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Merwin’s Wharf has found a home on the river and been a worthwhile effort for the Metroparks — P. 3 Cost of attendance has proven to be a complex challenge for Cleveland State and MAC schools — P. 4
UH’s plan to launch Level 1 facility has led to large divide on whether move is needed By TIMOTHY MAGAW tmagaw@crain.com
Cleveland still must address many key issues as GOP convention draws closer By DAN SHINGLER and JAY MILLER dshingler@crain.com, jmiller@crain.com
niversity Hospitals’ recent announcement that it plans to launch its own Level 1 trauma center has catalyzed a communitywide debate over whether another costly center was needed, especially when Greater Cleveland has been well served — at least as the hospital’s backers see it — by MetroHealth Medical Center. On one side, the move has been warmly embraced by public officials, particularly those on the East Side of the city who felt there’s been a trauma desert of sorts since Cleveland Clinic shuttered its money-losing Huron Hospital in East Cleveland. Conversely, backers of the Northern Ohio Trauma System, or NOTS — a Clinic and MetroHealth-led regional trauma network, which UH declined to join — characterize the move as a money-driven power play. But despite that back and forth, there likely won’t be any stopping UH’s effort to
U
ISTOCK IMAGE, PHOTOILLUSTRATION
See TRAUMA, page 28
Entire contents © 2015 by Crain Communications Inc. Vol. 36, No. 22
One year, one month and 18 days until the big event. That’s when the nation’s top Republicans, the party’s next presidential candidate, a throng of celebrities and a multitude of media will descend on Cleveland for the 2016 Republican National Convention. We’re nowhere near ready — but that might be OK. The Secret Service has not yet named a lead agent who will be in charge of security, and the RNC’s Committee on Arrangements hasn’t yet named a transportation consultant who will oversee the critical people moving. The Cleveland 2016 Host Committee, which was instrumental in putting together the bid that won the city the convention last July, only named its dayto-day top executive, chief operating officer Diane Downing, on May 18, and she only has one staff member, named at the same time. By comparison, the Philadelphia 2016 Host Committee for the Democratic convention there has had its executive director in place since it won its convention in February. That director, Kevin Washo, has already hired a handful of staffers, including a deputy director, a chief of staff and a director of diversity and community engagement. But then, Philadelphia has a slight advantage. It hosted the Republicans in 2000. Cleveland last hosted a convention, also the Republicans, in 1936. On the ground here in Cleveland, however, organizers say we’re as ready as we should be — and there’s plenty of work being done, even now, to prepare for an event that local boosters hope will be the biggest thing to come to town since the NBA Finals
RNC
CLE
trophy. Here’s a look at some of the key areas that are being — or need to be — addressed before next summer: Needless to say, an event as big as a national political convention requires a lot of money to pull off. During the past few conventions, that’s meant about $50 million that was granted by the federal governSee PREPARATIONS, page 24
ACK OLL TT P SCO
A TALE OF TWO TRAUMA CENTERS
We’re not ready, but we will be
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Small Business Matters i Want more information and resources on this week's topics, ideas and events? Go to www.cose.org/smallbizmatters.
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Merwin’s is mouth-watering addition Restaurant has helped Metroparks drive up its food revenue By KATHY AMES CARR clbfreelancer@crain.com
A trio of rowboats plies the Cuyahoga River near Irishtown Bend in Cleveland’s industrial Flats. On the nearby riverbank, skaters, runners, cyclists and other landbased urban adventurers take a break from their exertions to grab amber-colored beverages and various eats at a dockside restaurant. Who knows? At any given moment, the diners may see the nearby Columbus Road Bridge give a hulking ore freighter permission to pass through the shipping channel. Just a couple years ago, this plot of riverfront-facing land was little more than a boat showroom, marina and some post-industrial plots of concrete in an otherwise neglected area of the Flats. But thanks to the Cleveland Metroparks’ acquisition and repurposing of a 2.8-acre parcel, Rivergate Park is recharging a pocketsized space where nature and commerce coexist.
At the center of this parcel is Merwin’s Wharf, a full-service restaurant the Metroparks unveiled in late July 2014. Surrounded by the Cleveland Rowing Foundation, Ohio City Bicycle Co-Op, a skate park and bike rental station, Merwin’s Wharf is driving community riverfront connections while bolstering park system revenue. “Rivergate Park is a placemaking spot, and Merwin’s is its hub,” said Metroparks CEO Brian Zimmerman. The 180-seat open-air establishment is expecting a surge in traffic during its first full summer season based in part on 2014’s nascent sales trends, increased accessibility due to the December reopening of Columbus Road Bridge, and additional food and entertainment offerings. Among the latest Merwin’s enhancements: Dockside Grill outdoor grilling area with skewers, sandwiches and other grab-and-go items. Guests
can place their orders at the restaurant-attached ordering window. The 10-item menu features dishes such as watermelon and grilled haloumi salad, smoked salmon carpaccio, caprese skewers and langostino shooters. Paddler’s Point, an outdoor gathering place on the south side of the restaurant that includes a walk-up food order window, cornhole boards and picnic tables. Expanded lunch service. The restaurant recently expanded its lunch service to Thursdays and Fridays in addition to the weekend lunch hours. Live entertainment. Local musicians will perform bluesy-rock on an outdoor stage from 7 p.m. to 10 p.m. on Wednesdays. Its latest spring-summer menu rollout offers dependable items that range from sturdy soft pretzels, berry salads, protein wraps and burgers to walleye tacos and catfish dinners. “We try to offer something for See MERWIN’S, page 30
CLEVELAND METROPARKS PHOTOS
Cleveland Metroparks CEO Brian Zimmerman says Merwin’s Wharf, which debuted on the Cuyahoga River in July 2014, is the “hub” of Rivergate Park.
Manufacturing’s comeback trail is long, rocky By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com
U.S. manufacturers have found growth hindered by a whirlwind of factors this year, from the strong dollar to the drop in oil prices to a particularly rough winter. But Northeast Ohio’s connection to the still-strong automotive industry — and the tendency of many of its manufacturers to diversify the industries they serve — seems to be helping local manufacturers ride out the economic roller coaster. Stripmatic Products Inc. in Cuyahoga Heights has seen a “little more volatile” start to the year, said president Bill Adler. The metal stamper is on target to see growth this year, but the month-to-month sales have been unpredictable, which Adler ascribes to a still-lackluster economy and job market. Randy Solganik, owner of City
Plating in Cleveland, said business has been steady thanks to its strong base in automotive, but it has seen softness in the other markets. And companies like TimkenSteel Corp. in Canton have seen both extremes. “We are feeling the effects of a strong dollar and a U.S. rig count that’s down more than 50 percent,” said Joe Milicia, a spokesman at TimkenSteel, in an email. “The decline in rig count has been swift and dramatic. However, the rate of decline in rig count is flattening, and industry experts are forecasting we are nearing the end of the decline,” Milicia said. “On the other hand, we continue to see growth in our automotive markets in 2015. To the extent that new programs launch sooner, we could realize some upside in automotive markets.” Still, other areas companies have felt an even stronger squeeze. In re-
cent reports, companies including A. Schulman Inc. in Fairlawn and Chart Industries Inc. in Garfield Heights have highlighted the strong dollar as a hurdle. Steel companies that supply the oil and gas industry, such as United States Steel Corp. and Republic Steel, have laid off employees as oil prices tanked. Overall, the Federal Reserve has reported a decrease in industrial production, which includes manufacturing, mining and utilities, for five months in a row. The Fed found manufacturing output to be unchanged in April after a small gain of 0.3% in March.
How slow can you go? Fewer members in the Independence-based Precision Metalforming Association are expecting economic conditions to improve in the coming months, according to the
organization’s May Business Conditions Report. A majority — 60% — expects activity to stay about the same, an expectation president Bill Gaskin echoed. The industry thought it would be booming in 2015, Gaskin said, but instead, it’s been more of the same: modest slow growth. The “gravitational pull of the Great Recession has been great,” said Cliff Waldman, director of economic studies for Arlington, Va.based MAPI Foundation, pointing to the weak U.S. and global economies. In mid-May, the foundation lowered its expectations for manufacturing production growth for the year to 2.5% from 3.7%, thus forecasting a decline from the 3.5% growth it reported in 2014. Overall, he said, people aren’t surprised that it’s slow. They’re just surprised at exactly how slow it is.
Some of the headwinds affecting manufacturing in recent months were temporary, like the labor disputes at the West Coast ports, said Mekael Teshome, an economist for PNC Financial Services Group. Some of the other challenges, such as consumer caution and the strong dollar, may continue for awhile, he said. There’s a strong tie between manufacturing growth and consumer spending in North America, because of the types of products companies in those countries make, said Tom Mayor, industrial manufacturing strategy practice leader at audit, tax and advisory firm KPMG LLP’s Cleveland office. Everyone expected consumers to open their wallets because of lower gas prices. It hasn’t quite worked out that way. “People have been surprised that See MANUFACTURING, page 30
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Schools continue to grapple with the cost of attendance
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Volume 36, Number 22 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright Š 2015 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 212-210-0750 Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-9911, or email to customerservice@crainscleveland.com, or call 877-824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.
On April 15, Cleveland State University reversed an earlier decision to defund its wrestling program The move ended a 17-day battle in which local and national wrestling enthusiasts urged the university not to eliminate a sport it has carried for 52 years. Now, with the cost of attendance being added to the athletic department’s budget for the 2015-16 school year, comes the even more difficult part for CSU: How does it pay for everything? The Vikings are far from alone in trying to find a way to squeeze the cost of attendance — a stipend for student-athletes that, according to most estimates, ranges from $2,000 to $4,000 per year — into an athletic budget that is already too reliant on student fees and other school funds. The measure isn’t mandatory, and it’s largely viewed as a positive step, since it would give college athletes extra spending money. But with the COA comes a whole new set of questions, and months of analysis as schools scramble to balance their budgets before summer is more than a couple of weeks old. “People are waiting for interpretations,� Cleveland State director of athletics John Parry said. “There’s reasonable confusion.� The Indianapolis-based Horizon League, which counts CSU among its nine members, attempted to eliminate some of the uncertainty by ruling in April that all of its institutions must award the full cost of attendance for each men’s basketball player, plus an equivalent number of female athletes. “We tried to get ahead of the curve. We knew it was coming,� Horizon League commissioner Jon LeCrone said of the cost of attendance — a measure that picked up steam, and became a key recruiting tool for some schools, when the Power 5 conferences passed legislation in January.
Seeking answers LeCrone describes the Horizon League’s cost of attendance decision as “a combination of regulation and some autonomy decisionmaking for our schools.� In February, Parry told Crain’s that Cleveland State was looking at the cost of attendance from three perspectives, which would result in a budget hit ranging from $80,000 to $357,000 annually. The Vikings, whose $11,568,500 athletic budget in 2014-15 was almost $10.5 million greater than the athletic department’s annual revenue, are going with the least costly option as the COA is implemented for the first time this fall. Parry said the Vikings will award the cost of attendance — which he expects to be in the $2,900 range once the state passes its biennial budget prior to the June 30 deadline — to the 28 basketball players (13
men and 15 women) who receive scholarships. But instead of implementing the full COA, which would add an estimated $80,000 to the budget, CSU likely will phase it in over three years, Parry said. In 2015-16, the Vikings probably will award the cost of attendance at a rate of between 33% and 35% of the full amount, the athletic director said. Athletes will start receiving the full COA in 201718. Parry said coaches in other sports will have the option of adding the cost of attendance to athletes’ benefit packages, but if they do, the amount spent will come out of the program’s scholarship budget. And as has been the case since the measure first gained momentum, the more universities dive into the numbers, the more they find situations that need clarifications. There is a Student-Athlete Opportunity Fund, which, according to the NCAA’s website, helps needy athletes with funds for such things as education and clothing. Parry said there has been some belief that the fund could be used to help schools cover the cost of attendance, but he’s “still waiting for final interpretations from the NCAA� on the matter. LeCrone, the Horizon League’s commissioner, said he thinks the NCAA is going to open up additional funds that can be used to pay for the cost of attendance. And what about athletes who receive Pell Grants and get COA benefits? Parry wonders if those students will have to pay taxes on the benefits they receive, since they might be getting financial aid that is greater than the total cost of going to school. “People don’t have the answer to that,� he said.
MAC still crunching numbers The Mid-American Conference, a 12-member league based in Cleveland, doesn’t seem to be as far along in its COA decision-making as the Horizon. The reason for that is simple, but also very complicated: All of the MAC’s members have football programs (compared to two in the Horizon League), which makes the COA a much larger expense. The MAC is supportive of the cost of attendance, but it doesn’t have a leaguewide mandate on how the measure should be implemented. Earlier this year, Kent State University director of athletics Joel Nielsen told Crain’s the COA, depending on whether it’s awarded to every scholarship athlete, could cost the university more than $1 million per year. University of Akron director of athletics Tom Wistrcill estimated the COA would be a $600,000 to $700,000 expense for the Zips. The two athletic directors recently told Crain’s their universities have yet to make a final decision on the cost of attendance. Kent State is still “working on op-
tions, funding sources, etc.,� Nielsen said. Wistrcill, meanwhile, said Akron expects to wrap up its budget in late June. Ohio University director of athletics Jim Schaus expressed similar sentiments, saying there are “many financial aspects still up in the air.� The University of Toledo will award the cost of attendance to all of its scholarship athletes, AD Mike O’Brien said. But the Rockets’ athletic director said the amount hasn’t been finalized. At least one Ohio school from the MAC has made a firm decision on the COA. (Bowling Green didn’t respond to requests for comment.) Miami University will award the full cost of attendance — which will be $763 for in-state students and $1,873 for out-of-state students, assistant AD for athletic communications Dave Meyer said — to all 133 athletes who are on full scholarships. Meyer said the RedHawks will also give partial stipends to athletes who are receiving some type of athletic aid. The total expense is anticipated to be $375,046 for the 2015-16 school year.
Staying flexible The Horizon League’s LeCrone said the cost of attendance is “actually somewhat more manageable� for the conference, since it’s one that is focused on basketball, not football. “The football dynamic is entirely different,� he said. But even without football, the COA has proven to be pretty complex. Cleveland State’s athletic budget is further complicated by the addition of men’s lacrosse, at an annual cost of about $475,000, in 2016-17, plus the extra dollars that must then be invested into women’s athletics to meet Title IX requirements. Parry said “it’s not automatic� the Vikings will add a women’s sport in the coming years. Instead, he said CSU could decide to add to the scholarship budgets of such women’s programs as swimming and track and field. To keep wrestling, which has an annual budget of about $384,000, add men’s lacrosse and bolster a couple women’s programs, CSU will increase student fees a maximum of $3 per credit hour. The hike will be $1 in 2015-16, and go up one buck in each of the two years that follow. The Vikings are hoping to find a donor to help fund the wrestling program, and like their counterparts in the MAC, they’re eagerly awaiting the passing of the state budget later this month. “There are some things outside of our control,� Parry said. “Most people want to control everything they can. The competitive environment is changing, and you just have to be flexible with how you react to it.�
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Meijer is sizing up former Geauga Lake property By STAN BULLARD sbullard@crain.com
After marketing the former Geauga Lake property on and off since shutting the amusement park in 2007, Cedar Fair Entertainment Inc. is on the verge of making its first deal — and it’s a big one. Grand Rapids, Mich.-based Meijer Inc. is looking at taking 41 acres — just over 8% of the massive 500-acre property — for one of its hypermarket stores that sell groceries and general merchandise. Such stores are typically more than 200,000 square feet in size. Although Meijer had not applied formally by last Thursday, May 28, to Bainbridge Township to build on part of the landmark’s parking lot on SR 43 near the Marketplace at Four Corners, Sandusky-based Cedar Fair has had to show its hand in order for Meijer to submit plans to the township. Jeffrey Markley, chairman of Bainbridge Township trustees, said the trustees agreed to permit the Meijer application to be filed as part of a “win-win” strategy for the township, Cedar Fair and Meijer after learning that the amusement park operator was willing to sue to push the plan. “Suing does nothing positive,” he said, so trustees voted unanimously April 11 to exempt Cedar Fair and Meijer from a moratorium the trustees have had on development of the site since last November. The township in turn prepared a mixeduse zoning plan. The new zoning would preclude development of big-box stores and control development of the acreage to create a more desirable, Crocker Park-style project on the site. In exchange, Meijer agreed to
WIKIMEDIA
Grand Rapids, Mich.-based Meijer is hoping to purchase 41 acres of the former Geauga Lake property. Above is a Meijer store in Warren, Mich. work with the township to design the store so that it resembles from the outside a series of quaint, small shops. Meijer and Cedar Fair also agreed to install a road to the store that will also open up additional empty Geauga Lake land in Bainbridge to development. Meantime, the township is continuing to prepare its mixed-use zoning plan for the 200 acres around Meijer. “Cedar Fair does not want to be here, and Meijer will pay a lot of money to be here,” Markley said. He said trustees have worried about empty stores at the existing shopping centers in Bainbridge. However, trustees also recognize it will be difficult to redevelop the amusement park because it will be costly to remove remnants of amusement park rides and buildings from the land. Aurora already sidestepped such a
controversy. Aurora last year adopted by public vote a plan to impose mixed-use zoning on its 260 acres for former Geauga Lake Park land — and specifically zoned out big boxes like Meijer’s. Frank Guglielmi, spokesman for Meijer, said in an email that the retailer has interest in the Geauga Lake land. However, he noted, “At
this point, it’s just interest.” Retailers typically will not announce definitive plans until after approvals by local governments for such projects are in hand. Carolyn McLean, spokeswoman for Cedar Fair, declined to discuss the property. “I am not able to provide you with anything substantial at this
time due to our ongoing conversations with potential buyers,” McLean wrote in an email. Although Cedar Fair closed the amusement park, which traced its existence to the 1870s when it began as a lakefront location for public picnics, it continues to operate the Wildwater Kingdom water park at Geauga Lake.
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A new step is afoot that may install a new owner at Severance Town Center, the Cleveland Heights property that already is subject to a sheriff’s sale on a defaulted $39 million loan. CW Capital, a Bethesda, Md., special servicer that controls the securitized loan on the 645,000-squarefoot open air center at 3640 Mayfield Road, plans to offer the mortgage for sale with hopes to complete a deal by the end of August. That’s the word from New York City-based Trepp LLC, which receives updates from special servicers on troubled collateralized mortgage bond securities as part of its coverage of the market for loan issuers and underwriters. Moreover, Trepp said the note sale may produce proceeds of less than $24 million because the Regal Cinemas, which occupied 9% of the center, closed after its lease ended in March. The note offering means CW is opening a second track for disposing of the Severance mortgage. Judge John O’Donnell of Cuyahoga County Court of Common Pleas on Dec. 31, 2014, declared current owner Severance SPE Feeco LLC, an affiliate of Chicago-based Syndicated Equities, in default and ordered a sheriff’s sale. Severance SPE had purchased the retail center that replaced the former Severance mall for $55 million in 2003. However, the property went into foreclosure in July 2014 after the loan matured. The center had lost its Walmart anchor to the new Oakwood Commons big box center, which also made it difficult to fill vacant space at Severance, even though it continues to be home to retailers ranging from Home Depot and Marshall’s to Dave’s Supermarket. However, court records show the property did not sell on Feb. 6 at the sheriff’s sale. A new appraisal is being conducted before it goes to another sheriff’s sale at a future date. Should the special servicer find a buyer for the note, that buyer might complete the foreclosure process to secure ownership of Severance.
An entrance sign at Severance Town Center highlights current retailers — and open space. STAN BULLARD
And there are interested parties. Colette Gibson, the court-appointed receiver, said in a May 27 interview that several real estate developers have inspected the property and met with Cleveland Heights city officials about the center. Scott Wiles, a senior director specializing in retail property at Marcus & Millichap’s Independence office, said prospective buyers remain in the hunt for properties such as Severance. However, fewer bidders might be willing to buy the note and follow through with the sheriff’s sale, Wiles said, than might prefer to wait and deal directly with the lender for the complex. In either case, Wiles said the center likely needs more than a new owner with a lower purchase price who could slash rents to fill empty stores. “At some level, you have to look around and see who is available to fill the space,” Wiles said. “Most retailers have existing positions in
that market area. You can lower rents and seek lower taxes based on a lower purchase price. But there’s a lot of empty space. You’ll have to be creative and find other uses for the center, such as call center or medical uses to get the occupancy back to where it needs to be.” Meantime, the city of Cleveland Heights wants to see the value of the center protected, according to Richard Wong, city planning director. “You have to reinvigorate it and make it relevant to today’s marketplace,” Wong said. “A new owner could build off the core strengths of Severance, such as existing tenants and surrounding uses.” He noted part of the property might be redeveloped as for-sale townhouses, which have done well in the Heights. Mike Goodwin, a spokesman for CW Capital, declined comment on the Trepp report. CW’s website last Thursday, May 28, did not list the loan as for sale or auction.
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Buckingham regains strength after long battle After ‘fighting for its very existence’ during the recession, law firm is projecting 5.7% profit gain for ‘15 By JEREMY NOBILE jnobile@crain.com
Just five years ago, the Buckingham, Doolittle & Burroughs ship was taking on water. Like many firms, the recession hit hard at Buckingham, which was founded 102 years ago in Akron. John Slagter became managing partner in 2009 as Buckingham was reeling from the financial crisis. That’s when a new course was plotted for the company. Slagter laid off about 16 attorneys and dozens more support staff. In 2013, Buckingham, which was celebrating its centennial anniversary, divested its presence in Florida, where the company followed a health care client to more than 20 years prior. The offices there were simply underperforming, Slagter said, and Buckingham decided that reeling in its operations made more strategic sense as they sought to establish a more stable footing. “For me, my focus was on restructuring and survival,” Slagter said. But 2013 proved to be a pivotal year for Buckingham. After losing money in the years immediately following the downturn, 2012 saw finances begin to stabilize. By 2013, revenues began trending up again. And the pace has continued. By the end of 2015, Slagter said Buckingham expects to log an 11.5% revenue increase over 2012. Profits this year are expected to be up 5.7%. The firm’s total revenue is more
than $26 million. “When John stepped in as managing partner, our firm was struggling and fighting for its very existence. Like many other firms, we had grown too quickly and had outgrown our client base. The problem was exacerbated by the departure of a number of attorneys,” said Joe Feltes, partner-in-charge for Buckingham’s Canton office. “Five years ago, the firm’s prognosis was guarded,” he added. “Today, we have focus and are aimed at becoming a pre-eminent business firm to match the needs of our clients. I think the future looks bright.”
Sharper vision In May 2014, Buckingham launched a six-year plan internally dubbed Vision 20/20 —a reference to both clear vision and the initiative’s target year of 2020. The plan came out of an internal assessment, Slagter said, which began as soon as he became the firm’s managing partner. “The importance of the 20/20 initiative is to provide us with a disciplined process to strategically augment and enhance the capabilities of the firm to improve the client experience,” said David Kern, partner-in-charge of Buckingham’s Akron office. “We took a look at the client base and what kind of services we were providing,” Slagter said. “It became clear: We have a lot of middle market companies we represent. We wanted to not only focus our ener-
Buckingham, Doolittle & Burroughs managing partner John Slagter gy on clients, but they types of areas we practice in.” That includes the physical, regional area in Northeast Ohio. “We used to have offices in other states, but we decided it was time to focus on the region where we all started,” he said. “I didn’t want to just have a strategic plan. I wanted to be a strategic business.” Last year, Vision 20/20 kicked off with a rebranding and a fresh logo. Following that was more than $1 million invested in consulting, new technology — like systems for teleconferencing between Buckingham’s Akron, Canton and Cleveland offices — and new training for lawyers. All those efforts are intended to enhance efficiency and convey a strong refocusing on serving the firm’s middle-market business clients, which in turn should further elevate the bottom line. This year, the firm is interviewing clients to get a better sense of how
to serve them. “I think they’re going to want to see more predictability in fees, and I know that because I’m running a business myself,” Slagter said, adding that fees have increased slightly over the years, but the focus today is on offering better targeted and streamlined legal services. Changes enhancing transparency, like upfront estimating, which is something he said clients are asking for, are already being worked into the business model. On its website, Buckingham lists 16 practice areas, and the company is soon pulling that in to six: business; litigation; employment and labor; real estate and construction; health and medicine; trust and estates. While the firm still intends to handle cases in other areas like intellectual property and nonprofits, the change reflects Buckingham’s refocus on its strongest practices areas. “With our new plan, we as a firm are taking advantage of our areas of specialization and targeting them at the business sectors where we have decades of significant experience,” said David Woodburn, a Buckingham partner and member of its executive committee. “This approach enables our firm to efficiently serve our clients and partner with them in their growth and success.”
‘Great opportunity’ While the demand for legal services is growing, the market itself is still soft compared to years preceding the market crash.
With a client base heavy in regional, middle market businesses, Slagter said refocusing on Northeast Ohio “makes sense.” He referenced statistics from a recent middle market forum suggesting more than 60% of businesses will undergo a leadership change in the next decade — and that presents additional work opportunities. “There’s a lot more business activity going on now than there has been in years,” said Slagter, whose personal background is in real estate. “This region provides great opportunity and we are proud to be a key part of Northeast Ohio’s renaissance. I believe our focus on this region has and will continue to provide a significant advantage to our clients that do business here.” Buckingham today has just under 70 attorneys and 130 staff members in total. Slagter said the firm is hiring about one or two attorneys a year to bolster its corporate lawyer ranks. Slagter said he’d like to see the firm at 100 attorneys by 2020, which would support its efforts to become the leading regional business law firm in Northeast Ohio. The biggest challenge to that, he said, will be competition for talent. But there are no immediate plans to grow the footprint again, Slagter said, at least not until its Vision 20/20 initiative culminates in a few years. “You have to get it right first (before you expand),” he said, “and I think that’s where a lot of people make mistakes.”
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Battling money laundering is lucrative move By JEREMY NOBILE jnobile@crain.com
Chris Brauser noticed a stark split among the room’s crowd at a financial conference he attended in the Caribbean early in his career. G-men in black suits and ties filled one side. Middle-aged men with dark tans in colorful print shirts and shorts populated the other. The topic of the conference was anti-money laundering rules and regulations. Attendees were generally either rich businessmen or law enforcement investigators. All were there to listen about how the laws were changing. Brauser was, too. Today, Brauser, 40, is CEO of Gabriel Partners, a Cleveland financial advisory and risk management firm specializing in anti-money laundering and financial forensics. With anti-money laundering comprising the bulk of its business, the company works most often with banks and other financial institutions running the gamut in assets from $100 million to $100 billion. Those groups contract with the firm to work through today’s intense regulatory landscape and to assess financial reporting systems. It became quickly apparent the attire seemed to divide the crowd by “good guys and bad guys,� cops and crooks, Brauser said — the ones with offshore accounts often associated with illegal activities and the investigators who would try to catch them. He sat with the suits. “Hey, I didn’t want to get arrested,� quipped Brauser, a 6-foot-6 executive whose short hair is fashioned into a small Mohawk. Brauser saw then how the banking world was changing and how the world of anti-money laundering and forensic accounting had potential to become an explosive industry, particularly in the rest of the United States. That was nearly 20 years ago. “And 20 years from now, we might not even have banks, at least not in how we know them today,� Brauser said. “We’re in an explosive industry. And this is only going to create opportunities for us.�
Safe and sound Gabriel Partners, established in July 2013, reports that its revenues have surged by 500% in the last 18 months. Brauser projects revenues of $20 million to $25 million this year. The firm started with fewer than 20 employees. There are more than 105 today, and Brauser said it will hire more than a dozen in just the next couple weeks. Brauser by this fall expects to hit the 155-person capacity on the 31st floor of 200 Public Square. The company already is considering opening an additional office in the southwest. Gabriel Partners emphasizes hiring military veterans, especially those with backgrounds in reconnaissance, and has training programs tailored specifically for them. Many of Gabriel Partners’ clients are on the East and West coasts and along America’s southern border, where money laundering is rampant along with illicit activities, from drug trading to human trafficking. Prior to Gabriel Partners, Brauser founded AML RightSource LLC in 2004, a small Cleveland group that focused mostly on financial advisory and financial accounting work. Brauser anticipated a surge in the anti-money laundering advisory
CONTRIBUTED PHOTO
From left, Gabriel Partners CEO Chris Brauser is shown with executives Frank Ewing, Zak Schweda, Paul Linehan, Samuel Rosenfeld, Eric Fudo and John Ellis. business coming, but that was a small part of what AML did. He bought out the other owners at AML to start Gabriel Partners, where anti-money laundering services comprise 96% of the business. The rest is consulting and advisory work. It’s a complete flip from the focus for AML. “I saw the change coming years ago,� he said. “But when the recession happened, no regulator cared about anything besides safety and soundness.� Anti-money laundering efforts were an afterthought. Then, in the wake of the recession, new regulations kicked in. Many financial institutions today are scrambling to keep up with new compliance measures and assess their current systems. John Byrne, executive vice president at Association of Certified Money-Laundering Specialists (ACAMS), a global for-profit trade association headquartered in Miami that provides training, education and certification for people working in financial crime, called Gabriel Partners’ growth “very impressive.� It reflects that the company is poised to compete with massive financial services corporations, like those in the Big Four, which also offer sophisticated forensic accounting services. “It shows their strategy is not only valid, it’s working,� Byrne said. Some of Gabriel Partners’ staffers are members with ACAMS, which has a Northern Ohio chapter, and Brauser often speaks at the association’s conferences. “They’re definitely a company on the move,� Byrne said, “and we’ve noticed.� The banks Gabriel Partners works with don’t like to associate themselves publicly with anti-money laundering services and wouldn’t comment for this story. But Shawn Riley, Cleveland managing partner for law firm McDonald Hopkins, said Gabriel Partners’ consultants are “at the top of the group.� Several of the firm’s clients work with Gabriel Partners, which in turn provides expert witness testimony from time to time. “The feedback we get with respect to their services has been extremely positive,� he said.
Disruptions equal opportunity From illegal activities to disruptions in the payment space (think PayPal and the like), the evolving and increasingly complex world of finance and banking is resulting in lucrative opportunities for companies like Gabriel Partners. “And as this all gets more complex, the behaviors become more complicated,� Brauser said. “That’s where we find our market opportunity.�
And then there are unbanked populations, which could include everything from businesses dealing exclusively in cash to groups banks deem as high-risk individuals such as undocumented immigrants and college students. There are companies offering banking services to those people, “pseudo banks,� Brauser calls them, “and that represents a lot of growth opportunity for us.� Indeed, banks years from now will undoubtedly look different from to-
day. And as those evolve, so will additional opportunities come for Gabriel Partners. Brauser’s firm is on the forefront of anti-money laundering and financial forensic work. But a future challenge for companies like Gabriel Partners will be price competition. Brauser expects this and is already making efforts to make the business more efficient. “We know competition in our space is going to increase,� Brauser
said. “Right now, we’re a leader, but I know I’ve got to be prepared to get into a pricing battle, which means I have to get better, I have to get faster.� While declining to discuss specific efforts, Brauser said an efficiency initiative in the works today could cut business costs by 30%. “And if we can do that and maintain profitability,� he said, “I think we will capture the entire market.� And while the company’s 35 clients include no Ohioans — yet — Brauser intends to keep his headquarters in Cleveland, even though other cities across the country are knocking on his door and courting him to their regions. Economically, this area is cheap to work in. The talent pool is robust, Brauser said. But beyond that, the Hartville native’s heart will always be in Northeast Ohio. “It’s got the right elements. I like it here. I like the people here. I think that the region needs to grow and needs to change, and I don’t think that change comes from leaving,� Brauser said. “The hard work is staying and forcing it to change,� he said. “If you’re a Cleveland person, and you believe in Cleveland, you stay and try to make it better.�
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PUBLISHER:
John Campanelli (jcampanelli@crain.com) EDITOR:
Elizabeth McIntyre (emcintyre@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
A start Sometimes you have to hit rock bottom before you can begin rebuilding. Let’s hope that the agreement reached between Cleveland and the U.S. Department of Justice is a way of rebuilding trust after rock-bottom policeshooting incidents, including a chase and shooting in 2012 that resulted in the deaths of two unarmed citizens in a 137-bullet barrage and the shooting of 12-year-old Tamir Rice in 2014. The relationship between the city’s police department and many in the community it serves has long been broken. Last week’s reform deal, which calls for an overhaul of the Cleveland Division of Police, lays a solid foundation. It covers use-of-force guidelines, better training, “bias-free” policing, crisis intervention and increased community engagement. An independent monitor, chosen by the city and the Justice Department for an initial term of five years, will oversee the plan. The consent decree stemmed from a scathing report by federal investigators that found a pattern of abuse involving excessive use of force, lack of accountability and numerous civil rights violations. It marks the second time in recent years that Cleveland’s police department has entered an agreement with the Justice Department to reform its policies. The community — from business people, civic leaders, clergy, elected officials, to everyday citizens — must do its part to ensure the settlement agreement succeeds this time. Proof exists that when a diverse group of interests come together, the community benefits. Look to 2012, when the business community and other stakeholders rallied for Cleveland’s Plan for Transforming Schools. That support helped win voters’ approval – and led to the passage of a school operating levy in Cleveland for the first time in 16 years. The schools effort, however, took years of planning, collaboration and compromise to pull off. And it took money. This will, too. Millions of dollars will be needed to adequately equip, train and staff Cleveland’s police department to meet the settlement’s requirements, and it’s no surprise that Mayor Frank Jackson couldn’t estimate the cost. Joe Roman, president and CEO of the Greater Cleveland Partnership, said he expects the business community to take the same active role in implementing the settlement agreement as it did in the Cleveland schools transformation. “I think we have to do the same thing here,” he said. Darrell McNair, president and CEO of MVP Plastics Inc., said the business community, and philanthropies, can go beyond the consent decree to have a lasting impact on safety in Cleveland. “When you peel the onion back far enough, you get a socio-economic issue here,” said McNair, past chair of The Presidents’ Council, the largest AfricanAmerican economic development organization in Cleveland. “Are we developing enough employment opportunity, enough skills-based training through our philanthropic organizations to help people become employed and be participating members of the community. If people have an opportunity to participate meaningfully in society, you don’t get the disruptive behavior out on the streets.”
FROM THE PUBLISHER
Crain’s Akron is big, worthwhile step The distance between Cleveland and covered Akron news, especially the Akron is about 40 miles. high-interest sectors of health care, For some people, it may as well be higher education, manufacturing and 400. energy. But that coverage was always These are the Cleveland people who measured with the news judgment of a never think about Akron, or if they do Greater Cleveland business newsroom. it’s as if the Rubber City were a suburb, That’s changed. This week, we are somewhere south of launching Crain’s Akron DaiBrecksville. These are people ly, an email newsletter creatwho’ve never crossed the Yed solely for Rubber City busiBridge, never tasted Barberton ness professionals. It will be chicken or never pushed back loaded with news and infora bucket seat at Swenson’s. mation about Greater Akron’s Ask them what a “jo jo” is and vibrant business community they’ll look at you like an alien. filtered through the news But these are also the Akron judgment of a dedicated people who look to the north Akron editor. with disdain, who box against This is the beginning of a the shadow that Cleveland JOHN Crain’s Akron Business. A casts over all of Northeast monthly print version will be Ohio. These are people who CAMPANELLI launched this fall. refuse to drive north to enjoy Why are we doing it? First the cultural fruits of a bigger city, who off, Akron deserves its own dedicated see slights where none were intended or business news source. Is there a city the who harbor such contempt that they size of Akron with such a rich history, forbid the use of the C-word in their ofbusiness culture and upside that doesn’t fice (don’t laugh; it’s happened). have a business journal? I haven’t found But that’s only some people. I believe one. most people in Akron and Cleveland, In addition to serving the business especially in business, recognize the improfessionals of Greater Akron, our exportance and power of both cities and panded coverage serves everyone in our the gift we were given by having them region. only 40 miles apart. Savvy business people from SanCrain’s Cleveland Business has always dusky to Chardon to, of course, Cleve-
land are going to want to know more about what’s happening in the Akron area. In many ways, the Northeast Ohio economy is a living organism. If Cleveland is the head, then Akron is the guts, proven with its reinvention and resilience. When all parts of our anatomy are healthy and thriving, we as a region cannot be stopped. We’ve been working on Crain’s Akron behind the scenes for almost a year, meeting with business and community leaders, conducting focus groups, getting advice, studying the market and finding an experienced Akron-area journalist who can spend her days reporting the news and coordinating coverage. Sue Walton is her name; feel free to reach out to her at swalton@crain.com. As we met with people, not only were we warmly welcomed, we were given, without exception, above-and-beyond offers of assistance. The culture of collaboration in Akron is unmatched. Our job now is to execute, to provide Crain’s specialty: relevant, interesting and valuable business news and information. Please jump on and see how we do. It’s free and easy to subscribe to Crain’s Akron Daily. Just visit tinyurl.com/CrainsAkronNewsletter.
TALK ON THE WEB Re: DOJ consent decree Imagine having every moment you are on the job monitored by camera. This will do the opposite of solve crime. The police are on their way to becoming glorified security guards, as they will not feel enabled to protect and serve. Instead, they will do what they can to avoid controversy. I could be wrong, but I predict a chilling effect on actual crimes being solved. BTW: Why would the feds be involved as it is a local matter? As if they have all the answers. (Witness the Secret Service.) Big Brother will be watching … but not looking out for 99.9% of future victims. — Joe
Re: New retailer for downtown Geiger’s is a savvy local retailer with excellent customer service. Locating next to Heinen’s is a smart business move, as I’d guess the demographics are quite similar and co-location builds some retail synergy not far from the East Fourth Street-area arcades that are filled with niche local retailers. — John M. McGovern
Re: Legalizing pot The state Legislature won’t touch it. House Speaker Cliff Rosenberger made it clear that he is opposed to any
action that could involve legalizing marijuana.” So it’s up to Ohio citizens to do what’s right, because Ohio politicians serve their re-election campaigns first and Ohioans second. — M. Crowley
Re: Summer movies at Edgewater Park The Cleveland and/or Metroparks police need to not only have a uniformed presence at these movies, but plainclothes officers also mixed in the crowd. Don’t let undesirables cause problems for all the good people in attendance. — Jim Daniloff
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Small Cleveland firm believes it will pack big punch with unique approach By JEREMY NOBILE jnobile@crain.com
A couple prominent Cleveland lawyers have launched a firm here with intentions of capitalizing on the changes revolutionizing the delivery of legal services. Scott Matasar and Mark Jacobs in May formed Matasar Jacobs LLC in downtown Cleveland. While clients of both have followed them to their new venture, the team expects to attract new business with niche expertise and a heavily client-focused business model that they say embraces alternative fee arrangements and competitive pricing — two major trends reshaping a well-entrenched industry. That shift from traditional models is moving slowly across the field with large firms making calculated and methodical changes over time. But Matasar and Jacobs say a new firm operating at a nimble size can achieve those changes faster as the business crafts its identity. “What’s unique is what we’re trying to develop here,” Matasar said. “There are small firms that produce top-level work with outstanding practitioners who are experts in particular niches providing services comparable to much larger firms. We perceived that there isn’t that kind of law firm here in Cleveland — at least not at this point, from our view.” Matasar, 44, a Detroit native, was most recently an equity partner at Calfee, Halter & Griswold LLP, where he focused largely on securities and business litigation. Jacobs, 42, a Cincinnati native who grew up in Shaker Heights, was a partner and litigator in the Cleveland office of Taft Stettinius & Hollister LLP, where his practice dealt primarily with commercial and business disputes. While the two are marrying their focuses on finance and business law, they’re not out to recreate their former practices.
“This is an opportunity to follow our visions for how we want to practice law,” Matasar said.
‘Maverick’ spirit And that vision may very well shake up the local legal market. Christopher Sagers, director of the solo practice incubator at Cleveland-Marshall College of Law, said legal services were expected to transform as firms trudged through the recession that saw business opportunities slashed as corporate legal budgets scaled down, which forced practices to fold and put some lawyers out of work. Today’s market, he said, is still dominated by massive firms slow to embrace changes stemming from client demands for lower fees, greater transparency and a desire for firms to take on more risk in a given case. Of course, many startups fail simply because of the fierce competition that Matasar Jacobs will be facing, he said. “What I wanted to believe is someone would come along, be entrepreneurial and eat those other law firms’ lunch,” Sagers said. “You’d think someone could do it because other law firms charge very, very high fees. What I expected to see were maverick law firms seeking to serve large, wealthy clients and attracting them with fee competition. “It’s my impression that hasn’t happened yet,” he added. “But maybe (Matasar Jacobs) are trying to do that. And God bless them if they are.”
Feeling flexible With decades of experience and a history of successful practices behind them, Matasar Jacobs’ services certainly won’t come cheap, of course. But the founders believe their client-focused delivery will make an impact and attract new clients.
“Our model is really about knowing and understanding clients and knowing their broader business objectives and crafting our practice to meet those needs,” Jacobs said. “A firm of our size and expertise will allow us to approach that in a much better way. We don’t expect to have a set way of doing anything. That’s really the flexibility.” Costs in complex cases can rise quickly. When that happens, clients’ concerns on the bills can affect the lawyer’s strategy in a case, such as whether they might settle sooner or for less money or simply whether to pursue a case at all. That’s when the tail starts wagging the dog, “And that inhibits the attention from being able to bring to bear the full range of strategic advice because certain things wind up coming off the table because they’re just too expensive,” Matasar said. In one example, Matasar referenced negotiations with one client now working around a set fee for a given period of time. A coming advertising campaign for the firm geared toward finance companies will heavily push pricing and the availability of unique fee arrangements. Beyond predictable pricing is the fostering of deeper relationships, which Matasar Jacobs intends to brand itself on. Understanding a company and offering new delivery methods is key to the business model. It’s also partly why the duo plans to work as a twosome for the time being — adding scale will expectedly come in the future, Jacobs said, emphasizing there’s no intent to grow for the sake of growth. “We do our best work when we are invited to be embedded in a customer’s business and understand them on a more global level,” Matasar added. “We don’t want to just come in like firefighters to deal with this one issue. We want to structure strategies to further larger strategic goals of the company.”
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What really happens at a political convention? By CHRISSY KADLECK clbfreelancer@crain.com
When scores of politically pumped delegates arrive in Cleveland next July, they will gather at the Q with the main purpose of nominating the Republican Party’s 2016 presidential candidate and confirming the vice presidential candidate. Beyond that monumental and history-making task, however, the four super-charged days of the national convention also are marked by political activities that are both formal and informal, said Karen Beckwith, the Flora Stone Mather Professor in the Department of Political Science at Case Western Reserve University. “This is a real opportunity that comes once every four years for a party to sort of bond at that national level,” Beckwith said. The second main role of a convention is to adopt the Republican Party’s political platform, she said. “The certification of delegates and resolving any disputes, the hearing of various committee reports and crafting the party platform are all the things that happen formally at the convention, and they culminate in the formal nomination of the party’s nominee for president and the confirmation of the vice presidential choice,” Beckwith said. “Then we can think about the informal, less structural events that are not listed in the RNC rules — those include the major purpose of launching the presidential campaign, so as soon as the nominees are confirmed, that begins the campaign for the presidential election.” Conventions themselves haven’t really been particularly surprising in their outcomes since 1968, when the Democratic convention was in an uproar because even though Eugene Mc-
Carthy got more delegates from primaries, the convention nominated Hubert Humphrey, said Justin Buchler, associate professor in the Department of Political Science at Case Western Reserve University. “This led to an uproar in Chicago and some actual riots broke out,” Buchler said. “After that, the Democrats formed what was called a McGovern-Fraser Commission, and this commission was charged with changing the rules for delegate selection. … It adopted a new set of rules for 1972 and onwards, such that delegates were selected by primaries and caucuses and then the Republicans followed suit.” Before 1968, delegates cut deals with each other in order to determine who the nominee would be. “Every convention since the 1972, the nominee has been determined already by the primaries and caucuses and it has been primarily ceremony,” Buchler said. “Mostly what happens at the convention is spectacle and since the process has changed, what we have tended to see is that conventions mark the point at which attention to the presidential campaign starts to pick up among voters.” The convention is also an opportunity for the party to showcase rising stars and dig into the groundwork of the party that is not exclusively about the presidential candidate but also future Senatorial and House candidates and local candidates, Beckwith said. “Certainly persons who are there with their own political aspirations will be networking and they will also be looking for fundraising opportunities,” she said. “If you are thinking about running for a House seat, you’ll spend time connecting with people who share your values, who share your
interests and who are likely to support you.” Rob Frost, chairman of the Cuyahoga County Republican Party, was an alternate when the national convention was held in Tampa in 2012. “As a delegate you need to be in session each of the four evenings,” Frost said. “There are votes on platforms and rules in addition to the vote on the nomination and a lot of speeches. It’s a lot of fun. It’s one big huge political rally for four days and as a delegate you are part of that, front and center, sitting on the floor of the arena.” The most famous ceremony of the convention is the roll call of the states during which each state allocates its votes to a particular candidate, Buchler said. “They always give little speeches about what makes their particular state great,” he said. “It takes a long time but I find that part fun to watch and listen to how all of the states pitch themselves. That leads to the delegate count and there is usually some little extra thing for the state that puts the eventual winner’s delegate count over the 50% threshold.” In addition to the main event on the floor of the convention, there will be a lot of side events happening during and around the convention that are not related to the core ceremony. “It’s not like one of those music festivals that’s 24 hours a day for four days. People aren’t going to spend every second of the convention standing on the floor of the main convention hall,” Buchler said. “They are going to go off and do different things. They are going to have meetings. They are going to have rallies. They are going to have their separately hosted events. There will be meetings of special interest groups that are party aligned.”
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And the (presidential) race is on ... More than 400 days before the convention, eight candidates have officially declared their intention to vie for the highest elected office in the country: Ben Carson, Ted Cruz, Carly Fiorina, Mike Huckabee, Rand Paul, Marco Rubio, Rick Santorum and George Pataki. Other political players such as Jeb Bush, Scott Walker and Rick Perry are expected to announce their candidacy but have yet to “officially” do so. Then there’s the list of potential candidates, which includes Ohio Gov. John Kasich, who made an unsuccessful bid for the presidency in 2000. A nine-term member of the House, Kasich could be a “plausible” candidate for president and give pause to a candidate or two from the Midwest, but he is more likely to shape up as viable vice presidential candidate, according to political scientists here in the Buckeye State. “The race could change marginally if Kasich were to enter,” said Justin Buchler, associate professor in the Department of Political Science at Case Western Reserve University. “He would be a plausible nominee. Right now there are three people who are sort of the top tier of candidates and most likely to get the nomination — Jeb Bush, Scott Walker and Marco Rubio — all of whom have at least the potential to be broadly acceptable to the Republican Party, and then you have a bunch of candidates who are not broadly acceptable and hence not likely to get the nomination, or people who are sort of backup candidates.” If Walker, Rubio or Bush were to stumble, there might be an opening for a candidate like Kasich, Buchler said. “Kasich would be the type of person who would appeal to those favorable toward Bush,” he said. What Michael Parkin, associate professor of politics at Oberlin College, said he sees in the already crowded field of conservative politicians is the lack of defining differences between candi-
dates. This poses a problem for Kasich. “As is the case in any primary within a party, you are going to have people with pretty similar views, and I think this is a potential liability for Kasich because he would need to somehow distinguish himself,” Parkin said. “The strength of his record as governor of Ohio, his experience on Capitol Hill — he has done well — but how does he put that message together so that he stands out in what is going to be a crowded field of people who aren’t going to disagree with a lot of things that he has done.” If Kasich were to enter the race, it could give pause to one person in particular, said Karen Beckwith, the Flora Stone Mather Professor in the Department of Political Science at Case Western Reserve University. “If he were to declare, I think it would cause problems for Gov. Walker in Wisconsin, and I think it would make him think twice,” Beckwith said. “Kasich is a two-term governor from Ohio. He won by a landslide in somewhat lucky circumstances just last year. Ohio is a bigger state than Wisconsin and we have almost twice as many electoral votes. We are not only a more populated state, we are a more diverse state and we are a powerful swing state.” It’s way too early to say who the presidential nominee will be let alone the vice presidential candidate, but political experts agree that one way to be considered a serious vice presidential candidate is to declare for the presidency. “Ohio will have 66 delegates at the convention, the ninth-largest state delegation at the convention. We’re in Ohio for the convention and Ohio is a major swing state, especially for the Republican Party, these are things that would presumably favor Kasich,” Beckwith said, “I would think a convention would not look to Scott Walker if it could look to John Kasich as a vice presidential candidate.” — Chrissy Kadleck
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Brian Moloney says wise business travelers steered clear of Phoenix this winter when the Arizona capital hosted Super Bowl XLIX. Likewise, that family getaway to Rio de Janeiro should not fall anytime in August 2016 when the Brazilian seaside city will be engorged with Olympic athletes, spectators and media. Any plans to descend on Cleveland mid-July 2016 should be right out the door as well. “It’s not just a question of where are you going to sleep. Getting in and out of downtown will be difficult. Navigating anywhere around Quicken Loans Arena and the convention center may be impossible,” said Moloney, manager of the Wyndham in Playhouse Square and chairman of the local chapter of the Ohio Hotel & Lodging Association. Organizers anticipate 50,000 people will invade Cleveland when the Republican National Convention comes to town next summer. The convention is not open to the public, so the bulk of those visitors will be elected officials, entertainers, delegates and activists. Media coverage accounts for another 15,000 expected RNC guests. Long before the exact dates for the RNC event in Cleveland were announced early this year, Moloney and fellow managers of downtown hotels signed contracts to reserve a majority of their rooms for the convention. Most downtown hotels are 90% committed, he said, and reserved blocks go well beyond Cleveland and its suburbs. “(The RNC) reached out as far as Akron and Canton,” Moloney said. “They had needs way, way beyond the local market here.” The Cleveland host committee, headed by David Gilbert, who also serves as president and CEO of the Greater Cleveland Sports Commission and Destination Cleveland, declined to provide detailed information on hotel and housing arrangements for the event, which will take place at Quicken Loans Arena on July 18-21, 2016.
“(The RNC) reached out as far as Akron and Canton. They had needs way, way beyond the market here.” – Brian Moloney, chairman Ohio Hotel & Lodging Association local chapter However, it did send along a broad outlook. According to an email from Destination Cleveland spokeswoman Jennifer Kramer, 16,000 Northeast Ohio hotel rooms have been pledged to RNC, which will assume the task of assigning guests. Nearly 5,000 of those rooms are in 19 Cleveland hotels. Approximately 1,100 dorm rooms and 500 apartments downtown also will be utilized for the convention. While Cleveland hotels are largely booked, there are rooms to be had outside the city. Marin Owen, corporate sales and marketing manager at Hilton Garden Inn in Twinsburg, said it promised 115 of its 142 rooms to the RNC organizers. The remaining rooms will be doled out on a first-come, firstserve basis this July when the hotel begins accepting reservations for that weekend. IHG Group, which owns hotel brands InterContinental, Crowne Plaza and Holiday Inn, among others, has availability during the convention dates at Holiday Inns in Brook Park, Oakwood Village, Mayfield, Richfield and Streetsboro, according to IHG spokeswoman Kristal McKanders. Meanwhile, apartment and homeowners across the region already are preparing for an onslaught of delegates and dignitaries who can’t grab one of Northeast
Ohio’s fairly limited number of hotel rooms. Ohio City resident Don Hallum owns two apartments in an 85-year-old brick warehouse on Bridge Avenue and rents them out regularly through the Airbnb website. “During summer, I have to block out days so I can get a break (between boarders),” Hallum said. Not knowing what to expect with the RNC, he opted to list the apartments with a real estate broker rather than rent them out himself. Hallum said a friend recommended Re/Max agent Katy Brahler. She listed his firstfloor one-bedroom loft for $6,900 that week and the one-bedroom upstairs unit for $4,500. Normally those apartments fetch $149 and $135 a night, respectively. “I really hope someone stays here,” he said. “It’s just such a nice space and it would be great to be a part of something that is so great for Cleveland.”
Location, location, location Brahler said she has about 250 MLS and pocket listings lined up for RNC guests. None of those listings are currently booked, although Brahler is fielding about one phone call a week related to convention housing. “We get a lot of inquiry calls right now,” she said. “I think they are trying to book downtown first, the hotels, and once they find out those are booked, they start looking elsewhere.” Brahler’s focus has been securing condos and single-family homes downtown or those in Ohio City or Tremont. She has signed contracts with homeowners in Parma and other suburbs, but is not yet spending the time or money to add those to the MLS. “We don’t know if people are going to want to stay in Akron, for instance. We just don’t know,” she said. “We do know that if we have properties available downtown, Ohio City and Tremont those will be the first to go.” Coldwell Banker agent Jennifer Burke has RNC rental listings on the MLS as far out as Parma and Medina. She too said the calls are just now trickling in, but expects the pace to pick up at the end of the summer as convention-goers get more serious in planning for the 2016 event. She also agrees with Brahler that downtown and nearby neighborhoods will be the first to book. “My colleague, an investor who owns two homes in Tremont, did state that one was rented in Tremont for $10,000 that week,” Burke said. In addition, one caller has asked detailed security questions about a pricey $40,000 listing she has in University Circle.
This ship has sailed Hotels and homes aren’t the only amenities expected to fill up as the RNC event draws closer. Moloney said everything from golf courses to fishing charters will be fully booked months before the first guest arrives. Goodtime III Capt. Rick Fryan said he committed 100% of his 1,000-person capacity cruise ship for the four-day convention at the same time hotels were pledging their rooms. “They don’t want a group of 75 people to come down and monopolize the boat when we can do a party of up to 800,” Fryan said. “No questions we will be running at full tilt those four days.”
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Hollywood glitz and glamour might be headed this way, too By DAN SHINGLER dshingler@crain.com
OK, so not everyone likes politics — or politicians. That doesn’t mean the Republican convention can’t still be fun. There are still, after all, celebrities to watch. And if the 2016 gathering of Republicans is much like previous U.S. political conventions, there will be more than a smattering of glitterati on hand. Tourism officials love the prospect of having them in town too. “It’s always exciting for us when celebrities are in town to experience our great city. It’s even more thrilling when they use social media to document their travels and the experiences they have here because it provides us the chance to reach a larger audience and perpetuate the new story about Cleveland — a city that is most certainly on the rise,” said Jennifer Kramer, communications manager for Destination Cleveland. “The fans of these celebrities value the opinions they share and we also appreciate and value the endorsement when they validate that Cleveland is a destination hotspot,” she added. There’s good reason to hope for a bumper crop too. Just look at the A-list of stars who have attended past conventions — along with a few who might not get into the very best Oscar parties, but are still household names. At the 2012 GOP convention in Tampa, for example, the faces included, most famously, Clint Eastwood. Clint’s more than just a favorite of the older, whiter and more testosterone-filled voters that the Republican party is known for. As they say in the hair commercials, he’s not just a spokesman, but a client. Eastwood was previously mayor of Carmel, Calif. He first registered as a Republican when
Dwight Eisenhower ran in 1952 and the actor later went on to support Richard Nixon in both 1968 and ’72. Lately, his most memorable political performance came in 2012, when he spoke to an empty chair in order to criticize President Barack Obama. But his credentials are probably less conservative than some in the Republican party might hope. Eastwood has disapproved of pretty much every U.S. war since WWII, including Korea and Afghanistan. And though he is the man who made the .44 Magnum famous, he also is a supporter of gun control who reportedly once said he could see no reason why anyone should or would want to own an assault rifle. He even supported liberal California Sen. Dianne Feinstein, a Democrat, on at least one occasion. Will he come to the festivities in 2016? On the one hand, Clint did just turn 85 on May 31. On the other, he also just finished directing “American Sniper,” the biggest film of his or perhaps anyone’s career and a favorite of many conservatives.
Star-studded affairs Another stalwart of Republican events in the past has been actor Jon Voight, famous for his role in the 1972 film “Deliverance,” among others, and perhaps even more famous with younger audiences as the father of actress and international humanitarian Angelina Jolie. More a darling of ultra-right conservatives and Tea Partiers, Voight once reportedly predicted that the election of Obama would “cause a civil war,” and he has been an unabashed critic of Obama since before his first term even began. He’s been a semi-regular
guest on conservative talk shows and in 2014 The Washington Post speculated that Voight was angling for a speaking role at the 2016 convention. Another darling of conservatives is actress, Tea Party supporter and radio talk show host Janine Turner, best known for her career in modeling and as a star of the 1990s quirky television series, “Northern Exposure.” Turner describes herself as socially liberal and fiscally conservative, along libertarian lines. That sits well with many conservatives. But she’s also an advocate of single mothers and has been critical of those who have sought to put unmarried mothers in a bad light, noting that she herself was a single mom and that such circumstances are not always a woman’s choice. And then there’s Kid Rock — and what sort of party can anyone really have without Kid Rock? Detroit’s second-most famous white rapper and rock star is also famously conservative. At the 2012 Republican convention in Tampa, he reportedly rapped at a private concert: “They say Obama is lyin,’ that’s why I’m voting for Romney and Ryan” to an enthused crowd. Love abounds, of course, but sometimes it’s apparently good to get in the pit and try to bash someone as well. Other music stars, perhaps some who are more easily envisioned playing to a conservative audience, hit the convention scene as well. Also in attendance in Tampa in 2012 were the Oak Ridge Boys, Taylor Hicks, singer Sara Evans, Trace Adkins and the band Journey. And those are just the biggies — there were plenty of lesser-known celebrities on hand in Tampa back in 2012 as well, including actor Stephen Baldwin, and “Two and a Half Men”
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star Angus T. Jones. Perhaps the biggest star to be seen at the 2012 event wasn’t even there to support the politicians themselves. Jeff Bridges, a.k.a. The Dude, was on hand to promote a film about childhood hunger. People can debate forever which convention has the best celebrities, but to be sure the Republicans have no lock on Hollywood, to say the least.
The other side of the fence The Democratic convention, held in Charlotte, N.C., in 2012, featured Eva Longoria, James Taylor and the Black Eyed Peas’ Will.i.am. And then there’s The Boss. Which convention has the best chance of
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Experience the Power of Being Understood ® landing Bruce Springsteen? Well, he did do a song about Youngstown, and Cleveland was always a hot stop on Springsteen’s concert tours during his heyday. His song “Born in the USA” was even cited and used by conservative columnist George Will and President Ronald Reagan when it was a hit in 1984. But don’t expect Bruce to come to the Republican event, unless it’s to campaign for the other side as he’s done in the past. Both Will and Reagan famously and completely misinterpreted “Born in the USA” and Springsteen is a staunch liberal. Republicans are likely to not care, however — they seem to have plenty of their own supportive celebrities to attend their convention already.
“It’s always exciting for us when celebrities are in town to experience our great city ... it provides us a much larger audience ...” – Jennifer Kramer, communications manager for Destination Cleveland
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Another goal will be to keep things moving By JAY MILLER jmiller@crain.com
Presidential nominating conventions are no longer the place where the parties come together to choose from a slate of candidates. Now, by the time the conventions roll around, only one candidate remains standing after months, even years, of nationwide campaigning and debating. Instead, the conventions are the place where the parties gather the faithful for a televised spectacle of a party united behind the chosen candidate. So a key element of convention week is making sure the delegates are in the convention hall on time, when the cameras start to roll. They should leave the convention talking about the virtues of the candidate, not the parties they missed because their bus was late or the fact they missed a meet-and-greet because they couldn’t snag a taxi at the airport. So a major task for local convention planners is making sure people can move around the city safely and without delay. “Transportation will be higher on the list than ever before,� said Jo Ann Davidson, who is co-chair of the Republican Committee on Arrangements, which is the Republican Party group that’s responsible for planning and organizing next year’s convention. “I would bet you one of the (frequent) questions we’ll be getting is, ‘Will we have the same unfortunate situation we had in Tampa?’� Davidson remembers how dissatisfied many convention goers were with getting around Tampa at the 2012 convention. She said among the foul-ups was that there was no place nearby to stage buses so they could be ready to move delegates quickly from the convention hall to restaurants and hotels. While transportation is high on everyone’s list of things to do, serious planning has not begun. “The Republican Committee on Arrangements hasn’t named a transportation consultant to work with us yet,� said Joe Calabrese, general manager of the Greater Cleveland Regional Transit Authority. “It’s developing a lit-
tle slower than I anticipated, but I’m not saying that’s bad.� Calabrese said he’s been involved in discussions with representatives of the federal Transportation Security Administration, the FBI and the Department of Homeland Security, and he said those organizations have done a confidential security study of RTA’s facilities. “We have a potential plan, but we have to wait for people to be designated to take that to the next step,� he said. He said RTA is buying eight new trolleys to double the number of vehicles he can keep shuttling people around downtown. Cities vying for the convention were told they would need to be able to commit about 250 buses to serve convention goers and Calabrese said he’s begun talking to motor coach operators. Peter J. Pantuso, president and CEO of the
American Bus Association, said gathering that many buses should not be a problem. “It’s easier than it might seem,� said Pantuso, whose 1,000 members operate about 30,000 motor coaches across the country. “What we’ve seen in other cities for this type of event, like the Super Bowl or big conventions, is that the event logistics people, or a motor coach operator they subcontract with, will put out a call for coaches.� Pantuso said he knows of a number of good operators in Ohio and the region, and he said it’s likely that the convention transportation planners should be able to fill their quota from within a 250-mile radius of the city. Before convention goers can move about the city, though, they have to get here. Many will drive. Most of the orange barrels downtown should be gone by then — locals will have had a month
to acquaint themselves with the new traffic pattern around Public Square and the resurfacing of West Third Street and Prospect Avenue will be done by then — though the second span of the George V. Voinovich Bridge that is replacing the old Innerbelt bridge will not be completed until later in 2016. The real jet setters will land their private craft at Burke Lakefront Airport, which will have a new private terminal by convention time. Landmark Aviation, a fixed-base operator will add a new hangar and private terminal at the downtown airport. A fixed-base operator, or FBO, provides fuel, hangar space, aircraft maintenance and related services to private aircraft. James Price, Landmark’s general manager at Burke, told Crain’s in January that the goal is to have the one-story, 26,000-square-foot facility completed by the first quarter of 2016. Most of the others will arrive by plane at Cleveland Hopkins International Airport, which will have just completed a major facelift. Work is underway on a $20 million plan to make over the terminal’s exterior, ticketing lobby and baggage claim area. The work includes new window walls and doors and a new canopy over the upper ticketing level drop-off area, similar glass walls and windows on the lower baggage claim level and a renovated ticketing lobby with a new terrazzo floor. The airport, which is owned by the City of Cleveland, will also have a new, $28 million baggage handling system and $2 million worth of new signage ready for convention visitors. Because of the recent cutbacks by United Airlines, Cleveland Hopkins has the capacity to handle the surge in air service before, during and after convention week. In addition, an airport spokeswoman said in an email that the airport has increased its taxi fleet by 25 additional cars and is prepared to expand the service further. The spokeswoman also said that the rental car companies “are constantly adjusting their respective fleets to meet current and forecasted demand.�
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Who’s in charge of what REPUBLICAN NATIONAL COMMITTEE Chairman: Reince Priebus This is the umbrella organization for the political party, founded in 1856. The committee is comprised of the chairman, and a committeeman and committeewoman from each state and U.S. territory. It watches over activities of the Republican state committees and works with the two national legislative committees — the National Republican Senatorial Committee and the National Republican Congressional Committee. For its national convention every four years it creates committees to shape the party’s policy platform and the convention rules, in addition to a committee on arrangements. REPUBLICAN COMMITTEE ON ARRANGEMENTS Chairman: Steve King, Wisconsin businessman Co-chair: Jo Ann Davidson, former speaker, Ohio House of Representatives CEO: Jeff Larson, staff member, National Republican Senatorial Committee The CoA puts the convention together for the party — the party planner. Other committees examine the credentials of delegates when those slots are contested and create the policy platform. For the 2012 convention in Tampa, the committee reported that it spent $18.8 million of the federal money allocated to it, according to an audit by the Federal Election Commission. The Congress in 2014 ended the subsidy to political conventions. The Hill, a Washington, D.C., news organization that covers Congress, reported in March 2014 that the federal subsidy covered about 23% of the cost of putting on the convention. The committee is expected to hire a staff that will swell to between 150 to 200 workers in Cleveland by the start of the convention.
CLEVELAND 2016 HOST COMMITTEE Chairman: David Gilbert Vice president: Joe Roman Counsel, secretary and treasurer: Jon Pinney, managing partner, Kohrman, Jackson and Krantz Co-Chairs: Christopher M. Connor, chairman and CEO, Sherwin-Williams Co.; Beth E. Mooney, chairwoman and CEO, KeyCorp; Alexander M. Cutler, chairman and CEO, Eaton; and Chris Kelly, partner-in-charge, Jones Day, Cleveland COO: Diane Downing Executive director, Republican Party of Cuyahoga County: Brittany Williams, whose professional background includes fundraising and public relations. The Cleveland committee is a 501(c)(3) nonprofit whose main job is to raise as much as $60 million to cover the cost of local logistics — creating a media center, hiring buses to shuttle convention goers and lining up local suppliers for photography, catering, audio-visual equipment and the like. U.S. SECRET SERVICE Lead agent: To be named
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The federal agency will create and be responsible in a security zone around Quicken Loans Arena. — Jay Miller
CITY OF CLEVELAND Chief of government affairs: Valarie McCall The city will be responsible for administering the federal security grant that funds what is being called a National Special Security Event, maintaining the police presence in the area outside the Secret Service security zone and maintaining the flow of traffic downtown.
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So much to do , JULY 8, 2014 THE COUNTDOWN BEGINS: The Republican National Committee announces Cleveland would host the political party’s 2016 presidential nominating convention in summer 2016. RNC chairman Reince Priebus on Fox News said Ohio’s role as a presidential campaign battleground state and the city’s commitment to raise the $60 million needed to host the convention were deciding factors in picking Cleveland over runner-up Dallas. “We couldn’t be more excited,” Priebus told Fox News in a live interview. “It’s a city that’s on the rise.”
FEB. 1, 2015 GETTING WIRED: Telecommunications companies are expected to spend at least $30 million to upgrade their fiber-optic networks downtown, said Jon Pinney, counsel and treasurer of the Cleveland 2016 Host Committee. “I’ve read reports of over $30 million and some over the stratosphere, up to $100 million,” Pinney told Crain’s. “(I)t was a pretty substantial investment (in Tampa), and I think we’ll see something like that in Cleveland.”
MARCH 9, 2015 PUBLIC SQUARE RENOVATION: Contractors begin work on a sweeping, $32 million renovation of the historic, 10-acre center of Cleveland. Work is expected to be complete by June 2016, meaning convention goers will see new pedestrian pathways, open spaces for concerts and events, a café and restrooms. Visitors and residents alike will see a new traffic pattern, with two blocks of Ontario Street gone, covered by grass and what’s been described only as a “water feature.” Superior Avenue will remain open to bus traffic, but other traffic will be routed counterclockwise around the Square.
APRIL 21, 2015 WILL IT BE A NATIONAL SPECIAL SECURITY EVENT?: Philadelphia Mayor Michael Nutter, whose city will host the 2016 Democratic nominating convention, tells the Philadelphia Inquirer that he and Cleveland Mayor Frank Jackson were planning a joint campaign to win federal support for designating the two political conventions as National Special Security Events. The designation would direct as much as $60 million to each city to cover the cost of increased security during the conventions. Approval of the security grants is pending before Congress.
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GEORGE V. VOINOVICH BRIDGE, EASTBOUND: The Ohio Department of Transportation said in March that the second Voinovich bridge will not open until fall 2016.
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APRIL 22, 2015 RNC OFFICE SPACE: Halle Building owner Doug Price says he is beginning to move office furniture into the fourth floor of the Halle Building for the Republican National Committee. It’s expected that the first of as many as 200 workers will be coming to Cleveland to organize and plan for the arrival of more than 40,000 convention delegates, media workers, protesters and other political camp followers who will spend a week in Cleveland in July 2016. Staff members were expected to follow the office setup. Price described his offer of space to a meeting of real estate professionals as a political donation since the RNC will pay little for the space beyond the cost of utilities. “It’s good for the city and for Playhouse Square,” Crain’s reported Price saying to a meeting of local real estate professionals. “They looked all over town and liked the atmosphere at Playhouse Square.”
MAY 21, 2015 HILTON CLEVELAND DOWNTOWN: The operator of the new hotel that will be Republican Party headquarters for the convention is asking area residents for “authentically Cleveland” snapshots for an installation in the new hotel.“Our goal is for the faces of the Cuyahoga County community to come together to create a photo-mosaic that will be displayed in the lobby of the hotel,” said Teri Agosta, general manager of the Hilton Cleveland Downtown, in a statement. The $270 million, publicly funded hotel is scheduled to open in June 2016. It will feature a 28-story tower, 600 guest rooms and underground connections to the Cleveland Convention Center and the Global Center for Health Innovation, which also may host Republican events during convention week.
AUG. 5-7, 2015 THE FIRST REPUBLICAN CANDIDATE DEBATE: The Republican debate at Quicken Loans Arena, the first of the 2016 campaign season, will come to town Aug. 6. It will bring to Cleveland 10 presidential hopefuls, three Fox News anchors and the attention of voters across the nation. That televised event will coincide with the city hosting the GOP’s 2015 summer meeting. Cleveland was chosen for that gathering as well to familiarize party leaders with the city.
This special supplement is used as a tool for readers to become more actively involved within our region’s nonprofit community. Use this advertising opportunity to showcase your organization along with your commitment to Northeast Ohio. Issue date: October 26 Ad close: September 14 Materials due: September 21 Book your ad today. Contact Nicole Mastrangelo at 216-771-5158 or nmastrangelo@crain.com.
JULY 18, 2016 The Republican National Convention begins.
PEDESTRIAN BRIDGE: In March, city officials said work on the pedestrian bridge connecting the convention center with attractions on the lakefront — the Rock and Roll Hall of Fame and Museum and the Great Lakes Science Center — will not begin quickly enough to be ready for the convention. Jeremy Paris, director of the Group Plan Commission, said engineering on the $25 million bridge would not be completed in time for construction to be finished by the July 2016 convention.
View the 2014 Giving Guide at CrainsCleveland.com/GivingGuide
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ment to help cover the security costs of each host city, as well as millions more raised by the local host committees. In the case of Cleveland in 2016, the host committee has promised to raise more than $60 million. That money will go toward organizing the details, securing volunteers, setting up facilities and arranging infrastructure. It includes small and large donations from individuals as well as seven-figure contributions from major corporations. For instance, AT&T has provided the communications infrastructure for past events — to the tune of $15 million in Tampa for the 2012 convention — and it is being asked to help again in Cleveland. “There are currently millions of dollars of asks pending, across the state and nationally,” said Jon Pinney, general counsel and treasurer of the Cleveland Host Committee. The committee said early this year it had already raised half of the money it seeks. It will give a formal update sometime in June on how much money it’s raised, said Pinney and other members. But, for now,
all reports indicate that fundraising is going well — very well. “We’re satisfied so far,” said Chris Kelly, co-chair of the host committee and also partner-in-charge for the Cleveland office of the Jones Day law firm. “From what we’ve been told, we are well ahead of the progress of any other host committee that’s done this before,” he added. “We’re very pleased with the responses we’re getting from the corporate community.”
Keeping things safe and secure Another portion of the funding for the event is expected to come in the form of the federal security grant, which will go toward helping to defray the cost of police overtime and other costs associated with providing security for the convention. On this front, things still are a bit sketchy. The House appropriations committee that recommends such funding approved $20 million — $10 million for Cleveland and $10 million for Philadelphia. But the Senate has yet to act, and the House-approved amount is a far cry from the
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$50 million that each city expects to receive. Since 2008, Congress has given each host city $50 million to help defray the cost of security. That might not be cause for concern just yet, though. At this time in the last election, Congress had only approved about $4 million, say congressional staffers. On the other hand, the last time around, the Senate was controlled by the Democrats. Today, it’s controlled by more fiscally conservative Republicans. Ohio’s congressional delegation is lobbying hard to get the funds approved, including Republican Congressman Dave Joyce of Russell Township, said his deputy chief of staff Kevin Benacci. “The House has finished a few holes, but the Senate hasn’t even teed off yet,” Benacci said. The City of Cleveland is counting on that money and won’t be satisfied with less than the $50 million it’s been told to expect, said the city’s chief of government affairs Valarie McCall. “This is advocacy, we’ve reached out to our members, I’m meeting with (Congressional) staff,” McCall said. “This is a national security event, and it’s important that every city hosting (a convention) receive a security grant. In the past, it’s
JUNE 1 - 7, 2015
been $50 million for each city, and we’re asking for no less than that.” Assuming the Senate gets on board, whatever its appropriations committee passes will have to be combined with the House’s language when both proposals go to conference. But with the event still more than a year away — and even still awaiting its designation as a National Special Security Event by the Department of Homeland Security — there is ample time to get the money. Perhaps more importantly, as Kelly predicts: “If it’s something that involves funding to both parties’ conventions, it’ll get passed.” As far as security planning goes, it’s still too soon to say how big the security perimeter for the event will be, or what downtown offices and buildings will be inside it. For those that are, employees will likely need a security clearance in order to get to work. It’s also too soon to say how the Cleveland Division of Police or the Cuyahoga County Sheriff’s Office will be taxed with the event’s huge needs. Those agencies say they’re still waiting for information and instruction from the U.S. Secret Service, which is in charge of the event’s overall security.
Where will everyone go? One of the promises that Cleveland’s host committee made was that it would provide 16,000 hotel rooms that the RNC could use and assign to attendees. However, that’s been a point of contention in recent months. Several suburban hotels have reneged, said host committee president David Gilbert. Presumably, the reasoning would be that they can rent their rooms on their own to the highest bidder. Gilbert has had to play hardball, and has threatened several times to take the hotels to court for breaching contracts signed during the bidding process. And let’s not forget that he has one of the nation’s largest law firms in his corner, since Kelly is co-chair of his committee. That fight continues, but Gilbert and other committee members say it is abating, and it appears the hotels will relent and live up to their agreements. “It’s something we are working on daily in terms of conversations and meetings with the hotels. We have a number of people working on it and helping us with it. At this point, we have not had to resort to legal action. It still may be some-
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thing we have to do, but we’re working toward not having to do that,� Gilbert said. While vowing not to let any hotels with existing agreements off the hook, Gilbert said he’s also reaching out to new hotels to get them to hold some room for use by the RNC. “In the end, we still have an obligation to the RNC and we’re working very hard to have them (new hotels) be part of our block,� Gilbert said. “All of these hotels that are part of the RNC (package) are getting very good rates and they will be very full,� he promises. As for individual venues outside of the convention center and Quicken Loans Arena, plans have yet to be made. But various venues around the city center will eventually be tapped and used for convention-related activities. Arrangements also are still up in the air with regards to a media center for the convention. The city has promised the use of its 300,000square-foot Gateway East parking garage for the event, and Geis Cos. has proposed a rapid design and build-out of the space so it can be used by as many as 15,000 members of the media. A decision has not been made as to whether to use the garage, or some other space, as a media cen-
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ter, Gilbert said. But, he noted, even if the garage is used, it’s always been known that the city would only surrender it 90 days in advance of the convention, so a rapid job has always been a given on its conversion to a media center.
A team effort To be sure, no one working on the convention or with the host
committee is ready to call the event a success, and all of them say there is still much work to do between now and July 2016. But they also say the process, so far, is going smoothly — and getting more than ample support from the business community, local and state governments and the community at large. They’ve been more than a little pleased that recent controversies surrounding Cleve-
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land’s police have not sparked the volatile environment recently seen in Baltimore and elsewhere. Not to mention the outpouring of support they’ve gotten from citizens across Cleveland, Cuyahoga County and beyond. “On a daily basis, people reach out and want to help,� Gilbert said. Kelly said all of the area’s elected officials have been working hard toward making the event a success,
and he gave special praise to Cleveland Mayor Frank Jackson, who he said has been an exemplary leader in the process since the city first decided to bid for the convention. The fact that the city — as well as Jackson — has traditionally leaned Democratic, has never been an issue, he said. “People have put aside their political differences, whatever they are, in order to get something done,� Kelly said. “I give a lot of credit to the mayor — he set the tone early on and put aside all politics in order to get the convention. That’s just how he is — he just wants what’s best for the city.� For now, the host committee says it has more volunteers than it knows how to use. But that won’t always be the case, and those looking to volunteer will likely find plenty of ways to help as the convention draws closer and throughout its duration. “We will need thousands of volunteers for the period around the convention and we’re counting on folks to help then,� Kelly said. “We envision ambassadors of the city everywhere — from meeting folks at the airport to being stationed around restaurants and hotels.�
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ADVISER
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JUNE 1 - 7, 2015
THOMAS R. CROOKES
Prep for, but don’t ban politics talk
Thomas R. Crookes is a partner in the Vorys Akron office and a member of the labor and employment group.
The current political environment across the United States is ripe with the potential to breed heated workplace discussions and differences of opinion, and not just because of the 2016 presidential election campaign gaining foothold in the daily news and social media. From racially charged incidents, such as the events in Ferguson, Baltimore and even here in Northeast Ohio, to the Supreme Court’s deliberation over marriage equality and the debate about the raising of the minimum wage, we’re facing many high-profile events that wind up
being political because they have socioeconomic, racial or ideological foundations. And, people want to talk about them — not just at home or with friends, but around the office water cooler or in the lunchroom. As the presidential campaign escalates, and the Republican National Convention kicks off next summer in downtown Cleveland, chances are workplaces across Northeast Ohio will wind up being hotbeds of political debate and speculation, whether businesses want this to occur or not.
This likely leaves employers wondering if such discussions should be considered taboo during work hours. If you’re in that camp, you might want to rethink your stance. While many business etiquette advisers will say that such discussions are a big “no-no” on the clock, political discussions at the office, for a number of reasons, cannot be completely banned across the board, thanks to many provisions of the National Labor Relations Act, which protects various types of discussions among employees. A blanket policy against political
discussions, particularly ones focused on wage/hour debates and other topics covered by the NLRA, could be construed as “protected, concerted activity” by the National Labor Relations Board, the federal agency that oversees enforcement of these regulations. Enacting a policy that says, “Thou shalt not talk about political issues in the workplace,” puts your company at risk for NLRB scrutiny. In fact, if someone complains, and the NLRB launches an investigation, it ultimately might view your policy as too broad and determine that it’s unlawful. So, rather than banning discussion entirely, businesses instead should carefully review and strengthen their harassment policies and educate workers about them. A well-drafted and effective harassment policy should cover what constitutes unlawful or harassing conduct. And employees should be trained that if someone says to stop a discussion because it makes the employee uncomfortable, the discussion should stop. If it doesn’t, depending on the nature of the conversation and the issues that arise out of it, the employee leading the conversation could run the risk of unlawful harassment, and the employer may shoulder this liability. With this in mind, it’s best to create a less restrictive atmosphere where political discussions can fall into the realm of other watercooler topics, such as television shows, sporting events, movies or how someone spent his or her weekend. While not the standard espoused by the NLRB, a productive workplace is one where workers work together and their communication, language and behavior is based on common courtesy and mutual respect. While businesses can’t lawfully eliminate political chatter in the workplace, particularly with the 2016 presidential election gaining momentum and attention, basic policies and guidelines will allow employees to engage in respectful and appropriate discourse, should they choose to break from traditional business etiquette, and enter into a lively break room debate.
Can’t get enough coverage of the upcoming Republican convention? We have a solution. On the first Wednesday of each month, Crain’s will deliver to your email inbox its Convention Watch newsletter. Convention Watch brings you the latest news — and takes you behind the scenes — as Northeast Ohio prepares to host the Republican National Convention on July 18-21, 2016. Sign up for the free newsletter: www.crainscleveland.com/ section/connect (Click on the email newsletter tab.)
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27
HOTELS
H
(1)
Name Rank Address Phone/Website
Number of guest rooms
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Westlake Inn, soon to be DoubleTree by Hilton Cleveland-Westlake 22GG 91 ,!9 1 !:>- ,! &&2&% 4&&G5 ";2)<GGG
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Sheraton Cleveland Airport Hotel %?GG *B!9:* ! 9*B! -!B!- / &&2?% 4@2<5 @<;)2%GG=CCC6:(!9 >1/ -!B!- / *9319>6 1.
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TRAUMA continued from page 1
launch its own Level 1 center at Case Medical Center. The state of Ohio, like most states, doesn’t regulate the number of top-tier trauma centers in a geographic area. The move also appears to be the logical next step in UH’s bold quest to be the dominant health care provider in Northeast Ohio. It also is expected to help the system better recruit docs, elevate the quality of its other services and, perhaps, even boost the bottom line. Over the last five years or so, the UH enterprise has grown considerably. It’s added a handful of community hospitals to its portfolio, allowing itself to transform from an East Side-centric provider into a truly regional health care powerhouse armed to compete with the rivaling Clinic. All the while, the health system has had no other choice but to transfer its most-critical patients suffering from traumatic injuries to competing hospitals. As UH sees it, it’s one of the final puzzle pieces — and not one placed lightly — as the health sys-
tem had long offered Level 1 trauma services in the pediatrics arena. “It completes a program at UH,” said Ronald Dziedzicki, Case Medical Center’s chief operating officer. “That’s been lost in some of this fog of war. … It’s not like we’re entering into a venue we have not been in at our institution. We are completing a more comprehensive program that spans all generations.”
Big business? UH’s critics quickly point to the money angle as the motivation for opening another Level 1 center. Dr. Brendan Patterson, a MetroHealth orthopedic surgeon and a former NOTS head, argued in a strongly worded op-ed in Crain’s that UH is “willing to put the existing system of trauma care at risk for an institutional objective.” However, UH officials counter by saying it simply takes too long for EMS drivers to travel to and from certain East Side municipalities and MetroHealth’s main campus on West 25th Street. Dr. Michael Anderson, UH’s chief medical offi-
cer, last month described the East Side as having an “anemic trauma presence.” UH is cognizant that opening a trauma center could enhance the hospital’s revenue base, as was noted in a 2011 feasibility study prepared for UH by Dr. C. William Schwab, a trauma surgeon from the University of Pennsylvania. UH officials stress that money was not the motivating factor, though the system explored the financial viability of a trauma program as part of its due diligence. “Will we make money on trauma? We hope we will,” Dziedzicki said. “But our primary driver was the ‘to heal’ portion of (our mission).” Trauma, historically, had been a money-losing venture for hospitals, particularly those in urban strongholds that catered to large groups of uninsured and Medicaid patients. The troubling economic environment led several hospitals across the country to shutter their trauma programs. In Cleveland alone, four have closed shop over the last few decades.
However, experts say that dearth of trauma centers had concentrated power in a select few. And because so few hospitals offered these sorts of services, they’ve been able to wrangle higher reimbursements from government and commercial payers. As such, hospitals again have been trying to get into the trauma game. Hospital Corporation of America, a large for-profit provider, has led the charge elsewhere in the country, though nonprofits, too, have opened shop. In the Dayton area, Kettering Medical Center opened a Level II trauma center in 2011, much to the chagrin of the competing Miami Valley Hospital, which operates a Level 1. “It’s very costly to operate a trauma center because you’re operating 24 hours a day, but it can be fruitful for the bottom line if you do it right,” said Mike Williams, president of the health care consulting firm Abaris Group in Martinez, Calif. As Williams noted, trauma centers aren’t cheap. It’s not so much bricks and mortar — UH, for one, relatively recently remodeled its
emergency department at Case Medical Center — but the cost of personnel. UH wouldn’t comment on the size of the investment but say it’s in the range of millions of dollars. That said, some experts suggest that investment could drive up health care costs in the region — costs that will eventually be passed on to consumers and their employers through higher insurance premiums. Should other regional trauma centers stomach volume losses at UH’s hands, they could negotiate more lucrative contracts with payers to make up for the lost revenue needed to cover the high costs of staffing a trauma center. “It is undeniable from a macro point of view — the Cleveland area will have higher costs per patient,” said Michael Heil, founder and CEO of HealthWorks, a health care consulting firm based in Kensington, Calif. “That’s just math.”
The halo effect There’s a level of prestige associated with operating a Level 1
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trauma center. UH’s 2011 feasibility study noted that such a move could “reposition Case as a safety net hospital, good citizen and academic leader.” And although UH is already an academic medical center, its leaders said it’s a bit unusual to be so without a robust, inhouse trauma program. Also, it’s worth noting that MetroHealth’s reputation nationally is based largely on its expertise in trauma. Studies suggest that the beneficial effect of trauma center designation might extend beyond just caring for the critical injured. Certain resources, for one, are put in place — like a staffed blood bank — that can be mobilized at a moment’s notice for the treatment of even those who came to the facility for a routine, outpatient procedure. “By bringing a trauma program here, it makes us a more 24/7 center, brings highly skilled physicians here and gives us another avenue for our expertise to grow,” said Jane Dus, Case Medical Center’s vice president for medical surgical services and associate chief nursing of-
ficer. Still, there’s worry in the community about how a competing trauma center might impact the quality of care already provided. NOTS says its coordinated network of trauma hospitals has significantly reduced the mortality rates in the region, even on the East Side, where UH stresses there’s an absence of trauma care. NOTS backers have made some bold claims that a competing trauma system could compromise the quality of trauma care in the region by diluting volumes at its existing trauma centers. “We are so proud of the work we do,” said Deb Allen, NOTS program manager. “Is it easy work collaboratively? No. Is it best for community? Absolutely so.” UH isn’t so sure its trauma foray would negatively impact MetroHealth’s or the region’s other Level 2 centers’ volumes to the point that quality would be compromised. Dus contends that Case Medical Center’s catchment area is much larger, given that the system operates hospitals as far east as Con-
Cummins
Lorin Schultz, CCIM tel 330 535 2661 www.naicummins.com
neaut and Geneva. UH officials said the network they’re piecing together is much bigger than NOTS. UH said it was not invited to join NOTS when it launched about five years ago, as the newly formed system at the time did not include Level III centers or pediatric trauma centers. However, in April 2011, NOTS formally invited UH into the trauma network. By that time, though, UH was exploring the viability of launching its own trauma center, as its feasibility study was already underway. Both NOTS and UH said they’re willing to continue to have dialogues to best work together to improve health care in the region. Also, the trauma drama unfolding in Cleveland shouldn’t come as a surprise considering the lack of uniformity across the country when it comes to delivering trauma care. “There is very little industry and or professional consensus about what the ideal trauma system looks like,” Heil said. “The debates that I gather are going on in the Cleveland area should not be surprising.”
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JUNE 1 - 7, 2015
MANUFACTURING
continued from page 3
everyone on our menu because we have such an eclectic mix of guests,” said executive chef Nick Lanzo. About 90% of the menu dishes are made from scratch, with ingredients sourced from the West Side Market and other local farms when possible, Lanzo said. Merwin’s Wharf has also become a destination for corporate meetings and teambuilding activities, Zimmerman said. “Companies and organizations are even educating their employees and constituents about waterways in Cleveland and their relationship to the economic development and health of Northeast Ohio,” he said.
Piece of the pie The publicly funded Cleveland Metroparks is projecting a 105% bump in its food and beverage concession revenue, from $1.98 million in 2014 to $4.05 million in 2015, as a result of its foray last year into the full-service restaurant business. Merwin’s Wharf is projected to generate about half that amount, or $2.3 million, this year. The park system operates various other concession stands throughout its park system, including two stands at Edgewater Park, Buzzards Landing in Hinckley and East 55th Marina’s e55 on the Lake, the latter of which opened in May 2014.
Chalet and food concession sales represent only a slice — or nearly 4% — of Metroparks’ revenue, although five years ago, that fraction was more like a sliver, at just 0.5%. About two-thirds of the park system’s $107 million revenue is generated from property taxes in Cuyahoga County and Hinckley Township in Medina County. Passage in 2013 of a 2.7 mill levy provides the Metroparks’ with about $23 million in additional revenue each year through a 10-year levy cycle that ends in 2023. The revenue enables the Metroparks to expand its land acquisition and waterfront redevelopment strategy. Activating Rivergate Park, achieved through a $1.4 million land acquisition in 2012 from Trust for Public Land and Cleveland Rowing Foundation, is part of that comprehensive plan. Metroparks is set to acquire an additional acre from the Cleveland Rowing Foundation in June to open up more green space and public access to the river. “The vision for Rivergate Park was to create an open green space and a recreational hub along the future Cleveland Foundation Centennial Trail, and to provide public access to the Cuyahoga River in the city of Cleveland,” Zimmerman said. “Cleveland is rediscovering that it is a waterfront community.”
continued from page 3
spending has been a bit sticky,” Mayor said. Jeff Korzenik, chief investment strategist for Fifth Third Bank, said he believes all the cutbacks in manufacturing for this cycle have been made, and he expects the industry to stabilize. There has been softness in the industry, especially areas with more exposure to energy. The Northeast Ohio market, especially in the eastern part of the state, is sensitive to that because of its shale market, he said. But the “big swing factor” for manufacturing is what the U.S. consumer will do, Korzenik said, and Cleveland is susceptible to that with its auto industry exposure. On paper, consumers have a number of factors in their favor: interest rates have been down, lower gas prices have kept dollars in customers’ wallets and debt overhang has been paid down, he said. “We have a consumer in great shape,” Korzenik said. But it’s unclear if those consumers will hand over the money to buy cars and appliances. Korzenik said Fifth Third expects consumer spending to pick up, but the country’s largest single demographic is people who are 24 years old. While they will pick up spending, get married and buy houses as they get older, he said, many at present are saddled with student debt.
The importance of diversity Jacob Duritsky, vice president of strategy and research for Team NEO, said concerns like low energy costs and the strong dollar are “real,” but short-term, production issues. The economic development group remains optimistic about the future of manufacturing in the region and even made the industry the focus of its April Cleveland Plus Economic Review. In that report, Team NEO predicted manufacturing will grow by 25% by 2025, becoming a $53.3 billion industry and a larger share of the region’s economy. Duritsky didn’t sound concerned about the weak start to 2015, saying he thought the price of oil would continue to grow and pointed to the industry’s strength in the aerospace and automotive markets. Team NEO didn’t even include the downstream impact of shale in the state and its potential to fuel new polymer and plastics industries, he said. “I feel pretty good about our competitive base in manufacturing,” Duritsky said. But local companies aren’t just sitting by, waiting for the good times to return. Adler, president of Stripmatic Products, said that while the company is close to its goal of 20% growth for the year, it’s still trying to diversify into some non-automotive markets, such as appliances.
Steve Peplin, CEO of Talan Products Inc. in Cleveland, said the sectors his metal stamping company is strong in, like LED, solar or commercial building construction, are all “booming.” He said the company has steadily grown in recent years and is on track to hit about $35 million in sales this year. Some of the company’s continued growth is attributable to luck, Peplin said, but also to the company’s decision to target high-growth markets like LED and solar. The company can’t get complacent, though, and Peplin said he is working to expand its business in markets like military and automotive. Rich Gent, vice president of screw metal product maker Gent Machine Co. in South Euclid, said the company has continued to grow. Though it saw declines in the firearms market, more than 50% of its customers are in automotive. The company has invested in equipment in the past year and puts a strong focus on bringing in new sales, Gent said. City Plating’s Solganik said his company serves a wide variety of markets, including automotive, but he’s looking for further diversify it. While Solganik isn’t expecting another recession at this point, he also doesn’t see cause for great growth. “I see a slow grinding growth,” Solganik said. “And that’s what we’re planning for.”
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JUNE 1 - 7, 2015
WWW.CRAINSCLEVELAND.COM
THE WEEK MAY 25 - 31 The big story: The city of Cleveland and the U.S. Department of Justice reached an agreement to address the department’s earlier finding that the Cleveland Division of Police engaged in a pattern or practice of using excessive force in violation of the Fourth Amendment. Cleveland Mayor Frank Jackson and U.S. Attorney Steven Dettelbach said they believed that implementation of the agreement will improve dramatically the operations of the Cleveland police department and will better equip and train officers to respond to crisis situations. (See editorial, Page 10)
Too much synergy?: Federal regulators aim to stop Mentor-based Steris Corp. from acquiring Synergy Health — a $1.9 billion deal that would technically turn Steris into a British company. The two companies, both of which are in the medical sterilization industry, said they plan to challenge the U.S. Federal Trade Commission’s attempt to block the transaction. Steris CEO Walt Rosebrough said, “We have worked diligently to address the FTC’s concerns and to avoid litigation, but we will now focus our efforts on prevailing in court.” On the go: GOJO Industries Inc., the Akronbased maker of Purell hand sanitizer and other hygiene products, is expanding with a deal to occupy the former Rubbermaid warehouse in Wooster. The company agreed to lease 1.3 million square feet of space at the building to expand manufacturing and distribution operations. What will be called the GOJO Wooster Campus is in addition to the GOJO headquarters in Akron, and manufacturing and distribution operations in Cuyahoga Falls. GOJO said it expects to add 30 to 50 jobs at the Wooster operation within the next year, and more than a total of 240 jobs as operations expand. Putting up a fight: A group of community activists in Lakewood filed a lawsuit against the Cleveland Clinic and city officials, demanding the health care juggernaut follow through with its lease of the city-owned Lakewood Hospital through 2026 instead of closing shop and building a family health center in its place. The effort, led by attorney Christopher M. DeVito, also asks that once the Clinic’s lease expires, the hospital and all related assets are returned to the city. The lawsuit seeks damages of no less than $400 million for past breaches of contract, breach of fiduciary duty, fraud and other transgressions. Going south: The Cleveland Browns haven’t moved their summer training camp to Columbus, but they are shifting one of its marquee events to the state capital. The Browns will hold an “Orange and Brown Scrimmage” on Friday, Aug. 7 at Ohio Stadium. The intrasquad scrimmage, which will begin late in the afternoon, takes the place of the team’s annual Family Day, which, prior to 2014, had been held at FirstEnergy Stadium.
See what’s in store: A new Geiger’s clothing store will open by this fall in Ivory on Euclid, a mixed-use renovation of an office building to apartments at 1020 Euclid Ave. Chas and Gordon Geiger, co-owners of Geiger’s Lakewood and Geiger’s Chagrin Falls, said the store will focus on casual lifestyle clothing, active wear and shoes for men and women. The Ivory is immediately east of the Geis Cos.’ The 9 mixed-use project, which includes the Heinen’s at East Ninth Street and Euclid Avenue. Gordon Geiger said Geiger’s plans to preserve some characteristics of the 1911-vintage building in the 4,200-square-foot store.
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REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Tangled up in NOTS It’s not exactly clear whether Southwest General Health Center in Middleburg Heights will remain part of the MetroHealth and Cleveland Clinic-led Northern Ohio Trauma System when its affiliate, University Hospitals, launches its own regional trauma network later this year. NOTS officials stress they’re confident Southwest will remain part of their trauma network, and UH said the hospital would be a part its newly formed network, which will be anchored by UH Case Medical Center as a Level 1 trauma center. UH also told Crain’s last month it would be up to Southwest General whether it remains part of NOTS. Here’s how Southwest General is framing the situation: “When University Hospital launches its Level I Trauma service and a regional trauma system like NOTS, we will make the determination how Southwest General will participate,” Southwest General vice president Al Matyas said in an emailed statement to Crain’s. “Southwest General works closely with all health care facilities across the county. We will continue to do what is in the best interest of the patient. Matyas added, “Southwest General has been partnered with University Hospitals for nearly two decades and will continue to be a strong partner. We also have a long relationship with MetroHealth for trauma services. Our agreement and participation in NOTS is not exclusive of other relationships for trauma services.” Southwest General joined the NOTS network last year. — Timothy Magaw
MILESTONE
Southwest General vice president Al Matyas said the hospital “will continue to be a strong partner” of University Hospitals.
This one’s the pick of the litter Bill and Ted would be proud. A local physicist has created a guitar pick that will not tolerate “musical lameness.” A pick that puts your cheapo plastic picks to shame. Because it might as well be made of diamond. Jerry Mearini was just playing around when he started coating steel guitar picks with diamond-like carbon. But it turned out to be the best pick he’d ever used. And Mearini — the founder of Genvac Aerospace in Highland Heights — has been playing guitar for about 40 years. His guitarist friends loved it, too, so he formed a company called Rock Hard Pick. Now he’s selling them on Amazon.com for $25 a piece. That’s expensive for a guitar pick. What you get, however, is an extremely hard pick that also generates very little friction when you play, according to the company. It generates a louder sound without putting as much wear-and-tear on the strings — which is nice for hardcore shredders like Mearini.
Crisis management
OCCASION: Its 25th anniversary Polycase describes itself as “one of the largest dedicated manufacturers of plastic enclosures for electronics and electrical applications in the United States.” In the last quarter century, it says it has “grown from a small manufacturing company to an internationally recognized supplier of electronic enclosures.” The company’s president, Steve Began, said in a statement that the company has continued to grow over 25 years as a result of “product innovation and manufacturing efficiencies to provide our customer with the highest quality plastic enclosure products and service.” Throughout 2015, he said, the company is planning events to “(take) a look at where we started, what we have achieved and what our plans are for the future.” In June, for instance, Polycase is taking all employees and their families to Cedar Point to celebrate the anniversary. Polycase offers more than 2,100 variations of enclosures, from simple potting boxes to National Electrical Manufacturers Association-rated electronic enclosures. For information, visit www.polycase.com. Send information about significant corporate anniversaries to managing editor Scott Suttell at ssuttell@crain.com.
In China, Akron’s Smithers rolls out new capabilities Smithers Group Inc. of Akron, a global testing, consulting and information service company, is stepping up its game in China. The company said it’s expanding the capabilities at its Smithers Rapra testing lab in Suzhou, China, a facility that provides tire testing for a variety of specifications in the Chinese market. “We’re executing our strategy to expand our expertise and capabilities for tire, rubber and polymer component testing in China,” said Jim Dowey, president of Smithers Rapra, in a statement. Among the new capabilities at the China lab are long-term oven aging and endurance tire testing; radial and cornering fatigue testing of passenger car radial (PCR) wheels; rolling resistance of truck and bus radial (TBR) tires; and radial and cornering fatigue testing of TBR wheels. — Scott Suttell
BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com.
COMPANY: Polycase, Avon
His band, 80-HD, plays “Hyperactive Rock & Roll,” according to its Facebook page. Rock Hard Pick tried to raise $150,000 through Indiegogo.com, with the goal of buying equipment to mass produce the picks. It didn’t work: The company only managed to raise a few hundred bucks. They plan to try again at some point, after doing more marketing, according to a spokeswoman for the company. The Indiegogo profile is pretty funny though. For instance, it says the pick hits the strings like “a rapier sword spanking taught steel with the crisp ricochet of bullet-proof glass.” But even while you’re hitting the strings “like a merciless Vulcan cannon,” the pick will only do as much damage as “a sexy slap in the face.” — Chuck Soder
It turns out you can plan for a midlife crisis. MarketWatch.com notes that the concept of the midlife crisis, credited to the late Canadian psychoanalyst Elliott Jaques, turns 50 this year. According to some estimates, “about 10% to 15% of people in midlife — generally considered between ages 45 and 60 — actually experience a crisis, often characterized by radical changes such as ditching the job or the spouse.” One section of the piece, “You can’t possibly afford the house, the yacht, the divorce and the convertible,” quoted Joe Heider, president of Cirrus Wealth Management in Cleveland. “Buying a sports car is cheaper than divorce,” Heider said. Heider sees plenty of clients with a midlife urge to splurge. And he counsels them to indulge — in moderation. “Money is a tool,” says Heider, who at 39 bought himself a red Alfa Romeo convertible. But he first helps clients “assess whether a midlife splurge will put their retirement savings in jeopardy,” according to the story. “One client in his late 40s received a windfall after he sold his business and wanted to use the proceeds to buy a big house, a yacht, and a pricey vacation home. Although he could afford all three in the short run, Heider advised him to pick just one or risk his retirement savings.”
We know what we like CityLab.com ran a map that used Foursquare data to reveal the most unique tastes in food or drink, state by state. “An algorithm parsed Foursquare’s menus, tips and ratings — which represent
some 55 million users and 2 million businesses worldwide — to pull out the food or drink items most disproportionately popular in all 50 states and Washington, D.C., normalizing for population size,” CityLab.com said. “Developers also used the algorithm to determine a percentage that represents ‘the affinity for that taste over the national average.’ ” Ohio’s choice, overwhelmingly: pierogies. Northeast Ohio, in particular, just loves them.
Fun in the sun Theme park companies, including Cedar Fair, “have done surprisingly well in 2015” for investors, CNNMoney.com reported, and summer looks to be particularly strong. Shares of Cedar Fair, which owns Cedar Point and several other amusement and water parks nationwide, are up 20% so far this year. Six Flags is up 15%, and revenues at the theme park units of Disney and Comcast are up substantially. So, the website asks, “Why are these companies doing so well while many retailers have posted disappointing sales for the first quarter?” Simply put, it’s good — and relatively affordable — entertainment. Matt Ouimet, CEO of Cedar Fair, told CNNMoney.com that consumers are willing to pay up for a day or two at their local theme park, even if it means cutting back on spending elsewhere. Another factor helping the parks: the weather. “After a brutally cold and snowy winter in many parts of the country, Ouimet said consumers may be more eager than ever to head to theme parks,” the website said. “I pay a lot of attention to weather reports and they are all good for this weekend,” Ouimet added. “A little sunshine and warmth is what we need. People remember that it’s time to get outside.”
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