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New president boosts Akron’s financial mood Scarborough’s reputation as astute financial mind already paying dividends at university By TIMOTHY MAGAW tmagaw@crain.com
Lately, University Hospitals has been acting less like a sidekick and more like a superhero. For years, UH usually played the role of Robin while other local institutions acted more like Batman, leading heroic efforts to develop new medical technologies, save lives and battle the villains that plague Northeast Ohio’s economy. Now, however, UH is starting to lead more of its own innovation adventures.The hospital system is spinning out more medical technology companies. It’s funding more big ideas. And it’s trying to get its 25,000 employees to think more like entrepreneurial superheroes. That huge staff includes a lot of medical brainpower — doctors and other employees who constantly run into the same problems. They’re the type of people who often dream up new medical devices, diagnostic tools and software products. If they’re properly harnessed, UH’s efforts could have a big impact on medical innovation in Northeast Ohio. SEE SUPERHERO PAGE 25
Scott Scarborough’s name doesn’t carry the same cache as Jim Tressel, the former Ohio State football coach who also vied for the top job at the University of Akron. But what he lacks in championship rings, Scarborough makes up for in impressive financial turnarounds — just what’s needed at the University of Akron. Overall, the financial picture for higher education is a challenging one, particularly for public colleges and universities. State support hasn’t kept up with increasing expenses and affordability concerns have prospective students reconsidering higher education altogether. At Akron, those problems are compounded because of the hefty amount of debt — about $382 million worth — the university still has on the books from a dramatic campus overhaul carried out under former president Luis Proenza, who stepped down in June after 15 years on the job. Scarborough, an accountant by training, has never been one to back down from a steep money problem. He engineered the financial turnaround at the University of Texas at Tyler, where he served as vice president for business affairs, by directing efforts that generated more than $4 million in savings over four years. He also took the university’s performing arts center from a $130,000 loss in 1999 to an estimated net income of $100,000 in 2001. At DePaul University, where he served as executive vice president for finance and administration, he improved the bottom line in the 2003-2004 operating budget by $11 million in six months. Scarborough’s reputation as an astute financial manager paid off this month when the university looked to Fitch Ratings and Moody’s Investors Service to give their books a once over before going to market to refinance about $28.8 million in debt — an effort expected to save the university about $2.1 million in interest. In its report, Moody’s made note of “the fresh perspective of the new president with a proven record of good fiscal management and the strategic focus on stabilizing enrollment and improving future financial performance.”
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NEWSPAPER
74470 83781
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GOVERNMENT
BETTER BUSINESS Cuyahoga County has recouped more money than anticipated with the sale of properties it no longer needs ■ Page 5
Entire contents © 2014 by Crain Communications Inc. Vol. 35, No. 30
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Lean Dog considers itself an innovative company that invests in its work force. The Cleveland software design firm has a fitness center and a rock climbing wall, and is adding a rooftop garden and a chicken coop to provide fresh eggs. But its location within a converted barge on the docks of Lake Erie makes it challenging for employees to conveniently access healthy, local food. That’s why its future partnership with LunchOwl, a new healthy lunch delivery service, floats its boat. “We sit at computers all day, so sometimes we just eat what’s in front of us, like pizza,� said Lean Dog president Jon Stahl. “We want to encourage healthier lifestyles.� LunchOwl founder Scott Himmel has spent more than a year developing the service, which he is set to launch in late August with local chefpartners Ryan Hamel and Matt Del Regno. “We’re partnering with forwardthinking companies to provide their employees with fresh, energizing lunches,� Himmel said. “This service helps employees make healthier choices and be more productive at work.� About a dozen companies have expressed interest or have committed to the service. Thunder::tech, a MidTown-based integrated marketing agency, participated last summer in LunchOwl’s six-week pilot and is partnering with the service upon its rollout, said president Jason Therrien. “The team members missed it so
CONTRIBUTED PHOTO
One of LunchOwl’s offerings is an apple almond herb salad. much when LunchOwl went off pilot. We actually had a waiting list,� Therrien said. “MidTown has some great restaurants popping up, but it’s not downtown or East Fourth Street.�
How it works Himmel’s model is to make the process as easy for employers and employees as possible. Partner companies must have at least 25 employees and commit to a minimum enrollment period of
Volume 35, Number 30 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright Š 2014 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: 800-290-5460 Ext. 136
three months, with the lunch delivery frequency ranging from two to five days per week. Clients pay a refundable $750 fee per LunchOwl-branded refrigerator and pay a per-lunch contribution fee. The fee scale ranges from a minimum per-lunch contribution of $1 per person for companies with 200plus employees, to a minimum of $3 per person for companies with 25 to 75 workers. See LUNCH Page 11
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County is commanding better deals With all but four of 14 properties sold, FitzGerald administration has brought in more money than anticipated By JAY MILLER jmiller@crain.com
At the same time Cuyahoga County government is moving into a shiny new headquarters building, the FitzGerald administration is wrapping up the sale of a handful of properties it now no longer needs. The move of about 600 workers to the headquarters at East Ninth Street and Prospect Avenue is expected to be completed by Aug. 12, when County Council holds its first meeting in the new building. The FitzGerald administration initiated the property consolidation in 2011, believing it could save money. In a recent news release, it said the process should save the county $84 million in operating costs over the next 20 years. Even with several properties still unsold and several selling at very modest prices, it is looking like the selloff will net the county more than the $30 million it projected when it put the properties on the market in March 2012. With four of 14 buildings still without a purchaser, the county is booking about $31.4 million in sales. The goal was achieved largely with the sale of five properties between Euclid Avenue and Prospect Avenue, along East Ninth Street — the Ameritrust Building, the Cleveland Trust rotunda, two adjacent buildings and a parking garage south of the Ameritrust complex — to the Geis Cos. of Streetsboro. Geis agreed in December 2012 to buy the package of properties for $27 million. The county had valued the Ameritrust tower at $17 million. The other four buildings in the complex had tax values totaling $2.8 million before the county takeover a decade ago. What gave that sale price a boost, of course, was the agreement that the county would consolidate its staff into a new building on part of the Ameritrust site. It’s that eightstory tower that is now filling up with county workers. The county is leasing the $80 million building from Geis with an option to purchase it for $1 at the end of its 26-year lease.
ter, the former auto title office at 1261 Superior Ave. and a county vehicle garage at 1801 St. Clair Ave. Two county properties in Olmsted Township, totaling 7.5 acres were sold to the township.
Still in county hands
Property moves The reform of county government also helped. Unlike most Ohio counties, which have threemember commissions and a slate of elected officials whose duties and actions are governed by state law, Cuyahoga County voters in 2009 voted for a home-rule charter. That eliminated the commission and the other elected officials. The new charter also gave Cuyahoga County flexibility when it came to negotiating its contracts and purchases. “Having home rule and more ability to negotiate on real estate deals has proven to be beneficial for us,” said Bonnie Teeuwen, the county’s director of public works. “Before it was, ‘Submit your proposals,’ and we took the highest bidder. This (charter) gave us the
ability to be more creative and we’ve proven that it’s a good process. When the county sought bids for this group of properties, it did not have to take the highest bid submitted. In addition to price, the county scored bidders on redevelopment plans for the properties and strength of the bidder. The value of many of the older buildings in the group was enhanced because the structures are eligible for historic tax credits, which lowers the cost of redevelopment. The payoff to the county would have been even higher but for the decision to hold onto the 1950s-era Administration Building on Ontario Street, a valuable piece of land near the new Cleveland Convention Center, for a new, county-owned convention center hotel.
The county also turned over to the PlayhouseSquare Foundation the Loew’s Building, which houses the Ohio and State theaters. The county stepped in and saved the building from demolition in the 1970s and has been the foundation’s landlord/benefactor ever since. The foundation paid for the restoration of the theaters but the county has been absorbing about $1 million a year in building upkeep expenses. The foundation is paying $1 for the building and relieving the county of the maintenance cost. The biggest other deal was a three-building sale to Weston Inc. The Warrensville Heights developer that has taken an interest in downtown paid $3.4 million for three buildings — the seven-story Marion Building on West Third Street across from the Justice Cen-
The properties still unsold include Courthouse Square, the Whitlatch Building, a former health center and the former juvenile court complex on East 22nd Street. The closing date is Sept. 12 for bids for the 51-year-old Whitlatch Building, a three-story, 33,404square-foot office building at 1910 Carnegie Ave. Bids for the Clement Health Center are being evaluated. A deal for the former juvenile court complex may be completed soon. In an email, Ryan Jeffers, a commercial real estate broker with CBRE Inc., the firm that has been advising the county on its property disposal, said the county was “in the process of finalizing (an) agreement with a bidder to present to (County) Council for consideration.” Teeuwen would not disclose the name of the bidder, but the Sisters of Charity Health System, which operates St. Vincent Charity Medical Center across the street from the vacant property, has in the past expressed an interest in acquiring it. A spokeswoman said that the health system is no longer a bidder for the property. Courthouse Square, which has been home to the county executive’s staff since the demolition of the county administration building, is being held off the market until the dust settles on the move into the new headquarters. As a result of the streamlining into new space the county is also planning to create an operations and archive center. County council at its Aug. 12 meeting is expected to discuss a lease for the 220,000-square-foot former Halle Warehouse on East 40th Street. Council has had lease legislation on its plate since late last year, when it postponed approval because of concerns about the building’s age and condition.
Consolidation could speed up shifting of Stonebridge complex By STAN BULLARD sbullard@crain.com
The consolidation of many Cuyahoga County employees into new headquarters from offices the county rented or buildings it is disposing of may trigger the conversion to apartments of two buildings at the Stonebridge complex in the Flats. Doug Price, CEO of Willoughby-based K&D Group, said his company is “running the numbers” and likely will convert its five-story Stonebridge Office Building, 2019 Center St., and a two-story office/retail building, at 2020 Center St., to apartments. The trigger for developing a new plan is the departure of employees from the Cuyahoga County Department of Public Works to the new county building at 912 Prospect Ave. from the Stonebridge office building. The county had leased space for the department in the building since its 2001 opening. Another major tenant, Cleveland.com, exited to join other Northeast Ohio Media Group operations at the former Plain Dealer building at 1801 Superior Ave. “We just have Lucca’s (Italian restaurant) and one small office tenant in the building,” Price said. The empty building across the street may
also go to apartments, Price said, because he believes the office market is “too tough” to try to refill the space with businesses. He should know. K&D Group’s recently announced plan to buy the Leader Building, 530 W. Superior Ave., for future conversion to apartments, is part of a trend of developers snapping up old office buildings to repurpose them for residential. K&D also has converted three other downtown office buildings to apartments, including the just opened Residences at 1717 in the one-time East Ohio Gas Building on East Ninth St. The hip-roofed building at 2020 Center, a former tool and die shop, primarily was designed as a nightclub and coffee shop in 2007 to provide services to tenants at the eight surrounding Stonebridge apartment and condo buildings. However, the concept proved no stronger than the cavalcade of short-lived restaurants and nightclubs before K&D acquired it. The piazza building also went in as K&D developed the 12-story Stonebridge Plaza condo building next door. The 2020 Center building also went into service at a time K&D had an aggressive plan to add more apartment buildings on Center Street north toward Lake Erie, but it abandoned that
STAN BULLARD
approach in the recession and housing bust. In all, K&D developed more than 500 dwelling units at Stonebridge before it shifted its attention to developing residential rentals on the other side of the river in Cleveland’s central business district. Geoff Coyle, managing partner of the Ostendorf-Morris Co. unit of Hanna Chartwell LLC, declined to talk about efforts to market the Flats office space for K&D. Instead, he said, “I don’t think anyone knows better how to size up the opportunities for devel-
opment of apartments in Cleveland than (Doug Price and Karen Paganini).” As far as the fate goes of other rented spaces in older office buildings the county will vacate in its consolidation drive, Coyle said it is too soon to tell. However, there is some irony in K&D’s move to put apartments in the building. At the time it developed offices at Stonebridge in the Flats, Price called it a diversification move for the company.
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The Cleveland Indians’ attendance woes are nothing new. The Indians, fresh off a surprising run to the 2013 postseason, are 29th among Major League Baseball’s 30 teams in attendance this season. The Tribe seems certain to finish outside baseball’s top 20 in attendance for the 12th consecutive year. What’s different are the many ways the Tribe’s analytically inclined front office is trying to tackle the problem, plus the numerous methods it’s using to study its fan base. Gabe Gershenfeld — a 25-yearold who was hired in 2011, not long after he graduated from Cornell University — has developed a program the Indians use to predict attendance. The formula takes historical data into account and weaves in such critical factors as the weather forecast, opponent, team performance, night of the week and time of year. It doesn’t get fans through the gates, but it does give the Indians a much better idea of how to best serve their audience. “The first step is understanding how it’s used,� said Gershenfeld, the Indians’ business analytics manager. “Who are the stakeholders? What are they looking for?�
Predicting the future What the Indians are seeking are optimal methods of catering to their fans, whether it’s the 9,029 who showed up for an April 8 matchup against the San Diego Padres or the 40,712 in attendance when Omar Vizquel was inducted into the club’s Hall of Fame on June 21. “It’s certainly helpful information to have,� said Andrew Miller, the Tribe’s senior vice president of strategy and business analytics, of Gershenfeld’s forecasts. “If you’re ordering food, you have a certain amount of lead time. If you’re calling up staff members to work the game, you have a certain amount of lead time, but there are still things we’re changing on the fly. If we get to the last day or two and expect a big walkup, we need to be prepared for that.� The last two seasons, the Indians have been pushing the benefits of buying tickets in advance. The dynamic pricing strategy — a common one in professional sports — was met with resistance by some fans who were accustomed to being able to purchase a $9 bleacher seat at the ticket window on game day. The number of walkup sales has since decreased, but Miller said the majority of the team’s tickets are still sold “within a 48-hour window� of game time. In addition to dynamic pricing, which the Tribe first instituted on a limited basis in the second half of the 2012 season, providing a needed boost in ticket revenue, the Indians believe that by only opening up certain sections of the ballpark as demand dictates, the club is providing a better experience for the crowd that is on hand. That’s where Gershenfeld’s formula comes in. Miller said Gershenfeld’s pre-2013 attendance forecast “wasn’t that far off� the 1.57 million fans the Indians ended
sells out, 13 of the 15 Indians games that drew the largest crowds in 2013 were on Friday (seven of the top 15) and Saturday (six of the top 15). That trend has continued this season. Not counting the home opener, which was on Friday, April 4, the Indians’ seven Friday home games this season have averaged a crowd of 25,075. The 39 non-Friday games have drawn a norm of 16,618 fans. “I don’t know if it’s the surest way to draw a crowd,� Miller said of dollar-dog and fireworks promotions. “But it’s something we’ve studied quite a bit in the last few years, and analytics definitely plays a part in that. But the real fundamental question is what is drawing people to come to our games? Is that weather? Is that a promotion?� The MLB schedule-makers certainly didn’t do the Indians any favors this season. The Tribe will play nine Friday night games on the road this summer, and five of their eight Friday contests since June have been away from Progressive Field. That has resulted in two fewer dollar-dog promotions — from 15 in 2013 to 13 this season. The team did increase its fireworks shows from 16 to 17. Gershenfeld
Miller
up drawing last season. The Indians now have a much more concrete idea of which games are most likely to produce lastminute buying sprees, and which ones will be a friends-and-family type of gathering in which the staff size should be reduced and less food needs to be ordered. Gershenfeld begins forecasting the Tribe’s attendance as soon as the schedule is released, then continues to update it as the season advances. “Obviously, as you get closer to game day, it becomes a more accurate prediction,� Miller said. “But we have to start making predictions well in advance. We’ve already started our season-ticket renewals for 2015. In order to do that, we need to set pricing, we need to have some sense of what the different demand will be for games.�
Assessing needs Certain factors that drive demand for baseball games are obvious. Dollar hot dogs and fireworks usually are the most popular promotions, and the two are most often reserved for Friday and Saturday nights, when attendance is most likely to be at its best. “Our studies have shown that instead of taking a game that is going to be less highly demanded because it’s in April, mid-week, and trying to put those promotions on that game, it’s better to put it on a summer weekend when people want to come here,� Miller said. In 2013, when the Indians ranked 28th with an average attendance of 19,661, they had 16 firework nights and 15 dollar-dog promotions. Attendance for their 13 Friday night home games, at which dollar dogs are a staple in the summer, averaged 25,392. Not counting the home opener, which traditionally
Understand the fan As far as Miller’s fundamental question, the team is still looking for answers. When Mark Shapiro transitioned from general manager to president following the 2010 season, he brought the team’s Moneyball practices from baseball to business. Miller, who was hired in 2006, once aspired to be an MLB general manager. He made the move from baseball to business with Shapiro, and he now leads a business analytics team that includes Jeff Wilen (director of strategy and business analytics), Gershenfeld, Jason Sinnarajah (an organizational development strategist who was hired from Google in 2011) and Steven Shin (a sales analyst who led a 2013 ballpark eye-tracking study that was the first of its kind in MLB). Shapiro attributes the Indians’ attendance to the size of the Northeast Ohio market, what he calls the “fragmentation� of the sports entertainment market, and such variables as the number of people living downtown. One crucial number the Indians can control is their season-ticket base of about 8,000, which Shapiro has said significantly lags behind major-league teams in similar markets. To the Indians, that core group of customers represents a certainty in a sport in which weather and other elements can be such unknowns. The Tribe’s business analytics team isn’t giving any predictions on its 2015 season-ticket base or its average attendance, but it is studying its audience and looking for any way it can provide a boost. “There is a lot we can do and a lot we’re trying to do,� Miller said. “It is the (fan) experience. It’s trying to create benefits and products that align with what season-ticket holders or perspective season-ticket holders are looking for. We’ve spent a lot of time on trying to understand fan needs.� „
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JULY 28 - AUGUST 3, 2014
StreamLink capitalizing on ‘happening’ market
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StreamLink Software has doubled its revenue for three years straight and will probably do it again this year. But that’s not good enough for CEO Adam Roth. StreamLink, which makes software for nonprofits, has hit “a massive inflection point” that could supercharge the fast-growing Cleveland company, Roth said. A few new federal policies are putting a lot more pressure on organizations that receive grants from the U.S. government. They’re already starting to generate a wave of new RFPs — requests for proposal — from organizations looking for software that can help them manage the grants they receive. And StreamLink just so happens to have such a product. StreamLink just hired two new executives in an effort to prepare for an influx of demand for its AmpliFund software. The company hired John Dearborn to serve as its first president, and it hired Steve Kosko as chief revenue officer. Dearborn recently served as president of JumpStart, a nonprofit that works with local startup companies. Kosko, who will oversee sales and marketing, spent the
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past seven years as an executive at Rosetta, an interactive marketing firm with a large office in downtown Cleveland. Dearborn may help StreamLink raise more money from investors to ensure the company has the fuel needed to capitalize on what he described as a very clear opportunity. “The market is developing in front of us. It’s happening,” said Dearborn, who advised the company while at JumpStart and at one point sat on its board. In May, Congress unanimously passed the Digital Accountability and Transparency Act, which requires the U.S. government to collect standardized data related to federal spending and publish it online. The DATA Act will require grant recipients to meet new reporting requirements. And many of them — especially state and local government agencies — are getting ready now. For instance, StreamLink already knows of more than 30 public agencies that are looking for grant management software and planning to put out RFPs this year, Roth said. The company expects another 180 RFPs to come out over the next 12 to 18 months, he said. In the past, the company might’ve only had the chance to respond to roughly one RFP per month. “It’s a different ballgame,” Roth said.
Friends in high places StreamLink employs 35 people at the Caxton Building in downtown Cleveland, up from 17 a year ago. That growth is partly due to the success of the company’s first product, BoardMax. StreamLink gets roughly half of its revenue from BoardMax, a board management software product for nonprofits. Released in 2008, the software has become more popular over the past two years. These days, many nonprofit board members are carrying iPads and demanding better technology, Roth said. “For-profit companies have gone to these board portals, and now these people are sitting on nonprofit boards and they have a higher ex-
pectation,” according to Roth, who developed the product based on knowledge he gained while serving as chief operating officer at Westside Ecumenical Ministries in Cleveland. However, AmpliFund will drive more growth over the next few years, thanks to the DATA Act and other new policies designed to keep tabs on federal spending, such as the U.S. Treasury’s Do Not Pay initiative. StreamLink lobbied for the DATA Act, through the Data Transparency Coalition. Plus, in 2012, the company helped the U.S. government run a pilot project designed to test ways to collect standardized data from nine organizations that receive federal money. In June, the company met with U.S. chief technology officer Todd Park to talk about how that pilot project could be used as a model for implementing the DATA Act.
Growth vs. profit StreamLink has reached a point where it could generate a profit in the near future, if it chose to do so. For now, however, the company is more interested in growing quickly, given the massive increase in demand for grant management software. StreamLink has raised $3.5 million from investors since April 2013. The money came from several individual investors in Ohio and four organizations: Hyde Park Venture Partners and Hyde Park Angels, both of Chicago; Blu Venture Investors of Vienna, Va.; and North Coast Angel Fund, a group of local investors. Should StreamLink decide to raise more money, it should have options. Roth said that “lots of people … are interested in our company,” including market researchers, venture capital firms and other companies StreamLink works with today. Could any of those partner companies end up buying StreamLink? Maybe one day, but not any time soon, Roth said. “We’ve got a lot of growth and opportunities ahead of us before we have that serious conversation,” he said. ■
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James’ return is slam dunk for hospitality biz N
ow that the fervor surrounding LeBron James’ return to Cleveland has tempered — at least until the weeks leading up to the season’s first basketball game — the focus has turned toward how James’ return to the Cleveland Cavaliers will compound the city’s economic growth. For the area’s robust hospitality industry, the next couple of years could be a game-changer.
KATHYAMESCARR
WHAT’S COOKING The city is undergoing $5 billion in new development projects, more than triple the $1.5 billion in investment that downtown experienced in 2010 when James left Cleveland to play for the Miami Heat. Cleveland’s restaurants and bars already have been benefitting from the economic stimulus, and James’ return no doubt will be another windfall for business, particularly at the high-end establishments and sports bars in the Gateway District and East Fourth Street. “We’ve seen increases in sales every year on East Fourth,� said Ari Maron, partner of MRN Ltd., the developer behind East Fourth Street. “I would expect a 50% to 75% increase in restaurant sales on game nights, which would correspond to an approximately 20% increase in annual sales. “This is clearly a shot in the arm for the neighborhood that builds on existing positive trends of increased downtown housing, office attraction, infrastructure investments and energy,� Maron said. Local economist LeRoy Brooks predicts that Cleveland-area restaurants, hotels and bars will experience an additional $57 million to $69 million in revenue annually. The estimate includes recovering the annual $48 million loss between 2010 and 2014, due to the decrease of 6,500 seats at Cavs games after when LeBron left. The revenue estimates are adjusted for 10% inflation. A playoff run could inject an additional $30 million to $150 million back into the leisure and hospitality industry, he predicted. He estimates the total economic impact as a result of LeBron’s return at between $245 million and $521 million, only 0.5% of Northeast Ohio’s overall $111 billion GDP, but still a meaningful gain.
“A very likely more important contribution comes from the view residents and others throughout the U.S. and world will have about Cleveland and the further growth this likely portends,� said Brooks, finance chair at John Carroll University’s Boler School of Business. James’ return this time is just part of a larger economic success story in Cleveland, compared with the earlier part of his career between 2003 and 2010 with the Cavs, when he was arguably one of the main magnets for downtown entertainment and spending. His departure did little to stymie Cleveland’s momentum. Largescale projects such as the Horseshoe Casino Cleveland, Cleveland Convention Center/Global Center for Health Innovation and the first phase of the Flats East Bank have come online, attracting global attention. The city’s core daily population is 125,000, and its residential population has surged 28% since 2010, from 9,800 residents to 12,500 residents, the most in the city’s history. The Republican National Convention in 2016 is expected to further electrify downtown business. Downtown’s hospitality industry has followed suit. Cleveland experienced a net gain of 26 restaurants, or a 13% increase, since LeBron’s departure. In the last two years alone, over 30 restaurants have opened downtown. More are on the way, including three restaurants at the luxe 9 hotel and apartments; Barrio at 5th Street Arcades; Hofbrauhaus at PlayhouseSquare; a food service provider at North Coast Harbor and Butcher & Brewer on East Fourth Street. “We haven’t just sustained the restaurant scene, but have grown it over the last couple years,� said Michael Deemer, vice president of business development with Downtown Cleveland Alliance. “This speaks to the strength of downtown market, which will get another shot in the arm when these huge crowds come to see LeBron play.�
Thinking outside the box A shipping container at North Coast Harbor is gaining new life in the form of a stationary food truck that serves gourmet street food. The Blazing Bistro, operated by Lutheran Metropolitan Ministry, is scheduled to open in late July and will operate Wednesday through Sunday during peak hours for North Coast Harbor Transient Marina and other North Coast venues. “With the new marina fully operational and services like paddleboats and Jet Ski rentals available at North Coast Harbor, the district is
International spotlight Scott Ryan, executive chef at The Country Club in Pepper Pike, nabbed second place in the Global Chefs Challenge world finals, held July 2-5 in Norway. The chef competed against culinary professionals from Asia, Africa/Middle East, the Pacific Rim and Europe.
The truck operates near the more remote northwest area of campus, and will also appear at athletic events and campus festivals. The menu includes burgers, tacos and salads, and will change with the availability of seasonal ingredients. “This definitely is culinary-driven,� said Rich Roldan, director of Kent State’s Dining Services. “It’s going to be street food, but in a different fashion. It will be very good and healthy.�
A perfect pairing LARRY E. HIGHBAUGH/THISISCLEVELAND.COM
LeBron James’ return will be a shot in the arm for the high-end establishments and sports bars in the Gateway District and East Fourth Street. transforming rapidly to become a place where people can touch the water in downtown Cleveland. This new food service complements the vision for the future of North Coast Harbor,� said Joe Marinucci, CEO of Downtown Cleveland Alliance, which is a partner in the project. A new weekend tailgate event, Anchors & Ales, will provide residents and visitors another opportunity to enjoy the new North Coast
Harbor amenity. That event is set for 5 p.m. to 8 p.m. Friday, Aug. 22 and Saturday, Aug. 23, and the same time Saturday, Sept. 13 and 11 a.m. to 1 p.m. Sunday, Sept. 14 in conjunction with a Cleveland Browns home game.
Roaming around campus Kent State University’s Dining Services has rolled out its first food truck, Fork in the Road.
Talk about a respite from the office. Sommelier, fromager and Edwins founder Brandon Chrostowski is hosting a cigar and Cognac pairing at 6:30 p.m. Tuesday, July 29, at Edwins Leadership and Restaurant Institute, 13101 Shaker Square. Chrostowski and the Edwins team will lead guests though expert pairings that elicit the cigar and spirit’s subtle flavors. The event includes hors d’oeuvres and live entertainment. The event is $65, excluding tax and tip. For more information, call 216-921-3333 or visit edwinsrestaurant.org. „
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PUBLISHER:
John Campanelli (jcampanelli@crain.com) EDITOR:
Elizabeth McIntyre (emcintyre@crain.com) MANAGING EDITOR:
Scott Suttell (ssuttell@crain.com)
OPINION
Save the bank
A
mong the many contentious issues awaiting Congress when it returns from its summer recess in September is the reauthorization of the Export-Import Bank. The bank — the official U.S. export/import credit agency — provides financing for many American companies, from small businesses to behemoths such as Boeing, trying to sell goods overseas. Some Congress members want to scrap the bank, saying it provides “corporate welfare” that only benefits a handful of big corporations. Leading the charge against the bank are Rep. Jeb Hensarling, head of the House committee that oversees the bank, and incoming House Majority Leader Kevin McCarthy, who says private lenders can do its work. Ohio manufacturers know how important the Export-Import Bank is. More than 250 Ohio companies have used the bank to support $2 billion in exports, ranking Ohio sixth for exporters who’ve received financing from the bank for overseas sales, from 2007 to 2014. The vast majority of companies using the services of the Export-Import Bank are small to mediumsized companies. In fact, almost 90% of the bank’s transactions go to these types of businesses. In fiscal year 2013, the bank backed $37.4 billion in exports. Recently, Crain’s reporter Rachel Abbey McCafferty profiled local manufacturers who have benefited from and are closely watching the debate surrounding the Export-Import Bank. Among the companies she wrote about was Formtek Inc. in Warrensville Heights, which because of financing through the Export-Import Bank, can sell in markets with more restrictive banking. The U.S. Chamber of Commerce says disbanding the bank would amount to “unilateral disarmament” because nations including China, France and Russia have financing agencies waiting to take the business. The Export-Import Bank has done a lot of good since being formed during the New Deal era. Last fiscal year alone, the bank reports that it backed $37.4 billion in exports — about 2% of the U.S. total — and supported more than 200,000 American jobs. The Obama administration is seeking a five-year reauthorization and a hike in the bank’s lending cap from $140 billion to $160 billion. Before that step is taken, the bank’s operations should be closely examined. If it has flaws — and many reasonable people point to issues of accountability — those should be identified and rectified. But closing the bank would be a mistake. Ohio Sen. Rob Portman has taken a thoughtful position, calling for reforms while defending the bank because of the need to “do everything we can to support American exporters.” House Speaker John Boehner, who has supported the bank in the past, should withstand pressure from some under the Republican tent who want the bank’s charter to expire. The leadership of these Ohio lawmakers is crucial to the bank’s survival. And the bank is crucial to Ohio’s exporters.
FROM THE EDITOR
Investing in personalities little during brainstorming, talks to one othing strikes fear in me more or two people at an event … and the inthan a networking event at an vite for happy hour with co-workers? out-of-town work conference. They’ll usually pass. I’m in an unfamiliar place, with unfaI’ve learned to adapt because the work miliar people. Small talk (gulp)? What I love demands quick decision-making will I say? What if I have nothing to add and daily interactions with lots of peoto the witty banter around me? ple. We introverts often put on the skin The pep talk usually starts of the extrovert, but it usually about an hour before the comes with a price. By day’s schmoozing. “You can do ELIZABETH end, we’ve reached our limit this,” my inner voice says. MCINTYRE of human interaction. We’re “Just relax. Be yourself. You’ll exhausted and need to be fine.” And by show time, recharge with quiet time. The I’m usually ready to go. extrovert, who gains energy It’s a process I’ve gone from being around other peothrough countless times in ple, is ready to go all night countless situations. talking to anyone, strangers You see, I’m an introvert. included. People are usually shocked As managers and leaders, when I say that until I explain we need to make room for inthat I’m an introvert who’s troverts and extroverts in our worktrained herself over the years to be the places. opposite — an extrovert. They both bring value. We all know the classic extrovert, esIn her 2012 book, “Quiet: The Power of pecially at work. They’re the first ones to Introverts in a World That Can’t Stop offer ideas at meetings, to work the Talking,” author Susan Cain lays out the crowd at an event and to arrange the ofcase that the Great Recession was trigfice outing. gered in part by too much power in the The introvert, on the other hand, says
N
hands of aggressive risk-takers. The more thoughtful, statistics-driven, cautious types were pushed aside. History has shown that the extroverted risk-takers could have benefited from slowing down and listening to the counsel of their quieter, introverted colleagues. We can tap into the wisdom of introverts by recognizing how they operate. Take me, as an example. I’d rather listen intently during a discussion. Afterward, I need time to process, study and reflect on what I’ve heard before I reach a conclusion. I prefer to put my thoughts down in writing or to share them oneon-one rather than articulate them in front of a crowd. So what can you do? Instead of expecting an introvert to perform spontaneously and creatively on demand, give them advance notice to consider a topic. To study it and develop ideas. After the meeting, follow up and encourage them to share their thoughts in writing. We need to change our tactics at times to tap into the quiet power introverts hold. And, as for small talk, that’s easy: “How ’bout those Cavs?”
LETTER TO THE EDITOR
Mandatory vaccination issues T
he Occupational Safety and Health Administration and the Ohio Bureau of Workers’ Compensation need to weigh in on mandatory vaccination, which is spreading through the medical community and possibly other workplaces. This is an unsafe endeavor as the risks of vaccines are not adequately tested. For example, most, if not all, flu vaccine inserts have the statement that they have not been evaluated for “carcinogenic or mutagenic potential, or for impairment of fertility.” It would seem logical that before anyone is required to inject a chemical di-
rectly into his or her bloodstream that these risks would be evaluated. In addition to this shortfall in safety evaluation, the employee is prevented from suing the manufacturer or the one injecting the vaccine in civil court should an injury occur. The manufacturers and administrators are held harmless from civil suit as a result of the National Childhood Vaccine Injury Act of 1986. With the rate of cancer accelerating, this risk should be evaluated before subjecting employees to mandatory requirements.
To be truly objective, the testing for carcinogenic, fertility and mutagenic effects should be performed by someone other than the federal government or the drug industry, as these two parties have teamed up in this industry protectionism and vaccine promotion. Employers should also be aware that under Ohio Revised Code, even though workers comp is a no-fault system, employees may allege intentional act if the employer willfully misrepresents the risk of a toxic substance. — Dave Black Willoughby
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TALK ON THE WEB Re: Highway officials can’t trust federal trust fund ■We’ve been overbuilding highways for a generation. That’s just meant more and more infrastructure to maintain. We should have had a fix-it-first policy years ago. There’s a great local example: Instead of fixing existing roads, we’re going to waste $331 million on the “Opportunity Corridor,� which just means more roadway to maintain (or not maintain, as the case may be). The feds do the same thing. Build more where it’s not needed, instead of maintaining what we have. The Highway Trust Fund has been misspent. Why should we replenish it unless they revise its spending structure? FCB1899 ■I’m so tired of hearing about THIS trust fund and THAT trust fund, like Highway, Social Security and others. If the government is handling it, it would be better de-
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scribed as a slush fund. When we users pay gas taxes to fund the maintenance of our highways, and the legislators take it out for any other reason, it is by definition a slush fund, which you can “trust� will be pilfered by Congress. — Robert E. Chalfant
Re: RNC to spark big digital upgrade downtown ■Selfies are so 2014! In 2016, selfies may get replaced by some other trend (live broadcasting from the smartphone maybe?) or if they survive, selfies will be much more intelligent. All people and pets in the wefie or super selfie (or whatever it’s called in 2016) will be identified and notified, location based services will be triggered (information about the event, selfie booth locations, etc.), auto selfie with your favorite Republicans, tags and hashtags will be generated, audio annotations can
be added. Can we expect 4G? — Arya Patnaik
Food for thought
Stahl of Lean Dog expects that most of his 25 on-location employees will enroll and use the service about four times per week. “Yeah, our expense is $50 per month per employee, or $1,200 in total, but it’s an investment,� he said of the $3-per-lunch contribution. Employees pay the difference of the lunch cost. Most lunches cost between about $9 and $12, not including glass-bottled drinks, light desserts and energy snacks. The online ordering system allows employees to toggle between a “healthfulness� level and recommends different meals based on their taste preferences. “An employee who’s used to eating fast food doesn’t have to choose the kale salad,� Himmel said. “He can choose the buffalo grilled chicken salad, so you’re still getting that flavor, but it’s healthier.� LunchOwl generates an email with the following week’s suggested menu items based on dietary preferences, although the user can adjust the delivery days or meals. “It’s like Pandora for lunch,� Himmel said.
LunchOwl prepares the meals with nutrient-dense, whole foods. Menu items range from chicken salad lettuce wraps to a salad with wheat berries, blueberries, chickpeas and sunflower seeds. Snacks range from hummus to fresh fruit. Drinks include a cucumber mint, lemon lime and pineapple basil sparkling water and homemade fruit seltzers. Lunches are delivered each morning and placed on each employee’s specially marked tray. And forget about wasteful Styrofoam. LunchOwl uses reusable glass containers and silverware. Each tray also comes with a personalized lunch note. “We love the opportunity to deliver delight through thoughtful gestures,� Himmel said. The service offers a potential cost savings to employers. Healthier employees are sick less, resulting in lower health care costs and increased productivity, which leads to a healthier bottom line, Himmel said. Plus, employees see the offering as a perk and a reflection of the company’s commitment its work force’s wellbeing. “The best and brightest people
Space Beyond Measure
■It’s neat to see so much coming to Cleveland! It’s also encouraging to see businesses and community leaders coming together to improve Cleveland’s infrastructure. Props to groups like One Community helping to make Cleveland cutting edge! — Tony Loseto
Re: Crain’s supports Columbus’ bid for DNC ■Thank you Crain’s editors for your kind and generous endorsement of our Columbus bid for the 2016 DNC Convention! And, as a former Clevelander with lots of family still there, congratulations! Well done, especially with all the spirit, enthusiasm, and cooperation by all, including membership of both political parties, to achieve a common goal. — Eric Brown
Lunch: It’s like food version of ‘Pandora’ continued from PAGE 4
flock to innovative workplaces,� Himmel said. The LunchOwl concept is an outgrowth of Himmel’s computer science and restaurant industry background. He operated for five years a similar concept, the result of a computer science project while attending Tulane University in Louisiana, then sold that business. Himmel most recently ran the marketing side of his family’s business, Paladar Latin Kitchen and Rum Bar, located in Woodmere and Maryland. “LunchOwl is a mashup of my technology and restaurant background and personal interest in health and wellness,� Himmel said. He’s spent more than a year carefully evaluating its viability, and through the pilot molded his business model around a tiered employer contribution system that averages a 55% employee participation rate. Himmel’s two partner chefs prepare the food out of a shared kitchen in University Circle. Once the founders have built up their clientele in Cleveland and surrounding areas, Himmel said the startup is eyeing expansion into other regional markets. “We’d like to be in 25 markets in 10 years,� he said. „
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TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.
LIENS FILED Capitol Painting Inc. P.O. Box 307, Chagrin Falls ID: 34-1033986 Date filed: June 23, 2014 Type: Employer’s withholding Amount: $240,684 Capitol Painting Inc. P.O. Box 307, Chagrin Falls ID: 34-1033986 Date filed: June 23, 2014 Type: Employer’s withholding, unemployment Amount: $200,832 Picciones Jewelers Inc. 24659 Cedar Road, Lyndhurst ID: 34-0772251 Date filed: June 23, 2014 Type: Employer’s withholding Amount: $164,992 KSK Health Services LLC 7530 Lucerne Drive, Suite 208, Middleburg Heights ID: 45-1261120 Date filed: June 23, 2014 Type: Employer’s withholding Amount: $158,998 Medical Alliance for Contract P.O. Box 25802, Cleveland ID: 80-0231197 Date filed: June 4, 2014 Type: Employer’s withholding, unemployment Amount: $121,031 BSRW Staffing and Management LLC 2302 Hamilton Ave., Suite 201, Cleveland
ID: 27-3630074 Date filed: June 23, 2014 Type: Employer’s withholding Amount: $103,140 Cameron 64 St. Inc. 6316 Harvard Ave., Cleveland ID: 20-4236307 Date filed: June 4, 2014 Type: Employer’s withholding, unemployment Amount: $82,233 Global Point Technologies Inc. Global Point Corp. 13953 Progress Parkway, North Royalton ID: 20-0476043 Date filed: June 4, 2014 Type: Failure to file complete return, employer’s annual federal tax return Amount: $78,142 Omni Construction Co. 25975 Emery Road, Suite A., Cleveland ID: 34-1791040 Date filed: June 4, 2014 Type: Employer’s withholding Amount: $56,976 Fidelis Partners Inc. 27851 Wondergrove, Euclid ID: 03-0490144 Date filed: June 20, 2014 Type: Employer’s withholding Amount: $52,969 Bidder Transport Inc. 3565 Glen Allen Drive, Cleveland Heights ID: 34-1554376 Date filed: June 4, 2014 Type: Employer’s withholding, unemployment Amount: $48,836 George Dixon Corp. Lancer Steak House Corp. 7707 Carnegie Ave., Cleveland ID: 34-1657828 Date filed: June 23, 2014 Type: Employer’s withholding,
F I N A N C I A L
unemployment Amount: $43,404
Type: Corporate income Amount: $30,361
Type: Employer’s withholding Amount: $13,834
Extreme Cabling Inc. 17216 Sedalia Ave., Cleveland ID: 25-1905442 Date filed: June 20, 2014 Type: Failure to file complete return, unemployment Amount: $41,025
Womens Professional Services Corp. 27991 Center Ridge Road, Westlake ID: 46-0922239 Date filed: June 4, 2014 Type: Employer’s withholding Amount: $29,091
Amroc Construction Inc. 3210 Scranton Road, Cleveland ID: 68-0650859 Date filed: June 23, 2014 Type: Employer’s withholding Amount: $39,759
Quality Data Management Inc. P.O. Box 470417, Broadview Heights ID: 34-1839449 Date filed: June 4, 2014 Type: Employer’s withholding Amount: $27,779
Imani Home Health Care LLC 464 Richmond Road, Suite 205, Richmond Heights ID: 20-5834957 Date filed: June 23, 2014 Type: Employer’s withholding, unemployment Amount: $13,458
Spectrum Home Health Care LLC 2000 Auburn Drive, Suite 200, Beachwood ID: 20-8667298 Date filed: June 23, 2014 Type: Employer’s withholding Amount: $39,547
Red Fitness 24 7 Severence LLC 144 N. Canton Road, Akron ID: 46-1725770 Date filed: June 23, 2014 Type: Employer’s withholding Amount: $25,207
Center Cleaning Services Inc. 34100 Mills Road, Avon ID: 34-1366937 Date filed: June 20, 2014 Type: Employer’s withholding Amount: $35,730 Accelerated Learning Clinic Inc. 8043 Corporate Circle, Suite 1, North Royalton ID: 27-1018899 Date filed: June 4, 2014 Type: Employer’s withholding Amount: $32,140 New Hope Specialized Services LLC 13951 Progress Parkway, Suite A., North Royalton ID: 80-0690155 Date filed: June 4, 2014 Type: Employer’s withholding Amount: $31,254 AVK Transportation Inc. 11619 Lenacrave Ave., Cleveland ID: 45-2915141 Date filed: June 4, 2014
A D V I S O R S
Wirtanen Insurance Agency Inc. 23615 Lorain Road, North Olmsted ID: 34-1846529 Date filed: June 4, 2014 Type: Employer’s withholding Amount: $23,484 Cinhuff LLC P.O. Box 93446, Cleveland ID: 37-1467050 Date filed: June 4, 2014 Type: Employer’s withholding, partnership income Amount: $21,515 Open Arms Transportation Inc. 26111 Brush Ave., Suite 310, Euclid ID: 22-3948107 Date filed: June 20, 2014 Type: Employer’s withholding, unemployment Amount: $18,949 B & I Automotive Repair Inc. 33200 Aurora Road, Solon ID: 34-1835692 Date filed: June 23, 2014 Type: Employer’s withholding, failure to file complete return, corporate income Amount: $18,320 MRSO Elite LLC Elite Answering Services 20800 Center Ridge Road, Suite 205, Rocky River ID: 27-0472298 Date filed: June 23, 2014 Type: Employer’s withholding Amount: $18,297 Larrys Landscape Service Inc. 14521 Summit Ave., Maple Heights ID: 34-1548973 Date filed: June 23, 2014
Congratulations to the advisors, associates and staff at McDonald Partners, LLC for being named to the 2014 Financial Times Top 300 Financial Advisors List.
“Your dedication to clients and your passion for work made this honor possible. Here’s to continued success and further good fortune.” – Thomas M. McDonald, President & CEO CLEVELAND 216.912.0567
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Lynda V Butler, D.D.S. 5 Severance Circle, Suite 712, Cleveland Heights ID: 34-1834802 Date filed: June 4, 2014 Type: Employer’s withholding Amount: $13,155 Mathews Metal Works and Ornamental Concrete LLC 7831 Clinton Road, Cleveland ID: 26-4326447 Date filed: June 4, 2014 Type: Employer’s withholding Amount: $12,895 Able Grinding Co. 10015 Walford Ave., Cleveland ID: 34-0859095 Date filed: June 4, 2014 Type: Employer’s withholding Amount: $12,759 Quality Irrigation Inc. 5720 Highland Road, Highland Heights ID: 04-3621934 Date filed: June 23, 2014 Type: Employer’s withholding, unemployment, corporate income Amount: $12,730 Custom Health Care Professionals Inc. 5247 Wilson Mills Road, 125, Cleveland ID: 34-1875479 Date filed: June 4, 2014 Type: Employer’s withholding, corporate income Amount: $9,746 1057 Inc. Earth Nightclub 1295 Old River Road, Cleveland ID: 32-0036507 Date filed: June 4, 2014 Type: Employer’s withholding, unemployment, corporate income Amount: $9,574 Z Tech Solutions 17928 Heritage Trail, Strongsville ID: 27-0886831 Date filed: June 4, 2014 Type: Employer’s withholding Amount: $9,372
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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
GOING PLACES JOB CHANGES EDUCATION CASE WESTERN RESERVE UNIVERSITY: Dionne C. Broadus to senior director foundation relations.
Send information for Going Places to dhillyer@crain.com
HEALTH CARE BRAVO WELLNESS: Rick Kjerstad to senior vice president, business development.
LEGAL
CHAMBERLAIN COLLEGE OF NURSING: Lisa Pardi to SimCare Center manager, Cleveland campus.
JACKSON LEWIS PC: Roland J. DeMonte to associate.
ENGINEERING CT CONSULTANTS INC.: James M. Barry to land development department manager.
CLEVELAND COCA-COLA BOTTLING CO.: Tony Reed to night loading manager; Dan Gorey to assistant night loading manager.
FINANCE
MARKETING
ANDOVER BANCORP INC.: Martin R. Cole to chairman, CEO and Stephen E. Varckette to president, Andover Bank and Andover Bancorp Inc. HUNTINGTON BANK: David R. Menning to senior vice president, regional manager, commercial banking.
FINANCIAL SERVICE APPLE GROWTH PARTNERS: Susan Pho Burnoski to senior manager, director of assurance services; Julia R. Hall to senior manager, director of tax. PURTILL FINANCIAL LLC: Carly Purtill to controller and investment adviser. SPERO-SMITH INVESTMENT ADVISERS INC.: David J. Rubis to portfolio manager. TRINITY PENSION CONSULTANTS: Clinton Wall to consulting actuary.
FOOD SERVICE SIRNA AND SONS PRODUCE: Christopher DeSarle to general manager, Norwalk; Bob Woodring to customer service specialist.
Cole
Varckette
Menning
DeSarle
Woodring
DeMonte
TRIAD/NEXT LEVEL: Ryan Hunt to manager, production and media.
Reed
Gorey
Hunt
Bennett
Hughes
Dine
NONPROFIT
A. Chiricosta (Medical Mutual of Ohio) to chairperson; James B. Aronoff, Louis G. Joseph, Gena C. Lovett and Bernie Moreno to vice chairpersons; Katherine T. O’Neill to secretary; Gregory J. Skoda to treasurer; Gloria J. Moosmann to vice president, development and foundation.
MANUFACTURING
CANALWAY PARTNERS: Ken Schneider to project manager. CLEVELAND LEADERSHIP CENTER: Michael E. Bennett to director of external affairs. MUSIC SETTLEMENT: Patricia Camacho Hughes to director of development; Gabriel Pollack to manager, Bop Stop performance and education venue.
RETAIL STERLING JEWELERS INC.: Jeff Dine to vice president, distribution center; Valerie Perkins to vice president, purchasing; Kristine Swansiger to vice president, capital procurement and sourcing.
BOARDS CANALWAY PARTNERS: Gary D. Klasen (Eaton) to chairman; Tom Yablonsky and Pat Holland to vice chairs. CUYAHOGA COMMUNITY COLLEGE FOUNDATION: Richard
Hikma Pharmaceuticals agrees to purchase Ben Venue lab complex By CHUCK SODER csoder@crain.com
Hikma Pharmaceuticals has agreed to buy the massive Ben Venue Laboratories complex and its research and development team — but will Hikma bring the troubled facility back to life? The London-based company has only said it “will evaluate the potential to partially reactivate” the drug manufacturing complex to support “its medium and long-term growth plans.” Ben Venue shut down almost all production at the site in December, after spending several years and hundreds of millions of dollars trying to fix quality control problems identified by federal regulators. For now, however, Hikma plans to move some of the equipment at the site to its other manufacturing facilities, according to a news release from the company. The release didn’t include a purchase price, but it said Ben Venue’s tangible assets “have a book value of $4 million.” The purchase could have a huge impact on the city of Bedford, if Hikma puts the site to good use.
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A year ago, Ben Venue employed about 1,100 people, making it Bedford’s largest employer. However, that number had plummeted to 325 by the end of May. That month, Hikma agreed to buy Bedford Labs — the division of Ben Venue that makes and sells its own generic, injectable drugs — in a deal that could reach $300 million. At the time, Hikma announced that it would retain some of the 100 or so Ben Venue employees dedicated to the Bedford Labs division. However, Hikma said it would manufacture Bedford Labs’ portfolio of 84 products at other manufacturing facilities. So is there any chance they’ll reactivate the Ben Venue facility in Bedford? It wouldn’t be crazy, judging from comments Hikma executives made following the Bedford Labs deal. Hikma sees a lot of opportunity in the injectable drug market, and Ben Venue owns what Hikma has described as one of the largest injectable drug plants in the world. All that growth means the company may need more capacity “in the not-too-distant future,” a representative for Hikma told Crain’s in May.
Colliers International in Cleveland Welcomes Timothy Breckner and Christopher Kiely Colliers InternationalŇCleveland is pleased to announce the continued growth of its brokerage platform with the addition of two veteran industrial professionals, Tim Breckner and Chris Kiely.
GEAUGA GROWTH PARTNERSHIP: John Epprecht (Great Lakes Cheese) to chairman; John Steigerwald to vice chairman; Richard J. Frenchie to secretary; Jay Giles to treasurer. NORTH RIDGEVILLE CHAMBER OF COMMERCE: Dr. Carol Novak (North Ridgeville Eye Care) to chair; Jason Jacobs to first vice chair; Sara Markle to program chair; Christopher Teater to visitors bureau chair; Don Hackney to assistant treasurer; Jack Smith to treasurer.
AWARDS CLEVELAND LEADERSHIP CENTER: Sunny Nixon (Explorys Inc.) received the David J. Akers Leadership Award.
Timothy J. Breckner First Vice President Dir +1 216 239 5119 tim.breckner@colliers.com Christopher T. Kiely First Vice President Dir +1 216 239 5118 chris.kiely@colliers.com
Combined, Breckner and Kiely have more than 25 years of industrial expertise in the Northeast Ohio market. In the past four years, Kiely and Breckner have closed on more than 240 lease transactions encompassing 4.8 million square feet and $48 million in transaction value.
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20140728-NEWS--14-NAT-CCI-CL_--
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We’re proud to help drive growth for Cleveland businesses. baml.com/growth
The power of global connections™ “Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and members of SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed. THE POWER OF GLOBAL CONNECTIONS is a trademark of Bank of America Corporation, registered in the U.S. Patent and Trademark Office. ©2014 Bank of America Corporation 06-14-0205
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LEGAL AFFAIRS
DANIEL HERTZBERG
FROM JAIL TO JOB BECOMING MORE THAN A NUMBER By DANIEL J. MCGRAW clbfreelancer@crain.com
ntonio DeShawn Johnson knows the odds are against him. He is 21 years old, and got released from prison this past January after more than three years behind bars. His felony conviction was robbery, with a gun and drug possession component, and he has kept himself clean since getting out. Still, leaving his past behind and moving forward with employment and education is difficult. “I understand that someone might not want to hire me if I am running a cash register,” he said. “It was very hard at first, adjusting to things after being in for three years. No clothes, no place to stay, not having anything really. But I know that working hard will change things, and I am doing that.” Johnson works at a fast food restaurant in Lakewood, as a construction worker with the urban farming nonprofit Neighborhood So-
A
lutions Inc. and is a student at Bryant & Stratton College. Johnson said his goal is to own his own business someday, “maybe a restaurant or a barbershop.” About 5,000 to 7,000 inmates are released into Cuyahoga County each year from Ohio prisons, of which 71% are African-American and 83% are male, according to the Cuyahoga County Office of Reentry. About half of those were unemployed and did not graduate high school prior to incarceration, and about one-fourth had no housing and were in treatment for mental illness before they were sentenced. The average age is 34. “Given that the unemployment numbers are very high for young African-American males who are not convicted felons just out of prison, it is not easy to make the transition,” said Mary Kelley, program service coordinator for the county re-entry office. “But this is not about everyone hugging each other or being soft on crime. Getting those people to be productive citizens is just being smart.”
The key, Kelley said, is for program implementation to occur in the six months prior to release and for the first six months after release. The county has a budget of about $2 million a year, and tries to deliver the key components of counseling, employment training, educational options and having the proper paperwork filled out early in the process. “The better we do at needs assessment while they are in prison, and the quicker we work with them once they get out, the lower the recidivism rate,” Kelley said. The recidivism rate in Ohio (defined as those who go back to prison within three years of release), has been dropping since 2000, and is now at 27%, well below the national rate of 40%. One of the changes to which the county and other agencies are adjusting is the decrease in the number of inmates being sent to state prisons. Because the cost to the state is about See JOBS Page 16
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Jobs: Preparation is key continued from PAGE 15
$25,000 a year to incarcerate an inmate, some convicted of nonviolent felonies are being redirected to county jails and halfway houses. To deal with more felons serving out their time in Cuyahoga County’s jail facility — which traditionally has had fewer programs for inmates serving many months — the county is starting a program beginning Sept. 1 to address re-entry issues within the county jail population. That program has a budget of about $725,000 annually.
Giving a second chance Charles R. See, executive director of the Community Re-entry Program with Lutheran Metropolitan Ministry in Cleveland, said the key is to get the message out that most of those coming out of prison are not harmful to a business or employer. The Lutheran Metropolitan Ministry program is among a number of Northeast Ohio community resources available to those re-entering the work force. “We understand that employers are not social workers,” See said. “But we must also make them aware that we should not be punishing a man or a woman for something that a boy or a girl once did. And we try to give our re-entry assistance through training and education that is going to give a greater chance of our people succeeding with gainful employment.” Two areas of training at the Lutheran Metropolitan Ministry are for culinary jobs and a manufacturing program that creates bike racks for cities and businesses. According to See, 80% of those in the culinary jobs program (about 75 per year)
were able to attain employment, and 75% of those were able to stay in that job for more than a year. Brandon Chrostowski, 34, is also taking the culinary approach. The chef opened a restaurant about a year ago on Shaker Square, providing training and employment to those with criminal backgrounds. Edwins is doing about $1.5 million in annual sales in the 60-seat French-style restaurant, with a check-per-person average of about $52. Chrostowski had criminal convictions about 16 years ago in Detroit, and was able to get training in the restaurant industry to get his life right, he said. “I had chefs and restaurant owners make an investment in me, and what we are doing with Edwins, is making an investment in great people in this area who just need a chance,” he said. “What we are doing is showing other businesses and the clientele who eats here, that those people cooking food and serving it are very capable and responsible and can be successful individuals even after a term in prison,” Chrostowski said. “It’s about leveling the playing field and changing the perception in the community. We are doing that one customer at a time.”
WWW.CRAINSCLEVELAND.COM
JULY 28 - AUGUST 3, 2014
Employers adjust methods Recent EEOC guidance emphasizes ‘individualized assessment’ By JUDY STRINGER clbfreelancer@crain.com
Employers have many legitimate reasons for conducting criminal background checks, from mitigating the risk of workplace violence and negligent hiring lawsuits to reducing employee theft. Those that reject candidates based solely on convictions or arrests, however, face a different kind of threat. The U.S. Equal Employment Opportunity Commission has taken the position that criminal background checks may violate anti-discrimination laws because minorities are arrested and convicted of crimes at higher rates than non-minorities, said Patricia Weisberg, an attorney with the Cleveland law firm Walter Haverfield LLP. While the commission has yet to win a discrimination lawsuit based on criminal history screening practices, there is little question employers are under more scrutiny for pre-hire procedures. The EEOC in 2012 released a detailed guidance on the issue. Among other less rigorous recommendations, it advised employers to engage
in an “individualized assessment” before disqualifying an applicant who has a criminal record, Weisberg said. That often means no more asking individuals to self-disclose past criminal convictions on job applications. It also means contacting applicants after a criminal background search has turned up a red flag and giving each individual a chance to explain the circumstances or state how he or she has been rehabilitated. “The guidance does not prohibit employers from inquiring about applicants’ criminal histories. But how they choose to act upon that information could cause them to be held in violation,” Weisberg said. Jason Morris, president and chief operating officer of EmployeeScreenIQ, a Cleveland-based employment screening company, said companies are embracing the “individual assessment” protocol, though a bit reluctantly. “It’s not entirely popular,” he said, adding that the commission’s ambiguity is partly to blame for the mixed reviews. “The EEOC said it is not law, but they are suing you if you are not following it.”
Case by case
Success Depends on a Collaborative Approach
A 2013 EmployeeScreenIQ survey of 600 U.S. companies found that 88% of respondents had adopted the EEOC guidance on the use of criminal background checks, up from 32% in a survey conducted one year earlier. Of those companies that had adopted the guidance, half reported no impact, while others cited a negative impact on hiring costs, time to fill open positions and clarity in the hiring process. Morris said most of his clients have removed the “blanket criminal history box” from their employment applications. Rather than posing the question up front, they wait until later in the hiring process, most likely at the interview stage, before asking job seekers about their criminal record or conducting a criminal background check. And, inquiries are more tailored to the job opening. Companies hir-
ing individuals who will handle money or manage company assets, for example, might ask specifically about crimes related to fraud and theft. Those seeking employees who will work closely with children or seniors or make in-home service calls are screening for violent offenders. After a background search has turned up a conviction or arrest, many employers are asking EmployeeScreenIQ to notify job candidates of the screening results on their behalf and provide them with a list of their rights and a way to dispute or explain the information, he said. “In most cases, this is something they have to do under (the Fair Credit Reporting Act) anyhow,” Morris said. Melissa Sorenson, executive director of the National Association of Professional Background Screeners, an industry organization based Morrisville, N.C., has seen large companies spend upwards of $1 million to include individualized assessments in each hiring decision. Still, the biggest impact is being felt at smaller companies. “The rub within a smaller organization is that there often is not that in-house counsel or legal or compliance team,” Sorensen said. “Understanding and complying with a 52page guidance with well over 100 footnotes is no small task.” Another complicating factor is state and local laws that require criminal background checks for certain positions, such as day care employees, according to Sorenson. The EEOC’s guidance said state laws will not protect companies from enforcement actions related to overly broad background checks. Companies in locally regulated industries are forced then to choose between conflicting requirements. Despite the uncertainty and scrutiny, employers continue to view criminal checks as a way to protect their companies, its employees and customers. Statistics suggest as many as 90% screen future employees for any troubling criminal history and most of them have been doing it for years, Sorenson said.
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Q & A: Jill Rizika, executive director, Towards Employment According to Jill Rizika, executive director of the nonprofit Towards Employment in Cleveland, there are 1.9 million Ohioans who have a misdemeanor or felony record — 1 in 6 Ohioans. And, she stressed, it is important to recognize that people with a criminal justice history are a very diverse group and approach the prospect of re-entering the work force from many different starting points. Rizika, who last month was among those recognized as part of a White House program that calls attention to work being done to facilitate employment opportunities for people with criminal records, recently took time to answer questions from Crain’s Cleveland Business. What are some of the top issues facing those trying to re-enter the work force from the criminal justice system? This is a group of people that represents all categories of education, income, race and previous work experience. And not everyone who has a felony has been to prison. One thing they do have in common is facing employer reluctance to hire someone with a criminal background. Surveys of employers indicate that a criminal background is one of the most cited reasons why an employer would not hire, over any other type of barrier, expressing concerns about safety, liability, reaction on the part of customers, etc. Collateral sanctions: Too many occupations are closed to people with a felony conviction due to broad-based bans on access to state licenses or specific jobs triggered by the felony conviction, regardless of their skills, the nature of their conviction, the time that has passed since the conviction or the amount of rehabilitation achieved by the individual. While Ohio passed criminal justice reform legislation that addressed some of these sanctions, many remain. Networks and up-to-date skills: Returning citizens may lack a strong/expansive network to gain access to good quality career opportunities, and since we know many employers hire based upon referrals, this is a disadvantage. And, with the rapidly changing needs of the workplace, being out of the work force for a period of time may lead to a need to retool skills in order to be competitive. Additional issues arise when someone had limited work experience or educational attainment prior to their involvement with the criminal justice system. And, no matter what someone’s skill set, returning citizens often face challenges with housing, transportation, reintegration with family and community — all of which make the job search more challenging. What would you say to an employer with concerns about hiring someone with a criminal history? We would encourage employers to review their own hiring policies to be sure that they are not missing out on exemplary candidates who may have made mistakes but are ready, prepared and qualified to work. Best practices for fair hiring policies provide for individualized consideration. Don’t automatically exclude someone because they indicate they have a background. Take into consideration their fit in terms of skills and experience. Look at the conviction and
dividuals with criminal justice involvement placed in jobs each year over the period 2009-2013. That suggests that with the right supports and employer engagement, good opportunities can be found to match qualified candidates with employer needs, even in a challenging economy.
readiness, educational backgrounds, technical skills, work experience or career goals — all factors in determining how best to help someone successfully gain and retain employment and advance along a career pathway. One key factor in effective programming is that the person is able to access the right supports to close the gap between where they are starting from and their employment goals, given what employers say they need in terms of qualifications and experience. In addition, not all formerly incarcerated or others with a felony conviction have the same risk factors for recidivism, and the same approach to customizing services with regard to these factors should apply. Towards Employment was recently awarded a federal grant that will allow us to apply these best practices in Cleveland to build career pathways in three targeted industries where there is projected job growth: manufacturing, construction and hospitality. We will provide an integrated set of services to help both with life skills and social supports as well as academic and technical skill-building to create truly competitive candidates to help fill the work force needs of our local employers.
In 2011, the city of Cleveland joined the ‘ban the box’ movement. Has that had any type of ripple effect on the region? The city of Cleveland made a statement about the importance of fair hiring practices by joining the ban the box movement. Cuyahoga County followed in their footsteps in 2012. While these policies only apply to hiring by the city and county governments, they are setting an example and demonstrating that this approach can lead to greater opportunities for qualified candidates in a responsible manner without creating greater liability or sacrificing customer service or public safety.
whether it is relevant to the job responsibilities. Also consider time passed since the offense and track record since then. Partner with organizations like Towards Employment, which can provide prescreened candidates who have successfully completed programming to build employability and technical skills and can provide follow-up supports to strengthen job retention performance; and use tools available, such as the federal bonding program, which provides employers with a free $5,000 fidelity bond (http://bit.ly/OhioFedBonding). Employers can also save money on their federal income taxes in the form of a tax credit incentive through the Work Opportunity Tax Credit program, which provides up to $2,400 per employee with a felony record (http://jfs.ohio.gov/wotc); and ask applicants whether they have applied for a Certificate of Qualification for Employment (CQE). Employers that hire workers with CQE’s are protected from negligent hiring liability. Also, take into account other employers’ experiences, not just locally but across the country. At a national forum at the White House earlier this month, the senior vice president of human resources at Johns Hopkins Health Systems shared that her company has been successful at hiring employees with criminal records because of its screening and thoughtful placement of all hires, which includes individualized assessments to match people to the right job (for example, they will not put someone with a drug history in the pharmacy department). Of the 5,000 people they hired last year, 5% had criminal records, and she emphasized that there had never been a problem with any of these employees. ‘Don’t look at this as a social program, and don’t look at it as being altruistic. Look at it as a business decision,’ she said. What effect did the recession have on the number of opportunities available to those with criminal records? The recession reduced opportunities for so many people with any gaps or blemishes. Often we saw people taking jobs for which they were overqualified, crowding out those with less education or experience but who
What types of tools and programs are most effective in helping to transition former prisoners into the work force? As noted above, not all are starting from the same place in terms of job
had qualifications that matched the job requirements. That said, Towards Employment was able to increase the number of in-
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CRAIN’S CLEVELAND BUSINESS
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JULY 28 - AUGUST 3, 2014
Profile in employment: Employer
Profile in employment: Employee
Chris Hodgson has never turned away a convicted felon looking for employment and a shot to work for a better life. “No one’s perfect. I have been given second, third, fourth chances many times over, maybe not getting in trouble with the law but … making bad decisions and having to learn how to get back up on my feet once I’ve been kind of pushed down,” said Hodgson, the award-winning chef behind the popular food truck Dim and Den Sum and Hodge’s restaurant in downtown Cleveland. “Honestly I wanted to be able to give that same opportunity to other people.” To that point, Hodgson says he never asks prospective employees about their criminal pasts. “We don’t ask on the application, but a lot of them are very up front about it and very open and say, ‘Yeah, I spent two years in jail.’ Or, ‘That gap that you see in my resume was me while I was in prison,’” he said. “People coming out of the system tend to be overlooked quite often and while they may have some dark secrets in the closet or difficult times in the past, a lot of them have served their time, they have learned their lesson and they are just trying to find something that they can be passionate about.” In a restaurant setting, theft convictions pose the biggest concern to Hodgson. “In our industry, it’s very easy to walk out of the cooler with a steak and throw it in the backpack. While that seems very minimal to most people, when you talk about small margins, two steaks going missing can be the difference between you making money or losing money,” he said. “You’ve got to be able to trust the person and if your back is turned, you’ve got to know that they are not going to take something. “We’ve never not hired somebody based on being a convicted felon but it definitely raises some flags and you just pay a little more attention to it,” he said.
Drugs and alcohol consumed two decades of Patrick Carrigan’s life. Feeding his addictions netted the 41-year-old two separate prison terms for manufacturing methamphetamines, five DUIs and a smattering of other offenses, such as trespassing and drunk and disorderly. Before and after serving his total of four years in prison, Carrigan traveled in and out of rehabs to try to stop the vicious cycle of self-medicating. It wasn’t until he enrolled at the University of Akron in August 2008 that he finally “got clean.” “I liked the experience of college more than I like drinking so that’s what I did,” said Carrigan, who went on to earn a bachelor of science degree in geology in 2013. His education was funded through the Bureau of Vocational Rehabilitation, now called Opportunities for Ohioans with Disabilities. “They paid for everything. They gave me a gas stipend. They paid for my books. Anything that grants did not cover, they covered.” The Cuyahoga Falls resident, who gained custody of his 7-year-old son, said prospective employers wouldn’t even consider him for internships or full-time employment in his field. He doggedly searched for a job for three and half years. “I didn’t realize how hard of a time I was going to have finding a job, finding anybody willing to interview me, and once they did interview me and find out about the felonies, they would just say, ‘No, sorry.’ That happened to me three times,” said Carrigan, who worked part time in the university’s records and archive department. “It’s amazing to me that employers would ask about my past but not look into my past employment.” He blames the electronic age. “When I was out (of prison) the first time … 2000 was not the same as looking for employment now. Then you went and talked to people and you got a job through selling yourself to somebody,” he said. “Now I
FOOD NETWORK
It’s hard to say how many, but Hodgson says he knows he has hired and worked with at least a handful of kitchen guys with records over the past four years. “When I first started the Dim and Den Sum food truck, we had two guys with us, and we were lucky to have them on board. They were thrilled. They worked their butts off. They show up on time, and they do the best that they can because this is another shot for them and they don’t get that very often,” he said. He said local restaurants are lucky to have an organization like Edwins Leadership & Restaurant Institute, which has a mission to give formerly incarcerated adults a foundation in the hospitality industry and support a successful re-entry into employment. “I tell Brandon (Chrostowski, CEO and founder of Edwins) all the time that I’ll take any person he sends my way because of the level of service and expectation that he demands,” he said. “I tell him have them call me directly because I am going to make sure we try and find a spot for them.” — Chrissy Kadleck
Attor ey Gene Attorne neral
CONTRIBUTED PHOTO
have to send you my resume electronically and based on that you’ll talk to me. Once I check off that box that I have felonies, I’m out of the mix because there are hundreds of other people applying for the same jobs who have no felonies. It was really disheartening.” He was able to secure a solid, full-time welding position at JRB Attachments in Akron in September 2013, shortly after getting married. He turned to re-entry organizations for assistance finding a job in his field but the available positions were trade jobs. “That’s not what I wanted to do, I wanted to be a professional,” he said. It was “sheer dumb luck” that got him his current job as a testing technician with Air Compliance Testing in Brecksville, the largest environmental stack testing company in the nation. “I don’t know how I found my way into a job where I start off with five weeks of vacation a year,” he said. “I will be intensely loyal to this company. Unless something drastic happens, I will be with these guys until I retire.” — Chrissy Kadleck
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20140728-NEWS--19-NAT-CCI-CL_--
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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
Follow best practices for background checks Many employers perform criminal background checks on job applicants. The reasons vary, including adhering to state law requirements, attempting to mitigate the risk of a negligent hiring lawsuit, or just following company protocol. Criminal background checks seem reasonable and, if uniformly applied to all applicants, legal.
STEPHANIEHATHAWAY
ADVISER So what’s the problem? The problem is the Equal Employment Opportunity Commission, which in April 2012 issued “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII.” The EEOC’s guidance prohibited employers from baldly implementing these neutrally applied criminal record exclusions for convicted felons. After issuing the guidance, the EEOC brought a number of lawsuits against employers, challenging the companies’ criminal background check policies. The EEOC specifically alleged that such policies have a “disparate impact” on minority applicants, in part because members of minority groups may be arrested and convicted at a higher rate. Thus, the EEOC has concluded that employers must demonstrate that refusing to hire an applicant based upon criminal history is job related and consistent with business necessity. In other words, if an employer does not hire an applicant because of a criminal conviction, then the employer must demonstrate that it conducted an individualized assessment, considered the applicant’s criminal conduct and the dangers and risks for the specific position before refusing to hire the applicant, rather than following a blanket exclusion concerning felons. Of course, some industries have federal prohibitions that preclude employment of an individual convicted of specified crimes within a certain period. This includes security screeners, law enforcement officers, child care workers and bank employees. In those cases, the EEOC has stated that the exclusions are job related and consistent with business necessity. Problematically, the EEOC has concluded that the same state and local prohibitions are not a viable defense. The EEOC’s position left employers with a Hobson’s Choice — do they run a criminal background check and risk an expensive lawsuit with the EEOC, or do they ignore criminal history and risk an expensive lawsuit due to potential liability for criminal acts committed by employees? How can employers best protect themselves from the EEOC and still utilize criminal background checks? Employers should eliminate per se exclusion policies and focus on narrowly tailored policies for
screening applicants. Employers should also familiarize themselves with the EEOC guidelines, which require companies to conduct an individualized assessment of the applicant’s risks before excluding any application. This includes consideration of: ■ The nature of the job sought; ■ The nature and gravity of the offense of which the applicant/employee was convicted; ■ Time that has lapsed since the conviction (including employment history and evidence of rehabilitation); ■ Facts and circumstances surrounding the offense; ■ Number of prior convictions; and the age at time of conviction. First, it should go without saying that employers should only consider convictions, not arrests or charges that did not result in a conviction. An arrest is not proof that a criminal offense was committed. Second, employers should determine if they have a business need to conduct a background check for the particular position at issue. Employers should only consider convictions that are relevant to the job itself. For example, a DUI may be relevant for a school bus driver position, but it is probably not relevant for a data entry position. An assault conviction may be more relevant when a job is performed in a customer’s private home than an employee who works from his or her own home, or even who reports to work and is carefully supervised. A drug conviction may be more relevant for a job that involves access to prescription drugs than as a television salesman. The EEOC has determined that a criminal conviction should disqualify a job applicant only when there is a connection between the nature of the conviction and the nature of the job that creates a greater risk, creating a requirement for employers. Thus, the employer should be able to demonstrate the connection between the nature of the crime and the employee’s/applicant’s position. Third, employers must take into account the time since the conviction. Only recent convictions should be considered. Of course, “recent” is not defined by the EEOC, though many states have regulated the length of the “look back” period. Likewise, companies should consider rehabilitation, particularly when the offense involved alcohol or illegal drugs and the applicant had successful participation in a treatment program. The company also should consider employment history after the conviction and additional education or training. Fourth, if after conducting an individualized assessment, the employer is going to disqualify the applicant, the employer should give the applicant an opportunity to respond to the decision and proffer an explanation. Finally, companies should recognize that they should train supervisors and hiring managers (or HR professionals, when applicable) about the best practices for using criminal records in hiring. Stephanie S. Hathaway is a shareholder with Reminger.
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21
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CONTINUED
20140728-NEWS--22-NAT-CCI-CL_--
22
7/25/2014
1:43 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
JULY 28 - AUGUST 3, 2014
100 LARGEST NORTHEAST OHIO EMPLOYERS G
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62
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20140728-NEWS--23-NAT-CCI-CL_--
7/25/2014
1:44 PM
Page 1
JULY 28 - AUGUST 3, 2014
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
23
Full-time equivalent local employees Rank
Company Address Phone/Website
6/30/2014
6/30/2013
% change
Total number of employees in Ohio
Type of business
Top local executive Title
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Cosgrove: Clinic offers a way forward in improving health care By TIMOTHY MAGAW tmagaw@crain.com
paid based on how many procedures they conduct or patients they see. That’s the Clinic’s “secret sauce,� as Cosgrove characterized it. It’s a fairly unusual model in health care — one only replicated by a handful of health systems in the country. When Cosgrove joined the Clinic in 1975, it employed 140 docs. Today, that number is around 3,200. “No one questions whether you’re doing something just to generate return,� Cosgrove said about the Clinic’s group practice model. As for the economics of health care reform, Cosgrove said the Affordable Care Act and other pressures are pushing health systems to be more efficient. Over the next decade, for instance, $415 billion
ON THE WEB Story from: www.crainscleveland.com
Cleveland Clinic CEO Dr. Toby Cosgrove on Thursday evening, July 24, visited the City Club of Cleveland and in a frank discussion touched on topics including the future of health care and the importance of big data. He even acknowledged the health system’s telephone and billing systems should work better. Earlier this year, Cosgrove, who has been with the Clinic since 1975 and its CEO since 2004, released his first book, “The Cleveland Clinic Way,� which argues why the Clinic’s model of care should be the model of the nation. “Everybody talks about crisis and
how things are broken, and I thought we had a model that had been very successful and held up as a model where we might be going in the world,� Cosgrove said during his discussion with City Club CEO Dan Moulthrop. “I thought we were doing things that could benefit some other organizations, so I wanted to get it out there for people in health care and anybody else who was having trouble sleeping.� The Clinic’s business model is anchored in making its doctors salaried employees instead of being
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saline solution that resulted in $300,000 in savings. “Just like at home, you find ways to trim fat,â€? he said. As for the billing system, when Cosgrove took the helm at the Clinic in 2004, then-U.S. Sen. George Voinovich paid him a visit asking him to explain his Clinic bill. Cosgrove couldn’t explain it. Neither could a finance staffer. “He couldn’t explain it either, so yes, we do have an issue,â€? said Cosgrove, adding that the Clinic has since consolidated all of its charges on a single bill. He added, “We are a long ways from being the most efficient billing system. I would take that criticism, and I’ve heard it more than once.â€? â–
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will be taken out of Medicare payments. Also, payments from insurance companies remain flat or are decreasing, and patients have to foot more of their bills. As such, Cosgrove said the Clinic — a roughly $6.5 billion operation — will have to take $1.5 billion in costs out of the system over the next several years to remain in sound financial condition. That equates to about $300 million in cuts a year. Late last year, the Clinic announced plans to trim $330 million from its budget — an effort that resulted in 700 employees taking early retirement offers. During his City Club address, Cosgrove noted a series of cost-cutting measures the Clinic has taken to cut back, including an effort to save on soap and
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Employer Based Training offers you the chance to select from qualified candidates and then pays the wages of the new hire while they complete their training so you can be sure you have made the right choice. Learn more about this practical approach to hiring by calling our office at 440-324-3588 or visit our website www.matureservices.org/crains
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Above, a fan club turned out in droves for honoree Nancy C. Benacci, managing director and head of equity research for KeyBanc Capital Markets. Below, honoree Iris E. Harvey, vice president for university relations and chief marketing and communications officer at Kent State University, poses with Kent State staff members Pat Nash, Sonya Williams, Rebecca Murphy, Amy Lane and Alfreda Brown.
Below, honoree Dr. Margaret Larkins-Pettigrew, associate professor and head of global health programs in obstetrics and gynecology with MacDonald Women’s Hospital, University Hospitals Case Medical Center, tells health care stories of women around the world at the Women of Note award reception on Thursday, July 24, at LaCentre in Westlake.
Above, Shelley Underwood, honoree and owner of Johnny Mango World Café & Bar, poses with her children, Devan and Max. At right, Ariane B. Kirkpatrick, honoree and president of The AKA Team, poses with her husband, Danny Couch. PHOTOS BY BARON PHOTOGRAPHY
Gas Natural says company isn’t for sale, is in good shape By DAN SHINGLER and SCOTT SUTTELL dshingler@crain.com; ssuttell@crain.com
The war of words between Mentor-based Gas Natural Inc. and Canada’s Algonquin Power & Utilities Corp., which might determine the fate of the Ohio fuel retailer, got a little uglier last week. The latest skirmish began Wednesday, July 23, when Algonquin sent an open letter to Gas Natural’s board of directors, calling on them to reconsider a sale of the company to Algonquin and urging Gas Natural shareholders to compel their board to act. It blasted Gas Natural, a holding company that distributes and sells natural gas to 73,000 customers in seven states, for what Algonquin termed “selfdealing … poisoned relationships with regulators … (an) inexperienced, nepotistic management team” and, finally, for attempting to “entrench the board and senior management” with a proposal to double the number of Gas Natural shares without shareholder approval. Algonquin, already a major shareholder owning 4.9% of Gas Natural’s shares, has proposed paying $13 per share for the company. Gas Natural stock was trading for less than $12 per share when
Algonquin issued its latest statement, but soon rose to above $12.50 per share. In its July 23 letter, Algonquin said Gas Natural has failed to adequately consider its offers for the company, including the most recent offer, which it noted was above Gas Natural’s all-time high share price at the time. “Unfortunately, you once again refused to engage in any dialogue. In fact, your response letter stated unconditionally that Gas Natural is ‘not for sale.’ We were, of course, taken aback by such a response, given the challenges facing the company,” wrote Algonquin, which went on to claim that Gas Natural has high capital costs and lacks an adequate plan for its own growth. For its part, Gas Natural has been staving off Algonquin’s attempts consistently in recent months. It continued to do so last week, blasting back that its suitor’s most recent statements contained “misleading and incorrect information.” “Our board was unanimous in its determination that all three of Algonquin’s unsolicited offers were grossly inadequate and substantially undervalue Gas Natural as Algonquin attempted to create value for itself. We are committed to aggressively implementing our detailed, long-term strategic plan to create
ON THE WEB Story from: www.crainscleveland.com value for our shareholders,” Gas Natural chairman W. Gene Argo wrote in a statement released Thursday, July 24. Argo went on to express confidence in Gas Natural’s management and its plans for future growth, but not for Algonquin’s analysis. “We believe Algonquin is failing to see the transformative changes that have been implemented at Gas Natural and chooses to focus on past events that we have rectified,” Argo said. “Algonquin also appears to be willfully ignoring relevant facts about the company and making accusations and negligent assumptions as another tactic to distract our shareholders from the positive strides we have made. Such actions speak to their self interest, and further support our position.”
Offers rebuffed Gas Natural confirmed on Monday, July 21, that it had rejected three “unsolicited and inadequate offers” to acquire the company
made by Algonquin this year. The previous offers were made on Jan. 14, March 5 and May 7. On July 15, Gas Natural issued a news release denying it was for sale, after TheStreet.com reported that the company was engaging in a process to put itself up for sale. In its July 21 release, Gas Natural reiterated that its board “is not actively engaged, nor plans to be, in a process to sell the company.” The company said the board would “evaluate any legitimate offer to determine if it delivers value to the company’s shareholders greater than that which the board believes can be realized with the execution of Gas Natural’s growth strategy.” Argo on July 21 said that Gas Natural’s board “also believes that under the management of both our newly appointed CEO and CFO, we have the leadership the company needs to advance our strategy and drive quality, sustainable earnings power and growth.” Gregory J. Osborne was appointed CEO on May 15. James E. Sprague was named chief financial officer on May 1.
Family ties Osborne said in a statement last week, “I believe we are transform-
ing Gas Natural. We continue to make solid progress with building our accounting staff, enhancing processes and controls that address regulators’ preferences, strengthening our relations and communications with the regulatory bodies of each jurisdiction in which we operate, and creating a culture of transparency and safety.” He added, “Strategically, we are evaluating our assets to ensure we can generate strong earnings growth, which also includes the consideration of what may be less strategic assets. Importantly, we are training our people, learning from past mistakes and advancing Gas Natural to continue to be an efficient and effective growth utility.” Gregory Osborne is the son of former Gas Natural CEO Richard M. Osborne, who stepped down May 1 but sued the company on June 26. Richard Osborne in the lawsuit “demands payment of an earnout associated with Gas Natural’s (June 2013) purchase of assets from John D. Marketing,” another Osborne company, according to a Gas Natural filing with the U.S. Securities and Exchange Commission. He also alleges that the board of directors breached its fiduciary duties, primarily by removing him as chairman and CEO. ■
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Superhero: UH trying to ‘build a culture of innovation’ continued from PAGE 1
Innovation has “gained much more importance” at UH in recent years, according to Stephen Behm, director of technology management for the hospital system. For instance, take UH’s new strategic plan, which includes this phrase: “Build a culture of innovation.” That goal doesn’t just apply to UH’s efforts to develop tools for a doctor’s utility belt. The hospital system also has created an Innovation Unit that is hunting for ways to improve the process of care delivery and make patients happier. “We need to innovate across the board, because health care is going to look vastly different in five years,” Behm said. But when it comes to technical innovation, UH still has a reputation to build.
Driving the Batmobile Today, outsiders are more likely to mention the Cleveland Clinic or Case Western Reserve University when naming local institutions that create lots of medical products. Granted, UH has helped researchers at Case Western develop several medical technologies over the years, and there are some blurry lines between the two institutions: UH doctors often teach and conduct research at Case Western’s School of Medicine, and the school’s full-time faculty regularly see patients at UH. But in the past, the hospital system rarely spun out technologies under its own name. If it did, it was often because a doctor with a good idea took the initiative to pursue it. Nowadays, the hospital system itself is more often taking the initiative. The biggest example is the Harrington Discovery Institute, which aims to prove that there’s a better way to develop drugs. UH founded the institute and a sister company called BioMotiv in 2012, and since then they’ve raised roughly $150 million in the form of donations, grants and investments. With that money, the institute is funding promising drug development projects submitted by scientists from around the world. Meanwhile, Shaker Heights-based BioMotiv is licensing the rights to several drug candidates. The company aims to put the drugs through early clinical trials, demonstrate their potential and attract investors who want to commercialize them. The hospital system now wants to bring that level of ambition to other areas of medicine, according to Dr. Jeffrey Peters, who was named chief operating officer of UH earlier this year.
It’s a bird, it’s a plane! The hospital system could focus on something technical, such as technologies patients could use in the home, or on process-related innovations, Dr. Peters said. “We might innovate in the world of finance. We might innovate in the world of human resource management,” he said. The hospital also is drawing inspiration from a 5-year-old program at Rainbow Babies & Children’s Hospital. Each year, the children’s hospital gives a few $7,500 grants to help pediatricians and other employees who aim to create new medical
products designed for children. Now UH aims to roll out similar programs in departments throughout the hospital system. It started in May, when it awarded three grants to employees from its Ear, Nose & Throat Institute. And the program at Rainbow Babies has grown in popularity. The first year, six people submitted ideas, Behm said. “Last year, we had 28,” he said. The best ideas have access to more funding: For the first time, UH in late 2012 announced that it would put money into a venture capital fund created by UH and Case Western, which had funded high-tech spinout companies through its own fund for several years. The new fund consists of $1 million from UH, $2 million from Case Western and $3 million from the Ohio Third Frontier program. “There’s infrastructure in place to support those startups that wasn’t there before,” Behm said.
pediatric ophthalmologist at Rainbow Babies. For a long time, Örge has been unhappy with common tools used to prop children’s eyes open during examinations. The best ones are too
big for young children, especially premature babies. But he never did anything about it — until he heard about what was then a new grant program at Rainbow Babies. After he won one of the
grants, he hired Thogus, a manufacturing company in Avon Lake, to help him develop a prototype. Now UH is pursuing patent protection on the device. That experience “opened his mind,” said Örge, who also is director of UH’s Center for Pediatric Opthalmology and Adult Strabismus. He went on to develop a device designed to drain fluid that builds up in the eyes of patients with glaucoma. He also helped develop the iStrab, a device used to measure the degree to which patients’ eyes are misaligned. That device — invented by the late Dr. Jeffrey Bloom and built by Case Western engineers — is in clinical trials now. The Rainbow Babies grant program has created a ripple effect within the children’s hospital, Örge said. For instance, other physicians have seen his work and been inspired to come up with their own ideas, he said. But Örge admits he’s no superhero: He only got started because of support from UH. “If I didn’t have that, none of this would’ve happened,” he said.
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Assembling the Avengers But resources alone aren’t enough. To create a culture of innovation, UH needs to make sure its employees know what to do with their ideas and have strong incentives to commercialize them, according to Peters, UH’s chief operating officer. One of his goals is to create classes designed to teach employees how to become effective innovators. The hospital system also is thinking about giving them stronger incentives to commercialize their ideas, said Peters, who has served as a medical adviser for a few startups. Royalty rights aren’t always enough. The hospital system may need to give innovative employees more recognition and more opportunities for career advancement, Peters said. He also wants UH to conduct more translational research — the type of research that can drive the development of new technologies. Peters believes that commercialization is under-emphasized at many academic medical centers — a statement that applies to how University Hospitals has traditionally operated. “I think that’s probably safe to say that’s been true here,” he said. The nascent innovation culture at UH already has infected some doctors. Among them is Faruk Örge, a
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Akron: Scarborough is laying out five-year financial plan borrowed a lot of money to rebuild the campus and create a greener or more modern and inviting campus,” Scarborough said. “They understand the university is leveraged, and it’s going to be tight going forward, but I haven’t sensed any anxiety about it. If anything, I’ve heard they appreciate that I’m comfortable with these issues and the manner I’ve addressed them in the past.”
continued from PAGE 1
Both agencies reaffirmed the university’s current bond ratings and described its outlook as stable. By contrast, earlier this month, Moody’s issued a negative outlook for the entire higher education sector in the United States. University of Akron board chairman Dick Pogue said Scarborough’s financial acumen made him a perfect fit for the position. “Then we met him, and he turned out to be a nice guy, too,” Pogue said in an interview last month with Crain’s.
Scarborough: I’m an open book
The fix-it man Scarborough’s vowed to the university’s board of trustees that he will outline a five-year financial plan for the University of Akron within his first 100 days on the job. That plan, Scarborough said, will incorporate what he describes as elements of a “sustainable economic model.” Some of those elements include having enough working capital to pay bills when they’re due, six months of operating reserves, fundraising focused on building an endowment and posting an annual operating margin of 3%. That 3% operating margin is a particularly bold goal, especially in the higher ed space. In fiscal 2013, for instance, the University of Akron posted a negative 3.6% operating margin, according to the most recent Fitch report. While the final numbers for fiscal 2014 aren’t yet available, Fitch said the university expects to break even largely because of significant spending reductions. “Every university, they face challenges like this,” Scarborough said.
“You always have missions that are bigger than your resource base. It’s always a matter of making strategic choices about what matters most and learning to live within an eco-
nomic model that’s sustainable.” Scarborough said it was too early to divulge any of his plans, but stressed that cutting to profitability wasn’t part of his modus operandi.
Also, he doesn’t get the sense that faculty or staff are on edge about what he may have to do to turn around the university’s finances. “They understand the institution
Scarborough said his philosophy toward managing finances is rooted in transparency and active participation by the entire university community. To foster that openness, as he did at the University of Toledo, Scarborough plans to launch this fall a book club with faculty. The first book on the reading list is “College: What it Was, Is, and Should Be” by Andrew Delbanco. The idea, Scarborough said, is to put what’s happening at the University of Akron in context with what’s happening nationally. While Scarborough has worked at a handful of universities, his financial experience extends well beyond academia. For one, he’s also well-versed in health care finance, having served as executive director of the University of Toledo Medical Center. As such, he’s not afraid to look to other organizations or industries to solve a problem, according to Olivia Dacre, the chief administrative officer at the medical center and a former colleague of Scarborough’s. “He is constantly learning almost to the point where you’re like, ‘Dude, do you do anything else?’” Dacre said.
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THEINSIDER
THEWEEK JULY 21 - 27 The big story: The Ohio Bureau of Workers’ Compensation settled its longstanding legal dispute with a group of small business owners. The BWC agreed to pay as much as $420 million to a group of 270,000 Ohio employers who joined a class-action suit filed by a group of Clevelandarea employers in 2007. The settlement, which still needs approval by the appeals court, ends a planned appeal by the BWC to the Ohio Supreme Court. Both a Cuyahoga County Commons Pleas judge and a three-judge Eighth District Court of Appeals panel agreed that plaintiffs in the case were entitled to refunds from the BWC for premium overpayments made between 2001 and 2008.
Change afoot: Gerald B. Blouch will retire by month’s end as president and CEO of Invacare Corp., the hard-pressed, Elyria-based maker of wheelchairs and other home health care equipment. Come July 31, Blouch also will retire as a member of the company’s board. Robert K. Gudbranson, the company’s senior vice president and chief financial officer, was named interim president and CEO. Blouch joined Invacare in 1990 and assumed the role of CEO in January 2011, succeeding longtime CEO A. Malachi Mixon III. Mixon, Invacare’s board chairman, said the company is “searching for a successor who can take the company to the next level.”
Signs of life: Hikma Pharmaceuticals agreed to buy the massive Ben Venue Laboratories complex in Bedford and its R&D team — but will Hikma bring the troubled facility back to life? The London-based company has said only that it “will evaluate the potential to partially reactivate” the drug manufacturing complex to support “its medium and long term growth plans.” Ben Venue shut almost all production at the site in December, after spending several years and hundreds of millions of dollars trying to fix quality-control problems. For now, Hikma plans to move some of the equipment at the site to its other manufacturing facilities. Meating space: Michael Symon is bringing his interpretation of Cleveland barbecue to East Fourth Street. Mabel’s BBQ is scheduled to open this fall in the space formerly occupied by La Strada, just steps away from Symon’s flagship Lola Bistro. The 110-seat eatery will serve lowand slow-cooked, dry-rubbed barbecue using local oak and applewood. A ballpark mustardbased sauce featuring cider vinegar, Ohio maple syrup and chiles will kick up flavor and heat. Liz Symon, who designed Lola, Lolita, Roast and all B Spot interiors, will coordinate the aesthetics in partnership with Cleveland architect Richard Lalli and Scott Richardson of Cleveland-based Richardson Group. Bus stop: The people who bring tourists by bus to the Rock and Roll Hall of Fame and Museum, the Great Lakes Science Center and the Horseshoe Casino Cleveland are themselves coming to Cleveland. The American Bus Association said it will bring 3,500 delegates to its 2017 Marketplace, its annual convention, to the Cleveland Convention Center on Jan. 14-17, 2017. 40 more years: Cuyahoga County Council agreed on an extension of a portion of the county hotel bed tax. The issue now will be presented to the city of Cleveland and suburban communities. A majority of the county’s 59 municipalities must sign off before the tax can be extended. The 10-1 vote on an amendment changes the life of the tax from 20 years to 40 years. A 1.5% portion of the tax, set to expire when bonds used to build the Rock and Roll Hall of Fame and Museum are paid off in the coming months, will be available in the future for capital improvements for major events.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
A baseball revolution advances off the field ■ Major League Baseball’s “Moneyball” movement — popularized by Michael Lewis’ 2003 book and the 2011 movie that starred Brad Pitt — began in the 1990s. For the Cleveland Indians, the same basic principles — using data to make more informed decisions — became much more prevalent on the business side when Mark Shapiro transitioned from president to general manager after the 2010 season. Andrew Miller, who started as a Tribe baseball operations intern in 2006 before making the move with Shapiro to business, said there is one very big difference between the Moneyball approaches of the two sides of a big-league organization: collaboration among big-league teams. “What’s really exciting is when you look at the nascent stages of Moneyball from the baseball ops side, it’s sort of happening on the biz side (now),” said Miller, a 39-yearold former University of California baseball player who spent six years working in finance in Silicon Valley before going to graduate school at Northwestern University. “There are four or five teams that are involved in trying to come up with similar methods and answer similar questions.” In the four years since transitioning from baseball to business, Miller has been promoted to senior vice president of strategy and business analytics. One of his hires, business analytics manager Gabe Gershenfeld, said the “collaborative nature” of MLB business teams “is appealing.” “On the baseball side, it’s a zero-sum game,” Gershenfeld said. That’s not the case in business. “Someone
isn’t going to buy our ticket or a San Diego Padres ticket based on information we share with them,” Miller said. — Kevin Kleps
CWRU professor’s attention to detail wins court support ■ A Case Western Reserve University law professor was one of the first to challenge language in the Affordable Care Act that a U.S. appeals court struck down last week. Back in 2012, Case Western Reserve’s Jonathan Adler and The Cato Institute’s Michael Cannon argued in a paper that any federally established health insurance exchange does not have the authority to dole out health insurance subsidies. As they read the interpreted the law, the wording only allowed health insurance subsidies through state exchanges. Many states, including Ohio, have punted their exchanges to the feds. Last Tuesday, a panel of the U.S. Court of Appeals for the District of Columbia Circuit held that an Internal Revenue Service regulation permitting subsidies through the federal exchange wasn’t a proper interpretation of the law. On that same day, however, a panel of the U.S. Court of Appeals for the Fourth Circuit in Richmond, Va., came to the opposite conclusion, setting the stage for another Obamacare showdown at the U.S. Supreme Court. About a year ago, Adler testified before a U.S. House subcommittee on the issue and advised legislators that the IRS was overstepping its bounds in issuing the regulation. “This subcommittee has asked for my views on the legal basis for the IRS and Treasury Department rule purporting to extend the availability of tax credits and cost-sharing subsidies to federal exchanges. My con-
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COMPANY: Chemsultants International Inc., Mentor PRODUCT: Fish Allure scented bait tapes
Excerpts from recent blog entries on CrainsCleveland.com.
Peel, stick, catch. That’s the motto Chemsultants has adopted for its new product, the Fish Allure scented bait tapes. Chemsultants recently unveiled Fish Allure at the International Convention of Allied Sportfishing Trades in Orlando, Fla., a showcase for the latest innovations in fishing gear and accessories. This product is a scent strip that can be placed on any hard bait. After “thousands of lab trials,” Chemsultants says, its scientists “have created a proprietary polymer film that stores and releases amino acids, steroids, and other active ingredients at the precise levels needed to exceed a fish’s scent threshold.” The strips are available in multiple sizes and can be placed on any bait. This adhesivebacked product, when placed in water, is activated and “causes the emission of scent that provokes the fish to strike,” according to the company. Chemsultants says the scent “remains with the lure rather than floating away, and the clear thin tab doesn’t interfere with the functionality of any type of lure.” Each strip provides up to 60 minutes of fishing, the company says. For information, visit www.fishallure.com.
Send information about new products to managing editor Scott Suttell at ssuttell@crain.com.
Take our advice on sin ■ Milwaukee might want what Cleveland is selling, from a tax policy perspective. The city of Milwaukee is looking for advice from outsiders — including some from Cleveland — about how to pay for cultural facilities and a new downtown arena. Milwaukee’s Cultural and Entertainment Capital Needs Task Force “is considering ways to pay for a new arena to replace the BMO Harris Bradley Center and to fund other regional facilities, including museums and performance arts centers,” according to the Milwaukee Business Journal. The group met recently “to hear from the leaders of business associations in Cleveland, Denver and Oklahoma City, three communities that are a source of ideas for Milwaukee. The menu of options includes sales, sin and event ticket taxes. The paper says Cleveland “has successfully used a sin tax on alcohol and cigarettes to provide grants to cultural and sports institutions.” That tax, in case you’ve somehow forgotten, amounts to about 30 cents on a pack of cigarettes and oneand-a-half cents on a $5 beer. Joe Roman, president and CEO of the Greater Cleveland Partnership, Roman which led the campaign that persuaded voters to renew the sin tax, told the newspaper, “We looked at it as ‘how can we raise the resources we need, but not threaten anything else, not threaten other services?’ There were some bar owners who were against it. I wouldn’t say it was anywhere near a movement. It was a few people and their efforts were support-
clusion is simple: There is none,” Adler said at the time. — Timothy Magaw
Browns complete first pass of year with Value City ■ A new partnership with Value City Furniture will give Cleveland Browns fans a chance to get an early look at Johnny Manziel. The Browns are partnering with the Columbus-based company for a pass that will give fans first dibs on spots to watch training camp and faster entry to FirstEnergy Stadium on game day. This year, sparked in part by the hubbub that has ensued since the team drafted Manziel in the first round, the Browns are asking fans who plan to attend any of the 13 training camp practices in Berea to register on the team’s website. Those who do will get a chance to enter the Browns’ training facility 30 minutes early, via the Value City Furniture Easy Pass. Browns vice president of fan experience and marketing Kevin Griffin said fans who are signed up for a particular practice can then register online for the easy pass. “It’s a unique concept we’re rolling to camp and extending to game day,” Griffin said. The easy passes will continue when the games begin on Aug. 23 (the Browns’ preseason home opener against the St. Louis Rams) and Sept. 14 (the regular-season opener at FirstEnergy Stadium against the New Orleans Saints). While the training camp passes are based on each individual practice, the Value City Furniture Easy Passes for the season will be good for all 10 home games. — Kevin Kleps
ed by the beer and wine distributors.” Roman said the tax referendum lost in the city of Cleveland by a margin of about 200 votes, but the majority of voters countywide supported it.
Ugly numbers ■ Ohio is one of 14 states where gun deaths exceeded motor vehicle deaths in 2011, the last year for which complete federal data were available. The New York Times said a report from the Violence Policy Center “confirms yet again the lunacy of America’s loose gun policies.” The states with this dubious distinction in 2011 were Alaska, Arizona, Colorado, Illinois, Louisiana, Maryland, Michigan, Nevada, Ohio, Oregon, Utah, Vermont, Virginia and Washington state, as well as the District of Columbia. In Alaska, for example, there were 126 gun deaths and 87 motor vehicle deaths. The numbers in Ohio were 1,227 gun deaths and 1,178 motor vehicle deaths.
The money flows ■ Ann Arbor, Mich.-based Plymouth Ventures said it reached a final close for Plymouth Venture Partners III, which surpassed its fundraising target of $60 million and will invest in “growth-stage businesses located in the Great Lakes region,” including in Cleveland. With the close of the PVP III, Plymouth Ventures said it now has more than $100 million in committed capital under management. “Deal flow is strong, and we are excited about the opportunities we are seeing in the Great Lakes region,” said the firm’s managing partner, Mark Horne. “My partners and I look forward to deepening our involvement in cities such as Cleveland, Cincinnati, and Indianapolis, while continuing our emphasis across the state of Michigan and in the Chicago metro area.”
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