk Re: Future of LaunchHouse Chuck Soder’s April 18 article, “Uncertainty surrounds future of LaunchHouse,” shows that there are too many agendas and each has its own objective. When politics enters into this, it really makes for bad relations. The concept of LaunchHouse was great when it started and it’s still great today. It definitely was not one of the first and there have been other efforts. Most of these have companies renting space that can help support or even provide services to startups, so do not make claims that everyone graduates out. If LaunchHouse was being run successfully, it should actually generate revenue to the city and not to the pockets of a few. Check around the country and you will see examples of very successful incubators that make money for everyone. Some have even known how to get grants to support the effort. I absolutely believe that with the right management and the right mission/vision (along with a business plan that we tell every startup they must have) this facility could be very successful and just be one more tool to help revitalize Shaker’s commercial areas. — Neil Dick
LaunchHouse is five years old, simultaneously a veteran among Cleveland co-working spaces with a so-far successful model, but itself still a young business. Most of the startups that were at LH have moved on, a few becoming “mid-life ventures.” LH does have some expansion space on the second floor for when companies go beyond about five employees, but that space is currently fully occupied by Protem, which will be moving shortly as soon as its new building is ready. But a place like LaunchHouse is still necessary for the constant churn of new businesses. Old tenants grow out, new tenants move in. Currently, LaunchHouse is full with a wait list. I’m a new tenant and I’m here because of the culture (LaunchHouse CEO) Todd Goldstein and his team created. Hands-down, best co-working space I’ve ever worked at and I can’t wait to see where we land. — Jeff Bargiel
Re: The RTA way The April 18 Letter to the Editor by Wayne Capka criticizing a Crain’s editorial about the Greater Cleveland Regional Transit Authority represents an incredibly outdated way of thinking. As a government
institution, RTA has an obligation to not only its customers, but also its employees, and to suggest doing anything less would be at best cruel to both parties alike. Not to mention, cutting pensions might be more expensive than leaving them be, as we can see with cities like Detroit and Milwaukee mired in class-action lawsuits from people who were promised a pension, and many of whom are deserving of it. … What I would do on the state level is replace our dated and, frankly nigh useless gas tax with a mileage tax that affects those who drive and use our roads most while sparing people who don’t. I would also open our new mileage tax for more services than simply road repair and construction. There’d be a portion earmarked specifically for public transit, whose buses would be exempt from the mileage tax. Cleveland, I think we can all agree, isn’t at its best yet, but through smart investment in infrastructure we all rely on, whether for transit-oriented development or simply low-cost transportation, this city can create a solid base with which to attract outside investment. — 183377
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When Akron’s Innerbelt is gone, what comes next? BY DAN SHINGLER dshingler@crain.com @DanShingler
What does a mature city do when it suddenly gets 30 acres of vacant prime real estate added to its central core? Akron is about to find out. When the city closes its Innerbelt highway (state Route 59) over the next couple of years, it will free up 30 acres of land that is within a stone’s throw of downtown. What becomes of that property will be determined by a number of factors — from demand for its commercial use to the desire to provide amenities to the downtown residents the city is trying to attract and retain. “It’s a huge deal,” said Jerry Fiume, managing partner for the Akron office of NAI Cummins, a commercial real estate firm. “It’s not often a city ends up with 30 acres in its lap right downtown.” But Fiume’s not clamoring for the city to take any bold steps to develop the property into more commercial office space or other business properties — Akron doesn’t need them, at least not now, he said. Currently, office space downtown can be leased for as little as $8 per square foot, Fiume said, which is
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about what commercial warehouse space usually fetches and proof that there’s little demand for more desk space. So Fiume is on the same page as urban planners and downtown advocates. They support ideas to build a mountain bike park, adult playground or other green space. Such things could be an amenity for downtown residents and workers, while also tying together neighborhoods that have been separated by the highway for decades, supporters say. Because in real estate, it’s not all about the land you have, it’s also about what’s on the land next door — and right now the 30 acres sits next to a downtown that needs continued efforts to improve it. “You cannot talk about the Innerbelt without talking about downtown. You need to shore up downtown before you start messing with the Innerbelt and any new development,” Fiume said.
The neighborhood effect In previous decades, “supporting downtown Akron” would have meant doing what its business community wants. Today, it’s about what is wanted and needed by the downtown residents that the city is trying to attract
BILLION invested in environmental protection efforts
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and keep — it’s more like producing a neighborhood amenity than a commercial feature. “I think of downtown as a neighborhood — if you have residents, and we do have residents and are building more residents over time, you’re a neighborhood,” said Suzie Graham, president of the Downtown Akron Partnership. “The downtown is the living room of the city.” This might also be a rare occasion when everyone gets what they want, or at least something of which they can approve. Ironically, this is because of today’s relatively tough times — businesses aren’t clamoring to build on the site, the city does not have the funds to do a major development project there, and the only reason the road is being vacated at all is because too few cars are using it. What no one wants is a vacant highway — and that’s not what’s going to be there in 2018, said Jason Segedy, Akron’s planning and urban development director. He’s already got plans for the marginal roads of Dart and Rand avenues that run along both sides of the Innerbelt. Today, they’re more or less littleknown side streets, but they could be neighborhood connectors or even storefront locations with some bike lanes and other improvements, according to Segedy.
of our power plants are lowor non-emitting
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Closing the Innerbelt highway will open up 30 acres near downtown Akron. (Dan Shingler)
The mountain bike test The leading idea — or at least the one that’s gotten a little traction so far — is to build a mountain bike park on the land. That’s the idea that won Akron architect Jonathan Morschl some Knight Foundation funding to further study and plan the park. But whether it gets built will ultimately be up to others, said Knight’s Akron program director Kyle Kutuchief. “We think the bike park is a great idea to test. We hope it informs the long-term use for the space, which is to be determined by the city of Akron,” Kutuchief said in an email. Morschl, who is not a cyclist, said he chose the idea because he thought it fit in with existing downtown efforts to connect to the Towpath Trail and other cycling routes. “The idea for a mountain bike park is just to reclaim some of this land, which is going to be vacated in
a couple of years, to reclaim it for public use,” Morschl said. The bike park is not an idea for the entire space — far from it. Morschl said his proposed plan would only take up about an eighth of the Innerbelt space, or about four acres. That leaves lots of room for something else — and input from other downtown and neighborhood residents and advocates. “I want to see West Hill connected to downtown again in whatever way best serves the folks that live there or could live there. What that looks like will depend on the realities of what we’re dealing with on a very basic level,” said Nicole Mullet, executive director of Akron’s ArtsNow nonprofit and a downtown advocate. Her whimsical side wants something fun, of course — like an adult playground with swing sets. “Couldn’t you imagine all of the folks who work downtown swinging over their lunch break?” Mullet quipped.
Don’t laugh. Columbus, Cincinnati and other cities have successfully put exactly that along their riverfronts and in other routes — like the Towpath Trail — seeking to make green spaces more comfortable and inviting, Graham said. “We need those things — we need those spaces,” Graham said. “They are beautiful things, built into the downtown landscape. And people were thinking ahead of time about how to get people to them.” Most folks watching the situation seem to think one thing is for sure — nothing really substantial is likely to be built on the newly available space for some time. That might be a good thing, because it could let the space, and the ways that people choose to use it, evolve over time, Graham said. “All of us, as community members, are going to have an opportunity to play with the space,” she said. “We might learn about how it can be used even better in the future.”
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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 Universal Nursing Services Inc. P.O. Box 1218, Akron Date filed: Feb. 1, 2016 Type: Employer’s withholding Amount: $1,708,253 Atlantis Co. P.O. Box 5047, Largo, Fla. Date filed: Feb. 3, 2016 Type: Employer’s withholding, unemployment Amount: $416,585 N G N Electric Corp. 10310 Brecksville Road, Brecksville Date filed: Feb. 11, 2016 Type: Employer’s withholding Amount: $167,458
Horizons Employment Services LLC 20600 Chagrin Blvd., Suite 350, Cleveland Date filed: Feb. 11, 2016 Type: Employer’s withholding Amount: $88,967 Precious Medical Health Services 25000 Euclid Ave., Suite 210, Euclid Date filed: Feb. 19, 2016 Type: Employer’s withholding Amount: $65,993 Larchwood Healthcare Group Inc. 4106 Rocky River Drive, Cleveland Date filed: Feb. 19, 2016 Type: Unemployment Amount: $61,449
Konstanzer Masonry Inc. 514 Dover Center Road, Bay Village Date filed: Feb. 1, 2016 Type: Employer’s withholding Amount: $55,497 Pinkney-P Perry Insurance Agency Inc. 526 Superior Ave. E, Suite 910, Cleveland Date filed: Feb. 19, 2016 Type: Employer’s withholding Amount: $50,999
LIENS RELEASED Integrity Waterproofing Inc. 1334 Summit Ave., Lakewood Date filed: Feb. 23, 2011 Date released: Jan. 7, 2016
Type: Employer’s withholding, unemployment Amount: $29,121 Kocon Masonry & Design LLC 558 Vineland Road, Bay Village Date filed: Sept. 30, 2015 Date released: Jan. 7, 2016 Type: Employer’s withholding, unemployment Amount: $10,892 Lucas Memorial Chapel Inc. 9010 Garfield Blvd., Garfield Heights Date filed: Nov. 14, 2012 Date released: Jan. 6, 2015 Type: Employer’s withholding, failure to file complete return, corporate income Amount: $15,812 O Savage Biomechanics Inc. 7027 Mill Road, Suite 201, Cleveland Date filed: Nov. 10, 2011 Date released: Jan. 7, 2016 Type: Employer’s withholding Amount: $7,129 Perz Masonry Inc. P.O. Box 30367, Cleveland Date filed: March 26, 2007 Date released: Jan. 7, 2016 Type: Employer’s withholding, unemployment, failure to file complete return Amount: $31,535
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Rite Beverage Inc. Kinsman Shoprite 12807 Larchmere Blvd., Suite 3, Shaker Heights Date filed: May 15, 2015 Date released: Jan. 7, 2016 Type: Employer’s withholding, unemployment Amount: $5,799
Ten Industry Corp. 10 Industry Drive, Bedford Date filed: Sept. 26, 2011 Date released: Jan. 25, 2016 Type: Employer’s withholding Amount: $7,956
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Ridgewood Preschool Inc. 4550 W. Ridgewood Drive, Parma Date filed: June 4, 2014 Date released: Jan. 7, 2016 Type: Employer’s withholding Amount: $5,231
Santillo Construction of Ohio LLC 5600 W. Pleasant Valley Road, Parma Date filed: July 26, 2006 Date released: Jan. 6, 2016 Type: Unemployment, partnership income Amount: $8,579
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Tenpenny Asset Management Co., AKA Tenpenny Asset Management Trust 7264 River Road, Olmsted Falls Date filed: July 25, 2006 Date released: Jan. 25, 2016 Type: Individual income tax return Amount: $1,619,829 Tom Paige Catering Co. 2275 E. 55th St., Cleveland Date filed: Aug. 19, 2014 Date released: Jan. 25, 2016 Type: Employer’s withholding Amount: $20,298
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BCG’s Akron commitment is solidified with new site BY DAN SHINGLER dshingler@crain.com @DanShingler
The city of Akron planted the first seeds of occupancy at its 76-acre White Pond Office Park on Wednesday, April 20, as the accounting firm BCG & Co. and Cedarwood Development broke ground on what they said will be a 34,500-square-foot building when it’s completed later this year. The city won’t get any new employees right away; BCG has been based in Akron’s Merriman Valley since it was formed in 1986 and is moving. It has grown from six employees to more than 120 along the way, firm co-founder and managing director Dave Brockman told a crowd of media and well-wishers that included Mayor Dan Horrigan and other cabinet-level city officials. New jobs likely will come later, though. Brockman said BCG can add 60 more employees to the space it is building, and it has an option to add 25,000 square feet at the site. The company is not only an accounting firm, but it deals with information technology, which it said has been a key to its growth and still drives it today. The office building is being devel-
oped by Cedarwood Development, an Akron-based commercial real estate development company, with support from the city of Akron, Cedarwood Architecture and Tri-C Construction Co.
“Thank you for saying ‘I want to stay in the city of Akron.’” — Dan Horrigan mayor, Akron
The city is providing infrastructure at the graded site, including roads, water, sewer, utilities and fiber-optic lines, in return for Cedarwood Development and BCG agreeing to keep the accounting firm in the city, said Akron deputy mayor and head of economic development Samuel DeShazior. BCG will, for the first time in years, be able to get all its people under one roof. They are currently working from three separate buildings, Brockman said.
The city is hoping the arrival of BCG will spur others to come to the site, which sits across the street from FirstEnergy’s large, multistory office building on White Pond Drive. That’s what DeShazior thinks will happen. He said the entire site is construction-ready, and there’s space for about 10 or 12 more projects at the office park, depending on their size. The site has easy access to I-77 and, thanks to an adjacent rail line and right-of-way, it also has highspeed, fiber-optic communication cable, DeShazior said. Its location, and especially its easy highway access, also were cited by Brockman as reasons his firm chose the site — and thinks it will be easy to recruit new talent to the location. While he would not yet disclose details, DeShazior said there will likely be future announcements of additional occupants. “We’ve got a couple in the pipeline,” he said. Horrigan said his administration plans to be pro-development and work with more businesses like BCG to attract and keep them in the city. “Thank you for saying ‘I want to stay in the city of Akron,’ ” Horrigan told Brockman at the groundbreaking.
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Crain’s Cleveland Business received five awards, including three awards of excellence, in the Society of News Design’s 37th annual competition. “This recognition shows the tremendous strides that Crain’s Cleveland Business has taken in its visual storytelling the past few years, thanks to the leadership and vision of art director Rebecca Markovitz,” said publisher and editor Elizabeth McIntyre. Markovitz won awards of excellence in the page design category for covers she created for the annual Book of Lists special edition and for special reports on the preparations
underway for the Republican National Convention and on the food industry in Northeast Ohio. Additionally, Crain’s Cleveland Business was recognized with two other awards in the page design category, one for staff portfolio and the other for Markovitz’s individual portfolio. The Society of News Design is an international nonprofit organization for news media professionals and visual communicators. The 2015 SND award winners were selected from a field of nearly 9,000 entries submitted by newspapers and websites around the world.
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It’s time to rebuild Despite having been ravaged by the Great Recession, many Northeast Ohioans agree that Cleveland and Akron are on an upward trajectory. Both cities have seen some long-forgotten neighborhoods reinvigorated with fresh development. Young professionals are eager to live in the cities’ downtown districts. The idea of Cleveland and Akron collaborating for the betterment of the region is no longer a foreign concept but a real possibility. In this Crain’s special report, we explore what it will take to maintain and accelerate that momentum.
REBECCA R. MARKOVITZ
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REBUILDING CLEVELAND & AKRON
Collaboration takes center stage Fading is the frosty relationship between Akron and Cleveland BY JAY MILLER jmiller@crain.com @millerjh
The punchline, “very carefully,” to the joke question, “How do porcupines mate?” could also apply to the more serious question, “How will the Cleveland and Akron areas collaborate to build the regional economy of the 21st century?” More than a century of independent industrial growth and a recent rivalry or two — some in Akron still don’t forgive Cleveland for wooing the Cavaliers from Richfield in Summit County to downtown Cleveland — have kept the two largest cities in Northeast Ohio from working more closely on bringing new jobs and economic growth to the region. But that appears to be changing. Akron Mayor Dan Horrigan and Cleveland Mayor Frank Jackson are scheduled to meet in May. No agenda is set but it will mark the first time in recent memory that the mayors of the two largest cities in Northeast Ohio have sat down together oneon-one. The first step in this détente came in March, two months after Horrigan took office, elected to a full term to replace long-time mayor Don Plusquellic, when staff members from the planning departments of both cities met at Cleveland City Hall to discuss common zoning issues. Hunter Morrison, who served as Cleveland’s planning director under mayors George Voinovich and
Michael White until 2002, attended that meeting and remarked later that in his 20 years in that office he had never met his Akron counterpart. Like a number of other business and nonprofit leaders, Morrison, who now is working to improve collaboration across Northeast Ohio, believes that the Akron and Cleveland metropolitan areas are at the center of what has become a single regional economy, not separate local economies, and that the two communities must learn to work more closely together to grow in the global economy. “The job market, the entertainment market, the shopping market; all of those things are much more regional in nature,” he said.
The slow crawl David Abbott, executive director of Cleveland’s George Gund Foundation and a member of the executive committee of the Fund for Our Economic Future, a collaboration of Northeast Ohio philanthropies that works on regional issues, agrees, though he thinks collaboration will move slowly, in part because a meeting of two mayoral minds is only a beginning. “Northeast Ohio is complicated by a multitude of entities, not just Akron and Cleveland,” he said. “It’s not just the culture of working together across political divides, but having the (business) sectors working together on issues like (preparing people for jobs) and ac-
cess to jobs.” The two mayors also have to overcome a spotty past. Though regional economies have come to be known by the name of their largest city, former Akron Mayor Don Plusquellic, who led the city for 28 years, was openly hostile at times to the notion that Akron should accept a co-starring, not starring role, in an economy. “It’s got to be (a situation) where both parties come to the table feeling comfortable with each other and feeling respected by each other,” Morrison said. “That’s been an issue in the past.” For their part, the two current mayors are approaching their upcoming meeting cautiously. Horrigan, in a recent interview, said he’s starting by working to change the tone of his city government to be more collaborative. “Working regionally with cities like Cleveland, Youngstown and Canton, those are easy sells” for him, he said. Horrigan believes, for example, that Akron can learn from how Cleveland has nurtured its downtown residential development, a success story he believes Akron can emulate. Ken Silliman, Mayor Jackson’s chief of staff, said any public discussion of what the two mayors may talk about needs to wait until after the meeting. But he said his boss has spoken often about the value of communities working together. “Mayor Jackson has said that all of us in the region have a shared interest in maintaining existing employers and in attracting new employers to the region, and we should not be tripping over each other or getting in the way of making an arrangement
to keep a major employer or attract a new one by sparring with each other,” Silliman said. Morrison also believes his more recent work is helping to breach the divide. Since 2011 Morrison has been director of the Northeast Ohio Sustainable Communities Consortium, a federally funded program to develop coordinated planning efforts for a 12county region of Northeast Ohio that stretches from Lorain to Akron to Youngstown to Ashtabula.
“It’s got to be (a situation) where both parties come to the table feeling comfortable with each other and feeling respected by each other.” — Hunter Morrison director, Northeast Ohio Sustainable Communities Consortium
That group’s 2014 study, “Vibrant NEO 2040,” argues that the current pattern of development in Northeast Ohio, with so many independent fire departments, water systems and residential growth goals, will not generate sufficient new tax revenue to maintain existing services in a sprawling region.
It advocates strongly for greater collaboration among cities and counties to lower the cost of government services. Recently, Morrison pointed out that the region has a handful of independent public transit systems that move people around within their own county but rarely move people from their home city to job centers in neighboring counties. He noted that while an Akron resident can take an Akron Metro bus to a job in downtown Cleveland, Greater Cleveland RTA, which operates independently, doesn’t run in the other direction. The Federal Reserve Bank of Cleveland, in a study last November, “A Long Ride to Work: Job Access and Public Transportation in Northeast Ohio,” found that the Akron and Cleveland metro areas “rank below average for job access via public transit, suggesting a lack of coordination between groups making decisions about economic development, transportation, housing, and workforce development. It also suggests a missed opportunity to build upon regional assets.” Morrison said that when several leading transportation consultants were advising him on what transit recommendations should be included in the “Vibrant NEO 2040” study, he asked them where to start. “The starting point, they said, is to connect the biomedical network that runs from downtown Cleveland to University Circle in Cleveland to the biomedical center in Akron,” he recalled. “You’ve got people you’re attracting into those labs and firms, millennials who are more predisposed to public transit, so start to connect those 21st century assets with a 21st century transit system.”
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REBUILDING CLE AND AKRON
Downtown living has potential to energize region’s urban centers But even as downtown housing stock grows, challenges remain
BY STAN BULLARD sbullard@crain.com @CrainRltyWriter
Tony Troppe, an Akron real estate owner and developer, pushed up a window at his Cascade Lofts apartments near downtown Akron to let in the sound of water trickling through a nearby part of the Ohio and Erie Canal. Meantime, near the site of the canal’s Lock 44, where the original canal ended, residents who are paying some $2,000 monthly for new apartments at the Flats East Bank Neighborhood in downtown Cleveland look out their windows to see ore-carrying lakers and barges on the Cuyahoga River. The numbers of suites, residents and approaches vary in the two cities linked by the canal. But both find attracting residents, whether they are millennials who may eschew cars or empty nesters seeking a change, is a linchpin to efforts to
revitalize their urban cores following decades of post-World War II suburban sprawl. Neither effort is particularly new, and both are taking long to bear fruit. Still, signs of impact abound. In downtown Cleveland, the period since 2011 has been transformative on the residential side. Since 2011, 1,700 apartments were added, boosting the population to 16,000. “It’s been a changed world,� said Michael Deemer, vice president of Downtown Cleveland Alliance. “We’re always asked about the downtown population. Large and small office users are much more aware of general trends in downtown Cleveland. They are increasingly hearing from the workforce that they want to be downtown. We were lagging the national trend in businesses wanting to be downtown to attract talent. Now we’ve caught up.� The change in population also netted downtown attention from regional retailers, which led to the
opening last year of Geiger’s menswear, the Heinen’s supermarket and Metro, a furniture business. “They’re the leading edge to change retailing downtown,� said Deemer, calling attention to a change that will not be complete until national retailers return to the city center. “There are more people on the street during the day, from millennials to empty nesters as well as families with strollers.� In downtown Akron, Troppe said that when he undertook his first building renewal project at the Everett Building, 39 E. Market St., “The only people with us at night were people with their possessions in grocery carts. There weren’t the skinny ties and the stiletto shoes you see on people downtown today.� Troppe has also brought in businesses first by selling office condos in the Nantucket Building, a former strip club at 23 S. Main St., because he felt firms would be willing to show their support for the city with their own investments, added a jazz
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club and arts district as he accumulated a dozen buildings. Meantime, swing by the Cuyahoga Falls-based Testa Cos.’ NorthSide project, 21 Furnace St., which includes condominiums, townhouses and a Marriott Courtyard hotel to see a surprise. Lululemon Athletica, a prized national retailer, has set up shop at Northside Lofts. Downtown Akron and Cleveland both have benefited from the national surge in student housing which has remade areas near both the University of Akron and Cleveland State University. However, Cleveland has a larger stock of market-rate housing than Akron. Downtown Akron’s residential population was 2,600 in 2015 compared with 1,973 in 2013, the Downtown Akron Partnership (DAP) reports. Downtown Cleveland’s population of 14,000 in 2015 from just 6,484 in 1990, just before development of apartments downtown began to ram up. However, both share a key metric: high occupancy. Downtown Cleveland apartment occupancy is at 97% as of March, and it has remained high as units hit the market in unprecedented numbers the last three years, according to data from Downtown Cleveland Alliance.
“We are fashionably late to the game. Downtown housing is more recently recognized across the board as a need for our city and a means of catalytic growth to really diversify the economy.” — Suzie Graham, president and CEO, Downtown Akron Partnership
Likewise, Suzie Graham, president and CEO of DAP, said her office fields calls from people looking for rentals but knows they will have difficulty finding one as the downtown apartments have waiting lists. “We are fashionably late to the game,” Graham said. “Downtown housing is more recently recognized across the board as a need for our city and a means of catalytic growth to really diversify the economy.” Making projects such as Troppe’s and Testa’s more striking achievements is that the city of Akron does not offer tax abatement for residential construction. In downtown Cleveland, full property tax abatement for 15 years has been a staple for developers since the 1990s. Troppe, a suburban home builder who decided working downtown made more sense, uses his own crews and creativity to finance his projects as well as federal and state renovation tax credits. The Cascade Lofts, 24 units in the 1904-vintage Swinehart Brewery building at 23 W. North St., cost $4 million to develop. However, both cities have a stock of buildings that are old enough to qualify for federal and state historic credits that are essential to giving office buildings, apartments or hotels over age 50 a new lease on life.
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The need for replacing obsolete office space with apartments is a common thread in both cities. In 2009, amidst the recession, the rise in vacancy along East Ninth Street in downtown Cleveland was such that DCA, with support from the city’s brokerage community and building owners, the city and other stakeholders recast it as a “live-workplay area.” Three empty skyscrapers that dominated the scene then are now bustling with activity from office tenants new to the city, apartments, a Marriott Signature hotel, The Metropolitan and Heinen’s. In Akron, the office market, which may fuel the live-work-play movement and office-to-apartment conversions downtown, is suddenly a challenge. Gary Rickel, a CBRE Group Inc. vice president who specializes in Akron office space, said the central business district made it through the Great Recession but is now getting hit with vacancy, from tenants moving to the suburbs, the shale fracking downturn, and mergers and acquisitions. “The whole market has done a reversal,” Rickel said, as suburban Akron office vacancy exceeded that of downtown for years until this year, when suburban vacancy fell to 13% while downtown vacancy climbed to almost 24%. Rickel, who was founding chairman and a long-time board member of Downtown Akron Partnership, said conversion to apartments may be the solution. “We have missed opportunities for creating a live-work-play atmosphere,” Rickel said. “We’re about five years behind the curve. We now have a lot of people interested in doing downtown housing. The two cities are also in different places in establishing rents that are
high enough to support ground up construction. After 30 years of adding downtown rentals, apartments at The 9 and the Flats at East Bank, topof-the-line rents are now reaching the $2 a square foot range in downtown Cleveland. Troppe, however, said market-rate apartments in Akron are at about $1.10 a square foot — which would take a leap of faith to see additional construction. Downtown Cleveland’s challenge will be keeping the momentum going without overbuilding. Scott Wolstein, whose family and Fairmount Properties recast the north end of Old River Road in a mixed-use project, said support from a variety of demographic groups and rents have exceeded expectations, though he would not disclose rents directly. He expects the 90% leased Flats at East Bank to be full by May and believes the market will continue to grow. “Our downtown population is anemic,” he said. “As you create more of a market, there will be more people who will want to live there.” Growth of the downtown Cleveland market has apartment owners varying their strategies to attract different tenants. For example, K&D Group plans to install bonus-sized suites at the Halle Building, 1228 Euclid Ave., that are designed to attract older couples shedding suburban homes while lakefront developers Cumberland Group of Cleveland Trammell Crow Co. of Dallas, are planning with young families to reach a different demographic. The risk to both markets is that overbuilding apartments nationally prompts lenders in Northeast Ohio to scale back, even though apartment production in Northeast Ohio is far lower than in other metropolitan areas.
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REBUILDING CLEVELAND Downtowns are nice — if you’re a tourist. But most city residents live in neighborhoods, and Akron and Cleveland have some great ones. Some are up and coming after years of blight and neglect, others are holding onto the same hip and trendy status they seem to have had forever. Most of the neighborhoods in Akron and Cleveland face a common challenge. They’re all part of cities that have lost substantial portions of their populations and are confronted with old, often blighted properties.
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For almost as long as anyone can remember, the Highland Square neighborhood, which hugs West Market Street just northwest of downtown, has been Akron’s cool place to go. “In the ‘50s, the muscle cars and the greasers used to cruise Highland Square,” said Phillip Nabors, a longtime resident and businessman. Recently, the neighborhood has attracted enough new bars, restaurants and other businesses to attract new residents. Nabors is a big reason for that. He’s been a resident of Highland Square for almost 50 years — and today he’s also probably the neighborhood’s most important business owner and landlord. Nabors and his wife, Margaret, opened Highland Square’s Mustard Seed Market, their third, in 2015. Before that, he developed a strip of real estate along West Market Street into the neighborhood’s prime retail district. In the process, he has given the neighborhood a full-service grocery and an attached café that has already come to serve as a de facto town hall for everyone from neighborhood advocates to Akron city officials. “They (the Nabors) took a lot of risk and have thrown themselves completely into making it a successful venture — and the whole community has benefitted,” said Akron City Councilman Rich Swirsky, who represents the neighborhood. “The Mustard Seed is kind of like everyone’s front porch or community living room.” Nabors also brought in Wally Waffle — a locally owned restaurant, along with other retail shops to the south side of West Market Street — where he considers himself the neighborhood “curator.” “Highland Square is now, I think, a model neighborhood, because of the density you find at the corner of West Market and Portage Path today,” said Kyle Kutuchief, Akron program director for the Knight Foundation. In fact, today Highland Square has a problem many other neighborhoods would envy — there’s not enough cheap retail space, said Katie Carver Reed and Anita Marron of the Highland Square Neighborhood Association. “The challenge for this neighborhood is to get a good eclectic mix of stores and things like that,” Marron said. “We do pretty well, but there’s not enough space.” Still, many residents say they wouldn’t live anywhere other than “Akron’s best neighborhood.” They’re happy to show it off, too — during Highland Square’s PorchRokr festival in August — when more than 100 bands will be playing on porches around the neighborhood. Last year, more than 7,000 people came to the event.
OHIO CITY, CLEVELAND You’ve have to be living in a cave not to know that Ohio City is one of Cleveland’s coolest neighborhoods. And even then, the cave would probably have to be far out of town. It’s been a mecca for urban pioneers, hipsters and just about anyone who loves good food and beer. The West Side Market and Great Lakes Brewery, along with restaurants like Heck’s, have anchored the neighborhood for decades. But, recently, they’ve gotten some help as the community has built a critical mass of both residents and amenities, said Ashley Shaw, economic development and property manager for Ohio City Inc. The neighborhood has an enviable problem. With the market, the brewery and a vacancy rate in the market district that has dropped from 34% to 2% since 2013, it has no shortage of amenities or people that want to live near them. What it needs now, Shaw said, is more housing — and it’s getting it. ““We did a study in 2013 that said we could support, immediately, 1,800 units of new housing — we have about 900 under development right now,” Shaw said. She points to places like the new Mariner’s Watch apartments near West 31st Street, the Edge 32 apartments going in at West 32nd and Detroit, and the granddaddy of them all, Snavely Group’s 240-unit development at the key intersection of West 25th and Detroit. “There’s been a critical mass that’s been reached and you’re starting to see some real development taking place,” Shaw said.
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& AKRON While their solutions to these problems vary, they do have one thing in common: All of the neighborhoods that are making their way back have a core of committed residents working not just to improve their own homes and lives, but to better their entire communities. Crain’s explored a few of the region’s neighborhoods and talked with those — Dan Shingler charged with shaping their future. Here’s what we found.
photo by: Kevin Reeves
NORTH HILL, AKRON Here’s a neighborhood that only had to look to its past to find its future. It has had its ups and downs over the years — and there was a time when much of the community was known mostly for its prostitutes, rough bars and dangerous streets. But today, North Hill seems to be on its way back, and many say it’s because of the Bhutanese. Tens of thousands or ethnic Bhutanese have been in refugee camps, mostly in Nepal. The United States is one of the nation’s that has agreed to take some of them in and resettle them — and North Hill is one of the neighborhoods to which the U.S. State Department sends them. “They have 90 days to become self-sufficient,” said Elizabeth Walters, community outreach coordinator at the International Institute of Akron. She knows, because her organization is charged with making sure they have jobs, housing and are off government support in the allotted time. The Bhutanese are not only succeeding, they’re reshaping their neighborhood, along with some Hispanics and a few other ethnic populations. At an estimated 4,000 strong, the Bhutanese are the largest of the new groups. They’re also, often, small business people, and today North Hill boasts some great restaurants. That includes the place just about everyone says is a must-try: the Nepali Kitchen on Cuyahoga Falls Avenue. There, the heat is measured on a scale of one to five, there’s always a Bollywood flick on the television, and longtime locals share the small dining room with new immigrants.
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NOVEMBER 23 - NOVEMBER 29, 2015 Allyson O’Keefe started her legal career at Porter Wright in 2004 after completing a summer internship there as a Case Western Reserve University law student. Since then, she has worked on many significant deals across Cleveland, including Flats East Bank, The Metropolitan at the 9, Uptown in University Circle and Steelyard Commons, and has been promoted to real estateALLYSON partner. O’KEEFE, 37 “Young professionals who live downtown are so excited about the city,” said O’Keefe, a Partner; Porter Columbus native who lived downtown forWright 10 years before moving to Rocky River. “The ones who aren’t from here are often more excited about it. When you move here from somewhere else, you don’t for granted.” VOL. 36, NO. take 47 it Allyson NOVEMBER 23 - NOVEMBER 29, 2015 O’Keefe started her legal career at Porter Wright in 2004 after completing a sumWhen O’Keefe is not working or spending time with her husband and two children, she can mer internship there as a Case Western Reserve University law student. Since then, she has be found volunteering on the boards of nonprofit organizations and watching college football. worked on many significant deals across Cleveland, including Flats East Bank, The Metropolitan at the 9, Uptown in University Circle and Steelyard Commons, and has been proWHAT INSPIRES YOU ABOUT YOUR WORK? moted to real estateALLYSON partner. O’KEEFE, Just seeing what Cleveland has gone through in the time that I’ve 37 been here, there’s obvious“Young professionals who live downtown are so excited about the city,” said O’Keefe, a ly a lot of excitement around real estatePartner; development. I started in 2004 when we were crazy Porter Columbus native who lived downtown for Wright 10 years before moving to Rocky River. “The ones busy with development. That was sort of the boom from ’04 through ’08. I saw it go through who aren’t from here are often more excited about it. When you move here from somewhere the downturn, then I saw it rise again, even stronger than before locally. else, you don’t take it for granted.” Allyson O’Keefe started her legal career at Porter Wright in 2004 after completing a sumWhen O’Keefe is not working or spending time with her husband and two children, she can mer internship as a Case Western Reserve University law student. Since then, she has WORKED ON there ARE MIXED-USE URBAN PROJECTS. IS MANY OF THE PROJECTS YOU be found volunteering on the boards of nonprofit organizations and watching college football. worked on many significant deals across Cleveland, including Flats East Bank, The THAT AN AREA OF EXPERTISE? Metropolitan at the 9, Uptown in every University and Steelyard Commons, and has been proYes, definitely. Real estate is extremely interesting because deal Circle is differWHAT INSPIRES YOU ABOUT YOUR WORK? moted to real estate ent. You can never get bored because there’s so partner. much variety there, from tax Just seeing what Cleveland has gone through in the time that I’ve been here, there’s obvious“Young who live downtown so excited about the city,” said O’Keefe, a credits to historic renovations, from professionals ground-up development to rehab, are from ly a lot of excitement around real estate development. I started in 2004 when we were crazy mixed-use to residential. Columbus native who lived downtown for 10 years before moving to Rocky River. “The ones busy with development. That was sort of the boom from ’04 through ’08. I saw it go through who aren’t from here are often more excited about it. When you move here from somewhere the downturn, then I saw it rise again, even stronger than before locally. else, you LEADERSHIP don’t take it for granted.” HOW WOULD YOU DESCRIBE YOUR STYLE?
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Why not? COLLINWOOD, CLEVELAND The Collinwood neighborhood east of downtown Cleveland has not always been known as a desirable neighborhood. But today, its Arts District along Waterloo Road, is one of the city’s best places to hear live music, grab a meal or see some of the city’s best new art galleries. A $5.5 million streetscape project completed by the city, along with private investments by Cleveland entrepreneurs like former ad man Alan Glazen, have boosted development over the past couple of years. That’s resulted in new businesses opening along Waterloo — from art studios, workshops and galleries to new restaurants and clubs like Packy Malley’s, Citizen Pie and The Millard Fillmore Presidential Library (not what it sounds like) opening over the last year. If you go to Waterloo Road on the first Friday evening of any month, you’ll likely find hundreds of young people and art lovers prowling the street on one of the district’s popular “Walk All Over Waterloo” art walks. It wasn’t that way back in 2000, when partners Cindy Barber and Mark Leddy opened the Beachland Ballroom in a former Croatian social club. “My husband would go to the gas station at 5 in the morning and he would get solicited by prostitutes and have crack dealers in his face,” Barber said of the ‘80s and ‘90s. Today, things have improved, but the neighborhood remains eclectic, maybe even a bit edgy — and that’s fine by Barber. “The whole idea of this neighborhood is to center it around original ideas and make sure the people who are coming here can afford the space that they’re in and potentially buy that space,” Barber said. “We don’t want to be landlord-driven.” Amy Callahan is executive director of Waterloo Arts, a nonprofit that helps build the neighborhood’s arts community and runs a gallery on Waterloo Road. She said she also has seen the neighborhood improve steadily since she took her present post in 2008. “Oh my god, it’s changed tremendously. So many of these shops and galleries weren’t open. … It didn’t look anything like this a couple of years ago,” Callahan said. There’s more to do, though — and more to come. For instance, Barber said a Slovenian social hall, just down the street from the Beachland Ballroom, has been purchased by an investor who hopes to turn it into another music venue. Those who have come to Waterloo, so far, said they’re glad they did. That includes John Farina, who opened the Maria Neil Art Project gallery on Waterloo in 2013. “It’s always challenging to revitalize a neighborhood that hit the kind of places that this neighborhood had, but there are a lot of really committed and dedicated people who are doing great things here,” Farina said.
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O’KeefeI expect is not working or spending timeI work, with her husband and two children, she can I definitely believe in leadingWhen by example. the people with whom MANY OF THE PROJECTS YOU WORKED ON ARE MIXED-USE URBAN PROJECTS. IS be found volunteering on the very boards of nonprofit and watching college football. my associates, to work hard, and they see me working hard. For me, it’sorganizations all THAT AN AREA OF EXPERTISE? about working hard and doing good work. Yes, definitely. Real estate is extremely interesting because every deal is differWHAT INSPIRES YOU ABOUT YOUR WORK? ent. You can never get bored because there’s so much variety there, from tax Just WHAT seeingWAS whatITCleveland has gone the time that I’ve been here, there’s obviousWHAT OTHERS ARE SAYING: LIKE TO WORK WITHthrough O’KEEFEinON credits to historic renovations, from ground-up development to rehab, from ly a lot of excitement around real estate development. I started in 2004 when we were crazy THE FLATS EAST BANK PROJECT? mixed-use to residential. busy with development. of the boom from ’04 through ’08. I saw it go through “Allyson is extremely bright and quick witted, butThat whatwas trulysort distinguishes her the downturn, then I saw itpeople rise again, even from most successful attorneys is her exceptional skills. Shestronger has an than before locally. HOW WOULD YOU DESCRIBE YOUR LEADERSHIP STYLE? uncanny ability to encourage the ‘adversaries’ in her negotiations to work in I definitely believe in leading by example. I expect the people with whom I work, OF THE PROJECTS YOU WORKED concert with her to achieve win/win MANY solutions to difficult problems,” said ON ARE MIXED-USE UR my associates, to work hard, and they see me working very hard. For me, it’s all THAT AN AREA EXPERTISE?of the Scott Wolstein, CEO of Starwood Retail Partners andOF co-developer about working hard and doing good work. Yes, definitely. Real estate is extremely interesting because every deal is differFlats East Bank project. ent. You can never get bored because there’s so much variety there, from tax — Lee Chilcote WHAT OTHERS ARE SAYING: WHAT WAS IT LIKE TO WORK WITH O’KEEFE ON credits to historic renovations, from ground-up development to rehab, from THE FLATS EAST BANK PROJECT? mixed-use to residential. “Allyson is extremely bright and quick witted, but what truly distinguishes her successfulInc. attorneys is reserved. her exceptional people skills. She has an Reprinted with permission from the Crain's Cleveland Business. © 2015from Crainmost Communications All Rights YOU DESCRIBE YOUR LEADERSHIP STYLE? HOW WOULD ability to encourage the ‘adversaries’ in her negotiations to work in Further duplication without permission is prohibited. Visituncanny www.crainscleveland.com. #CC15040
I definitely believe in leading by example. I expect the people with whom I work, concert with her to achieve win/win solutions to difficult problems,” said my associates, to work hard, and they see me working very hard. For me, it’s all Scott Wolstein, CEO of Starwood Retail Partners and co-developer of the about working hard and doing good work. Flats East Bank project.
— Lee Chilcote WHAT OTHERS ARE SAYING: WHAT WAS IT LIKE TO WORK W THE FLATS EAST BANK PROJECT? “Allyson is extremely bright and quick witted, but what truly distinguishes her successfulInc. attorneys her exceptional people skills. She has an Reprinted with permission from the Crain's Cleveland Business. © 2015from Crainmost Communications All Rightsisreserved. ability to encourage the ‘adversaries’ in her negotiations to work in Further duplication without permission is prohibited. Visituncanny www.crainscleveland.com. #CC15040 concert with her to achieve win/win solutions to difficult problems,” said Scott Wolstein, CEO of Starwood Retail Partners and co-developer of the Flats East Bank project.
Reprinted with permission from the Crain's Cleveland Business. © 2015 Crain Communications Inc. All Rights reserved. Further duplication without permission is prohibited. Visit www.crainscleveland.com. #CC15040
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Foundations play a vital role in the region’s rebirth BY LYDIA COUTRE lcoutre@crain.com @LydiaCoutre
Foundations are often in a good position to be nimble and responsive to the community, able to take risks businesses or governmental entities cannot. They aren’t accountable to stockholders, and don’t have to worry about reelection or making quarterly numbers. And as Cleveland and Akron continue to recover from the doldrums of the Great Recession, Northeast Ohio’s community foundations’ entrepreneurial spirit is more important than ever. Foundations can serve major roles in the revitalization of a region, said TeleangĂŠ Thomas, director of the Midwest for the Foundation Center, which serves as a source of information about philanthropy worldwide. They can bring awareness to communities where developers aren’t pouring in money, take on risks on behalf of the community and invest in the people where economic development is happening. “I think foundations really pose a great perspective in keeping the conversation balanced and also bringing the data forward to help the community understand at a greater level what the implications may be,â€? Thomas said. The Cleveland Foundation, in particular, has been one of those risktakers. During the recession, for example, the foundation helped launch a series of for-profit, employeeowned companies called the Evergreen Cooperatives, which employed people who had a tough time getting jobs otherwise. “So we can be the risk capital for the community to do proof of concept to basically say, “Come on in, the water’s fine,’â€? said Cleveland Foundation president and CEO Ronn Richard. “We took the risk. Now we’ve lowered the risk bar for the corporate and government sectors.â€? In addition, during the downturn, the foundation “kept the wheels on the busâ€? for many social services, Richard said. The foundation gave $1 million to the local food bank, supported a homeless shelter and offered free dental clinics and other medical services. Meanwhile, the Akron Communi-
ty Foundation changed its grantmaking philosophy during the recession, encouraging community organizations to focus their requests on what they need to keep the lights on rather than touting innovative programs. “We went to a lot of those organizations and said, “OK, we’re going to get down to wanting to support basic human needs in the community,’� said John Petures, the foundation’s president and CEO. “It had to be a priority.� Foundations often can find a cheaper, faster test of an idea. What they discover from that test can help inform longer term investments, said Kyle Kutuchief, the Akron program director for the John S. and James L. Knight Foundation. For example, the Knight foundation recently spent a few thousand dollars to place Adirondack chairs, a prefab cabin and a fire pit in Cascade Plaza in downtown Akron to see if it would bring people out of their offices and experience downtown in a new way. The goal, Kutchief said, is to help people reimagine what the downtown business district could be. New ways to present the plaza, which doesn’t currently offer spaces for people to gather, could be a step toward improving the area and therefore helping attract and retain talent for businesses. “The only way we’re going to keep employers in downtown Akron is to make their employees love working there,� Kutuchief said. “The purpose of the prototype is to prove the value of the work.� Foundations’ independence allows for them to take on risk, but they must keep in mind the flip side, said David Abbott, executive director of the George Gund Foundation. It can be dangerous for foundations to view themselves as a sole leader or director in community initiatives. “Foundations are unelected private bodies that are in many ways unaccountable,� he said. “Those aren’t the best characteristics for broadly based public leadership.� Collaborative leadership roles are key with other foundations, businesses, governmental entities and others, he said. The public and other organizations generally don’t criticize foundations, as they’re often looking to receive grants at some point. “Because of that phenomenon that we tend to get only praise, if we
are the active decision makers solely in any kind of process, we’re denied the kind of critical feedback loop that makes for better decisions,� Abbott said. Foundations can bring a longrange perspective to issues, Abbott said. He doesn’t see the most recent recession as a particularly significant point in the revitalization of the area. It was merely a more acute phase of issues the region has faced and addressed for decades — and will continue to tackle. The Gund Foundation and other local foundations helped fund the transformation of Cleveland’s Public Square in an effort to help the city and its businesses attract talent. “What we’re talking about is making Northeast Ohio more globally competitive, and competition will never end,� Abbott said. “Even if somehow we were widely acknowledged to be the most successful regional economy in the world, that doesn’t mean you stop.� In Akron, as a new administration settles in under the leadership of Dan Horrigan, the city’s new mayor, foundations are looking for ways to offer support. Christine Amer Mayer, president of the GAR Foundation in Akron, said supporting Horrigan’s economic development priorities will be a big focus this year. “We think that’s a really good place for us to lend some of our support and our credibility to help drive that forward,� she said. Richard, of the Cleveland Foundation, said the next step in continuing the momentum of the region’s revitalization is to resuscitate the city’s low income neighborhoods — a major strategic focus for the foundation. “We can’t have a prolonged renaissance and leave behind very geographically large areas of the core city,� Richard said. Foundations need to continue their role as thought leaders and share what they’re learning through their strategies to help the community move forward, Thomas said. It’s key that foundations anticipate what is next, she said, by staying engaged in the community and keeping “a pulse on what are those emerging needs or potential opportunities or challenges that may be on the horizon for cities, for neighborhoods, for communities.�
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Mending Northeast Ohio’s broken bones BY RON RUTTI clbfreelancer@crain.com
Maybe the most fundamental factor to keeping the region’s rebound going is the health of its infrastructure. Much of Northeast Ohio’s infrastructure is concealed in the form of underground pipes that carry drinking water, storm water and waste water to and from industry, businesses and homes. That leaves it to the bridges and roads to provide a hint of the conditions below. In parts of this region, the wear and tear is disturbing. “Everybody agrees (repairs) are necessary, but the will to pay for them isn’t always there,” said Norb Delatte, chairman of the Civil and Environmental Engineering Department at Cleveland State. Still, all is not gloomy as some bigticket projects buoy spirits. Residents and business owners cheered in 2013 as the Ohio Department of Transportation opened the first of two new Innerbelt bridges. When a companion structure is completed this fall, five lanes of traffic will move freely in each direction through downtown, and Cleveland will have a pair of shiny symbols of rejuvenation at a cost of $566 million.
“It was the number one priority of our administration,” said Ken Silliman, Mayor Frank Jackson’s chief of staff. And a new road is coming. The West Shoreway along Lake Erie is being remade into a picturesque boulevard to improve access to Lake Erie. Although the $41 million conversion will not be finished until 2018, the project has spawned a combined $150 million in housing developments to the south. “It was the promise that created that environment,” said Jenny Spencer, managing director of the Detroit Shoreway Community Development Organization. Summit County is not left out. Later this year, ODOT will start reconstruction of Interstate 76 south of downtown Akron, work that Allen Biehl, ODOT’s District 4 deputy director said, “will reinvent the gateway into downtown Akron.” Joe Roman, president and CEO of the Greater Cleveland Partnership, applauds the projects and adds another that will have impact — the $331 million Opportunity Corridor project destined to link the end of Interstate 490 at East 55th Street in Cleveland with University Circle. He said the corridor will pass through an urban core ripe for investment in
housing, parkland and business. The big projects mask in a way basic defects in the region’s infrastructure such as potholes that jar commuters on their routes to work and basements that flood after storms. There is a lot to ponder in this region, faced with a dwindling return of dollars from the state and where tax increases are sought in growing numbers by local communities. In an ironic twist, eight Cuyahoga County city governments sued the Northeast Ohio Regional Sewer District in 2013 after the agency slapped on user fees to pay for a nearly $3 billion, 25-year project to reduce the amount of sewer water that flows into the lake by four billion gallons a year. The U.S. Environmental Protection Agency ordered the remedy. Last fall, the Ohio Supreme Court rejected the suit. The $35 quarterly household rate hikes will show up again on July bills. “You talk about roads and bridges, all that goes toward commerce and economic development,” said Julius Ciaccia, CEO of the sewer district. “In our case, it also supports the environment.” He warned more fixes are needed. Lines carrying sewage from homes to the agency’s interceptor are a community’s responsibility. Many are cracked, and storm water
PRESENTED BY
rushes in during heavy rains. Akronites already feel the pain of the EPA crackdown. The $1.4 billion cost of the correction there has spurred a 269% increase in user fees since 2010. Another hike is scheduled in 2021, said Chris Ludle, the city’s deputy service director. The 2014 water scare in Toledo, and the embarrassment in Flint, Mich., where residents were drinking water containing lead and other toxins, raised concerns whether those things can happen here. Darnell Brown, Mayor Jackson’s chief operating officer, said the city spent $650 million over 15 years on its water department, mainly for maintenance and improvements at the four treatment plants. Chief of Staff Silliman described the water system as “probably our strongest competitive advantage.” Officials maintain Cleveland is less vulnerable to the problem that befell Toledo when toxic algal bloom made tap water undrinkable for three days. Cleveland sits off a deeper basin of Lake Erie and its water intake points are at least three miles offshore. And Flint? Brown said Lake Erie is a superior water source than what Flint used and Cleveland puts the orthophosphate into its water to protect the inside of pipes from corrosion.
Meanwhile, studies have long given mediocre ratings to the condition of bridges and roads around the nation. The surfaces in Northeast Ohio reflect those reports. Michael Dever, Cuyahoga County’s public works director, said 20% of the county’s bridges are close to needing major work or replacement. Among the prominent structures is one on Hilliard Boulevard straddling Rocky River and Lakewood. “We basically have been putting Band-Aids on it,” Dever said. The county will determine soon if the bridge can be repaired. If not, even with 80% funding from outside sources, the county’s share of the estimated $50 million cost of a new span would wipe out a year’s bridge repair budget, Dever said. Cleveland seeks outside money for its road program. A problem here: No outside money is available for residential streets, which fall victim to the area’s freeze and thaw winter weather cycle just as the more traveled roads do. Brown said the administration and City Council want to resurface all city streets over 20 years, working on the worst first. They hope to commit $10 million a year to get it done. But getting that amount of money into the program has been a challenge in its early years.
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SPONSORED CONTENT
CIO OF THE YEAR: A LOOK BACK PRESENTED BY: 2016 CRAIN'S CIO OF THE YEAR WINNERS AND HONOREES
TERABYTE AWARD Matt LoPiccolo (above) Vice president, customer service and supply chain, Swagelok Company 2016 AWARD RECIPIENTS PUBLIC CATEGORY Sandy Rapp, Timken Co. PRIVATE CATEGORY Neil Weiss, Cleveland Indians
MCKINLEY WILEY
From left, Kevin Kleps, assistant editor, Crain’s Cleveland Business; Neil Weiss, SVP, technology and chief information officer, Cleveland Indians; Brandon Covert, director of information technology, Cleveland Browns; and Mike Conley, VP, digital and emerging technologies, Cavaliers Operating Co. LLC discuss how technology is changing the world of sports. The panel discussion was held prior to Crain’s CIO of the Year Awards event April 14 at Executive Caterers at Landerhaven.
A whole new ball game Technology is MVP of fan engagement s this the year for LeBron and the Cavs? Does the Tribe have enough lumber to get back to the postseason? Have the Browns finally found the right front office combination to turn it around? For Cleveland sports fans, once again, there are more questions than answers. One thing is certain: Technology will continue to be the MVP off the fields and courts. Tech leaders from the city’s big three teams put aside their playoff predictions earlier this month to share insights into how technology is revolutionizing the world of sports. The panel discussion, moderated by Crain’s Cleveland Business assistant editor Kevin Kleps, kicked off Crain’s 2016 CIO of the Year awards on April 14. While technology is playing an increasingly bigger role in many facets of team management, such as player analytics and performance monitoring, these industry insiders say some of the biggest strides are aimed at fans, changing the way they see, hear and even interact with their favorite teams. “It really is an experience to come to one of our games, whether it is the Cavs, the Indians or the Browns,” said Browns director of information technology Brandon Covert. “The game is the forefront, but we want that experience to be more than just the game.” Yes, that experience includes mega Jumbotrons
I
and state-of-the-art sound systems, but it is so much more. HDTV has created a more immersive environment for at-home viewers. In order to compete, stadiums, baseball fields and arenas have to provide home-like tech comforts, such as fullseating wi-fi; fast and reliable smartphone and mobile connections; and instant access to sports news, highlights and stats, according to Neil Weiss, senior vice president of technology and chief information officer for the Indians. Then there’s the role technology can and should play in taking some of the hassle out of attending big-time sporting events, like long lines at the concession stands. Last year, the Cavaliers began offering certain segments of fans the opportunity to order food and beverages from their seats via a “Cavs Eats” function on its app. Mike Conley, the Cavs’ vice president of digital and emerging technologies, said that although expanding the service beyond the arena’s lower bowl is not yet feasible — primarily because of the physical constraints imposed by the Q’s 22-year-old kitchen — the platform presents a great opportunity for deeper fan engagement. The Cavs, along with concession partner Aramark, are now trying to understand how they shift through those fan order histories and “really start to use that to personalize their
experience the next time they come into the stadium,” Conley said. Sleuthing aside, Twitter also gives fans a unique window to speak directly with teams, and they do. Whether the issue is wifi connectivity or a cold hot dog, venue guests are not timid about broadcasting their experiences — especially negative ones — to the Twittersphere. “Twitter has become the new ‘contact us’ email alias,” Conley said. “People go to Twitter to complain about an experience. The job for the team that is listening on game night is to get them offline as quickly as possible … get that conversation offline.” Conley’s tech team created a secondary “Q Assist” Twitter handle to wrangle complainers off its primary feed. It aims to respond to fan issues within five minutes, he said, and rectify within seven. On the horizon, virtual reality is a technology that — if properly harnessed – will provide another avenue for fan engagement. Covert said the Browns are already testing VR headsets as a tool for coaching and training players. Look for sports venues to one day offer them as enhancements to live events, allowing fans anywhere in the venue to sit courtside or stand on the mound. “We are on the 20-yard line in terms of making (live-stream VR) a reality from the technology operational standpoint,” Weiss said, “but it’s coming. The question is how we use it so that it is not just a gimmick.”
FOR MORE PHOTOS AND VIDEO FROM THE EVENT, GO TO www.CrainsCleveland.com/CIO
NONPROFIT CATEGORY Jerry Hourigan, Cuyahoga Community College GOVERNMENT CATEGORY Don Phillips, City of Cleveland RISING STAR AWARD RECIPIENT Anthony Joy, Cleveland Metroparks PROJECT OF THE YEAR CATEGORY Q IX Center Project Team Lead: Crystal Wilkie, IT director Project Members: Rusty Young, senior engineer, Samsung; Leonard Jenkins, engineer, Samsung; Robbi Price, operations coordinator, IX Center 2016 FINALISTS PUBLIC CATEGORY Q John Fleischer, CBIZ Q Sherry Neubert, Goodyear Tire & Rubber Co. PRIVATE CATEGORY Q Tony Casanova, ExactCare Pharmacy Q Kathy Golden, OEC NONPROFIT CATEGORY Q Tom Furnas, ideastream Q Greg Kall, Summa Health System Q Dan Strom, Jewish Federation of Cleveland GOVERNMENT CATEGORY Q Matt Crowley, Cleveland Airport System Q Brian Kelley, Portage County PROJECT OF THE YEAR CATEGORY Q Cleveland Institute of Art Q FIT Technologies
CRAIN CONTENT STUDIO C l eve l a n d
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Business of Life
“Indians Live” hosts Jensen Lewis, left, and Al Pawlowski talk to a producer prior to a recent show at SportsTime Ohio’s downtown Cleveland headquarters. (McKinley WIley photos)
At showtime, they’re on their game BY KEVIN KLEPS Tom Farmer casually walked through Fox Sports Ohio’s massive production truck at Quicken Loans Arena. It was April 13, about a half-hour before the Cleveland Cavaliers and Detroit Pistons were set to tip off on the final night of the NBA regular season. The Cavs were resting four starters, but that didn’t make the next few hours any easier for FSO’s production crew. Farmer — who as executive producer of Fox Sports Ohio and SportsTime Ohio oversees the regional sports networks’ Cavs, Indians, Columbus Blue Jackets and Cincinnati Reds broadcasts — calls game night “controlled chaos.” When both the Cavs and Indians are playing, as they were on this night, there are two crews of about 30 working each broadcast. Fox Sports Ohio’s 53-foot-by-12-foot truck, which is housed in the bowels of The Q, is the game-night office of 15 workers. In the arena, there are nine camera operators, plus three robotic cameras, a stage manager and the five-person talent crew (announcers Fred McLeod and Austin Carr, reporter Allie Clifton, and pre- and postgame show hosts Jeff Phelps and Campy Russell). The SportsTime Ohio production setup is similar for the Cavs’ next-door neighbors, the Indians. To an outsider, the production truck at The Q seems like a blur, with monitors displaying almost every possible angle of the court, and producers yelling shorthand commands that only their coworkers can understand. To Farmer, who has been with the network since it launched as SportsChannel Ohio in 1989, it’s business as usual. “There’s a golden rule that I have,” he said. “That’s that we can have problems, and we will have problems just about every night, but as long as it doesn’t make it to air, then no-
body knows about our problems.” He’s proud to say that’s the case way more often than not with such glitches as a camera or microphone going down, or a quick fix that’s needed with the “Fox Box” — the onscreen score-and-time display that’s a broadcast constant. Half a mile away is another high-tech setup — Fox Sports Ohio’s 9,000-square-foot studio and production space on the second floor of 200 Public Square. The network moved into the 45-story building at the start of the year, which allowed it to finally bring its Fox Sports Ohio and SportsTime Ohio crews together under one roof. (STO had been using WKYC’s Lakeside Avenue studios for the past decade.) The new headquarters has two studios, both of which are often being used at the same time. The larger space, Studio A, is home to the Indians and Cavs pre- and postgame shows when the clubs are on the road. On April 13, “Drennan Live” was being filmed in its regular locale, the smaller-butstill-vibrant Studio B. Studio A has four layers of insulation and soundproofing, plus three levels of drywall to mask the surrounding sounds — a fitness center above it on the third floor and the ongoing construction of the 200 Public Square atrium that is right outside one of the studio walls. The new space has what Farmer said was a must — 18-foot-high ceilings, which allows the LED lighting grid to be located 12 feet off the ground and keep the space cool. The latter description also applies to the entire setup, which Farmer said is as state-ofthe-art as almost any regional network. “We have all these extra people because the shows have gotten so much larger,” he said. “The regional sports show has to be as close as you can to what the networks do. That’s what people expect.”
Above, Fox Sports Ohio executive producer Tom Farmer, right, talks to Cavs executive Dave Dombrowski, left, and “Cavaliers Live” host Jeff Phelps before a recent game. Below, producer Joe Ranyak, front, and director Dan Sevic are shown in Fox Sports Ohio’s broadcast truck at Quicken Loans Arena.
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BUSINESS OF LIFE
Source Lunch Oleg Fridman just got back from a year-long trip around the world. Fridman is one of the three guys who started ONOSYS, a food-ordering software company that was sold in 2012 to LivingSocial, which is best known for offering daily deals online. But in 2014, he and one of his colleagues, Dave Hurt, left to start a custom software development firm called Prototype1. After working at the same company for years, Fridman was a little bored. Now, however, he gets to create software for all kinds of companies. He can do that work from anywhere in world. So with his high-powered laptop in tow, he and his wife Brittany hopped on a plane in March 2014. They briefly lived in Vietnam, Germany, South Africa, Australia and Croatia. And they visited all sorts of other countries.
Oleg Fridman
“It was an adventure. Like I said, I was a little bored.”
TECHNOLOGY
— Chuck Soder
You say Prototype1 lets customers “touch, feel and play” with prototypes before you write much code. How does that work if the app hasn’t really been built? With mock data, it pretends to do what it’s supposed to do, but it doesn’t actually have to do anything. There’s no database behind it. There’s no API behind it. You click the continue button and it takes you to that page. … It actually acts as the exact app will act at all times. There’re no assumptions being made by the developers — who aren’t designers. … It’s super minimal. It’s something a front-end developer can do without having to involve a database guy. Is this a specific philosophy that you heard about somewhere, read about somewhere? The high-fidelity model, it’s from a book called “Inspired” by Marty Cagan. He wasn’t the first to invent it, but he did a really good job of laying it out. We really took that and ran with it. Prototype1 has four domestic employees and six foreign contractors. You’re largely virtual. What challenges have you faced with managing your remote workforce? Communication is one of the biggest ones — making sure everybody is accessible at all times they should be accessible
but also respecting that not everybody is accessible at all times. … The other is motivation. Somebody who’s literally in their own house … they need to feel involved, and that’s hard to do when you’re talking to them only via Slack or Hangouts or whatever. So we try to find ways to bring them in. One thing is we’re very transparent. … People like to know why they’re working on what they’re working on. I remember seeing your desk at ONOSYS. Do you still use a giant wall of computer monitors? At ONOSYS, I had eight. I’m down to just six, but one of them is 36 inches or something like that. … What’s funny is, I traveled, and in all that travel you have to work on a laptop. … So I ended up buying a new laptop. An upgraded, workhorse style laptop that weighed, like, 18 pounds. But I also picked up two USB monitors. Super light, super thin travel monitors. No matter what country I was in I had at least three monitors on me. It’s a habit that doesn’t die quickly. How has the local tech scene changed since the mid-2000s, when you were at Case Western Reserve University? Cleveland in general has definitely grown up. … People are now considering working for a small company rather than
having to graduate and say, “Oh, Progressive is hiring.” … We had a lot of people who left good, secure jobs at big firms to work at ONOSYS. I think that’s a cultural shift from where it was previously when everyone just wanted a secure job. What’s one thing you learned on your world tour? How different people deal with different scenarios. Vietnam is a great example. … Our base camp was Hanoi, where traffic laws don’t mean anything, 90% of people are on scooters and you get a haircut on the street as often as you get it in a barbershop. The people were genuine, and they were super nice, super friendly. … It had that small-town feel, but the city has 6, 8, 10 million people. LivingSocial has laid off hundreds of people over the past few years. You keep in touch with a lot of people at the local ONOSYS office. Has that office been affected? The answer is no. It has not impacted the ONOSYS Cleveland office because … we were allowed to set our own budgets based on the revenues we were bringing in. … Every time any LivingSocial news comes out, I get 10 emails … and the question is always, “Anybody at ONOSYS affected?” My answer every single time has been literally one word — “Nope.”
FIVE THINGS: FAVORITE ANIMAL ON AFRICAN SAFARI The cheetah. Also cool: leopards and dung beetles
FAVORITE CITY ON THE TRIP Cape Town. It has oceans, mountains and cities with lots of interesting neighborhoods. And it felt a lot safer than Johannesburg.
CAMERA I CARRY Nikon D800E
ON FULL-STACK DEVELOPERS Prototype1 doesn’t hunt for people who can start and finish a software project. “We want people who specialize and are really great at one thing.”
TEAM OF REFUGEES All three ONOSYS founders moved to the United States under refugee status. They were born in countries that had been part of the Soviet Union.
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The meal Pizza and salad combo with Diet Coke; grilled chicken salad with iced tea
The vibe Flour describes itself as a “rustic Italian kitchen.” They also try to stock their menu with local products “harvested at their seasonal peak,” according to the menu. “We wish to thank the farmers, producers and artisans who take special care and bring their chosen craft to our table.”
The bill $37.26, plus tip
20160425-NEWS--29-NAT-CCI-CL_--
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CRAIN’S CLEVELAND BUSINESS z APRIL 25 - MAY 1, 2016 z PAGE 29
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20160425-NEWS--30-NAT-CCI-CL_--
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z APRIL 25 - MAY 1, 2016 z CRAIN’S CLEVELAND BUSINESS
Frekol.com connects local artisans with local shoppers BY CHUCK SODER csoder@crain.com @ChuckSoder
Freddy Hill has “never sold anything of significance on Etsy” — even though it attracts millions of shoppers hunting for unique products. But almost every month, someone buys one of his leather handbags through a local website designed to connect local artisans with local customers: Frekol.com. Today, about 350 “makers” from throughout Northeast Ohio sell handmade goods through Frekol, which describes itself as a website that helps you buy “the incredible things your neighbors make.” Think of it as an online version of the Cleveland Flea. The website technically went live last July, for testing purposes. Frekol plans to come out of “beta” mode later this week, when it launches a feature that will allow visitors to buy goods with a credit card, said cofounder Trent Schulz. Today, they have to email the person who made the item and set up the transaction themselves. So far, Frekol has facilitated “hundreds of transactions,” Schulz said. Why would someone buy something through Frekol? If you’re looking to buy something unique, why not just go to Etsy? Or UncommonGoods.com? Or the “Handmade” page on Amazon? For one, it doesn’t make sense to ship some items across the country. Maybe it’s too big. Maybe it’s perishable or breakable. Or maybe it’s something you’d prefer to see and feel before buying. Plus, Schulz suggests that some people just want to shop local. He posed a question: If you’re in the market for handmade soap, who would you rather buy it from? Someone in Lakewood or someone in San Francisco? “You can relate to the guy from Lakewood. You want to support the guy from Lakewood,” he said. Schulz got the idea to start the company about two years ago, when he saw the cake at his nephew’s
This screengrab of products available on Frekol.com includes goods from Cleveland, Lakewood and Chardon. (Contributed photo) fourth birthday party: The top level was black and featured the Batman symbol. The bottom was red and blue and featured the Superman symbol. And the cake rested on a red disc covered in a circular web pattern — like the one on Spiderman’s outfit. Schulz asked his brother where he got the cake. Turns out, one of his wife’s friends made it at home. She had no storefront. So Schulz started wondering whether he could create one for people like her. Granted, she’s not one of the makers on the site, but you can buy cakes and other food items through Frekol, as well as clothing, furniture, jewelry and all kinds of knickknacks. Christine Cotter sells photo canvases that she makes in her attic. So far, she’s sold at least five of them through Frekol. The Cleveland resident now directs potential customers to her Frekol page. After all, most of her customers are local, and her canvases often feature local landmarks. She also likes to personally deliver her
creations when she can. Plus, it’s not like many people were visiting her page on Etsy, where she felt like “a needle in a haystack.” Freddy Hill also described Etsy as “a flooded market.” Frekol, on the other hand, helps his products stand out, even if the audience is limited to local shoppers. The local focus also would make it possible for his company, Freddy Hill Designs of Lakewood, to eventually sell its furniture through Frekol, since he wouldn’t be required to ship it across the country. If Frekol catches on in Cleveland, Schulz plans to give people in other cities a way to buy creative products from creative people in their own towns. Hill noted that Schulz has “an uphill battle in front of him,” given that companies like Amazon are putting more focus on selling handmade goods these days. But Hill thinks Frekol might succeed if it stays exclusive and keeps its standards high. “You can’t do what Etsy did — make it too big,” he said.
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CRAIN’S CLEVELAND BUSINESS z APRIL 25 - MAY 1, 2016 z PAGE 31
The List
FAMILY OWNED BUSINESSES Ranked by Local Full-Time Employees
COMPANY ADDRESS PHONE/WEBSITE
FT LOCAL EMPLOYEES MAY 30, 2016
% FAMILY OWNED
FIRST GENERATION BUSINESS OWNER
1
Minute Men Cos. 3740 Carnegie Ave., Cleveland 44115 (216) 452-0088/http://minutemenhr.com
37,800
100
Sam Lucarelli
1967
Human resource company specializing in staffing, PEO, workers' compensation
Jay Lucarelli CEO
2
Discount Drug Mart Inc. 211 Commerce Drive, Medina 44256 (330) 725-2340/www.discount-drugmart.com
2,080
96
Parviz Boodjeh
1968
Regional drug store chain
Don Boodjeh CEO
3
American Greetings Corp. One American Road, Cleveland 44144 (216) 252-7300/www.americangreetings.com
1,564
NA
Jacob Sapirstein
1906
American Greetings creates and manufactures innovative social expression products.
Zev Weiss Jeffrey M. Weiss co-CEOs
4
Fred W. Albrecht Grocery Co. 2700 Gilchrist Road, Akron 44305 (330) 733-2263/www.acmestores.com
1,512
98
Frederick Wilhelm Albrecht
1891
Retail grocery and pharmacy stores
Jim Trout president
5
Ganley Auto Group 8748 Brecksville Road, Suite 210, Cleveland 44141 (440) 584-8202/www.ganleyauto.com
1,403
100
Thomas D. Ganley
1968
Automobile sales and service and repair, insurance, financing
Kenneth G. Ganley president
6
Safeguard Properties Management LLC 7887 Safeguard Circle, Valley View 44125 (216) 739-2900/www.safeguardproperties.com
1,255
100
Robert Klein
1990
A mortgage field services industry leader, preserving vacant and foreclosed properties in the U.S., Puerto Rico, Virgin Islands and Guam
Alan Jaffa CEO
7
Sprenger Health Care Systems 3885 Oberlin Ave., Lorain 44053 (440) 989-5200/www.sprengerhealthcare.com
1,011
100
Grace Sprenger
1959
Full continuum of care for the aging population
Michael Sprenger COO
8
Dave's Supermarkets 5300 Richmond Road, Bedford Heights 44146 (216) 763-3200/www.davesmarkets.com
940
100
Alex Saltzman
1935
Grocery
Daniel Saltzman president
9
Vitamix Corp. 8615 Usher Road, Cleveland 44138 (800) 848-2649 /www.vitamix.com
736
NA
William G. “Papa� Barnard
1921
Privately held and family-owned manufacturer of high-performance blending equipment for home and commercial use
Jodi L. Berg president, CEO
10
East Manufacturing Corp. 1871 state Route 44, Randolph 44265 (330) 325-9921/www.eastmfg.com
622
100
Howard Booher
1968
Leading manufacturer of all aluminum semihighway truck trailers, including dump, platform and refuse
David J. de Poincy president, COO
11
Sandridge Food Corp. 133 Commerce Drive, Medina 44256 (330) 725-2348/www.sandridge.com
595
100
Vincent R. Sandridge
1960
Fresh food manufacturer of deli salads, soups and sauces
Mark D. Sandridge chairman, CEO
THIS YEAR
(1)
TOP LOCAL EXECUTIVE TITLE
YEAR FOUNDED TYPE OF BUSINESS
YOUR BUSINESS IS OUR BUSINESS Ä´  ¢ Ƹ ¢ȓ ¢ ¢ǯ Ƹ Ĺ˜Ĺ—ĹœÇŻĹ™ĹœĹ™ÇŻĹ–Ĺ—Ĺ–Ĺ–
COMPANY ADDRESS PHONE/WEBSITE
FT LOCAL EMPLOYEES MAY 30, 2016
% FAMILY OWNED
FIRST GENERATION BUSINESS OWNER
12
Oatey Co. 4700 W. 160th St., Cleveland 44135 (216) 267-7100/www.oatey.com
475
100
L.R. Oatey
1916
Manufacturer of plumbing products
Gary A. Oatey chairman
13
Car Parts Warehouse 5200 W. 130th St., Brook Park 44142 (216) 676-9304/www.carpartswarehouse.net
365
100
Tonino and Carmelina Di Fiore
1975
Warehouse distributor and retailer of auto parts
Tony G. Di Fiore owner
14
King Nut Cos. 31900 Solon Road, Solon 44139 (440) 248-8484/www.kingnut.com
330
100
Michael Kanan
1927
Purveyor of nuts and snacks
Martin Kanan president, CEO
15
Sirna & Sons Produce 7176 state Route 88, Ravenna 44266 (330) 298-2222/www.sirnaandsonsproduce.com
292
100
Gaetano Sirna
1979
Food service distribution
Tom Sirna, president Vince Sirna, vice president
16
New Horizons Baking Co. 211 Woodlawn Ave., Norwalk 44857 (419) 660-4000/www.newhorizonsbaking.com
265
100
Tilmon F. Brown
1967
Commercial bakers
Tilmon (Tim) F. Brown CEO
17
Donley's Inc. 5430 Warner Road, Cleveland 44125 (216) 524-6800/www.donleyinc.com
262
66
Terry Donley
1941
Innovative construction and concrete solutions
Malcolm M. Donley president, CEO
18
Majestic Steel USA Inc. 31099 Chagrin Blvd., Suite 150, Cleveland 44124 (800) 321-5590/www.majesticsteel.com
260
100
Dennis H. Leebow
1979
Steel Service Center, distributor and processor of flat rolled and cold rolled steel in North American steel market
Todd Leebow president
19
The Cafaro Co. 2445 Belmont Ave., Youngstown 44504-0186 (330) 747-2661/www.cafarocompany.com
250
100
William M. Cafaro
1949
Real estate development and shopping center owner and operator
William A. Cafaro Anthony Cafaro Jr. co-presidents
19
Precision Environmental Co. 5500 Old Brecksville Road, Independence 44131 (216) 642-6040/www.precision-env.com
250
100
DiGeronimo Family
1987
Asbestos abatement, selective demolition, floor and surface preparation, concrete sawing and drilling
Anthony DiGeronimo president
21
Motorcars Cleveland 29503 Mayfield Road, Cleveland Heights 44118 (888) 815-5884/www.motorcarscleveland.com
227
100
Chuck Gile
1972
Honda, Toyota, and mobility vehicle sales and service, including collision, parts and accessories
Chuck Gile president
22
Dearing Compressor & Pump Co. 3974 Simon Road, Youngstown 44512 (330) 599-5720/www.dearingcomp.com
225
100
Albin P. Dearing III
1945
Packager compressors and pumps
Richard H. Dearing president, CEO
23
Great Lakes Brewing Co. 2516 Market Ave., Cleveland 44113 (216) 771-4404/www.greatlakesbrewing.com
171
NA
Patrick and Daniel Conway
1988
Ohio's original craft brewery, serving the Great Lakes region
Patrick Conway Daniel Conway co-owners
24
Frank Novak & Sons Cos. 23940 Miles Road, Cleveland 44128 (216) 475-5440/www.franknovak.com
150
100
Frank Novak
1912
Commercial finish contractor since 1912 and manufactrurer of custom lighting, acoustic panels and OEM parts
Gayle F. Pinchot president
24
Gasser Chair Co. 4136 Logan Way, Youngstown 44505 (800) 323-2234/www.gasserchair.com
150
100
George, Louis and Roger Gasser
1946
Build to order manufacturer of seating products for the gaming and hospitality industries
Mark E. Gasser president
THIS YEAR
TOP LOCAL EXECUTIVE TITLE
YEAR FOUNDED TYPE OF BUSINESS
RESEARCHED BY DEBORAH W. HILLYER Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists. (1) We used this definition for the list: A family owned business is defined by having 2 or more family members involved and the majority of ownership or control lies within the family.
20160425-NEWS--32-NAT-CCI-CL_--
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2:14 PM
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Enter Spring in Style! Mercedes-Benz
28450 Lorain Rd. North Olmsted, OH 44070 (888) 478-1896 mbzno.com
of North Olmsted
/mo. $369 36 months
2016 Mercedes-Benz C-Class Sedan C300 4MATIC® AWD 4MATIC®
$4,663 due at signing.
Available only to qualified customers at participating authorized Mercedes-Benz dealers through Mercedes-Benz Financial Services. 2016 C300 4MATIC® – 36 months, 10,000 miles per year. 25¢ per mile thereafter. Rate based on MSRP of $43,125. Advertised lease rate based on a gross capitalized cost of $40,346. Includes destination charge. Fully Redesigned, Radiator grill with central star, Sport Suspension, 4MATIC® AWD, Heated Front, Seats, Sunroof, power locks power windows, auto turbo climate control, universal remote transmitter, audio controls on steering wheel, memory settings for 3 drivers, 2.0L inline 4 cylinder DOHC engine with variable valve timing 241 hp horsepower. Excludes title, taxes, registration, license fees, insurance, dealer prep. and additional options. Total monthly payments equal $13,284. Cash due at signing includes $3,499 capitalized cost reduction, $795 acquisition fee, and first month’s lease payment of $369. Total payments equal $17,578. Subject to credit approval. No security deposit required. Offer expires on 5/2/16.
© 2016 Porsche Cars North America, Inc. Porsche recommends seat belt usage and observance of traffic laws at all times.
2016 Maserati Ghibli S Q4
2015 Infiniti Q50
Life, intensified.
$
299
/MONTH 39MTHS
$1,299 due at lease signing *MSRP $46,130, 10,000 miles per year, .25 cents per mile thereafter. Premium AWD Navigation. Two or more vehicles available at this price. Tax, title and doc fee additional. Security deposit waived. See dealer for full details. Offer expires 04/30/2016.
Infiniti of Beachwood 25900 Central Pkwy, Beachwood, OH 44122 (888) 928-2038 infinitiofbeachwood.com
Lease the Macan S for $599 per month.
$ $
599 39
*/MONTH MTHS
$4,999 due at lease signing Excludes tax, title, and license fees. No security deposit required. Offer expires 5/02/16.
Porsche of North Olmsted North Olmsted, OH (888) 515-3584 porscheofnortholmsted.com
799
/MONTH 36MTHS
$2,000 due at lease signing
*Available only to qualified customers through Chase Bank and Maserati of Cleveland DMA through April 30, 2016 or while inventory lasts. Not everyone will qualify. Available only on Demonstrator Chassis #138139 MSRP $80,600/$68,582. Delivery to be completed before April 30, 2016. Advertised 36 month lease payment based on MSRP of $80,600/$68,582. Cash due at signing $4,500. Excludes title, taxes, acquisition fee, security deposit, documentary fee, registration, license and title fees. Lessee pays for any amounts due under the lease at lease end, any official fees and taxes related to the scheduled termination, excess wear and use plus 10,000 miles per year $.30/mile over, with no disposition fee. Subject to credit approval. Prices, payments, and Gross Cap Cost based on chassis #138139. Subject to availability and may apply to other units in inventory depending on MSRP. Special lease rates are available for top ‘S’ Tier qualifying Chase customer. Prices includes incentives and CSI funds for clients in dealer market area. Rates may change due to credit worthiness as determined by Chase Bank. SECURITY DEPOSIT WAIVED. Offer expires 4/30/2016
Cleveland Motorsports 28300 Lorain Rd, North Olmsted, OH 44070 (888) 871-0050 clevelandmotorsports.com
20160425-NEWS--1-RG1-CCI-CL_--
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1:51 PM
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CRAIN’S CLEVELAND BUSINESS z APRIL 25 - MAY 1, 2016 z PAGE A-1
Talking economic development with Akron mayor Dan Horrigan In a conversation with Crain’s, Horrigan touched on innovation, worker training and business attraction. Dan Horrigan became Akron’s 62nd mayor Jan. 1, filling a chair occupied for 28 years by Don Plusquellic. At his inauguration, Horrigan said he had a strong belief that “our city is on the verge of a renaissance” and that Akron is “poised to innovate and grow.” A former school teacher, Horrigan entered politics in 1999, winning election to Akron City Council. After eight years in council, he was appointed Summit County Clerk of Courts, filling an unexpired term. He won election the next year and was re-elected in 2012. Soon after he was declared Akron’s new mayor, Horrigan appointed a task force to help him map out a plan for the city’s future. One area of focus in the Blue Ribbon Task Force report issued in February was economic development. In an interview with Crain’s Akron Business, Horrigan focused on his plans for economic development, laying out where his administration is headed. He focused on several key areas, among them how the city will attract new businesses. He also expanded on his thoughts about how Akron can be a city of innovation and about his concern for what he called the “skills gap,” the need for the city to help its residents train for the jobs of the future. What follows is an edited transcript of that conversation. — Jay Miller
How have the first months gone? It’s obviously extremely busy. Nothing has really been shocking as far as the issues you have to deal with. Having some experience on council and in the clerk’s office you get a pretty good idea. But obviously there is a lot more. One of the things that I think are those quality of life issues, the skills gap, housing. I’m a big fan of trying something, failing early, learning. You know Edison tried 10,000 times on the light bulb before he got it right. He didn’t fail, he just kept improving. That’s the same thing we have to do as a city. At Crain’s we’re interested in economic development. Where are you going with the city’s economic development programs? The Blue Ribbon Task Force talked about two things that stood out. One of those was the need for a comprehensive economic development plan. Is that something you’re going to tackle? Absolutely. I think of ours as, “What were we doing before, what should we be doing now and how do we make better.” It’s a focus every week, so to speak, because our economic development coordinating committee meets every week. We want the Greater Akron Chamber to help, and they have, and we also have to partner on those quality of life issues that companies look at and say, “Is there new housing there? How is the infrastructure? What are my fixed costs in sewer, water and electric bills?” So we’ve got to
partner with the FirstEnergys, the counties and the chambers. It’s not fully developed yet, it’s one of those things that takes time to do. But I want to do it right. I just don’t want to do something fast. Another thing the Blue Ribbon Task Force said was there was room for improvement in the city’s business-attraction efforts. It recommended changing Akron’s business-attraction focus. Your predecessor favored international business attraction. We don’t want to be out of the conversation when it comes to international. So we’ll still have a presence at some of those trade shows and some other things the chamber and we think are important to help companies that are already here. The Blue Ribbon Task Force
also talked about economic development intermediaries, like Team NEO, that can assist with business attraction and nurturing technology businesses. Your predecessor wasn’t eager to deal with them. How do you see those relationships going forward? I’ve talked to Team NEO, our chamber. There’s no conversation that I would think is not worth having. We want to see our area grow, not just the city of Akron. I’ll be more than happy to work with Team NEO and others. We’re on the same page. It’s just changing kind of the tone and tenor of the culture to be a little more collaborative in our approach. You’ve talked about innovation. What does that mean to you? Innovation is a buzzword that is talked about around every small,
medium and large city. We have the Austen BioInnovation Institute (ABIA). If we’re going to rebrand ourselves or talk about innovation, how do we expand ABIA out of just biosciences into an innovation institute that concentrates on other technologies or sectors of the economy? I’ve had conversations with people who say that would be a better focus. We have some tremendously innovative companies here — the Goodyears, the Bridgestones, the polymer companies — we want to involve all of them. I’m not excluding any sector, but we’re probably better at some, like polymers. But we don’t want to be a discourager of technology. Look at the proximity to the shale fields. Can we do something there — off the top of my head, maybe an energy innovation institute?
You’ve also talked about education and training, the skills gap. How will you tackle that? The city of Akron is the largest city without a true community college presence, like Cuyahoga Community College or Sinclair Community College. We want to make it easier for kids to get the kinds of educational and economic opportunities. Stark State College (based in North Canton) would be valuable for those efforts. I’ve been pretty aggressive in trying to get them into the city of Akron, finding a location for them. They have a tremendous draw from the ZIP codes up here. What about downtown housing? It’s a strong focus for us. The downtown Y is full; what’s the next project for us? But we’re not forgetting the neighborhoods.
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z APRIL 25 - MAY 1, 2016 z CRAIN’S CLEVELAND BUSINESS
AKRON
Putting Akron’s roads on a diet Planning director Jason Segedy wants a more walkable and bikeable city BY DAN SHINGLER dshingler@crain.com @DanShingler
When you look far down a wide road with no traffic on it, it narrows. That’s what artists and photographers call perspective. It’s also Jason Segedy’s perspective. Segedy, Akron’s relatively new director of planning and urban development, is on a mission to help the city’s diverse neighborhoods attract and keep residents by becoming more livable, walkable and bikeable. That will mean changing some of the city’s roads, which is an idea Segedy is promoting across Akron. “The default for a lot of residents is always ‘I don’t know why we would do stuff for bikes; no one rides a bike anyway.’ But what they often mean by that is, ‘I don’t ride,’ ” Segedy said. But other residents, maybe even most of them, agree with Segedy, and Akron is becoming more of a bike-friendly city as a result of more riders and changing attitudes. Last year, the city even won a bronze award from the League of American Bicyclists for its work as a “bikefriendly” city. With Akron fighting as hard as it can to attract new, young residents –
many of whom want to bike in the city and live in walkable neighborhoods – Segedy figures he has a mission to help. One of his chief tools to do that is something called “road diets.” Currently, too many of the city’s neighborhoods are split up, or at best cut off from one another, by big, four-lane roads that were built to serve more as highways than as neighborhood streets, Segedy said. Those roads were built mostly before the 1960s – before the city lost about a third of its population in the succeeding decades and at a time when city leaders were still counting on and planning for more growth. Today, the roads carry far fewer cars, just at greater speeds – as Segedy pointed out all too easily while giving a recent tour of Akron, where he seems to have an encyclopedic knowledge of every street and neighborhood.
A lot of bloat “Take your time, no one’s coming,” Segedy told a photographer, who was standing in the middle of four-lane Maple Street near Glendale Avenue, taking a photo of a completely empty street in the middle of a Tuesday afternoon. Segedy, without even a map or
GPS, can find a lot of examples of streets like this. Over the course of about two hours, he drove to about a dozen more areas: Portage Path near Highland Square; East Exchange Street between state Route 8 and Arlington Street; Rand and Dart avenues along the Innerbelt; Cuyahoga Falls Avenue and North Main Street in the North Hill neighborhood; East Tallmadge Avenue near North High School; Cedar and West Exchange streets between Broadway Street and Rhodes Avenue; Kenmore Boulevard – the list goes on. It starts to seem like Segedy will run out of gas before he runs out of bloated roadways he’d like to get onto diets. It’s not pie in the sky either. The city narrowed part of Copley Road two years ago and added bike lanes, and it will put at least two more road diets into effect this year and add bike lanes on Cedar and West Exchange. Some of the other roads are slated to get diets beginning in 2017, and still others are on Segedy’s list for diets beyond that. The projects can sometimes be a tough sell with existing residents, and especially among older residents who are more car-centric than their younger counterparts. But once road diets are put into effect, residents generally like them.
Seeing is believing That became evident last year, when the North Hill neighborhood did a three-day Better Block project that included streetscaping, temporary new trees and narrowing North Main Street from four lanes to two with bike lanes on both sides. North Hill residents Tina and John Ughrin worked with Segedy and the Dallas-based Better Block Foundation to survey residents before and after the project, as well as coordinate the event. The couple said they love their North Hill neighborhood – which is coming back with an influx of new immigrants – but they wish it was more pedestrian friendly. “There’s only one crosswalk – and it’s more than 100 feet to get across,” John Ughrin said, noting that it’s often difficult, if not downright dangerous, to cross Main Street in the heart of the neighborhood. Some of the neighborhood’s residents were resistant to the idea of narrowing the street until they experienced what that would be like during the Better Block event, the Ughrins said.
Akron director of planning and urban development Jason Segedy, below, wants to narrow Maple Street, above. (Dan Shingler)
“Since everything’s temporary, it’s easy to get people to agree to try it,” John Ughrin said. “Folks didn’t mention that they wanted bike lanes or the roads to be narrowed before Better Block … But after they saw it, 69% of the people were in favor of bike lanes,” Tina Ughrin added. The Ughrins are big fans of Segedy and his ambitions – not to mention the kind of residents he’ll need to support the projects he envisions.
Growing momentum They are not the only ones calling for roads to be narrowed to make room for bikes and pedestrians. The Akron Metropolitan Area Transportation Study – which does hard research on just how many cars use the area’s roadways – lists 60 roads in Akron, other parts of Summit County and parts of Portage County that it says are due for road diets. In addition, the North Hill Better Block event was supported by the John S. and James L. Knight Foundation, as well as the city, which lent street painting crews to help . Last year, AMATS did a study and
found 21 four-lane roads that carry fewer than 10,000 cars a day, said AMATS interim director Curtis Baker. He too is supportive of Segedy’s efforts, as well as projects like Better Block. “The North Hill project kind of opened a lot of people’s eyes to how much vibrancy can be added to a neighborhood when you consider what the street brings,” Baker said. “How many opportunities are there like this in the region?” The city has been seeing its traffic decline for decades, Baker said. “Now we’re looking at roads that are old and officials are saying, ‘We have four lanes to repave. Why are we doing this?’ ” he said. Sometimes, a diet can be done with just some repainting of the road, while other sites require more construction. Segedy is picking off some of the low-hanging fruit first, but still has his eyes on larger projects. As a city resident who sometimes uses a bike to get around, Segedy said he’s personally aware of how challenging it can be on some Akron streets without a car. “I’ve gotten shouted at: ‘Get on the sidewalk!’ he said.
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ENTREPRENEURSHIP: Tobin Buckner
How Akron leaders can create a culture of entrepreneurship The city can become a thriving hub for entrepreneurs from all over the world, and now is the time to do the work I recently finished the New York Times best-seller “Mo’ Meta Blues: The World According to Questlove,” by Ahmir “Questlove” Thompson. For those who don’t know, Questlove is the bandleader for the hip-hop collective The Roots, best known as the house band for “The Tonight Show With Jimmy Fallon.” His memoir is enthralling, largely because of its intricate vocabulary (written by a self-proclaimed music nerd). But one of Questlove’s main points stood out to me above all others: Timing is everything. In the music world and in the entrepreneurial world, timing can be the difference between going platinum and fading into obscurity. With that in mind, here are a few things we, as leaders of our city, can be doing RIGHT NOW to help cre-
Tobin Buckner is JumpStart’s Akron entrepreneurial community manager and contributes a monthly blog about entrepreneurship in the region.
ate a greater culture of entrepreneurship in Akron.
Cultivating connections The recently published “62.4 Report: Profile on Urban Health & Competitiveness” states that Akron is well-positioned to confront our issues and build a more vibrant entrepreneurial culture. The report specifically mentions “existing support for young professionals and immigrants moving to the city, a growing regional economy, and new programs aiming to break the cycle of generational poverty are important bases from which the city can grow.” So, why not build on these existing advantages by developing welcome centers for immigrants in the neighborhoods where they are most concentrated, with a particular focus on entrepreneurship and
small business development? We also can focus on better and more direct connections between the chamber of commerce and small business owners in order to gauge their needs and connect them with the assistance they need to grow.
Tightening up We know that strong ecosystems
need world-class innovators, cutting-edge facilities, growth capital, amazing talent and targeted service providers. But it is also critically important that this entire ecosystem be 100% aligned around one common cause: fostering a thriving community of high-impact entrepreneurs and their ventures. To accomplish our lofty goals, all of the key players in our ecosystem
must be willing to come together whenever and wherever necessary to assist entrepreneurs and drive economic impact and vitality.
Ensuring a top-notch experience Imagine a kind of “concierge” for entrepreneurship in our city. A position designed to provide a “front door” for entrepreneurs and business owners to help them get the information and access the space, mentorship, peer-to-peer contact and testing/maker opportunities they need to grow. This centralized point of contact would no doubt be welcomed by many local ventures attempting to navigate our multifaceted ecosystem. Akron is fast becoming a dining, arts and shopping destination. Today, I am more convinced than ever we can also become a thriving hub for entrepreneurs from all over the world. But in order to meet this goal, we have much work to do — work that must begin right now. Just like Questlove says, timing is everything.
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Tight industrial property market spurs Stow construction boom Between December 2014 and December 2015, the city gained 10 new commercial construction projects BY JUDY STRINGER Flash back to 2008: The foundation was poured and still drying for two new, 16,000-square-foot office buildings on Campus Drive in Stow when the economic downturn brought construction to a screeching halt. Seven years later, signs of life have returned to the once-dormant Hudson Drive Business Campus II project, where Akron-based Albrecht Inc. is putting the final touches on the first of its long-awaited office buildings, 1151 Campus Drive, which is three-quarters leased, and has erected steel for a twin office building at 1051 Campus Drive. “We have found that there are people [who] are saying to themselves: ‘It is time for us to get out of our tired spaces we’ve outgrown,’” said Albrecht senior vice president Jack Juron. “Up until recently, they really have not had any choices. … There are vacancies in Beachwood and Cleveland, but Stow and Hudson don’t want to go to Beachwood.” Albrecht is not alone in responding to what Juron called a “pent-up demand” for office and industrial properties in northern Summit County, which has triggered a Stow building boom. Between December 2014 and December 2015, the city was home to 10 new construction projects with an estimated value of at least $700,000 each, according to Stow planning and development director Rob Kurtz. Five are valued at more than $1 million. The bulk of industrial activity is centered in Stow’s northwest quadrant, which straddles state Route 8. Along with Albrecht’s two new office buildings off Hudson Drive, Ray Fogg Corporate Properties is developing a 45-acre business park at the Route 8-Seasons Road interchange in partnership with land owner BH Ohio Leasing, an affiliate of Brennan Management Group in Akron. There, the duo recently wrapped up construction of Greater Akron’s first speculative industrial facility in years – a $5.4 million, 114,000square-foot, high-bay warehouse/office building named Seasons Business Center. Just last month, Stow City Council gave Ray Fogg the green light to add a second identically sized spec building next to the first one. South of the Fogg/Brennan development, J&E Development is constructing a new 14,000-square-foot industrial building on Alpha Parkway. The building will be occupied by QuestMark Flooring, a provider of industrial and commercial flooring systems, which is currently located around the corner on Allen Road in a multitenant building also owned by J&E. On nearby Commerce Drive, meanwhile, Walter Metals and Esterle Mold and Machine are adding to their existing footprints with 20,000-
Construction is underway at the Hudson Drive Business Campus II project in Stow. (Shane Wynn) square-feet and 16,000-square-feet expansions, respectively. Juron and fellow developer Mark Ray, vice president at Brooklyn Heights-based Ray Fogg, cited Stow’s business friendly climate as an important consideration in their decisions to build in the city. Both their projects involve property tax breaks. Still, they said, location was a bigger factor. The city’s northwest quadrant includes two Route 8 interchanges within six miles of the Ohio Turnpike. So in addition to quick access to Cleveland and Akron, “you can go east or west pretty easily,” Ray said. Indeed, the three-year conversion of Route 8 south of I-271 into a full freeway, completed in 2011, has fueled other developments along the corridor that runs through the Summit County communities of Boston Heights, Hudson and Stow. Of note, according to Steve Lazarides, a senior associate with CBRE’s Akron office, is Arhaus’s massive $43 million, 750,000square-foot global headquarters and distribution center near the Hines Hill Road interchange in Boston Heights. The facility will be nestled behind Costco and Bass Pro Shop stores, also under construction. Lazarides added that much of the construction activity – especially in the industrial sector, which he said has been one of the “leading performers in the commercial real estate world” in recent years – can be attributed more to the lack of available buildings than a business boom in Summit County. “It’s a tight market. That is what spurred new construction, and we are definitely seeing a lot of it along the Route 8 corridor,” Lazarides said. “The first spec development that has been done in our market in quite some time is, I think, a direct result of just how strong the market got.”
New buildings, old names To Juron’s earlier point, the companies securing new space in the area thus far have been local businesses looking for roomier accommodations. Along with QuestMark Flooring’s planned move to Alpha Parkway, Wheaton & Sprague Engineering Inc., a current tenant of Albrecht’s Hudson Drive Business Campus I development on the south side of Campus Drive, will be the anchor tenant of the first of the two new office buildings across the street. Wheaton & Sprague signed on to lease 12,000 of the building’s 16,000 square feet. And fellow Hudson Drive Business Campus I tenant TTR Shipping
is moving to the recently opened Ray Fogg Industrial Building on Seasons Road, where it will occupy 30,000 square feet and double its current space. TTR fielded offers from Cuyahoga Falls and Twinsburg, but chose to stay in Stow. In the latter case, Juron is losing a tenant but said he welcomes the nearby development and views it as “another step in announcing to the marketplace that the northwest quadrant of Stow is a great place to do business and that there are plenty of opportunities.” Given the proximity to freeways, Ray believes much of that opportunity lies in warehousing and distribution – a prediction reflected in the company’s decision to build not
one, but two speculative, high-bay industrial buildings there. Early indicators suggest he’s on to something. In addition to the TTR Shipping deal, Ray Fogg on April 4 signed a lease for another 57,000 square feet with a yet-unnamed distributor. Yet, the quadrant is home to a small cluster of high tech companies as well, and Lazarides considers the more modest office and flexible space offerings at Hudson Drive Business Campus a nice fit for information technology or research-anddevelopment firms. Then there’s also a handsome dose of undeveloped land. “That is what’s great about the area. It really does have something for everyone,” Lazarides said.
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ST&P Marketing launches digitally focused arm BY DAN SHINGLER dshingler@crain.com @DanShingler
Fairlawn-based ST&P Marketing is eating some of its own cooking as it grows its new Prophetic Marketing division, which it launched as a new brand late last year. The firm is now using its branding acumen not only to help customers, but to build its new business – an effort that ST&P and Prophetic chief operating officer Rick Kenney said is so far working out well. In fact, it’s working well enough that Kenney is now looking for more people to staff the new operation further after hiring four new people to initially launch it. “Right now we have three slots we would like to immediately fill,” Kenney said. ST&P is an established firm – born back in 1992, when Hesselbart & Mitten Advertising, a Fairlawn firm was sold to Cleveland-based Arocom, Meldrum and Fewsmith. Kenney remained and with five others formed ST&P, where they’ve worked with major companies on sales and branding programs while growing the firm to its present headcount of 20 people, including the four who work primarily with Prophetic. The firm has worked mostly with big companies. Bridgestone/Firestone, Mack Trucks, Bendix and Phillips 66 are all longtime clients, Kenney said. Its work dates back to when it ran sales promotions and tracked customer data on paper – with rooms devoted to mailings on busy days. But today all that stuff, along with ST&P’s work, is mostly digital. That’s why it was natural to start the new division, which is focused on online brand strategies, digital content marketing and data analysis, said Cory Finding, Prophetic’s chief strategy officer and one of the four new hires. He said the division’s work dovetails nicely with ST&P’s existing clients, as well as new ones, like printer company Epson. “We work with clients that are launching brands ... and now when you’re launching a brand, branding happens both traditionally and digitally,” Finding said. Not that the firm is new to join the trend – which is particularly hot in Northeast Ohio, where Cleveland hosts the Content Marketing World annual conference again this year. Creating digital content – blogs, placed articles, dedicated websites and other content that seeks not to directly sell a product so much as to position a company as a leading expert in consumers’ minds – is a fastgrowing business for many area firms, said Joe Mosbrook, owner of Cleveland Heights-based Acclaim Communications. “With the growth of digital content, consumers have sort of become trained to ignore all of the promotional messages. “So brands need to create value
content — not selling their product but getting valuable information to their consumer,” Mosbrook said. Mosbrook said he understands another benefit that Kenney said ST&P enjoys – a presence in the cheaper suburbs rather than downtown. It fits hand in glove with a digital marketing model, too, he said.
“There’s no longer a reason to be downtown and have Class A office space, because everything is online and everything is remote,” Mosbrook said. Finding said his Fairlawn location so far has never kept him from catching a hire – and he’s hoping that holds true as he looks for three new marketing professionals.
Prophetic Marketing’s Cory Finding, chief stragegy officer; Matt Widdoes, senior vice president, innovation; and COO Rick Kenney.
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Reopening Front Street could be a business boon for Cuyahoga Falls Opening the pedestrian mall to vehicle traffic could generate up to $65.9 million in new sales by 2021 BY JENNIFER CONN It’s been nearly 40 years since residents could drive down Front Street in Cuyahoga Falls, park their cars and walk into a business. Back then, restaurants, hardware stores, drugstores, dry cleaners and camera shops were among the establishments lining the blocks running north from Broad Boulevard, edging the Cuyahoga River. But after 1978, when Front Street was converted to a pedestrian mall, most of those businesses eventually closed or moved. Now cruising Front Street could become a reality once again. The city is completing the legwork required to make its case within the month to Cuyahoga Falls City Council that there’s value in reopening Front Street to cars and re-establishing the greater downtown district as a vibrant, mixed-use environment. With council’s approval, the city will then solicit bids for an engineering firm to draw up preliminary plans, a process Cuyahoga Falls Mayor Don Walters expects could take about a year. “Ironically, now the indoor malls are failing and people want to come to the old downtowns for the experience,” Walters said. “The time is finally right; all the stars have aligned. If it weren’t for that, I wouldn’t be moving forward.” Front Street was turned into a pedestrian mall in a strategy many U.S. cities adopted to pull shoppers away from those booming new indoor malls and bring them back downtown. But as a pedestrian mall, Front Street’s value was most evident during festivals and other outdoor events. The rest of the time, it’s been all but abandoned. In fact, only about 11% of outdoor
pedestrian malls in the country actually succeeded, Walters said. “Those that survived are usually in the south, or in college or coastal towns,” he said. “Not in Northeast Ohio in February.”
The future of Front Street To understand the next move for its stagnant downtown, Walters’ administration last year launched a master planning process, commissioning studies on the city’s and the region’s retail and residential markets, and its historic architecture, as well as concepts for Front Street’s conversion back to vehicular traffic. “There are 115,000 cars a day on Route 8 within 100 yards of Front Street, and we have a river,” Walters said. “There’s no river in downtown Akron. There’s no highway in downtown Kent. It’s the biggest underutilized section of the city.” The retail and residential studies, conducted by Gibbs Planning Group, focused on the potential for mixed-use development in three main areas of downtown — the twoand-a-half block pedestrian mall; South Front Street, which is currently undergoing a construction boom; and the Schwebel’s plant, which the bread maker recently vacated. The residential study found Cuyahoga Falls will need up to 45 new housing units per year, from 2017 through 2030, for a total of about 585 new housing units. Much of that demand, the study concluded, could be met within the immediate downtown area. Regional projections for jobs show the city gaining more than 1,700 new jobs by 2022. According to the retail study, reopening Front Street could positively impact the city by adding 95 to 115 new restaurants and stores, generat-
ing up to $65.9 million in new sales by 2021. The analysis also captures spending from workers within a fiveminute drive of downtown Cuyahoga Falls, figuring 14,000 workers could spend $75.8 million per year on prepared food and beverage, grocery purchases, retail and convenience items. Additionally, with the number of residents ages 35 to 44 forecast to increase, delivering a mixed-use lifestyle is increasingly important. “Millennials want to live, work and play all in one area,” Walters said. “They would love to park their car on Friday night and not touch it again until Monday.” A plan conducive to that lifestyle was among several concepts developed by Columbus-based urban designer, MKSK, known for its work along the Downtown Columbus Riverfront. MKSK’s hybrid design was chosen by Cuyahoga Falls and residents who attended public presentations as the best design for foot, bike and vehicular traffic for a reopened Front Street. While the projections bode well for reopening Front Street, the process of renovating and improving existing structures faces challenges. For starters, the buildings along Front Street are owned by many different entities and are in varying physical condition. Some are vacant while others are of historic value, so any development will have to blend old with new in a way that’s cost effective. Local developer Testa Companies is creating a comprehensive marketing plan for Front Street. “When everyone owns a little piece, no one person could afford to spend the time, effort and money to
develop a comprehensive marketing plan for the whole street,” said Joel Testa, Testa Companies president. “Testa has so much real estate, we’re happy to do it.” Testa Companies already owns several properties on Front Street and has developed much of South Front Street, including Hibachi Japan, Watermark Village, the Craft Beer Bar and The Office Bistro. The company is looking at developing the Schwebel’s building into medical, retail or a mixed-use property, but it’s keeping its options open by serving as the property’s listing agent. Creating a comprehensive marketing plan requires communicating with all the building owners and documenting what’s there and what’s needed. For example, if the area supports two hardware stores, but there’s only one, the plan can apply specific metrics and search nationally for a retailer that fits the project. “We’re laying everything out, using as much of the history and existing buildings as we can, as though it were a mixed-use project being built from scratch,” Testa said. “It’s a matchmaking process.” Incorporating the existing value in a project — such as mom-and-pop stores, local artists, restaurants and historic buildings — is extremely important because it is much more difficult to recreate that, he said. “This is the history, the stuff that attracts people,” Testa said. What’s more, the city has formed a Design and Historic Review Board to work toward having the entire downtown district deemed historic, said Testa, who serves on that board. That includes all of Front Street, the Schwebel’s plant and streets west of downtown.
To assist in rehabilitating some of the historic structures in the historic district, the city recently became designated a Certified Local Government, enabling it to declare a parcel or building historic. It can then apply for grants to rehabilitate the properties, or apply for historic tax credits to help with venture funding, Walters said.
Funding Front Street Even without the notion of reopening Front Street, the city doesn’t have the option of investing nothing, Walters said. The brick veneer throughout the mall is badly eroded and requires at least a $1 million investment to make it safe. “Do I want to spend a million dollars for a ghost town? Probably not,” Walters said. Front Street is public property but the buildings are privately owned, so the city is working to understand all the costs involved to identify funding, such as private-public partnerships, and state and federal grants. The city is completing an application due in late April for a federal Transportation Investment Generating Economic Recovery (TIGER) grant. TIGER grants fund capital investments in surface transportation infrastructure for projects that impact a metropolitan area or region. According to Walters, most residents and city council members are on board with reopening Front Street. All the projections so far point to the project adding jobs, increasing income tax and strengthening property values. “We’re leaving no stone unturned,” Walters said. “We’re doing the research so we don’t have to move forward and wonder. The potential is off the charts.”
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THE MAIN COURSE: Jennifer Conn
The secret’s out: Northside Speakeasy brings a vintage feel to Akron hotel The Northside Courtyard by Marriott may host the only post-Prohibition bar in the country with two hidden entrances. The Northside Speakeasy, on the ground floor of the new Marriott at 41 Furnace St. in the Northside Arts District, this month celebrated its grand opening, making it safe to reveal a clue about gaining entry — everything is not as it seems at either the street entrance, a Prohibition Era newsstand and apothecary, or the old London-style, red phone booth in the hotel’s Bistro lounge. Like the secretive bars during Prohibition, the way into the Northside Speakeasy is hidden in plain sight. The hotel was developed by Testa Companies, but the Speakeasy is operated by BYTE, Testa’s restaurant arm, and will share an outside patio space with Dante Boccuzzi Akron (DBA). BYTE is an acronym for last names of partners Dante Boccuzzi, DBA executive chef; Morgan Yagi, who owns the Hibachi Japan on Front Street; and Joel Testa, president of Testa Companies. The “E” is for enterprises. BYTE operations manager, Dave Sharp, manages operations at the Speakeasy, and chef de cuisine Ernie Cornelius develops much of its food and cocktail offerings. Inside and out, the Northside Speakeasy feels like Batman meets J.K. Rowling. The old-time, roomkey fob appearing in the Speakeasy’s décor is emblazoned with 22, Testa’s lucky number from playing sports. The tricky entrances are his design as well. “As a kid I loved the idea of hidden entrances — the mansions that have the hidden bookcase,” he said. “I emulated Bruce Wayne; Batman was one of my alter egos. Testa still owns a Batman outfit and one of his vehicles projects the Bat Signal. What’s more, to ensure he didn’t miss a trick in speakeasy mystique, he and his girlfriend took a bus tour of historic Chicago speakeasies as research. Once you’re inside the tiny bar, which has seating for 30 with zero standing room, Testa’s marketing and industrial-design background is evident. The décor is dark, urban-industrial chic, with leather and metal everywhere. But make no mistake, the old-timey décor includes out-ofsight amenities, such as purse hooks and USB jacks, to serve a modern clientele. A vintage television in the small lounge area shows feeds of the bar’s entrances, as those outside work through the secrets of entry. (Bartenders can open the doors for patrons who struggle.) Above the couch is a huge image of Akron’s downtown from a time when four hotels still graced Main Street. Wine barrels and liquor-shipping crates serve as small tables. A few intimate booths for two with courtyard views feature an old-time radio with adjustable volume playing house music and a call button
www.felberpr.com | 330.963.3664 We’ll make your competitors pay attention.
Above, the red phone booth is a secret entrance into Northside Speakeasy. Below, booths at the bar are outfitted with curtains for privacy. (Shane Wynn)
Congratulations to our colleagues Susan E. Baker and Ralph Streza for their inclusion in 2016 Best Lawyers in the areas of workers compensation and products liability, respectively. CC&J has five offices strategically located in northern Ohio to serve clients effectively and efficiently. Visit us at www.CCJ.com. that flips a light for service in case you and your date close the floor-toceiling curtains. Traditional cocktails are on offer as well as many unique recipes developed in-house, such as the Beefeater gin-based Corpse Reviver No. 2 and Down the Rabbit Hole, featuring Effen cucumber vodka. Some recipes include flavored bitters, cordials and infused alcohols created by the staff using fresh fruits and spices. Testa said he approves of restaurants that empower bar staff with the same kind of creative license chefs are granted. The signature Northside Speakeasy cocktail arrives tableside in a small wooden box etched with the words “Mixology 101.” Inside are several glass bottles containing everything patrons need to mix a straight-up Manhattan. To chill it, you stir it with the tiny icecold steel wand included in the box. Another house specialty celebrates the legendary absinthe, a strong, chartreuse-colored, anise and fennel flavored liquor. Absinthe, banned in the U.S. in 1915 as an addictive hallucinogen, was the rage during Prohibition. And with those
effects proven baseless, absinthe now is openly consumed. At the Northside Speakeasy, drinking absinthe requires paraphernalia. Bartenders provide a glass, a bonglike beaker that holds the absinthe, ice and a sugar cube, which come together to create chemical wizardry that emits a licorice-scented steam to enjoy while you sip the green fluid. “It’s very tactile,” Testa said. “It hits multiple senses.” Food is available, but you can’t order full dinners here. Most menu items are appetizers that come on wooden flight trays, reminiscent of craft beer halls. The menu includes various gourmet meat and cheese items. Smoked salmon parfait and chips and green salsa are available, as well as a chocolate pudding/mousse with cherries and a cookie treat. Testa admits his recreation of a speakeasy is not historically accurate. “Hollywood has glamorized them into elaborate places in basements where alcohol is passed through a moving brick in a wall,” he said. “I wanted to create what people’s perception of a speakeasy would be.”
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The RubberDucks play at Canal Park in downtown Akron. (David Monseur)
Q & A: Jim Pfander Club general manager and chief operating officer, Akron Rubber Ducks The Akron RubberDucks opened their season April 7. We talked to general manager and chief operating officer Jim Pfander to see what’s coming up for the minor-league baseball team that makes Canal Park in downtown Akron its home. Among this season’s highlight is a turn hosting the Class AA Eastern League All-Star Game in July. — Sue Walton
The organization and the city of Akron teamed up to make some improvements to the field at Canal Park over the winter. Can you tell me about that work and why it was needed? We partnered with the city of Akron to replace the playing surface, install new irrigation and drainage, and have the best possible field for our players, coaches and the community. We typically host more than 100 events during the year, including 71 RubberDucks games, high school baseball games, family movie nights, a beer festival and the Akron Marathon’s finish line. There had been a number of issues with our field’s drainage, especially after heavy rains, which caused lengthier rain delays as our team worked to get the field playable again. Thanks to the city and Ag Design Group, a local turf company who managed the project, we feel we now have the best playing surface in the Eastern League. What was the cost of the project, and how was it split between the organization and the city? The field project cost just shy of $400,000 and was split equally between the city and the RubberDucks. Are there any more upgrades or new fan experiences we can expect this season? Each year we try to add more to the fan experience with our
71-game slate of promotions, giveaways and fireworks nights. Among my favorite giveaways this year are the Shooter McGavin Bobblehead Giveaway and appearance by actor Christopher McDonald (who played Shooter in “Happy Gilmore”) on May 28 and a salute to the late Cavaliers power forward John “Hot Rod” Williams on Sept. 3. Plus, there will be a total of 23 post-game fireworks displays. In addition, we’ve added some incredible artwork from local muralist Mike Ayers to the lobby area outside the front offices of famous people from Akron. I think fans have come to enjoy Mike’s artwork over the years, and it adds so much color and beauty to our ballpark. Last year, the RubberDucks were fifth in the Eastern League in attendance, with about 5,013 fans per game. That was a bit down from 2014. What are the organization’s attendance goals for this year? We measure our success in attendance and with creating an unparalleled atmosphere of affordable, family fun for everyone. While we keep our goals internal, we hope to eclipse those attendance marks that we achieved last year. Last year the organization was awarded the Larry MacPhail Promotional Award for the being the top minor league team in the country for our efforts in promotions and marketing. While our attendance did drop slightly from the year before
(thanks in part to a very wet spring), the fun and excitement only continued to build at our games and we look forward to putting together another great lineup of entertainment and promotions at the ballpark again this season. Canal Park is hosting the Eastern League Class AA All-Star Game July 12-13. How did the organization land the game? Very carefully! This was one of the first things Ken Babby and I discussed when he bought the team in October 2012. We wanted to bring this event to Akron for the first time ever, and we approached the Eastern League with the idea and formal submission not long afterward. Being from Akron, I knew that our fans would love the opportunity to see the best players in Class AA baseball compete here in Akron. And since we’d never hosted the event, we knew that this would be a great way to show off our city and the ballpark to the rest of the country. We were selected by the Eastern League to host the event after the success we had during the first three years of ownership and increasing attendance by 27%. We could not be happier to bring this game to Akron for the very first time.
including a Home Run Derby on July 12, featuring the best home run hitters in the EL and a fireworks show. On July 13, we will host the game itself as the best players from the Western Division play the top players from the Eastern Division. In addition, the AllStars will spend the day on July 13 visiting local hospitals and other community engagement venues. Plus, all 12 teams from the Eastern League will send owners and executives for a semi-annual meeting, and these executives will get to experience all that Akron and Northeast Ohio have to offer during the summer with excursion to Akron landmarks like Firestone Country Club and Goodyear. How many out-of-town visitors are expected for the weekend? The All-Star Game usually attracts a number of visitors from all over the country including baseball personnel from major-league teams, scouts, minor-league executives, fans from the other 11 cities and baseball aficionados from all over the region.
Tell me about the events surrounding the All-Star weekend?
RubberDucks owner Ken Babby last year purchased the Jacksonville Suns of the Southern League. In fall, you were named president of Fast Forward Sports Group LLC, the parent company of the RubberDucks and the Suns. What are the challenges of overseeing the operations of two teams in two states?
We have planned a two-day event for the All-Star Festivities,
Being two places at the same time can always be challenging,
but the key for me is having the right people in place to operate our teams. We have an incredible staff in Akron, led by our Assistant GM Scott Riley, and because of his efforts and that of our entire team, it has allowed me to be able to travel to Jacksonville once a month or so to help get that team up and running for their season. Ken and I share a vision of bringing quality family entertainment in a clean, safe and friendly atmosphere at an affordable price, and I have enjoyed my extra responsibilities in addition to running the team in Akron. The RubberDucks have a pretty loyal fan base and have done well in merchandising, last year landing among the minor leagues’ top 25 in licensed merchandise sales. Did Akronites just get behind their hometown team, or is that something the organization has made an effort to work at? We are so fortunate to have an incredible fan base in Akron. Our fans love coming to the ballpark. We are always working hard to make Canal Park the epicenter of family fun, but our fans have really latched on to the RubberDucks identity. Being from Akron, I know how proud we are to be from this region, and we strive to provide a product that fans of all ages can be proud of and wear proudly 12 months out of the year.