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Vol. 36, No. 29
Entire contents Š 2015 by Crain Communications Inc.
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The owner of the IMG Center says the downtown office market is as lively as he’s ever seen it — P. 4
KATE LORD
Cuyahoga County wants to guide entrepreneurs through ‘valley of death’ via three loan programs — P. 6
Cleveland company takes on New York-sized project Ameco, a small Cleveland-based manufacturer, created large sculptures for world-renowned architect and artist Santiago Calatrava that are on display along Park Avenue in New York City. Of the seven sculptures in the collection, Ameco made the three largest. See story, page 3
Plenty to see and do Veritix gains entry Host committee for GOP convention is making plans for guests’ free time By JAY MILLER jmiller@crain.com
Local public officials and civic leaders are happy Cleveland is hosting the Republican presidential nominating convention next July. Paid staffers and volunteers are hard at work preparing for the four days when the focus of the country will be on the comings and goings of the party’s politicians, especially the presidential and vice presidential candidates who will dominate the podium at evening sessions at Quicken Loans Arena. But another cadre of folks is thinking about the free time the 40,000 or so convention-goers, media members and influence peddlers will have during convention week. These are the people who want the members of the media, Republicans and their supporters to spend some of their non-convention time taking in the region’s arts, recreational and cultural venues.
RNC
CLE
By KEVIN KLEPS kkleps@crain.com
What’s being planned so far: The Western Reserve Historical Society is planning a number of things, including static displays of political memorabilia and videos of politicians from the area who made a splash in national politics, such as former president James A. Garfield and president kingmaker Marcus Hanna. It will adorn the pillars in the baggage claim area at Cleveland Hopkins International Airport. University Circle is planning to have a “Circle Pass” that will allow convention week visitors entry to a number of University Circle museums for one price.
They hope that, in addition to giving convention goers a good time, the city and its sights will make a lasting impression. David Gilbert, president and CEO of both the Cleveland 2016 Host Committee and Destination Cleveland, the regional convention and
to exclusive club
The Cuyahoga Valley National Park leaders are planning to showcase two sites they run — Lawnfield, the Mentor home of former president James Garfield, and the First Ladies Library in Canton. In Lake County, officials are putting together a package to promote their destinations, including golf courses and the waterfront. They also will target the Utah delegation and a few others with information on the Mormon Temple in Kirtland, one of the religion’s key sites.
visitors bureau, told Cuyahoga County Council last Wednesday, July 15, that one key benefit of hosting the convention is to have the opportunity to sell the city and the region to the media and to people who might return again as tourists. See RNC, page 18
Veritix has already outgrown second- and fourth-floor spaces in the Chase Financial Tower at Tower City Center. The digital ticketing company owned by Dan Gilbert is now, in the words of CEO Sam Gerace, “squatting” in a wide-open fifth-floor office as it looks for yet another home. By the end of the year, Veritix also will have a new name, thanks to a merger last month with Los Angeles-based AXS that makes the combined entity the second-largest ticketing company in North America. Things are changing at the company almost as rapidly as a ticket to a Cleveland Cavaliers game switches hands on Flash Seats. “We’ve been busy for nine years bringing innovation to the ticketing market — an industry that’s been dominated by a monopoly and hasn’t seen innovation in decades,” said Gerace, who has managed Veritix since its 2006 launch as Flash Seats. “This is a validation.”
It’s also a potential game-changer for an industry that has largely been controlled by Ticketmaster. The combined company has more than $2 billion in annual sales, and it would seem to represent an ideal mix of access (AXS parent company AEG has relationships with more than 100 major venues), innovation (a heavy focus for both companies) and sports (Veritix’s digital lifeblood). Veritix-AXS has partnerships with five NBA teams, five Major League Soccer clubs, two NHL teams, the Detroit Lions (Veritix ended Ticketmaster’s exclusive hold on the NFL in 2013) and the WNBA’s Minnesota Lynx. Factor in deals with the NCAA, several major colleges, minorleague and semipro teams, plus a budding high school sports business, and Gerace believes the combined company can end Ticketmaster’s lengthy tenure atop the industry. “Absolutely,” the Veritix CEO said. “And we will win because of See VERITIX, page 10
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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.
PRESENTED BY
52 TIPS FOR YOUR BUSINESS
#29 – Increase Productivity by Reducing Stress Stress in the workforce has become one of the biggest problems in business today. It has been called a global epidemic, with numerous studies encouraging businesses to be more proactive in helping their employees manage stress. “Every day, people deal with stress at work or in their personal lives — or probably both,” says Cindy Ballog, manager of Health Promotion, Wellness and Disease Management for Medical Mutual. “That’s why it’s important for organizations to understand [OL L LJ[ P[ JHU OH]L VU [OL OLHS[O VM [OLPY employees, and what that means for the future of their business.” With the high demand and fast pace of today’s work environment, employees at practically every level of an organization are dealing with some level of stress. By providing stress management resources, organizations can help employees be healthier and control healthcare costs. “Healthy employees are often happier and more productive employees,” says Ballog. “In many cases, turnover and absenteeism can also go down.” Stress is hard on the body. There are the VI]PV\Z HUK PTTLKPH[L L LJ[Z Z\JO HZ headaches, upset stomach and loss of sleep.
your mind often does, too,” she explains. “People often adopt poor eating and lifestyle habits as a form of stress relief, but those habits just make the symptoms worse.” Exercise is another important factor. Just 30 minutes of exercise a day can have a ZPNUPÄ JHU[ PTWHJ[ VU Z[YLZZ ,]LU H[ ^VYR when feasible, Ballog says employees should be encouraged to do things like go for a walk at lunch or use the stairs instead of the elevator. 6M JV\YZL LHJO LTWSV`LL PZ KP LYLU[ ^OLU P[ JVTLZ [V Z[YLZZ ^P[O KP LYLU[ ZV\YJLZ HUK KP LYLU[ L LJ[Z VU [OLPY OLHS[O :VTL LTWSV`LYZ V LY JSHZZLZ VU relaxation techniques and managing time Cindy Ballog, TVYL L LJ[P]LS` ,TWSV`LLZ ZOV\SK HSZV Medical Mutual feel comfortable discussing challenges and But there are more long-term consequences. asking for help, which can help reduce stress Chronic stress can weaken the immune for those employees and ensure projects are Z`Z[LT ^OPJO THRLZ P[ [V\NOLY [V Ä NO[ completed on time. ¸0[ JHU IL KP J\S[ [V LSPTPUH[L HSS [OL Z[YLZZ V PSSULZZ JH\ZPUN WLVWSL [V NL[ ZPJR TVYL often. It’s also linked to high blood pressure, MHJ[VYZ PU SPML I\[ L]LY`VUL JHU Ä UK ^H`Z [V abnormal heartbeat, heart attacks, anxiety understand their stressors and respond to and depression. These conditions and others them a little better,” says Ballog. “Helping your employees along in the process could can worsen as a result of continuous stress. According to Ballog, diet and exercise go help your business be healthier—both a long way. “When your body feels good, WO`ZPJHSS` HUK Ä UHUJPHSS` ¹
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Defy the Hand You’re Dealt
Photo credit: Patrick Chin
roots in music and pull the focus to the heart of the matter: networking and education. 6UL VM [OL Ä YZ[ [V OVW VU [OL -LZ[ lineup was design legend Michael Bierut, partner in New York City’s multidisciplinary
KLZPNU Ä YT 7LU[HNYHT MV\UKLY VM [OL Design Observer blog, and a senior critic in graphic design at Yale School of Art. Bierut, originally from Parma, is donating his time due to his passion for Cleveland and WMC. According to Bierut, there was nothing resembling WMC or graphic design in the suburbs of Cleveland in the ‘60s when he was growing up. Bierut will explain his journey in a talk titled: “How to Use Graphic Design to Get from the Corner VM .YHUNLY 9VHK HUK >LZ[ UK :[YLL[ PU .HYÄ LSK /LPNO[Z [V [OL *VYULY VM -PM[O (] LU\L HUK [O :[YLL[ PU 5L^ @VYR *P[` PU 6US` @LHYZ ¹ The Fest, whose motto is “Defy the Hand You’re Dealt,” is expected to bring more than 1,000 attendees to Cleveland for three days of learning, self-discovery and knowledge.
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PHOTOGRAPHY BY KATE LORD
A bustling Park Avenue scene features sculptures by famous architect and artist Santiago Calatrava. Three of the sculptures, including the one above, were manufactured in Cleveland by Ameco.
Manufacturer shows off creative side Cleveland metal fabricator creates sculptures for world-renowned artist, on display in New York City By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com
American Manufacturing & Engineering Co., or Ameco, is a metal fabricator, not an art studio. But that didn’t stop the small, Clevelandbased manufacturer from taking on a project for world-renowned architect and artist Santiago Calatrava. Today, large sculptures created by the company for the Calatrava exhibit are on display along Park Avenue in New York City. Calatrava views the sculptures as “found objects in a human forest,” representing the link between humans and nature, according to a news release on his website. For New York City, the outdoor gallery is a way to help expose people to art, said Jonathan Kuhn, director of art and antiquities for NYC Parks. But to Ameco, the pieces were a chance to gain some visibility for the quality of work it can provide. “It really establishes a credibility, these kinds of projects,” said David R. Kloss, Ameco’s director of sales and marketing.
Ameco got involved with the Calatrava project in 2013 through Steve Bickley, a retired Virginia Tech professor who was friends with the college roommate of Ameco’s president, Michael W. Perkins. Ameco had worked on a Ronald Reagan memorial with Bickley a few years ago. The company officially got the order in March 2014, said sales engineering manager John Tobias Harkness. There aren’t many art fabricators that can make something so big, Bickley said, and the few that can often are busy. But pieces of this size are nothing to people in manufacturing, and it’s “rewarding” for employees to do something so unique and high profile, he said. The new NYC Parks exhibition, in partnership with the Sculpture Committee of the Fund for Park Avenue, is part of a long-running program called Art in the Parks, Kuhn said. Bickley officially was working for the Marlborough Gallery, which jointly commissioned the pieces with Calatrava, and he contracted the fabrication out to Ameco. Dale Lanzone, exhibition curator and man-
ager, said Calatrava wanted to do a project in New York that would serve as an aesthetic and cultural gift to the public. With a tight timeframe and the scale of the sculptures — some being very large and others quite complex — the team knew getting all seven fabricated by one company would be difficult, Lanzone said. Ultimately, the pieces were made by Pinwheel in Ukiah, Calif.; Versteeg Art Fabricators in Bethany, Conn.; and, through Bickley, Ameco. Upon getting the order, the Calatrava project took about 14 months for Ameco to complete, Perkins said. That included the work to ensure the designs were strong enough to withstand the weather and public, the shipping of the raw materials and the cutting and welding of plates. The company’s products were delivered in May, and the exhibition will run from the beginning of June through midNovember. Officials at Ameco would not disclose what the company was paid for its work on the project. Ameco serves a range of industries, from
aerospace and military to commercial nuclear and power generation. A large amount of its business is in bridge components, which is a highly specialized field. It’s a small company, with 25 employees in two buildings — one in Cleveland and one with four employees in Elyria that goes by ArcAlloy — and about $5 million in annual revenue. Business has been somewhat sluggish in recent years, Perkins said, but the company is still going in an industry in which many failed during the recession. The company was started in 1992 and bought the Elyria plant, where it could do some of its manufacturing work, in 2008. Prior to that, the company handled engineering and design and contracted out manufacturing it needed done, Kloss said. Ameco moved to its plant at 4600 W. 160th St. about four years ago and with the move became a larger fabricator. Overall, Ameco sets itself apart by taking on projects that other companies don’t have the overhead or patience to do, Perkins said. “We are flexible, there’s no doubt about that.”
The Takeaway: The individual behind the sculptures is Santiago Calatrava, a “world-renowned artist, architect and engineer,” according to a news release. His artwork has been in exhibits at galleries including New York’s Metropolitan Museum of Art, and he is wellknown for designing the still-in-progress World Trade Center Transportation Hub.
The two sculptures above, along with the one on Page One, were made by Ameco. The remaining four, below, were made by other companies.
Three companies were involved in fabricating the sculptures: American Manufacturing & Engineering Co. (Ameco) in Cleveland; Pinwheel in Ukiah, Calif.; and Versteeg Art Fabricators in Bethany, Conn. There were seven total sculptures made. Ameco made the three largest. The three sculptures made by Ameco were all made of aluminum and painted red. The other sculptures were painted silver or black. The sculptures Ameco made were about: 33 feet long by 14 feet wide by 20 feet high; 25 feet long by 10 feet wide by 12 feet high; and 30 feet long by 15 feet wide by 10 feet high. Information compiled from Ameco, Calatrava’s website and a press representative on behalf of Calatrava’s team
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Volume 36, Number 29 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.
Avalon Document Services occupies part of the 10th floor of the Leader Building, 526 E. Superior Ave. — prime space for the firm, but also for apartments, as K&D Group converts the building to mixed use with rentals on upper floors. So the firm was asked to move, if only to a lower floor that will remain offices. However, J.P. Midgley, the Buffalo-based CEO of Avalon, didn’t go for it. “Leader is a nice building and a nice spot,� Midgley said, but the document, image and scanning firm for legal and construction firms expects to be in place in October at IMG Center, 1360 E. Ninth St. “IMG had nice first-floor space, and it’s also not retail and apartments,� he said. “We have a lot of pickups and deliveries from law firms. It does not bode well to be in the same building as one that people are living in and going up and down elevators with their laundry.� Avalon is part of a movement starting to sweep tenants from lowrent older buildings as they get converted to apartments. Both K&D Group at the Leader Building and Warrensville Heightsbased Weston Inc. at the Standard Building, 1370 Ontario St., are readying plans to turn both massive buildings to primarily residential with a smattering of office on lower floors and retail on the first. More such redos are afoot. As a result, tenants are looking for offices nearby — many are small law firms that need to be near downtown’s courthouses — and most are price-sensitive at a time when the city’s inventory of cheap, old office space is
getting trimmed at an unprecedented level. The situation reminds David Hollister, a Newmark Grubb Knight Frank managing director, of The Eagles’ hit “Hotel California.� “For a lot of tenants at Leader and Standard, they would check in and never leave,� Hollister said. At 55 Public Square, an Optima Management Co.-owned building where Hollister does the leasing, “there is a lot more activity than in the past.� Likewise, Jim Breen, who owns and leases IMG, said that in leasing downtown offices since 1989 he has never seen “more (leasing activity) at any time downtown than now. Sometimes we are showing the IMG building (to prospective tenants) three times a day. At some points in time, it was two showings a month.� Breen also is readying the building to sell it and focus on brokerage. Brokers say IMG is aggressively pursuing tenants and is landing an outsized share of transactions at the 1960s-vintage building. For his part, Breen says he can compete for such economy-driven tenants because he runs the building efficiently. He won’t discuss rents beyond the stated asking rate of $17.75 a square foot. However, the results speak for themselves. Eleven companies — including two related firms — have leased a total of 41,000 square feet in the last eight weeks. The building has just 18,000 square feet left to lease. IMG’s vacancy has dropped to about 8% from 30% at the start of the year. With a falling supply of space, Breen said he regularly sees a look of disbelief on the face of tenants as
he talks about how the market is tightening and the supply of good, inexpensive offices is no longer inexhaustible.
Step up Other buildings are benefiting from the movement, albeit to a lesser degree. Oswald Centre, 1100 E. Superior Ave., has landed four tenants from Leader, and more are in the works there and at 1111 Superior (formerly Eaton Center), according to Myrna Rodriguez Previte, a Kowit & Passov Co. vice president who does leasing for the two Cleveland properties owned by Chicago-based American Landmark Properties. The 55 Public Square building has landed many attorneys and other firms, so the quality budget, ready-to-use spaces are disappearing, Hollister said, an observation that other brokers echo. Other properties landing significant numbers of tenants include the Broadvox, Caxton and Hanna buildings, according to Abram Schwarz, an associate at Colliers International who works on leasing Broadvox and focuses on the city’s locally oriented services terms for clients. Brokers expect to see upward pressure on rents in the future, though for now rent concessions and landlords rebuilding office space for new tenants for free or at little cost — dubbed tenant build out — are disappearing. The movement is a disruption that Avalon, which entered the Cleveland market by buying another firm, and others did not see coming. However, some tenants see it not only as a choice of swallowing See SPACES, page 7
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Ex-PD managing editor lands at Hennes Communications Thomas Fladung says he knew ‘it was time’ to leave newspapers, but he doesn’t buy into the ‘dying industry’ narrative By JAY MILLER jmiller@crain.com
Thomas Fladung is leaving an industry in crisis to work at a firm that advises clients dealing with crises. Fladung, who was until recently managing editor of The Plain Dealer, is joining the crisis management-focused Hennes Communications of Cleveland as a vice president. The firm, led by managing partner Bruce Hennes, advises a client base that includes law firms, hospitals, corporations and public agencies. “I was a newspaperman for 33 years, and I always told myself that when it was time, I would know it was time and I would act on that. And it felt like time to me” to try something new, Fladung said last Thursday, July 16, from a vacation spot in the North Carolina woods. “I knew I wanted to be in a communications field. This opportunity came up, and it interested me a lot,” he said. “The field of crisis communications is particularly intriguing to me.”
Fladung, a Canton native, joined The PD in February 2011. He was hired by former editor Debra Adams Simmons, who had moved up from managing editor the previous October with the departure of editor Susan Goldberg. Fladung leaves The PD six months after George Rodrigue was hired to replace Simmons as editor. Fladung’s long newspaper career includes five years as editor of the St. Paul (Minn.) Pioneer Press, nine years at the Detroit Free Press and stops at the Akron Beacon Journal and The Repository in Canton. He began at the Beavercreek Daily News after he graduated from the nearby University of Dayton. Anyone who has spent more than three decades in the newspaper business has seen a fair amount of change. That has been particularly true at The PD, which in August 2013 saw its parent company, New York-based Advance Publications, shake up the Cleveland operation with the creation of the Northeast Ohio Media
Fladung
Group to operate the cleveland.com website. With that transition, the site became the company’s flagship news operation in Cleveland, a part of what Advance calls its “digital first” strategy — a response to the increasing reliance of news consumers on
Internet news sites. And while the newspaper continues as a seven-day-a-week publication, it has dropped home delivery to four days a week and has seen a steady decline in circulation. In the process, a separate and growing nonunion NEOMG newsroom was created. Increasingly, the newspaper relies on stories generated by NEOMG reporters, as the PD newsroom run by Fladung continued to shrink. “I don’t buy into the whole narrative that we’re all fleeing a dying industry,” Fladung said. “I don’t feel that way at all. I wanted something different. I’m looking forward to learning some new skills and (facing) some new challenges and applying what I’ve learned.” Hennes Communications advises clients on how to avoid communications mistakes that lead to unwanted publicity and supports them when the glare of public scrutiny can’t be avoided. Its engagement with some clients might last only a few days, while with others it has
long-term relationships. Among the firm’s regional clients are GrafTech International Ltd., Lubrizol Corp., Hawken School, the MetroHealth System, the Westfield Group and a number of law firms. The firm, on a pro bono basis, for a time handled the media onslaught faced by Amanda Berry, Gina DeJesus and Michelle Knight in May 2013 after they escaped from the Seymour Avenue house of Ariel Castro after years of captivity. “I’m very excited” about Fladung joining the firm, Hennes said. “We’re a small, boutique firm that is very, very focused. Thom understands how to communicate. We’re going to throw him into the mix with our existing clients and with ones that come in the door.” In June, Hennes and longtime partner Barbara Paynter parted ways. Paynter has started her own public relations consultancy, Paynter Communications, with a practice that extended beyond crisis communications to include issues management and reputation management.
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Cuyahoga County is getting into the venture capital business — indirectly, at least. The county wants to lend a total of $7.5 million to private investors and other organizations that finance tech startups and other highpotential small businesses. Through three proposed loan programs, the county aims to help entrepreneurs get through the socalled “valley of death� — that point in a young company’s life when it needs more capital than friends and family members can provide, but isn’t yet ready to raise money from larger venture capital funds or a bank. County executive Armond Budish regularly talks about wanting to help entrepreneurs. It’s a good way to create jobs in a way that’s open to people of all races, sexes and education levels, according to Nathan Kelly, interim director of development for Budish. “Entrepreneurship is not limited to over-educated, rich white folk,� he said. The county, however, isn’t particularly good at spotting promising startups or giving them technical assistance. So instead, it wants to loan money to organizations that are, Kelly said. “We are not experts in technology or polymers or Bitcoin,� he said, referring to a form of digital money that has attracted the interest of some big-name investors. Two Cleveland-based organizations have told Crain’s that they aim to participate in the county loan programs: JumpStart, a nonprofit that works with local entrepreneurs, could end up submitting proposals for all three of the proposed loan programs, said CEO Ray Leach. Nirvana Analytics, an asset management and consulting firm, did so already. The deadline for the proposals is July 31. So what do the loan programs consist of? The details aren’t set in stone, and applicants could push for changes. However, here’s how they are described in the requests for proposal issued by the county: ■Innovation Match: This pro-
gram was designed to complement an Ohio Third Frontier program that lends money to venture capital firms and other organizations that invest in high-tech startups. Investors could receive $1 million or more, so long as they raised at least $7 million from other sources (including the Third Frontier). The county could award a total of $3.5 million through the program. ■Early Stage Loan Fund: The county aims to lend $2 million to an organization that would turn around and lend that money to high-tech startup companies, preferably those that have yet to release a final product but have proven that they can generate revenue. The organization would have to raise at least $8 million from other sources. ■Accelerated Growth Loan Fund: This one’s like the Early Stage Loan fund, but the recipient would focus on more established small businesses, especially those owned by females and minorities. The organization would have to raise another $7 million. Money for the programs would come from the county’s economic development budget. Before the money is released, however, the development department would have to enter into formal contracts with applicants and then ask county council to allot the money.
Here’s the catch So are the loan programs any good? Leach, of JumpStart, says yes — with a few caveats. For one, the county says that loan recipients would have to provide a guarantee that they will pay back the loans. That could create headaches for investors trying to be fair to other investors that receive no such guarantee. Another issue: If an investment group only makes a little bit of money, the county would just receive its standard loan payments. But if that group manages to double its money, the county wants to receive a proportional share of anything it makes after that. The county’s logic: As Kelly described it, if an investment, “goes bananas,� the county wants to “be
there for banana time.� Leach, however, noted that the Third Frontier loans don’t include that requirement. Still, JumpStart may apply for all three loan programs. Leach wasn’t sure whether the nonprofit would ask the county to alter its terms. Each loan program requires that a vast majority of the money goes to companies based in Cuyahoga County, though the specifics vary between the programs. Leach believes those requirements are reasonable. “If you’re at all connected to the deal flow in Cuyahoga County, it’s not going to be an issue,� he said, noting that JumpStart has invested in 50 companies based within the county.
This sounds interesting The county loan programs are designed to fix the same problems that JumpStart was created to fix. Leach has long stated that there are not enough local sources of early stage venture capital for young tech companies. JumpStart also recently formed a subsidiary called Growth Opportunity Partners in an effort to help female and minorityowned businesses, even if the companies aren’t high-tech startups. But there also are “a lot of other entities in Cuyahoga County that would find (the loan program) interesting and useful,� he said. A few other organizations attended an information session about the loan programs in April. Among them were two more Clevelandbased nonprofits, OneCommunity and Magnet. OneCommunity, which promotes the adoption of high-speed Internet access, is thinking of submitting a proposal. Magnet, which helps local manufacturers, believes the program has “great promise,� but the group is “not yet in the business of truly raising funds,� CEO Ethan Karp said. Nirvana Analytics is in that business. Founder J. Burner Crew isn’t certain that the company and the county will strike a deal, but he praised the county for “trying to get capital to companies in the early stages of development.�
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rent increases, but improving their situations. Although Tom Ryan, a partner at the family-owned Ryan LLP law firm, smiles and says, “no one likes moving,� he’s pleased with the expansive views at the firm’s new 21stfloor office at 55 Public Square. The firm’s move also helped empty lawyers from the Standard Building who agreed to rent offices ranging in size from 100 to 600 square feet in size as the family formed the Law Offices of Cleveland to rent at 55. “We started out with five lawyers moving over and wound up with 35,� Ryan said. “It mushroomed. We went from looking at six suites to a full floor.� All told, 50 people shifted from the Standard to 55 in the shared-office arrangement, which bills tenants at cost for Wi-Fi, Internet and phone services. There’s room for more, and the move means the lawyers have access to large conference rooms to meet with clients — with the types of city views that defense law firms typically enjoy — and a huge reception area for waiting clients. “This is a big step up,� Ryan said. Meantime, Tom Johnston, president of the SearchPath Interna-
tional headhunter firm and a startup job-hunt counseling venture called HuntPath, said he struggled to find appropriate offices to replace the outfit’s former office at Leader. “We’re one of the worst commercial real estate tenants ever,� Johnston quipped, as he’d been on month-to-month leases since downsizing in the recession after the 9/11 terror attacks. He needs a variety of spaces for different uses and flexibility, as he expects the firms to add staff as the economy continues to recover. He looked at a multitude of offices and buildings before landing at IMG’s fifth floor, where he now has a corner office overlooking East Ninth Street and Lake Erie. “Before,� he said, “I looked into a parking garage.� Johnston said he needed space that suited very different needs. On one hand, it had to be top-tier, appropriate to selling franchises for SearchPath to accommodating franchisees as they undergo training. On the other, his new HuntPath venture will provide Internet-based training for job hunting and space for job seekers to hunt work. The 7,500 square feet he leased at IMG is almost double the space he
had at Leader, and he gained valuable access to amenities once reserved for big corporations: a penthouse conference center and basement training room.
Staying put One tenant keeping the same building address is Clevelandbased Surety Title Agency. Vic Pascucci, president of Surety Title, has been in Leader since 1982 and said he looks at moving a land title firm, which has voluminous records, maps and security requirements, the same way that “Hannibal looked at crossing the Alps.� The 12-employee firm will take 6,000 square feet, the same amount as now, but drop from the 10th floor to the third. Pascucci said he’s staying put because of the can’t-miss location and “basically the same rent� as before. “I’ve seen a lot of buildings in Cleveland become apartments over the years. This is a gorgeous building,� Pascucci said. “You knew it would become apartments someday.� Pascucci said he doubts Leader will feel different on weekdays, but he added, “I’m sure there’ll be a lot of activity here on the weekends when we’re (usually) not here.�
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PUBLISHER:
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Elizabeth McIntyre (emcintyre@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
On the clock According to people who were in the room, something remarkable happened last August at the RNC summer meetings in Chicago. Among the items on the agenda was the formality of a vote on which city would host the 2016 Republican National Convention — a formality because the party’s site selection committee had already chosen Cleveland a month earlier. The remarkable came when Cleveland Mayor Frank Jackson, who made the trip to Chicago, was introduced. The 170 or so party officials in attendance rose from their seats and gave the mayor a standing ovation. Loyal Republicans saluting a Democratic mayor. The gesture said a lot about the impression Cleveland made on the RNC and the collaboration, commitment and passion we showed during the bidding process. We are now a year away from the convention, a historic moment in national politics, our city’s history and our city’s future. It’s important to remember that winning spirit of collaboration in the months ahead, because for many people in Northeast Ohio it’s going to get difficult to do so. So far, the presidential candidates and their campaigns have thrown only jabs. These are, after all, the early rounds of a very long fight. But soon, things will start getting ugly. As the race for The White House intensifies, we will be subjected to the worst of what our partisan political culture can deliver: lies, personal attacks, distortions, accusations, dirty tricks, innuendo — the list goes on and on. Both sides will shovel it, and both sides will get dumped on. Nastiness will take the place of civility. Collaboration among political rivals will become a rarity. Let’s not make that happen here. It’s important for all of us, left and right, to remain above the muck. The candidate we are all supporting is … Cleveland. In addition to setting a standard by hosting the best political convention in history, our goal should be to set the bar on civility, discourse and respect — no matter how hot the rhetoric gets. If we can somehow do it, a Democratic city in a Democratic county flawlessly hosting the Republicans’ most important event — with class — we may just get an ovation from the nation.
FROM THE PUBLISHER
NFL’s choice looks much better now In 1998, I was working nights as a copy Dolan and football legend Don Shula. editor at The Plain Dealer. One summer Other would-be ownership groups/ afternoon, as I was trudging up Rockwell owners included Bart Wolstein, Dick Jatoward the back entrance of the old cobs, Howard Milstein, Tom Murdough building, an entourage flew and, of course, Al Lerner. around the corner, right toCosby’s celebrity at this ward me. point was at its zenith. In the middle of the pack Advertising Age, a sister was Dr. Huxtable. publication of Crain’s CleveI stepped aside, and, feeling land Business, reported pretty cocky that day, said, around this time that only one “Hey Coz!” person on Earth had a higher Bill Cosby looked over, public approval rating than smiled and, without breaking Cosby: the pope. stride, said, “How ya doing?” At a news conference introI was too surprised to anducing the ownership bid, JOHN swer, and in fewer than 30 secCosby suggested the Browns onds, the group was into cars CAMPANELLI might be able to use his most and gone. endorsed product — Jell-O — That was a fun summer in Cleveland, as part of their game plan: “If things get especially with our sports teams. The Inrough, and the visiting team is marching dians sold 4 million shares of stock in a on us, that might be the time that we’ll highly publicized IPO. They also drafted spread it right wherever they’re runa promising lefty out of high school ning.” named CC Sabathia. Our new football If the league had chosen the Dolanstadium was under construction. And in Cosby-Shula group, we can imagine a little more than a year, our expansion what would have happened. Browns would be taking the field. ProbCosby, a pretty good fullback at Temlem was, we still didn’t have any players ple back in the 1960s, would have been a or a coach … or an owner. regular at training camp, tossing the ball Cosby was doing a local media tour around, hamming it up with coaches that day as part of a potential Browns and players, and holding court on Amerownership group with Larry and Charles ica’s youth. Cameras would have cap-
tured him in the suites during home games. There’s a good chance his face would have become just as linked to the Browns and Cleveland as it was to pudding pops. Now think about what would have happened in the last year, as the world learned of the revolting side of Cosby. Imagine the media circus, the protests, the late-night jokes, the worst kind of attention for our storied football team and city. Imagine the damage. But that didn’t happen. Lerner won the ownership derby, and any thoughts of Browns-part-owner Cosby were gone by the time the team dashed on the field for their openingnight slaughter in 1999. In Cleveland, we’ve been so focused on the negative that we have named and immortalized our bad luck — “Red Right 88,” “The Drive,” etc. We call ourselves cursed. No way. Cursed are the women who found themselves in Cosby’s path. As much as the Browns and their ownership have struggled and bumbled since 1999, nothing has come close to a Cosby level of embarrassment for our team. So I guess I can now answer Cosby’s question: “How ya doing?” I’m feeling thankful.
TALK ON THE WEB Re: University of Akron budget cuts I am left wondering how much of the budget deficit could be recouped, and jobs saved, by foregoing the unpopular rebranding campaign, particularly since these campaigns have not proved positive for other institutions that have made similar moves. If I were a gambler, I’d say a few hundred thousand in current and a few million in future expenses could be put back into the coffers for the short term. — Concerned This specific and dramatic scenario will be commonplace in publicly funded
traditional education environments where fiscal responsibility and student success, aligned with the organization’s mission and vision, have been afterthoughts. Traditional education organizations are playing a catch-up game because they have been asleep at the wheel for decades, strategically focused on the wrong things. The only reason education exists is to empower students with success, and with the skill sets to become sustained, productive members of society after graduation. Traditional education has strategically lost sight of this, and with decreased funding, along with relevant data collection, the glaring ineffective-
ness and inefficiencies are becoming glowingly transparent. Education in the 21st century must revolutionize education to be focused on student success, supported with defined metrics and case study examples. Students and the public know that if major dollars are to be invested in education, then education MUST provide a bettered ROI for the student and the public. It is the new paradigm. This will be a very forced, very painful process for traditional educators, but it’s long overdue. — Tom McDonald This puts new meaning into why UA teams are known as the “Zips.” — DKelly
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CRAIN’S SUMMER IN THE CITY PHOTO CONTEST “Scranton Flats in bloom” — By Ken Schneider Ken Schneider was
taking a walk on the Towpath at Scranton Flats when he took this photo. Schneider, 36, is a project manager and writer at Canalway Partners. His prize includes gift cards to All City Candy, Malley’s Chocolates, Mitchell’s Ice Cream and Rocket Fizz.
Summer in the City is a contest inviting people to share their Cleveland photos. Weekly prizes include gift certificates to metro Cleveland venues, grocery stores and retailers at a value of $50 to $100. Three grand prizes will be awarded after Labor Day. Add images at crainscleveland.com/SITC.
TALK ON THE WEB (CONTINUED) Re: Budget cuts (cont.) The stadium cost $65 million and hasn’t been paid off. University president Scott Scarborough makes $500,000, is receiving $350,000 in home “upgrades,” $2,000 per month in a childcare stipend, rebranded the school, started a new “cadet program” and is giving student athletes full rides with stipends. Instead, the problem is being “fixed” by cutting jobs and benefits. No wonder our best faculty members are leaving for other schools and students are transferring to Kent State. — the truth I was at the University of Akron for 35 years and active as a faculty member in Faculty Senate and the faculty union. I can say with all candor that UA has never, ever been transparent in any way with its budget/expenses.
The academic community routinely would wake up on a Monday to the news that somehow the university “lost” $15 million, $20 million, and so on. This recent $40 million deficit is just the latest in a very long line of losses. Even though everyone knows the university subsidizes the profoundly underperforming football program to the tune of over $8 million a year, not to mention the albatross of a stadium to the tune of $3 million to $5 million a year in maintenance (this without a single sellout event in its short history), this most costly sports program remains an untouchable. But what is most troubling to me as an Ohioan, former faculty member and one who understands the critical need to build a real university through its faculty, is the complete lack of attention to the one factor that would fundamentally attract and keep students coming to UA — a strong faculty first.
Complimentary In-flight Wi-Fi Although the “plan” states that no faculty will be fired during this most painful cost-cutting process, the administration has already decided NOT to rehire the 120 plus faculty who retired or left the university in disgust. These jobs are gone like the Incas from Machu Piccu — never to return. In some departments, they are left with a skeleton crew of a few full-time faculty, and a cadre of low-paid, part-time faculty who essentially teach with their laptops and cell phones since they have no official places in the brick-andmortar university. Full-time, university-trained faculty are the least expensive way to grow fundamental allegiance to a quality institution. Further, recruiting and keeping these experts are really the ONLY way to insure that a university survives. It is what keeps those institutions UA so often wants to emulate in business. — Dave Witt
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GOING PLACES Miller to area director of marketing and business development, Great Lakes Mall and Richmond Town Square.
JOB CHANGES CONSULTING TOWERS WATSON: Gina Brian to managing consultant.
FINANCE KEY PRIVATE BANK: Gary Poth to head, family wealth. CBIZ: Heather Calabret and Rochelle Blee to area managers, payroll.
FINANCIAL SERVICE CORRIGAN KRAUSE CPAS: Kelly S. Linden to senior associate, tax services. SKODA MINOTTI: Brandon Ferris to marketing coordinator; Tim Porter to staff accountant.
HOSPITALITY QUAIL HOLLOW RESORT: Angus O’Hara to executive chef.
MANUFACTURING OSBORN: Brian S. Smith to marketing manager, North America. PLASTIC SAFETY SYSTEMS: John Bassett to national sales manager.
MARKETING C.TRAC INC.: Nik Gatzendorfer to solutions architect; Jessica Schuster to UX developer. SONNHALTER: Andrew Poulsen to public relations technician.
NONPROFIT KOINONIA HOMES: Amber Giangrande to social services manager. POLICY MATTERS OHIO: Cynthia Connolly to resource development manager. ST. PAUL’S EPISCOPAL CHURCH: Rev. Jeanne A. Leinbach to rector.
REAL ESTATE ALLEGRO REALTY ADVISORS LTD.: Chelsea Kulhanek to associate, transaction advisory practice. SIMON PROPERTY GROUP: Kate
TRANSACTION REALTY: Tim Creek, Jehan Strickland and Josh Stone to sales associates.
TECHNOLOGY TRELLISPOINT CRM: Janae Fusco to business development manager. WARWICK: Joe Hesske to vice president, sales and marketing.
BOARDS CATHOLIC HEALTH ASSOCIATION OF THE UNITED STATES: Sister Judith Ann Karam (Sisters of Charity of St. Augustine) to chairperson. EPILEPSY ASSOCIATION: Peter Nelson (Dollar Bank) to president; Jeffrey Karlovec to vice president; James Smith to treasurer; Debra Horn to secretary. LAKEWOOD CHAMBER OF COMMERCE: Julie Warren (Erie Design) to chair; Mike DeStefano to treasurer. METROHEALTH FOUNDATION: Brenda K. Kirk (Hyland Software) to chair; William L. Aamoth to vice chair, finance; Linda L. Bluso to vice chair, governance; Franziska H. Dacek to vice chair, outreach; Robert A. DeAngelis to vice chair, audit; Ann C. Lutz to treasurer and vice chair, investment; Thomas E. Collins Jr., M.D., to vice chair, nominating and board development.
AWARDS LAKEWOOD CHAMBER OF COMMERCE: Julie Warren (Erie Design) received the Business Person of the Year Award; Marty Foster (Conexo Communications) received the Outstanding New Member Award.
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JULY 20 - 26, 2015
VERITIX continued from page 1
innovation. The market is hungry for it. We have a history of being able to deliver it repeatedly, and that’s what it’s going to take.”
Double vision The new company is co-owned by Gilbert, AEG and Cirque du Soleil (an AXS partner). AXS CEO Bryan Perez will hold the same role, and Gerace will continue to lead Veritix’s booming operation out of Cleveland. Veritix-AXS still has to “create a unified and functional organization” that has “one vision and one culture,” Gerace said, but he expects that to all get sorted out in the coming months. Perez told Sports Business Journal that AXS and Veritix “realized pretty quickly how aligned our vision was.” Merger discussions began almost immediately after Perez and Gerace appeared on the opening panel of Veritix’s 2014 Ticketing Symposium. “We’re both looking at each other, going, effectively, ‘He just spoke my speech and I just spoke his,’ ” Gerace said. “And they were much more focused on the live entertainment side, and we were much more focused on the sports side — so, chocolate and peanut butter.” Gerace believes there are four phases in what he calls the “fan life cycle” — discovery, purchase, inevent and post-event. The questions he said ticketing and entertainment companies must answer during the respective stages: Can I find the event? Can I buy a ticket? Can I enhance the experience? How can we enhance the experience? “AXS is really good at the discovery phase, both with their internal technology and their investments, and is good at the in-event phase,” Gerace said. “With Flash Seats, we
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Building our bank one quality relationship at a time
obviously do the purchasing phase well, and are very good in the postevent and discovery (phases). So this is very much a deal where we’ve now filled out the entire spectrum.” AXS has stakes in Gimbal, which produces beacon technology that is becoming a must for live events, and Bypass (technology that allows customers to order food and drinks from their seats). AXS also owns Carbonhouse, a leading mobile and website development firm, and AXS Advantage, a respected consumer marketing platform. Then there’s AEG, which hosts more than 10,000 annual events at its facilities, and owns, operates or has relationships with 27 worldwide venues that were ranked in Pollstar’s top 100 in 2013. “I think it’s smart what they’re doing,” said Troy Kirby, the director of ticket operations at the University of California, Davis, and the operator of sportstao.com. “Coming up with a ticket platform is $2-3 million, but the problem is a lot of people don’t have the investure to get into the building or know how to get into a locked agreement. Now, Veritix has become the No. 2 platform behind Ticketmaster.” The combined company provides more competition, and it’s good for the industry, said Ken Troupe, a senior consultant for SportsDesk Media (a Dallas digital media analytics company) who spent 19 years working in the ticketing industry. “It gives teams and venues other options,” Troupe said.
‘Shining moment’ When Crain’s wrote an August 2013 story on Veritix striking its big deal with the Lions, the company had 20 full-time employees in Cleveland. At the time, it was coming off a 2012 in which it had $901
million in sales on its platforms and had processed 17 million transactions. Today, Gerace said Veritix has 54 full-time employees in Cleveland, plus another 14 at its call center in Dallas. Veritix’s revenue grew 43% year-over-year in 2014, and through June, the year-overyear growth was 58%. A whopping 23 million transactions were processed on Veritix’s platforms last year (a 35% jump in two years), and the company has now topped the $4.5 billion mark in commerce in its nine-year history. More than half that total — $2.5 billion — has occurred in the last 24 months. In the coming years, Gerace expects Veritix’s Cleveland employee count to reach triple figures. Gerace — who lends advice to aspiring entrepreneurs via JumpStart’s mentoring program and is the chairman of the Cleveland chapter of Minds over Matter, a nonprofit that gives guidance to students from low-income families — said the merger with AXS “is a shining moment for technical entrepreneurship” in Northeast Ohio. He mentioned the successes of TOA Technologies, which was acquired by Oracle in 2014, and OverDrive, which was purchased by Rakuten in March. Veritix is the latest addition to that list. “Veritix started in Cleveland and grew in Cleveland,” Gerace said. “We grew a sports tech business in Cleveland, and had fantastic growth and a successful exit. I hope what we’re doing is letting the next class of entrepreneurs see that it can happen here repeatedly. It’s been exciting to lead innovation and a really talented team here in Cleveland. It can be done.” It’s also far from finished. Veritix-AXS just needs a name. And a new Cleveland headquarters (again).
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SMALL BUSINESS
SET IN STONE NE Ohio monument companies adapt to new innovations By DOUGLAS J. GUTH clbfreelancer@crain.com
Though the process of burying the dead hasn’t changed much over the millennia, advancements in gravestone technology have brought innovation to one of mankind’s oldest traditions. Lasers, intricate computer design programs and electronic burial markers are among the upgrades in how the bereaved tell the life stories of their departed loved ones. A number of Cleveland-area monument businesses are utilizing these developments with varying levels of acceptance. Classic Memorials, which moved last year from its longtime location in University Heights to a vacant property across the street uses digital imagery to personalize headstones for its clientele. Company founder and president Vladimir Konstantinovsky has a computer in his office that feeds into a monitor on the wall. Onscreen is a program Konstantinovsky helped develop, featuring a rudimentary headstone that can be fully customized for font, color, granite type and what type of image will be engraved onto the rock. Konstantinovsky can even switch backgrounds from flat field to lake to wooded area so clients can determine how the stone will look in its natural state. “This type of personalization is very new,” Konstantinovsky said. “Half of our customers want something customized.” Konstantinovsky, a master engraver originally from
Ukraine, uses a diamond-tipped etching tool to fashion detailed reproductions of photographs as well as intricate images of scenes and objects that meant something to the decedent. “Everyone is unique, and we’re trying to capture that,” said Dan Konstantinovsky, Vladimir’s son and a fourth-generation proprietor with the family-owned enterprise. “The final design reflects the person rather than being something cookiecutter.”
In memoriam The human desire for remembrance is delving further into the space age thanks to a scannable, stamp-like image called a quick response, or QR, code. The codes can be attached to headstones, allowing visitors with a smart phone and the proper app to boot up a web page with text, photos and video about the deceased. “This is something that will be used by the younger generation,” Vladimir Konstantinovsky said. Milano Monuments, meanwhile, utilizes computer design to create highly detailed headstones and gravestones. Owner Jim Milano is a proponent of MonuVision, a custom monument program that offers Photoshop-quality renderings for families in search of a lasting and meaningful memorial. Designs taken from MonuVision are engraved or hand-etched onto stone in a cavernous manufacturing facility at Milano’s See STONE, next page
Above, Michael Johns Jr. of Johns-Carabelli Co., which has locations in South Euclid and Brook Park, works with a hand tool to complete the process of adding a name to a headstone. (More photos of that process can be found on Pages 12 and 13.) PHOTOS BY REBECCA R. MARKOVITZ; HISTORIC PHOTOS CONTRIBUTED BY MICHAEL JOHNS JR.
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Cleveland headquarters on Brookpark Road. The facility carries, among other innovations, a laser etching machine and a diamond-tipped stonecutting saw. A staff that includes trained craftspeople and a certified memorialist well acquainted with industry trends ensure the personal touch established by Milano’s father, Vincent, when he founded the company in 1969. “For me, it’s about whatever’s best for the customer,” Milano said. The monument manufacturing company plans to engage patrons further through blog postings detailing the memorial crafting process. Most families looking for a stone do so with little experience, making the online resource a natural extension of the business, Milano said. “The blog is a platform that enables us to share our knowledge,” he said. “We’re creating a whole new fabric of information on the web to improve our industry.” Fourth-generation stonecutter Michael Johns Jr., owner of memorial maker Johns-Carabelli Co. in South Euclid, has been purposely slow to embrace technologies like laser engraving, which he maintains can never replace the pinpoint artistry of a hand-held etching tool. With laser etching, a beam is directed at a high-quality black granite gravestone. The laser, working like a printer, peels away surface rock to form a grayscale image on the black stone, which is perfected by a worker employing a razor blade or other tools. Johns-Carabelli uses lasers sparingly, mostly for projects with either large amounts of lettering or those with very small lettering. Otherwise, the company owner prefers to craft headstones by hand in his on-site machine shop. Johns, who specializes in lettering, feels mostly the same way about computer drafting of gravestones. Though computers are handy for making quick corrections, they have nothing on a studious artisan’s eye when it comes to understanding spatial relationships between carved letters, Johns contends. “Technology is good, but it can cut both ways,” said Johns, part of a legacy that built John D. Rocke-
feller’s obelisk and Wade Memorial Chapel at Lake View Cemetery. “It can make it so you don’t need to understand the creative process.” Diamonds, however, are used at Johns’ 136-year-old monument business. He and his employees cut stones with diamond-affixed saw blades and buff the results with 3,000-grit diamond polishing pads. Johns has heard industry rumors about fiberglass, polymers and other materials getting added to stone, but not many clients will takes risks on products that should ostensibly last forever. “The biggest challenge I face is getting customers to understand the process,” Johns said. “We need them to understand the timelessness of what they’re purchasing, and build a cost-effective monument around those particular dynamics.”
‘Customizing every step of the way’ Keeping the cemetery industry informed of new technologies and practices is one of the roles of the International Cemetery, Cremation and Funeral Association, a Virginiabased organization composed of more than 9,000 cemeteries, funeral homes and related companies. Laser engraving and scannable electronic codes may not be integrated into the business plan of every one ICCFA’s members, but executive director Bob Fells is glad these options are available. Laser reproduction of photographs, for one, has been on the market for longer than two decades, and will likely last for years more should the public so choose. “The people tell us what they want, so if we’re doing our job, we’re offering them the best choices to consider,” Fells said. Konstantinovsky of Classic Memorials attends industry seminars to stay on top of the monument innovation game. The lifelong engraver believes technology, used with care, won’t detract from an industry built on the preservation of memories. “We’re still customizing every step of the way,” Konstantinovsky said. “As a business you just can’t be blended in with everyone else.”
While technology can speed up certain steps in creating a memorial, some things still require a human touch. For example, workers at Johns-Carabelli Co. in South Euclid (clockwise) hand-carve letters to match an existing headstone, perfectly center a stencil before it is sandblasted and control a sandblaster by hand for certain projects.
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13
MONUMENTAL WORKS AT LAKE VIEW CEMETERY
Wade Memorial Chapel Wade Memorial Chapel was built in memory of Jeptha Wade, founder of The Western Union Telegraph Co. and first president of Lake View Cemetery. The inside of the chapel was totally designed by Louis Comfort Tiffany and his studios. A stained glass window, The Flight of Souls, helps bring light into the chapel’s interior.
The bronze doors weigh more than 4 tons. The Carabelli Co. built the building in 1899, and it received a $1,000 bonus for a job well done.
Electric lighting inside the chapel was a prerequisite set by Tiffany in order to prevent damage to the mosaics from the oil lamps of the day.
Rockefeller Monument The Rockefeller Monument was designed and erected by the Carabelli Co. in 1898. It is made up of four pieces totaling nearly 66 feet in height and 181 tons.
Sometimes, like above, a name needs to be added to an existing headstone. First, a rubbing of the headstone is made and a stencil for the new name is hand drawn, hand cut and then applied. After a light sandblasting, the stencil is removed and the stone is finished by hand, which allows a craftsman to mimic the slope and shape of the existing letters, have better control of letter depth and carefully blend the edges of the stone where new work meets the old.
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The granite was so large it came to Cleveland from Barre, Vt., on two flat cars equipped with turntables in order to negotiate the turns on the rail line. It is said that 20 teams of horses were used in the erection of the monument. Sources: Michael Johns Jr.; www.lakeviewcemetery.com
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Case could result in Ohio tax challenge SAFE financing alternative f A recent decision by the U.S. Supreme Court could have serious implications for Ohio-based taxpayers who also pay income taxes in other states. The Supreme Court case surrounds taxpayers Brian and Karen Wynne, a Maryland couple who collect their income through a passthrough S corporation that earned its income in several different states. The couple paid income tax to the various states where the S corp earned income, then claimed a credit against the Maryland state and county income taxes as a result of paying the various out-of-state taxes. The Wynnes learned their credit against Maryland state income tax was permitted, but the credit against the county income tax was denied. Seeing that as a form of double taxation in violation of the dormant Commerce Clause in the U.S. Constitution, the Wynnes challenged the decision in court and won. Officials in Maryland appealed all the way to the U.S. Supreme Court, where justices recently ruled 5-4 that Maryland’s tax treatment was unconstitutional. The Court said such a system discriminates in favor of intrastate over interstate economic activity in violation of the Commerce Clause. In the view of the majority of justices, Maryland’s denial of the county-level credit amounts to a tariff against residents who earn income through interstate commerce. The state is now busy processing claims and issuing refund checks to thousands of taxpayers who generated income in other states and were not given the same credit. So what does all of that have to do
Peter A. DeMarco is vice president and director of tax services at the regional accounting and business consulting firm of Meaden & Moore, headquartered in Cleveland. with Ohio? Just as in Maryland, Ohio gives credit to Ohio resident taxpayers who pay income tax to other states through pass-through entities, such as S corporations, limited liability companies, partnerships or sole proprietorships. These types of entities do not pay tax at the corporate level, but pass their income directly on to shareholders, who are responsible for reporting the income and paying the tax. If such a taxpayer earns an income of $1,000 through a partnership, for example, and pays tax to Pennsylvania of $300, Ohio will consider that $300 paid to Pennsylvania in determining the tax ultimately owed to Ohio. If Ohio income tax would have been $400, the taxpayer will get credit for the $300 paid to Pennsylvania
and will owe Ohio only $100. Ohio does not collect county income taxes, as in the Wynne case, but Ohio cities collect income taxes from residents of their municipalities and non-residents doing business within their cities. Those city tax collection processes, as with Maryland’s county tax, do not give credit for income tax paid to other states. Does this mean Ohio’s tax rules are about to change? It’s too soon to say. The Supreme Court decision is specific to Maryland, so it doesn’t immediately compel Ohio authorities to act. It would take a legal challenge to arise from within Ohio to determine case law that would be specific to Ohio. It’s important to note that businesses organized as C corporations likely would remain unaffected, even if an Ohio taxpayer were to mount a legal challenge. C corporations do not pay income tax, but instead pay a commercial activity tax based on their gross receipts. That is entirely different from an income tax. Some legal experts believe a challenge in Ohio is likely for two reasons. First, the fact pattern around Maryland’s system of taxation is similar to Ohio’s in many ways. Second, the number of dollars that could be affected is likely significant, as it is not uncommon for an Ohio taxpayer to earn income via a passthrough entity that does business out of state. If an Ohio taxpayer similar to the Wynnes challenges the denial of a local tax credit in an Ohio court, the Wynne Supreme Court decision might well factor into the case as a legal precedent.
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Your early stage company needs money to grow, so what are your options? Historically, small business owners in this position apply for an SBA loan only to find that, even if your company qualifies, you are required to sign a personal guaranty, which means you’re stuck repaying it even if the business fails. Another option — you could sell a chunk of equity. But that means you will have to give up a little (maybe a lot) of management control, not to mention that the legal and accounting paperwork involved can be overwhelming. In recent years, many startup founders have used convertible debt offerings to raise seed financing as a bridge between formation and pricing a preferred equity “Series A” round. While convertible notes are great under the right circumstances, there is now another option known as Simple Agreement for Future Equity, commonly known as SAFE. SAFEs are based on the principle that the investor provides funding to the company today in exchange for the right to receive equity in the future. While still relatively unknown outside of active startup markets on the coasts, SAFEs have proven an effective and easy method of raising money for early stage companies. The SAFE concept was created in 2013 and popularized by Y Combinator, a Silicon Valley technology seed fund and accelerator. Since then, SAFEs have steadily
Jake Derenthal is a partner in the corporate transactions group of Clevelandbased Walter | Haverfield LLP. gained momentum and now are making their way to the Midwest. The key attraction of a SAFE is its simplicity — the contract is only a few pages long — and its easy conversion into equity. SAFEs can be structured to offer investors and entrepreneurs the advantages of convertible notes, such as the option to give investors a discount to their purchase price for the next round of equity securities; the ability to add a valuation cap setting a pre-negotiated maximum valuation at which the investor’s equity will be issued; and the right for investors to participate with founders in the event of a change of control if the company is sold. Most investors will like that the SAFE requires the company to issue them equity upon the first sale of preferred shares without the requirements typical in convertible notes
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e for early stage companies that the transaction reach a certain “qualifying transaction” threshold prior to triggering conversion into equity. However, what sets SAFEs apart from the convertible note fundraising model is the ability to take advantage of the future equity offering while avoiding the legal and structural requirements of issuing debt. In particular, a SAFE does not include an interest rate or maturity date. On its face, the lack of interest or maturity date may sound scary to investors accustomed to calculating potential returns that include interest and have a fixed outside repayment date. Although, in practice, most interest earned by investors on convertible notes merely accrues and is unpaid until conversion (or is converted alongside principal), so adding a favorable discount rate in place of interest will assure investors they are being adequately compensated for the risk involved in seed-round or angel investing. Consider, also, that the maturity date has little value if the company is not able to repay the debt. In many cases, in fact, the existence of a maturity date will force an early stage company to pursue equity financing simply to compel conversion of outstanding notes prior to maturity, even if it’s not the best time to do so.
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Another common scenario caused by maturity dates compels company founders to engage in time-consuming and expensive negotiations with investors to extend the note maturity date, which takes their focus away from growing the business. Using a SAFE allows company founders to make decisions about future rounds of financing in the best interest of the company, which in the end will benefit investors. As you can tell, the SAFE instrument arguably “favors” the issuing company and its founders. This makes it an option best suited to startups with a ready pool of funding lined up. For businesses that are not as “hot,” convertible notes, equity and other traditional financing options will continue to play an important role. The SAFE represents the latest step in the ever-evolving marketplace of early stage company funding. Due to the infrequency at which SAFEs are currently being used in Ohio, it is critical that investors and founders, alike, involve experienced legal counsel early in the process. Many unknowns around the SAFE process, including the tax and securities law consequences, can best be addressed with strategic legal advice.
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Live Internet music station has local beat Cleveland radio alums create oWOW as alternative to corporate rock By DOUGLAS J. GUTH, clbfreelancer@crain.com
Cleveland has a new live and local Internet radio station that champions its North Coast origins with nostalgia-fueled hometown pride. Called oWOW Radio, the station was launched by a former WMMS program director, and it carries a
playlist peppered with regionally based bands and is partially funded by a community bank as well as grant from the City of Cleveland. “Locally owned, operated and programmed” is not just a slogan that’s proudly trumpeted on the station’s website, but it is a selling point meant to reach ears along with Cleveland-area advertisers keen on snagging oWOW’s growing listenership. “Our challenge is in letting people know we’re here, but there’s a buzz developing around what we’re doing,” said John Gorman, oWOW Media LLC’s chief content officer and a Cleveland radio mainstay formerly of WMMS.
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Nestled in its new 1,600-squarefoot production area and studio space in the 78th Street Studios complex, oWOW is gaining traction in a diverse and deregulated industry, its founders maintain. oWOW’s staff-curated format is labeled adult contemporary rock, and can be accessed via the station’s website player, a downloadable app or Internet-connected car stereo. Tune in for Friday Night Live, airing Fridays from 5 p.m. to midnight, and you may hear a littleknown version of Chuck Berry’s “Reelin’ and Rockin’” recorded live from London. A random listen to oWOW’s 12 hours of daily live programming, meanwhile, may garner a Cleveland performer like Welshly Arms. Rising national acts including ZZ Ward also get airtime on oWOW. The idea is to give consumers that old-school feeling of pleasurable surprise when hearing a cool new song on the radio, said Gorman. oWOW’s approach, delivered by a bevy of live personalities with traditional radio roots, is meant to jumpstart a regional radio industry largely dominated by nationally programmed stations churning out computer-created song logs. “Good music doesn’t have a time stamp,” Gorman said. “We play stuff that makes you say, ‘Hey, I know that song.’” John Chaffee, who helped steer WMMS’s creative direction as president of the Malrite Communications Group, recently joined oWOW as a consultant. The station’s warm, personable vibe, derived from the days when radio icon Murray Saul would vociferously instruct Buzzard fans to “Get doooooooowwwn!” is something many modern listeners are still keen on connecting with, he said. “It reminds us of listening to rock and being in Cleveland,” he said. “The station has to touch people in as many ways as possible.”
Getting creative
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Many traditional radio venues have lost the distinct personality oWOW is emphasizing, station officials said. Gorman said he has walked through empty studios that echo with voices coming from other cities. In contrast, oWOW has former
WMJI host Ravenna Miceli spinning tunes, a far more agreeable situation for a station serving a combined market of 17 counties within Cleveland, Akron, Canton and Youngstown. Live musical performances are among the plans oWOW has to build the excitement its founders remember from rock radio’s heyday. To get the word out, the station has partnered with area arts and culture events including Wade Oval Wednesdays. During a recent night out at the popular free concert series, station employees gave out food truck vouchers to visitors who downloaded oWOW’s app onto their smart phones. Inventive hyper-local marketing will be key moving ahead, particularly in a market where the shop-local movement has become an increasingly relevant lifestyle choice. “We’re creating a community around local ownership,” said oWOW director of sales and marketing Jim Marchyshyn. The digital station also provides promotions and on-air mentions to such Cleveland companies as Motorcars Honda. Prime visibility across oWOW’s social media platforms can be another attractor for area businesses wanting to harness an audience, said Steve Bossin, oWOW’s director of business development. “We have an opportunity to step in and take a piece of that advertising,” Bossin said. Neighborhood group University Circle Inc. invited oWOW to its Wade Oval concert event to give the station exposure. UCI president Chris Ronayne is impressed by the station’s homegrown efforts to innovate while further bolstering the region’s hardrocking reputation. “(UCI’s) quest is to help out area businesses that have the potential to scale,” Ronayne said. “The mix of music and innovation from oWOW fits the essence of who we are.” The station has been steadily picking up listeners since launching in mid-March, Gorman said. According to figures measured by an outside consultant, 10,680 listeners are tuned in to oWOW weekdays from 9 a.m. to 2 p.m. People are listening for longer, too, keeping the digital dial locked to the station for over an hour at a time. oWOW officials are more than pleased to be establishing such a dedicated listener base after barely four months on the air. “We see a consistent growth curve, in terms of both new listeners and time spent listening,” Bossin said. “We’re also seeing minimal listener drop-off in terms of people coming to oWOW for the first time, then not returning regularly.” Gorman sees a future that includes additional stations sprouting from the oWOW model. Success will come as long as there is an audience clamoring for a C-town born and bred alternative to corporate rock. “Music used to be the soundtrack of our lives,” Gorman said. “We’re putting together a format that people will stick with.”
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LET OUR EXPERIENCE BE AN ASSET TO YOUR BUSINESS Contact Chris Felice + cfelice@maloneynovotny.com + 216.363.0100
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20150720-NEWS--18-NAT-CCI-CL_--
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CRAIN’S CLEVELAND BUSINESS
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JULY 20 - 26, 2015
RNC continued from page 1
The idea is to serve up a few appetizers — the Rock and Roll Hall of Fame and Museum on the lakefront, the Cleveland Museum of Art in University Circle, and Lawnfield, the Mentor home of Republican President James A. Garfield — to woo convention visitors back for a full-course, family visit. If all goes as planned, Republican and media visitors will have a smorgasbord of destinations and events to choose from when the focus is not on the evening convention sessions. “This is just very exciting to us,” said Kelly Falcone-Hall, CEO of the Western Reserve Historical Society. “We would have done something anyway because it’s an election year, but the coming of the convention has been an accelerator for the historical society. “It’s going to be about raising interest in our collections and the stories they tell.” The historical society has a deep collection of political memorabilia focusing on Ohio’s eight presidents, especially Garfield, whose Lawnfield home is a repository of historical society papers, mementos and furnishings. It also has deep photograph and
manuscript collections of Garfield, Republican kingmaker, senator and Cleveland businessman Marcus Hanna and President William McKinley, a native of Niles. In addition, the historical society is preparing a series of short videos on subjects like Hanna, the hometown presidents and other political leaders that can be used by the media, or by the convention itself, during lulls in the action. The short videos are designed so they can be knit together into a longer program. “We’re hoping that some of this historical content will be interesting to them,” Falcone-Hall said. “It’ll be easily digestible.”
Open wide Falcone-Hall and Karen GahlMills, executive director of Cuyahoga Arts and Culture, the county agency that funds the arts, are coordinating an effort to provide outof-towners with sightseeing opportunities for every taste, with support from Destination Cleveland. Michael Mulhall, Destination Cleveland’s vice president of partnerships, said his organization has been researching how convention
visitors spend their free time. “We want to understand as much as we can about how visitors will behave that week,” he said. “We’re talking to people who attended prior conventions to find out how much free time they had and what they did with it. ‘Did you play golf, go fishing, go to the art museum?’ The more we know how a visitor typically behaves, the better we can prepare.” Falcone-Hall said institutions ranging from Lake View Cemetery, home to the James A. Garfield Monument, to the cultural institutions of University Circle and the National First Ladies’ Library in Canton, are thinking about convention week. University Circle, in particular, will be opening its doors wide for convention visitors. “We’re hopeful that delegates, their families and friends will find their way up the HealthLine (transit line) to University Circle,” said Chris Ronayne, president of University Circle Inc. “There are a lot of daytime opportunities for delegates and their guests.” Ronayne said his nonprofit development group is working on creating a “Circle Pass,” that could of-
fer admission discounts or other special incentives to a group of University Circle museums, such at the Cleveland Museum of Art, the Museum of Contemporary Art and the Cleveland Natural History Museum.
“We want to understand as much as we can about how visitors will behave that week. ... The more we know how a visitor typically behaves, the better we can prepare.” – Michael Mulhall vice president of partnerships, Destination Cleveland Those institutions and others could host caucuses, cocktails parties or other convention meetings. Ronayne said he’s also thinking about putting on a “special, starspangled extravaganza,” as part of UCI’s regular summer “Wade Oval Wednesday” outdoor concert series. The outer counties also are pursuing convention goers. For instance, Lake County Commissioner Kevin Malecek said at
least four hotels in his county will be hosting convention visitors, so it has hired a consulting firm and raised $90,000 to develop a plan to get visitors to spend some of their off time in Lake County. “It’s been a great exercise,” he said. “We’ve got parks, golf courses, the shoreline. We want people to spend money in Lake County.” Malecek said the county will reach out to the Utah delegation, and perhaps several others, that might have Mormon contingents, to remind them of the Kirtland Temple, the first temple built by what became the Latter Day Saint movement. However, the usual fare of dance, theater and musical entertainments of Playhouse Square won’t be available to visitors, though they may attend an event in one of the district’s historical theaters. Cindi Szymanski, brand communications manager at Playhouse Square, said the theaters aren’t booking any shows for convention week. “We anticipate hosting some convention-related events so until we know more of what is expected of us, we can’t plan anything else,” she said.
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Denise Donaldson (216) 522-1383 (216) 694-4264 DDonaldson@crain.com
REAL ESTATE
19
Copy Deadline: Wednesdays @ 2:00 p.m. All Ads Pre-Paid: Check or Credit Card
AUCTIONS
FOR SALE LAND CONTRACT 3 acres. 5700 s.f. beautiful building, nice area near 271. New 20 yr. roof, HVAC & parking. $249K
AUCTION - AUGUST 13, 2015 COMMERCIAL, DEVELOPMENT & RESIDENTIAL PROPERTIES PARTNERSHIP DISSOLUTION FORCES IMMEDIATE SALE!
8 OFFICE CONDOS - THE COURTYARD OFFICE PARK 7055 ENGLE RD., MIDDLEBURG HTS., OH 44130
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OFFERED INDIVIDUALLY WITH PUBLISHED RESERVE PRICES OF ONLY:
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All units located within 6 contiguous buildings. Units ranging from 800-2,600 SF, Published Reserve Prices range from $17,000 to $52,000 per unit ($20/Sq Ft). Solid brick constructed one floor private entranced buildings. Immediate highway access (½ mile from I-71 Bagley Rd Exit) and minutes from Cleveland Hopkins Int’l Airport. Beautifully landscaped courtyards, units have private restrooms & ample parking. Great upside potential for users, investors or user/investors.
Commercial warehouse/properties Available for lease Up to 50,000 ft2. Featuring a 44 dock Truck Terminal with offices. Very close to the airport, I480 and I71.
On-Site Inspections: Thursdays, July 23rd, July 30th & Aug 6th from 1:00 PM to 3:00 PM
OUT-OF-STATE SELLER ORDERS IMMEDIATE SALE!
OFFERED WITH A PUBLISHED RESERVE PRICE OF ONLY:
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3592 LEE RD., SHAKER HEIGHTS, OH 44120
More information: http://www/ipstneo.com
Attractive all-brick constructed office building with ample parking in rear. Centrally located just minutes from SR-8 & SR 422, the property was built in 1956, sits on .69 acres and is zoned C-3. The building is partially renovated leaving a terrific opportunity for the new owner to custom finish.
Need a Medical Office Condo?
On-Site Inspection Dates: Thursdays, 10:00 AM to 12 Noon, July 23, 30 & August 6
Tour 875 sq. ft. at Westlake's St. John Medical Center. Call Sandra M. Johnson, Realtor, Howard Hanna Real Estate Services. 216.999.1093
RESIDENTIAL PROPERTIES OFFERED WITH A PUBLISHED RESERVE PRICE OF $125,000
RELOCATION FORCES IMMEDIATE SALE!
2,318 SF RESIDENTIAL HOME
BIDDING TO COMMENCE AT:
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1443 ELMWOOD, LAKEWOOD, OH 44107
5 Bedroom, 2 ½ Bath, 2-story colonial with 2 ½ car garage. The home also includes a full basement, central A/C, 2-fireplaces and spacious outdoor patio. Located in an established residential community the home has been recently updated including Kitchen, Baths, HVAC, roof, etc. Open House Dates: Sundays, July 26, August 2 and 9 from 12 Noon -1:30 PM
RETIRING OWNER ORDERS IMMEDIATE SALE!
2,144 SF DUPLEX - INVESTMENT OPPORTUNITY! 2029 WEST BLVD., CLEVELAND, OH 44102
OFFERED WITH A PUBLISHED RESERVE PRICE OF ONLY:
$15,000
Currently rented for $700/Month. This 2,144 Sq. Ft. Duplex consisting of 4 Bedrooms, 2 Baths on approximately .8 acres is a terrific opportunity for homebuyers and investors. Located in an area of wide boulevards, tree-lined streets, old-fashioned front porches, Cleveland doubles, newly constructed townhomes and lofts. Open House Dates: Sundays, July 26th, August 2nd and 9th from 2:00 PM to 4:00 PM
AUGUST 27th AUCTION
PARTNERSHIP DISSOLUTION FORCES IMMEDIATE SALE!
150 +/- ACRE DEVELOPMENT SITE 150 +/Acres
8
I-271 & SR-8, MACEDONIA, OH 44056
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Located near I-271 and SR-8 and bordered by Highland Rd., Empire Pkwy and Capital Pkwy. The property is currently zoned G-1 (Gen Indst) and surrounded by several established residential developments. Possible rezoning opportunity for the astute builder/developer. FOR BROCHURE AND TERMS OF SALE, CALL:
216.861.7200 CHARTWELLAUCTIONS.COM
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Pearl near I71 or Bagley Zoned multi or GB MLS #3704084
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List your commercial, industrial, executive property or retail space HERE! Crain’s Cleveland Business’ classifieds will help you fill that space.
Contact Denise Donaldson at 216.522-1383 DDonaldson@Crain.com
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BUSINESSES FOR SALE
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ON-SITE: 3407 MILAN RD, SANDUSKY OH PROPERTY 1: 18,722± sq ft 2-story office/retail bldg on Milan Rd PROPERTY 2: 7± acres on Cleveland Rd across from Sawmill Creek Resort
BUSINESS SERVICES
To find out more, contact Denise Donaldson at 216.522.1383
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Crain’s Executive Recruiter SYSTEMS ANALYST for Ohio Farmers Insurance, One Park Circle P.O. Box 5001, Westfield Center, OH 44251. Design, code, test, & analyze software programs JAVA, Ajax, & JSF. Req. Bach. in CS, MIS, or related IT field; 10 yrs of progressive developer, programmer or similar exp. w/ design & development of enterprise apps & web services. Proficiency in Java, J2EE, OOA/OOD, RUP, XML, Hibernate, Web Services, Java Script, Ajax, XSLT, JSF, MQ/Message Broker, Websphere Req. exp. w/ IDEs e.g. RAD, build tools & source control tools. Send resume (NO CALLS) to Renee Dusek at address above.
Wanted: Plant Manager 25 person stamping shop Resume only to: Plant Manager 1404 Lear Industrial Parkway Avon, Ohio 44011
20150720-NEWS--20-NAT-CCI-CL_--
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20 CRAIN’S CLEVELAND BUSINESS
THE WEEK JULY 13 - 19 The
big story: The fundraising campaign for the Cleveland portion of the Republican presidential nominating convention has hit $39 million, about $25 million from the goal as the 2016 Host Committee begins the national portion of the cam- Gilbert paign. David Gilbert, president and CEO of the committee, said it has secured commitments for 12,000 of the 16,000 hotel rooms it has pledged to the Republican National Committee to have available. Steve King, chairman of the Republican National Committee’s Standing Committee on Arrangements, said his committee and the local host committee are making “excellent progress” in planning for the convention, which runs July 18-21, 2016.
Transition time: Aluminum products producer Aleris Inc. of Beachwood has a new CEO as Steve Demetriou, its chairman and chief executive since the company’s launch in 2004, decided to leave the company for a new job. Aleris appointed Sean Stack as CEO to replace Demetriou, effective immediately. Stack most recently served as executive vice president and CEO of Aleris North America. Meanwhile, Jacobs Engineering Group Inc. of Pasadena, Calif., named Demetriou as its new president and CEO. Demetriou will start in his new role with Jacobs on Aug. 17. Aleris said Demetriou will work closely with Stack over the next few weeks to ensure a smooth transition. Legal maneuvers: Joseph Castrodale, a prominent former partner and chairman of the business litigation practice for law firm Ulmer & Berne LLP, was named vice chairman for Benesch. Castrodale will be stationed in Benesch’s Cleveland office and now chairs the firm’s litigation department, the company’s largest group. He also brings with him three partners from his former business litigation team at Ulmer: Andrew Fiorella, Greg Phillips and Yelena Boxer. Castrodale brings to Benesch a sizable book of business, though he would not disclose a dollar amount. End of an era: Daniel Klimas, president of Lorain National Bank for the last decade, will part with the bank when it merges next month with Northwest Bancshares Inc., the parent company of Northwest Savings Bank. Klimas had intended to remain with the combined company as regional president and market leader for Northwest’s Ohio franchise upon the deal’s Aug. 14 consummation. However, Klimas said in an interview with Crain’s that Northwest president and CEO William Wagner “indicated that he and the management team didn’t feel I would necessarily be the best fit for running the region going forward.” A future together?: The Cuyahoga County Board of Elections received about 1,600 signatures on a petition from East Cleveland citizens seeking to initiate a process that could end up with the financially troubled eastern suburb being annexed by the city of Cleveland. However, it could take months or even years of negotiations and managing a complicated state-mandated process before an annexation could be put before voters. The elections board first must verify that the petitions have at least the 559 valid signatures needed to initiate the annexation process. Then, Cleveland must agree to enter into annexation negotiations either by a public vote or a vote of city council.
On the move: A high-level administrator at the University of Akron is leaving for a position at Syracuse University. Candace Campbell Jackson, currently the vice president for student success and vice provost for academic success at the University of Akron, was named vice president and chief of staff to Syracuse chancellor Kent Syverud. Jackson is expected to begin her new role on Monday, July 27.
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JULY 20 - 26, 2015
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Meat the new tenant at 200 Public Square
there,” he said, as Fox Sports Ohio also will occupy space in the atrium. — Stan Bullard
A big name is about to fill a big, longempty space at downtown Cleveland’s 200 Public Square office building. Ruth’s Chris Steak House is bound for the former Frank & Pauly’s space on the Superior Avenue side of the skyscraper’s atrium, Norfolk, Va.-based building owner Harbor Group International announced. Ruth’s Hospitality Group, the publicly traded owner and franchisor of 146 Ruth’s Chris locations, confirmed the plan. Michael O’Donnell, CEO of Ruth’s Chris, said in an email, “Ruth’s Chris Steak House is excited to bring our tradition of hospitality and quality of service to Cleveland. We look forward to helping more guests create memories on 500-degree sizzling plates.” Jim Vallos, managing director of 200 Public Square owner Harbor Group, said his company had been waiting for the right opportunity to fill the space. “We think it’s a great opportunity for the building,” he said. “It will complement the tenant roster. It really does not get any better than this.” Although the Winter Park, Fla.-based chain confirmed committing to the space, a spokesman declined to provide details on the opening date and store size. However, a presentation for investors said the company invests at least $3.5 million in each location. The sites generate about $4 million yearly in sales. Brian Hurtuk, manager of the Cleveland Colliers International office, said the restaurant will expand into the building’s atrium and factor in the planned renovation of the indoor and outdoor retail-oriented section of the building. “It’s going to be a whole new ballgame
Presidents’ Council’s next innovation: its own chamber
MILESTONES
BEST OF THE BLOGS
COMPANY: Cedar Brook Financial Partners LLC, Mayfield Heights OCCASION: Its 10th anniversary
Excerpts from recent blog entries on CrainsCleveland.com.
Cedar Brook this month is celebrating a decade in business as an independent wealth management firm. Its 75-plus professionals deliver services including comprehensive wealth strategies, invest- Glubiak ment and insurance advice, retirement plan consulting, and group benefit programs to physicians, corporate executives, privately held business owners and families. Cedar Brook is headquartered in Mayfield Heights and has offices in Strongsville; West Bloomfield, Mich.; and Bonita Springs and Palm Beach Gardens, Fla. Its managing principal is William Glubiak. For information, visit www.cedarbrookfinancial.com.
COMPANY: Nino’s Fine Italian Cuisine, North Ridgeville OCCASION: Its 25th anniversary The family-owned restaurant for a quarter century has served up old world Italian favorites along with fresh fish and local vegetables. Nino’s recently expanded with an additional dining room. Proprietor Tom Barber, who opened the restaurant in 1990, makes his employees a special meal on Sundays to express his appreciation to them for being part of the Nino’s family. Head chef Tony Bostwick has worked with Barber for more than 20 years. For information, visit www.ninosnorthridgeville.com.
The Presidents’ Council of Cleveland is starting its own chamber to help connect the community with African American-run businesses and to connect those businesses with resources in the area. The Presidents’ Council is a group of CEOs of some of the largest African-Americanowned businesses in Northeast Ohio. The council advocates for inclusion of African American-owned companies in the business community, said Michael Obi, CEO of Spectrum Global Solutions LLC in Richmond Heights and a member of the council. The Presidents’ Council Foundation runs the PC Scholars program for high school students and the Emerging Entrepreneurs program. The group has trained more than 100 entrepreneurs, entrepreneurs who can now become part of the Presidents’ Council Business Chamber. “We need to continue to reinvent ourselves,” said Obi, the chamber’s chairman. In the past, people have come to the Presidents’ Council for advice on African-American-run companies to work with on projects. Obi said the council was able to help on an informal basis, but the chamber will give more structure to the process with a member database. There are also plans for in-person meetings and retreats for members. The chamber will be open to companies of any size, and the companies don’t have to be African-American-owned to join. The companies just need to believe in the mission, Obi said.
Off track Cleveland and Elyria have two of the “saddest Amtrak stations in America.” So said CityLab.com in a piece filled with pictures and regret. Kriston Capps wrote that “regrettable transit hubs” can be found “all across the nation,” and he put them in a few distinct categories. Cleveland’s Amtrak outpost belongs to a group he calls “the fail station,” which includes Amtrak stations in Detroit, South Bend, Ind., and Savannah, Ga. Capps noted that Tower City Center, once Cleveland Union Terminal, “is the hub for the Regional Transit Authority’s rapidtransit lines (and a multi-use commercial and civic center to boot). That’s not a bad deal; arguably, city rail is a better use for a central train station than passenger rail, and the history supports the city’s decision to make the move. But Lakefront Station … the Cleveland terminal that Amtrak began using in 1977, leaves something to be desired.” Worse, Elyria was grouped in the “noteven-a-station station” category. “The shed that stands as the East River Road Amtrak station in Elyria makes the basement-dungeon depicted in the ‘Saw’ series look like a Pixar playground,” Capps wrote. “A fire — a cleansing, purifying, merciful fire — closed the station shed in 2013. Trains still stop there, according to Amtrak, even though the shed is now closed. Arguably, this situation is an improvement.”
Way to go, Ohio In 30 of the top 100 markets in the country, including Akron and Cleveland, saving for a 20% down payment is faster without a
Starting at 8 a.m. on Monday, July 20, the chamber is launching with a 100 in 100 Membership Campaign. The goal is to get at least 100 businesses to join the chamber in its first 100 hours. For information, visit ThePresidentsCouncil.com or call (216) 771-8702. — Rachel Abbey McCafferty
Singing the praises of music and manufacturing Rube Goldberg would be proud. Same goes for the members of the band Daft Punk. Two Cleveland-area companies — RGI International and Hy-Tech Controls — designed a crazy musical contraption called The Music Factory. It’s on display at the Discovery World Science and Technology Center in Milwaukee. The device lets visitors compose music and turn it into a visual display. As music plays, colored lights flash and colored balls move through the machine in a way that might remind you of the board game Mouse Trap. All that craziness is designed to get young visitors interested in engineering and automation. That goal is important to the sponsor of the exhibit: Rockwell Automation, which is based in Milwaukee and has a large presence in Northeast Ohio. RGI, of North Ridgeville, has built trade show booths and other interactive exhibits for organizations such as Rockwell, Lubrizol, NASA and the Great Lakes Science Center. Hy-Tech, an automation systems supplier in Oakwood Village, developed the wiring and controls for the machine. Rockwell products are used in the machine, and engineers from the company helped design and built the machine. — Chuck Soder
college degree, according to a new study from Trulia. “In those markets, a household with a college degree isn’t making that much more than a household without,” said Ralph McLaughlin, Trulia’s housing economist, in a story on CNNMoney.com. “The burden that student debt brings to a household with a college degree makes it slower to save for a down payment.” A home “is the biggest purchase most people will make, and there’s been a lack of buying activity among Millennials,” according to the story. “Student loan debt tends to get blamed. While going to college usually means higher lifetime earnings, hefty student loans can erode savings and make it harder to accumulate a down payment.” Trulia estimated that people with a college degree need 5.9 years in Akron and 6.1 years in Cleveland to save for a 20% down payment for a house. For people without a college degree, those figures are 5.7 years in Akron and 5.9 years in Cleveland. Still, Ohio is a pretty affordable option for millennial buyers. “Ohio is a state that if you want to buy a house, it’s going to be your best shot at doing so,” McLaughlin said. “You are going to be able to do it faster than any other state in the country.”
On the make Ohio’s three big cities remain exporting powerhouses. The International Trade Administration’s latest Metropolitan Area Export Overview showed that Cincinnati, Cleveland and Columbus all are among the top 50 export cities nationwide. Cincinnati was tops in Ohio, at No. 14 overall with $22.3 billion in 2014 exports. Cleveland was No. 29 nationally with $10.7 billion in 2014 exports, and Columbus was No. 48 with $6.2 billion in exports last year.
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Your business deserves the best network.
Trade in your phone. Buy a Samsung Galaxy S6 or Galaxy S6 edge. Get $250.
Until July 31st.
New 2-yr. activation on $34.99+ plan req’d. $250 = $200 bill credit + $50 smartphone trade-in credit (account credits applied within 2-3 billing cycles). Trade in must be in good working condition.
VISIT: findmyrep.vzw.com Bill Credit will be removed from account if line is suspended or changed to non-qualifying price plan after activation. Offers expire 7/31/15. Activation/upgrade fee/line: $40. IMPORTANT CONSUMER INFORMATION: Corporate Subscribers Only. Subject to Major Acct Agmt, Calling Plan, & credit approval. Up to $350 early termination fee/line. Offers & coverage, varying by svc, not available everywhere; see vzw.com. While supplies last. Restocking fee may apply. © 2015 Verizon Wireless. I7520MW
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THE 2015 SPRINTER
To maximize your efficiency, you need to minimize your vehicle’s downtime, including stops at the gas pump. With the superior fuel efficiency of its 2-stage turbocharged diesel engine, service intervals of up to 20,000 miles1 and legendary durability, the 2015 Sprinter will help keep your business ahead of the rest. Plus, new standard Crosswind Assist2 helps stabilize your Sprinter in strong, gusting crosswinds. The 2015 Sprinter—your hardest worker. www.freightlinersprinterusa.com
1 Driver is responsible for monitoring fluid levels and tire pressure between service visits. See Maintenance Booklet for details. 2 Crosswind Assist engages automatically when sensing dangerous wind gusts at highway speeds exceeding 50 mph. Performance is limited by wind severity and available traction, which snow, ice, and other conditions can affect. Feature not available on 3500 models. ©2015 Daimler Vans USA LLC. All rights reserved.
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