Issuu

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Vol. 36, No. 35

$2.00/AUGUST 31 - SEPTEMBER 6, 2015

MesoCoat CEO says company didn’t pay its loans because of holding companies’ ties to ‘crook’ — P. 3 12-story Tower City structure could join L.A. business’ growing downtown Cleveland portfolio — P. 4

Convention crowd is ideal target Marketers and advertisers will go out of their way to reach GOP delegates, guests By JAY MILLER jmiller@crain.com

ing and attendance plummeting, and the Tribe winning one playoff series since 2002 — has been well-chronicled. Shapiro has a simple explanation for the most common complaint leveled by fans at the franchise — that the Indians aren’t spending as much as they could, or should. “Always remember the overarching challenge that we have is baseball is a game that shares limited revenue, and then has no salary cap,” said the longtime Tribe executive, who recently was mentioned as a candidate to be the next president of the Toronto Blue Jays. “So just start with that. That makes the bulk of our revenue dependent on local revenue, and those local revenues are not completely, but by and large determined by size

How does a business make an impression on the small city of people who will be in residence in Cleveland for the GOP convention in July? Marketers and advertisers are just beginning to figure out their answer to that question. For University Hospitals, it may be ads on the free trolleys that circulate through downtown. For Coca-Cola, as it has done at past conventions, it may be Coca-Cola-themed recycling containers along the routes from Quicken Loans Arena to the downtown hotels. Or maybe an automaker will take space in a strategically located parking lot to display its latest, glitziest models. The convention crowd is an elite and influential market target comprising affluent trendsetters and decision makers. Some of the marketing will be heavy duty, the wining and dining aimed at those who come to town who might end up making decisions about energy policy or what military hardware to buy. But most of the advertising and marketing will just try to make an impression on the media, lobbyists, other guests and even convention delegates milling around downtown. At past conventions, for example, AT&T passed out ChapStick and cup cozies with the company’s logo. CNN had a headquarters where it handed out CNN ballcaps. “We have clients that are interested but we also have goals” for lining up marketing opportunities,” said Loren Chylla, executive vice president for media services at the Adcom Group, a Warehouse District marketing firm. “We like to be prepared.” Chylla is gathering names of businesses, developing an inventory of signage that he will

See INDIANS, page 22

See CONVENTION, page 23

GETTY IMAGES

The Cleveland Indians invested a combined $104 million in Michael Bourn, left, and Nick Swisher — signings that turned out to be regrettable.

A losing proposition? Shapiro says Dolans haven’t turned a profit during ‘a few’ Indians seasons By KEVIN KLEPS kkleps@crain.com

74470 83781 NEWSPAPER

The perception is that the Cleveland Indians, who annually have one of the lowest payrolls in Major League Baseball, make millions in profits — thanks to eight-figure checks they receive from television networks and revenue sharing. The reality, according to team president Mark Shapiro, is that the Tribe’s much-maligned ownership has suffered plenty of losses over the years, and any profits the Dolans make go back into the team. “There are not many people who could steward the process better or differently unless they were willing to take huge losses every year — and they’ve taken losses quite a few

years, including this year,” Shapiro said of the Dolan family. “So I’m not sure what the expectations are, but a lot of times the disappointment has to be focused somewhere. And it tends to get focused disproportionately on them, and I think that’s situational and timing more than anything else.” The timing aspect to which Shapiro is referring is the Dolans’ $323 million purchase of the Indians in 2000. The season before the Dolans bought the franchise from Richard Jacobs, the Tribe qualified for the postseason for the fifth consecutive year, and the club’s payroll in the first two seasons of the new ownership was among the largest in the game. What’s transpired since — the Browns returning to the NFL, the Indians’ payroll rank-

ALSO INSIDE: SPORTS BUSINESS — PAGES 15-20 Officially branded Cleveland Browns programs are everywhere (and very valuable).

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Small Business Matters i Want more information and resources on this week's topics, ideas and events? Go to www.cose.org/smallbizmatters.

PRESENTED BY

CONTINUING EDUCATION

;HYNL[ @V\Y 4VZ[ 7YVÄ [HISL *\Z[VTLYZ All customers are not created equal. :VTL HYL TVYL WYVÄ [HISL [OHU V[OLYZ Focusing on those customers who are TVYL WYVÄ [HISL JHU TLHU H IPN IV[[VT line increase for your business. )\[ OV^ KV `V\ KV [OH[& 1L :\ZIH\LY co-developer of the COSE Strategic 7SHUUPUN *V\YZL OHZ PKLU[PÄ LK [OYLL RL` Z[LWZ I\ZPULZZLZ ZOV\SK [HRL [V Ä UK V\[ the answer to that question. Know your own cost At the end of the day, Susbauer says, customers don’t care in the least what your costs are. They just want to satisfy their own needs. This means it’s up to the individual business to keep a watchful eye over its own cost structure. All businesses should ask these questions of themselves, Susbauer says: ¸*HU `V\ M\SÄ SS J\Z[VTLY ULLKZ ^P[O [OL cost structure that’s in place? Does that cost structure enable you to make a WYVÄ [&¹

August 31

By The Numbers BYOD Usage

STEP

Understand what the competition is doing If the business down the street is selling the same thing you are for less than you are, you will probably be in trouble

STEP

when that business starts going after your customers. What are your options if this happens? Susbauer says in addition to changing your cost structure, you can also improve the perceived value of what you’re V LYPUN How do you do that? It could be as ZPTWSL HZ V LYPUN H ¸I\` VUL NL[ VUL¹ deal, coupons, or a free consultation. Know your market As hard as you might try, you’re never going to be able to take down Wal-Mart, Susbauer says. The retail NPHU[ JHU H VYK [V SVZL TVUL` I` ZLSSPUN below cost. You can’t. What you can do is know your own market inside and out. You STEP

should have a laser-like focus on those customers who meet what you have to V LY -PN\YL V\[ ^OV [OVZL J\Z[VTLYZ HYL and go after them. “Sales are vanity,” Susbauer says. ¸7YVÄ [Z HYL ZHUP[` ¹

The COSE Strategic Planning Course is a six-month, results-oriented process that delivers concentrated executive-level business education and exceptional networking opportunities. The course is designed to help you overcome obstacles while building the foundation to take your business to the next stage. Learn more at www.cose.org/spc

60% 14% of employers allow the use of personal devices for work purposes.

have plans to implement such a policy this year.

SOURCE: TECH PRO RESEARCH

Connection Calendar COFFEE WITH COSE

52 TIPS FOR YOUR BUSINESS

#35 – BYOD Can be a Boon to Productivity Employees are increasingly using their own devices to do at least some of their work. BYOD (“Bring Your Own Device”) examples range from accessing company email and calendar remotely to working from home on a computer connected to the company network. Users often prefer to use their own tablets or laptops to access company systems, especially when working remotely. BYOD can be a boon to productivity. It’s convenient and users like the ability to work with the devices with which they are most comfortable. Additionally, there might be cost savings for the company when users provide their own hardware. Large organizations often enforce formal policies to realize advantages while mitigating risks of BYOD. They also invest in technologies that make it easier for IT departments to safeguard corporate data even when it’s accessed from a device the company doesn’t own. Small business owners, however, could wonder whether it is worth the expense to implement. It would be a mistake for any business owner to ignore the BYOD question. “Just Say No” probably won’t work because some \ZLYZ ^PSS LHZPS` Ä N\YL V\[ OV^ [V JVUULJ[ their smartphones and tablets to the company’s email system and perhaps even to its internal network. “Just Say Yes (And Hope for the Best)” might also be a costly mistake. Is there another choice?

implications arise from the use of employeeowned devices. You might need to revise and strengthen some of your existing guidelines. You should identify and answer the unique questions raised by BYOD: ₔ >PSS [OL JVTWHU` WH` VY ZOHYL [OL JVZ[& ₔ >PSS 0; WYV]PKL [LJO Z\WWVY[ VU user-owned devices?

Tony Felice, Inline Technology Services, LLC

start by doing research and adapting BYOD policy examples from other organizations to Ä [ OPZ VY OLY I\ZPULZZ ( )@6+ WVSPJ` ZOV\SK complement and extend your information security policy and acceptable use policy. Your security policy should provide reasonable safeguards against unauthorized access. Passwords shouldn’t be “1234.” Those responsible for IT should have procedures for granting access to company resources, including in emergency situations. Rules should clarify what can be shared in public-facing resources such as public or shared Dropbox folders or FTP servers. Your acceptable use policy should be designed minimally to prevent abuse of IT reZV\YJLZ [OH[ H LJ[ V[OLY \ZLYZ HUK WYVOPIP[ users from damaging the company’s reputaA thoughtful, practical alternative tion or even exposing it to legal risk. Among The alternative is implementation of a other things, this would mean prohibiting the BYOD policy that balances user wants with use of company resources to publish spam, the company’s need to support productivity, hateful or other illegal speech or to adversely protect resources, and manage costs. A H LJ[ PU[LYUHS VY L_[LYUHS Z`Z[LTZ X\HSPÄ LK 0; ZLY]PJL ]LUKVY JHU OLSW ^P[O [OPZ With your security and acceptable A budget-conscious business owner might use policies in hand, consider what new

ₔ >PSS [OLYL IL H SPZ[ VM HWWYV]LK OHYK^HYL operating systems and applications? ₔ >PSS [OL JVTWHU` OH]L [OL HIPSP[` HUK right to remotely “wipe” a device that has been lost or stolen (or when the employee is terminated or leaves the organization)? BYOD is here to stay. The “consumerization of IT” is a cultural phenomenon and business trend. A thoughtfully-developed policy will help manage risks and maximize )@6+ ILULÄ [Z

i Want more expert advice? Check out Linktunity (www.cose.org/linktunity), an online forum connecting business owners with creative solutions to the tough questions they face every day.

COSE’S TAKEAWAY Ensure your business is ready to make the leap to BYOD, or you might be dealing with headaches later on.

CONTENT PROVIDED AND PAID FOR BY THE COUNCIL OF SMALLER ENTERPRISES

Get an early start with other COSE members at this casual round table session. Discuss tips HUK [YPJRZ VM [OL [YHKL V]LY H J\W VM JV LL :OHYL your challenges and successes with your peers, and get real advice on how to grow your business!

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COSE WEBED SERIES: TRADE SHOW EXHIBIT SECRET SAUCE Are you and your team struggling to unlock the keys to trade show success? Rock The House Founder/CEO Matt Radicelli shares their team’s secret sauce that keeps the troops happy and the leads pouring in. This informative presentation will begin with an interactive assessment of your current trade show tactics and strategies, then build on a series of industry best practices and methods that just plain work! Matt will also share creative ideas about booth design concepts, motivating and managing your team, and keeping it all fun in the process!

SEPTEMBER 18 Register at www.cose.org/events.

10TH ANNUAL COSE SMALL BUSINESS CONVENTION Now in its 10th year, the COSE Small Business Convention is the premier event for entrepreneurs and small business owners in the Midwest. Partners from across the region come together to produce the ultimate experience for small business professionals, complete with nationally-recognized keynote speakers, a business-to-business trade show, special events and unforgettable networking experiences.

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Check out www.cose.org/events for all the latest happenings.

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AUGUST 31 - SEPTEMBER 6, 2015

CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Colleges are moving to fill gap Two-year institutions are working to help manufacturing companies fill what’s expected to be large void By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com

With the help of a federal grant, community colleges across the state are taking steps this year to better prepare the next generation of workers for manufacturers and other industries. At Stark State College in North Canton, that will mean an expanded machine shop. At Lakeland Community College in Kirtland and Cuyahoga Community College in Cleveland, it’s taking the form of rapidly growing welding programs. A lack of qualified workers is a big problem for manufacturers, and it’s one that could continue to grow as existing employees retire. A 2015 report from the Washington, D.C.based Manufacturing Institute and consulting firm Deloitte estimated that between retirements and industry growth, close to 3.4 million manufacturing jobs would be available in the next 10 years. But, based on current percentages of open positions, about 2 million of those positions could go unfilled if job-training efforts aren’t boosted significantly. Ohio’s community colleges are working to close that gap with the help of a $15 million Trade Adjustment Assistance Community College and Career Training grant received late last year. The grant project, known as the Ohio Technical Skills Innovation Network, is being spearheaded by Elyria-based Lorain County Community College, but it spans 11 schools and includes industry partners, according to a news release. The grant money allows the colleges to work with companies of all sizes to identify the jobs available and the core skills needed in the industry, said Tracy Green, vice president for strategic and institutional development at Lorain County

CREDIT: ABOVE, LAKELAND COMMUNITY COLLEGE; BELOW, LORAIN COUNTY COMMUNITY COLLEGE

At top, Malcolm Spears, a student worker in Lakeland Community College’s welding lab, observes Carl Ellefsen, an engineering lab technician, demonstrating stick welding. Below, Roger Diamond, a Lorain County Community College associate professor, reviews corrections on a CNC program with student Beverly Minnich.

Community College. “It really does put employers at the table,” Green said. The efforts are close to the heart of the college’s mission, as the students and the employers it serves tend to stay in the area. The college needs to remain relevant in terms of what industry needs, Green said. The schools are using their share

of the funds differently, but all are expanding job-training efforts in the region. For example, the grant has allowed Lakeland Community College to grow and expand its welding program, said project manager Linn Gahr. The grant focuses on developing programs where there is job demand and solid wages. The timing couldn’t have been better for Lake-

land, where enrollment in welding was growing, Gahr said. The grant allowed the college to grow its capacity by adding new equipment, and it’s expanded its curriculum to include pipe welding. And to better engage employers, the school has created a welding advisory committee to gather thoughts from a range of local em-

ployers on whether Lakeland’s curriculum meets their current and future needs, Gahr said. The council met for the first time in mid-August. Cuyahoga Community College also is expanding its welding program with help from the grant. Alicia Booker, vice president of operations and manufacturing, said the school is creating a “stackable platform” of training options for students. The college previously offered a 10-week welding boot camp that helps employers fill gaps right away, but in January, it will begin offering the option of a one-year credit certificate. Stark State’s portion of the grant is allowing the school to expand its machine shop, which also will include two large 3-D printers funded through a separate grant. The school also is working to secure National Institute of Metalworking Skills credentials to launch with the expanded shop. When it opens in the spring, students will be able to create prototypes, said Donald M. Ball, dean of engineering technologies and information technologies. “It’s really a giant step forward,” Ball said. Overall, the region’s community colleges have “embraced their role and responsibility” in addressing the manufacturing skills gap, a move that has become more deliberate in the past eight to nine months, said Judith Crocker, executive director for workforce and talent development at Magnet in Cleveland. The local community colleges have been looking at unique ways to offer short, focused training, she said. It’s important to offer programs that lay down a pathway of career growth for job seekers. “It’s not dead-end training,” Crocker said.

MesoCoat blames default on scheme run by ‘crook’ Euclid-based metal coatings business lands in receivership, owes $1.77 million to company in Panama By CHUCK SODER csoder@crain.com

Was MesoCoat hoodwinked by a crooked investor, or did it just fail to pay back its loans on time? The Euclid-based metal coatings technology company has been put under the control of a court-appointed receiver after missing deadlines to pay back loans issued by two holding companies in Panama. But the CEO of MesoCoat’s parent company, Abakan Inc., says that the company is a victim of a scheme led by an investor he described as a “crook” with a shady past. In court, Abakan CEO Robert Miller argued that the two holding companies worked together to force MesoCoat to end up in receivership — a move that could give them a chance to buy the company on the cheap. Miller claims that one of the lenders, Sonoro Invest, used stalling tactics during a separate lawsuit against Abakan so that the MesoCoat’s parent legally wouldn’t be able to move ahead with a deal to refinance a loan issued by the other company, George Town Associates. And that loan was about to come due.

Why would Sonoro work with George Town? Miller claims that they are both controlled by one man, from his hometown of Vancouver: John Xinos. A lawyer representing Xinos denied that claim, noting that other men are listed as the trustees of the two companies. Steve Jackson of Forstrom Jackson, a law firm in Vancouver, dismissed Miller’s argument as “the last desperate gasp” of someone who doesn’t want to make loan payments. U.S. District Court Judge Denise Cote dismissed Miller’s argument as well and never called on Xinos to testify. In her view, it didn’t matter whether he controlled both of the Panama-based holding companies. The two companies both had a legitimate goal: To get their money back, she wrote in an opinion filed in the Southern District of New York on Aug. 18. She added that Abakan also was late in filing a quarterly report with federal regulators — which was considered the equivalent of a loan default, according to George Town’s loan contract. Cote also hit MesoCoat and Abakan with a contempt of court violation. While under a preliminary injunction that is supposed to

stop companies from taking actions outside the normal course of business, Abakan swapped shares and other assets with the advanced materials company that founded MesoCoat — Powdermet Inc. of Euclid. Thus, the court-appointed receiver is now tasked with finding a way to pay back the $1.77 million that MesoCoat owes to George Town. All of MesoCoat’s employees are still getting their paychecks, and receiver Robert Seiden says he wants to keep it that way. He’s talking to a few potential lenders who have expressed interest in financing the company, he said. Though MesoCoat has had financial problems, the company appears to have “enormous potential,” according to Seiden, president of CSI Legal in New York. Granted, Abakan, which owns no companies other than MesoCoat, lost nearly $4.5 million on just $773,000 in revenue during the nine-month period that ended on Feb. 28. However, MesoCoat press releases say that big companies are starting to take interest in its PcomP powders, which are used to strengthen metal components that need to endure lots of wear and tear.

For instance, last week, Miller spoke with Crain’s late at night, because he was in Asia “negotiating with people who like the product.” And before the judge made her decision, MesoCoat announced plans to eventually build a second plant in Euclid, on land acquired in the Powdermet deal. At the moment, however, MesoCoat doesn’t have the money or the decision-making power to go forward with that plan.

Trade association Abakan and MesoCoat couldn’t prove to the court that Xinos was involved with either of the Panamanian companies that issued the loans. But Miller said Xinos and his lawyers negotiated the loans. Xinos has been in trouble at least once in the past. In 2001, the Investment Dealers Association of Canada stuck him with a $27,500 fine for engaging in “16 unauthorized trades in two different offshore corporate accounts,” according to an online newsletter from the association. None of the trades were See MESOCOAT, page 23

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

AUGUST 31 - SEPTEMBER 6, 2015

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STAN BULLARD

The 12-story, 320,000-square-foot Skylight Office Tower could be switching owners in the near future.

Skylight Office Tower looms as big Hertz buy California investor emerges as favorite for 12-story complex By STAN BULLARD sbullard@crain.com

BE WHERE YOU WANT TO BE Let us help you get there. We help business owners plan for and implement a successful exit strategy. Increase Value. Minimize Taxes. Protect Assets.

Call our Certiﬁed Exit Planning Advisor, Ray Lampner: 330.572.8014 Ray.Lampner@bcgcompany.com • www.BCGLegacyAdvisors.com Volume 36, Number 35 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2015 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 212-210-0750 Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-9911, or email to customerservice@crainscleveland.com, or call 877-824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.

Hertz Investment Group, the California investor with an appetite for office buildings across the country, looks to be closing in on buying the 12-story Skylight Office Tower in Forest City Enterprises Inc.’s Tower City Center complex in Cleveland. Los Angeles-based Hertz earlier this year bought 27-story Fifth Third Center in downtown Cleveland for almost $54 million. It was rumored to be the bidder that Forest City described in 2014 as the prospective buyer of most of Tower City, although Forest City announced in September of that year that it had broken off negotiations. However, Forest City has continued to offer the downtown shopping and office complex for sale as part of its drive to shed older properties in non-core markets. The properties are being marketed as part of Forest City’s effort to continue cleaning up its balance sheet to aid its shift from a real estate operating company to the taxprotected status of a real estate investment trust. The transition is being pursued as part of a quest for higher stock market values more reflective of the value of its portfolio, the company has said. Forest City recently scheduled a shareholder meeting for Oct. 15 to decide on pursuing REIT status. Hertz’s renewed interest in at least a part of Tower City surfaced Aug. 13, when it formed an Ohio limited liability corporation called Skylight Office Tower Mezzanine LLC, according to online records from the Ohio Secretary of State’s office. The document identifies as the agent for the limited liability corporation John D. Forbess, who is a vice president and general counsel at Hertz. The address of record is the same as that of Hertz’s corporate headquarters.

Gary Horwitz, Hertz president and chief financial officer, responded to queries about a potential Skylight purchase with an email that said, “We have no comment.” Forest City spokesman Jeff Linton also declined to comment on the formation of the Hertz-led Skylight company. In its most recent conference call, on Aug. 5, executives at Forest City executives said they are continuing to offer Tower City and other older assets in noncore locations for sale, but that process is taking longer than they had hoped. “The sale of these targeted assets aligns with our strategy to simplify business and while we’re not holding out for the last dollar, it’s also not a fire sale on these assets,” said Bob O’Brien, Forest City’s chief financial officer, according to a Seeking Alpha transcript of the call. An element that may aid Forest City’s effort to dispose of Skylight is that it has paid down nonrecourse debt on Skylight along with that on several buildings in other markets, according to the company’s June 30 earnings announcement. When the company negotiates loan payoffs, it typically secures principal reductions from its lenders. That might allow both parties more wiggle room to reach an amicable price.

Removing impediments Buying Skylight alone would be a simpler undertaking than also acquiring several pieces of Tower City Center. The property also includes The Avenue, which is the retail portion of Tower City, and Post Office Plaza, 1500 W. Third St., as the original deal included. However, if Hertz buys Skylight, it may leave The Avenue and Post Office Plaza to another buyer. Forest City has said it intends to retain the Terminal Tower, which gives Tower City its name, be-

cause the iconic office building also serves as its corporate headquarters. Alec Pacella, managing partner of NAI Daus Inc., a Beachwood-based brokerage firm, said it’s not uncommon for parties in a major transaction to return to the bargaining table after parting ways. “The seller or buyer may have removed an impediment to closing the transaction the first time around,” Pacella said. “You also have a buyer that has put time and probably money into getting to know the asset. So they are willing to look again. It happens all the time.” Moreover, a change that Forest City made on July 21 may portend a sale. According to Cuyahoga County land records, the lobby of the Skylight building had been incorporated with the retail avenue, and the company shifted ownership of the lobby back to the office tower itself. Although the massive Tower City Center complex incorporates connected buildings that have been built or redeveloped, the individual assets are structured as condominiums to reflect the different uses in the project. Skylight Office Tower consists of 320,000 square feet of office space and dates from 1990. The building is 96% leased, according to CoStar, an online realty data service. Skylight Office Tower overlooks a glass dome atop the Avenue retail portion of Tower City. The opposite side of the dome is home to a Tower City building housing the Ritz-Carlton Hotel and office space that Forest City developed but that is now owned by an affiliate of Dan Gilbert’s Detroitbased Rock Gaming concern. Hertz is a major owner of downtown office buildings throughout the United States, with 53 major urban properties representing almost 19 million square feet of office space in the downtowns of 20 U.S. cities and 15 states.

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CRAIN’S CLEVELAND BUSINESS

WWW.CRAINSCLEVELAND.COM

Squire Patton Boggs’ Connell plotting unique path By JEREMY NOBILE jnobile@crain.com

Considering she was once a diplomat for the United States, becoming a veritable ambassador for her powerhouse international law firm seems like a natural fit. This time, though, Michele Connell will be leading the growth of a business instead of helping to rebuild a hurricane ravaged country. Connell, a partner in Squire Patton Boggs’ global corporate practice, is set to take the reins of the firm’s Cleveland office as the company’s first female office managing partner. Connell blazes not only a trail for other female leaders — particularly in the legal industry’s usually maledominated international corporate M&A practice that she specializes in — but younger attorneys as well. At 42, she’s believed to also be the firm’s youngest U.S. office managing partner to date. Connell officially assumes the new leadership position next March. But her transition to the role, where she will replace current Cleveland office managing partner David Goodman, who has held the position for nine years, begins now. The two will serve as co-managing office partners until next year. “She brings a perspective to leadership that her predecessors didn’t have about how law gets practiced these days, and that’s entirely a good thing,” said Goodman, 63, referencing Connell’s background as a diplomat and transactional lawyer. Goodman will remain with the firm, devoting time after the shift to his public finance practice. For Connell, who joined the firm in 2003 fresh out of Case Western Reserve University School of Law, the position is certainly an opportunity to set a tone for future leaders. “I’ve worked with many women in the corporate practice, so there were always women role models from the beginning. And I’ve had lots of male mentoring and support, too,” Connell said. “But to the extent anyone can look and say, ‘She’s the first at something,’ then that opens up the possibility in anyone’s mind that it’s something that can be achieved.” The transition comes at a pivotal time for the firm itself as well. The business expanded into public policy with the acquisition of Washington, D.C.’s struggling lobbying powerhouse Patton Boggs in June 2014. Meanwhile, Connell will take over the spring before the Republican National Convention comes to Cleveland. The firm will be in the thick of the action considering its ties to the capitol and bench of active and former politicians. Today, the Cleveland location, where legacy Squire, Sanders & Dempsey was founded in 1890, is the third-largest in the overall footprint — behind the D.C. and London offices — with about 120 lawyers. In the wake of the firm’s most recent merger, Squire Patton Boggs chairman and global CEO Mark Ruehlmann has charged regional managing partners with furthering connectivity among the firm’s 1,500 some lawyers in 44 offices across 21 countries. Beyond running the local office — no major, sweeping changes are expected — enhancing collaboration across the globe will be among Connell’s ongoing priorities.

And that’s something she’s is particularly suited for. The Pennsylvania native, who studied international relations at Georgetown University, is a former foreign service officer for the U.S. Department of State. She served at American embassies in Warsaw, Poland, and Tegucigalpa, Honduras. She was in Latin America when the region was devastated by Hurricane Mitch in the late ’90s. There, as a commercial attaché, she helped stranded Americans and facilitated bids with U.S. companies rebuilding everything from homes to bridges. She eventually earned the Meritorious Honor Award for her ser-

vice. It wasn’t until she returned to the states with her husband that she enrolled at Case Western Reserve University School of Law. The family lives with their three kids in Shaker Heights today. “(Law school) was on my radar for years,” Connell said. “But it was through the state department that I learned to enjoy the business aspects of law more than litigating. I really like advising and counseling to a mutually beneficial result, and that’s what I do today with advising on transactions.” Beyond serving as a regional ambassador within the firm itself, Connell also steps in as the firm’s figurehead for civic engagement.

She’s a member of United Way of Greater Cleveland’s Women’s Leadership Council and serves as chair of the Case Western Reserve Women’s Law & Leadership Conference. “In the years that I have known Michele, she has proven to be an exceptional lawyer and a highly regarded, natural leader whose experience, integrity and commitment to the community will continue our firm’s storied history in Cleveland,” Ruehlmann said in a statement. He said Goodman “has guided one of our largest offices through a tremendous period of growth for our firm, while also continuing our great legacy of civic responsibility.”

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Tri-C, hoteliers are working together with RNC in mind By DAN SHINGLER dshingler@crain.com

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The 2016 Republican National Convention is less than a year away and, before it gets here, Clevelandâ€™s hospitality industry and Cuyahoga Community College hope to address an age-old problem: training and placing enough qualified workers to staff the cityâ€™s hotels. â€œThe RNC is coming, and beyond the RNC, some of us want to determine whether (hospitality industry) growth can be sustained. So we decided to bring in the general managers of the major hotels in the area, and â€Ś Destination Cleveland, to conduct a focus-group session,â€? said William Gary, executive vice president of Tri-Câ€™s Workforce and Economic Development Division. â€œTri-C wants to understand their workforce challenges and issues (coming) within the next couple of years,â€? he said. Gary and executives from the under-construction Hilton Cleveland Downtown, the Hyatt Cleveland at The Arcade, the Renaissance Cleveland Hotel, the boutique Aloft Cleveland and the InterContinental Suites Hotel all met on Aug. 13. They were joined by representatives of the tourism agency, Destination Cleveland, as well as The Literacy Cooperative, a Cleveland nonprofit. The group discussed why job applicants canâ€™t find the jobs they want at area hotels, why the hotels canâ€™t find workers and what can be done about it. â€œIt was a beautiful meeting,â€? Gary said. Perhaps not surprisingly, one of the first ideas to come from the meeting was to hold a job fair for the nearly 700 Tri-C students in hospitality-oriented programs, as well as any other students interested in working in the hotel industry. Tri-Câ€™s counselors and other staffers will meet with hoteliers in September to plan that event for sometime later this year. â€œThatâ€™s the low hanging fruit,â€? Gary said, adding that itâ€™s certainly not the entire harvest that Tri-C and the hotels hope to eventually reap.

On the right track? Beyond the job fair, the real work begins. Gary first plans to better tailor Tri-Câ€™s existing curriculum so that graduates leave with some of the qualifications hoteliers say they need, ranging from management

CUYAHOGA COMMUNITY COLLEGE

William Gary (second from right) meets with area hotelier and tourism officials on Aug. 13. skills to the softer skills required to work with the general public. Even basic math and literacy skills need to be addressed for some potential workers. â€œI need to know in my restructuring of these workforce programs â€” am I on the right track? And, if Iâ€™m not, what do I need to do to get back on the right?â€? Gary said. Tri-C will examine the existing in-house training programs that some hotels already use to help do that. It might also see if it can take over that training for some hotels, perhaps even training their existing workers to company specifications on a contract basis, Gary said. Heâ€™s asking the hotels to do their part, too. For starters, that means working more closely together, sharing best practices and jointly supporting external efforts like TriCâ€™s to train more workers, Gary said. The industry needs to establish and maintain a continual pipeline of new workers, he added. It also might mean that some hotels change their hiring practices. Hoteliers say the number one reason they canâ€™t hire all of the people they need is because of pre-employment screening for things like drug use or criminal records. Gary wonders if they are being too tough â€” to their own detriment. Too often, like other industries, hotels and restaurants shut out potentially good employees for life because of past mistakes, Gary said. â€œI said: â€˜Do you have data to support those pre-employment requirements and criteria as being sustainable in todayâ€™s times? You may want to rethink those to open up access,â€™ â€? he said. So far, none of the hotels have yet committed to making changes, or to having Tri-C take over some of

their internal training, but Gary said the meetings and dialogue will continue. And at least some hotels think the effort is a good one that could have positive results. â€œIt could be enormous, the benefit for both the hotels and Tri-C,â€? said Steve Groppe, general manager of Renaissance Cleveland. Groppe agreed with Gary that hotels, restaurants and other hospitality businesses constantly face a challenge in finding employees with the skills they need. Also like Gary, Groppe said he hopes that the benefits for working with Tri-C extend well beyond next yearâ€™s Republican National Convention. â€œThe RNC is one thing, but there are going to be needs on an ongoing basis,â€? Groppe said. Teri Agosta, general manager of the 600-room Hilton Cleveland Downtown, said sheâ€™s also optimistic about Tri-Câ€™s efforts. Her hotel, now under construction, is set to open next June. Before that happens, she needs to hire nearly 400 new employees. Agosta, who has managed hotels in Washington D.C., Baltimore, Philadelphia and Scottsdale, Ariz., said what Garyâ€™s doing is not the norm, and sheâ€™s glad heâ€™s taking on the initiative. â€œThe fact that heâ€™s reaching out to us is unusual. And heâ€™s saying â€˜I will build a curriculum around you,â€™ Agosta said. â€œItâ€™s the beginning of a partnership.â€? And, if Clevelandâ€™s comeback continues, along with the expansion of its hotel and restaurant industry, the challenge of finding employees will likely intensify. â€œWhenever you increase the number of hotels and restaurants, it increases the competition for talent,â€? Groppe said.

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Painesville manufacturer making the most of waste Production has soared since products were turned into animal feed By DAN SHINGLER dshingler@crain.com

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When food manufacturers have to dispose of cooking oils, fats and other waste that is produced in the manufacturing process, they create a lot of waste. Or at least they used to. These days, a lot of that former scrap goes to Painesville, where it’s recycled and turned into nutrientrich animal feed. Magnus International Group in Painesville — with its subsidiaries, Hardy Industrial Technology and Hardy Animal Nutrition — started out less than a decade ago taking fatty and oily food waste and turning it into industrial products. But once it discovered it could produce animal feed additives from that waste, which is full of nutrients but often is discarded anyway, its business really took off. “The animal nutrition part has just eclipsed what we were doing originally,” said Scott Forster, the company’s co-owner and chief operating officer. When they started Magnus in 2007, Forster and partner Eric Lofquist bought a shuttered margarine plant, thinking they could use it to convert food waste into industrial lubricants and waxes. They did, and it worked, but the company was using only a fraction of the plant’s capacity. The following year, Magnus began producing animal feed additives, and it soon discovered that was where its real opportunities lay. “We were just some crazy guys who started with one one-hundredth of the plant operating. … It’s incredible the way it’s evolved,” Forster said. Now, eight years after it began life with six employees, more than 75% of Magnus’ sales come from animal feeds, which it primarily produces for pigs, cows and chickens. What’s not chicken feed is the company’s sales, which hit $57 million in 2014, Forster said. Today, Magnus has 72 employees at its plant on 25 acres on Hardy Road, which also is the namesake of the Hardy subsidiaries. (As it turns out, “Hardy” is also a good word, with a positive connotation, for marketing products to feed makers, but that was just luck, Forster said.) The company is growing quickly and Forster said he’s constantly looking for new employees. He figures he’s in the right place, at the right time, serving the right industry, too. Magnus is in the middle of the country, able to serve customers in Texas, the Northeast or even along the West Coast, thanks to the plant’s location near a Norfolk Southern rail line, which handles its shipments that go farther than about 350 miles. Magnus got a great start in life on the cheap. Forster and Lofquist have a little more than $35 million invested in the plant so far, in part because there were not a lot of buyers lining up to buy a defunct fat processing

DAN SHINGLER

Magnus co-founder and chief operating officer Scott Forster (above) said he and partner Eric Lofquist “were just some crazy guys who started with one-hundredth of the plant operating.” plant in 2007. Today, Forster said he figures it would cost $250 million or more to build a similar facility from scratch. And his mix of customers and products, both of which are diverse, line up well. For instance, Forster said some feed makers want a highly concentrated food, which they can use in small quantities to substantially increase the nutrition of their own products. Others want more bulk and volume. Magnus’ manufacturing process produces both types of product, which is sold in tiny pellets called “prills.” “We’re in the right place. We’re in the food business, in helping production animals. There’s not more space (to graze and feed animals), there are more people. And people aren’t excited about (livestock producers) going to a non-natural alternative,” Forster said. “That’s the space I’m in.”

Hungry for innovation Food waste has become a major issue with both environmentalists and governmental entities — both of which say it produces methane gas, causes burdens on sewage treatment systems, clogs landfills and, of course, is just plain wasteful. From the city of San Diego to Connecticut, local governments have instituted programs to cut down on waste. At the federal level, the U.S. Environmental Protection Agency supports converting food waste into animal feed and lists it as the one of the top three ways to reduce food waste — behind only reducing production and diverting still-usable

food so it can be used by humans. According to the EPA’s website, “Food is now the #1 material sent to landfills and incinerators each Year. . . Food waste makes up almost 14 percent of all the municipal solid waste generated in the United States.” That amounts to more than $100 billion a year in wasted food, the EPA reports, with food processing serving as a major contributor. Still, the agency says, less than 3% of food scraps ever make it to any sort of recycling program. Many of the existing recycling efforts deal with sold food waste — not the oils and fat that Magnus takes in, which can’t be used to feed people. That’s another reason Forster says he thinks he’s in the right niche.

Refining the process Forster said he’s also in the right place from a process standpoint. The plant gets most of its water from Lake Erie, treats it on site before discharging it into the Grand River, and also gets a good chunk of its natural gas from a Lake County landfill that produces methane. Magnus even has a bit of a lock on his supply chain. Companies that make human food send him their waste in tanker trucks, and it’s often black, greasy and messy — so no one else wants to take it and it costs Magnus little to get. But Forster and his partner aren’t resting on their laurels. The next step is to begin making food additives that can be certified as organic, but that will require a substantial additional investment, Forster said.

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PUBLISHER:

John Campanelli (jcampanelli@crain.com) EDITOR:

Elizabeth McIntyre (emcintyre@crain.com) MANAGING EDITOR:

Scott Suttell (ssuttell@crain.com)

OPINION

Keep trying Back in 1980, when Ohio Gov. John Kasich was a young state senator, he voted for an amendment that set a 15% target for Ohio agencies to buy goods and services from certified minority-owned businesses. It was 35 years in the making, but Ohio finally reached that laudable goal in budget year 2015. A recently released report showed state boards, commissions and cabinet agencies bought a record 19% of eligible goods and services through minority business enterprises in the fiscal year that ended June 30, according to the Associated Press. That’s an expenditure of $228.5 million. “By making this a priority, we are now able to help more small businesses from all backgrounds take part in our state’s economic success,” Kasich said in a statement. “That is reason to celebrate.” Luis Cartagena agrees. As one of the leaders of the Cleveland chapter of the Minority Business Development Agency, he has seen firsthand the obstacles many qualified minority-owned firms face when trying to compete with more established businesses. In recent years, some of those challenges were addressed. Outreach efforts helped to identify qualified minority-owned businesses, the time-consuming certification process was brought online and streamlined, and the vast network of organizations that work with minority-owned firms was tapped into. “An undeniable fact is that diversity programs only work when you have a committed CEO leading the effort,” Cartagena said. “While this is true for corporations, I believe it translates to any government administration or agency. Hitting these goals became a priority for the administration of the state of Ohio, which in turn, heightened the commitment for supplier diversity.” That commitment is a welcome development. Leveling the playing field so that all businesses can compete fairly for public contracts is certainly worth celebrating. But there can be no shortcuts to reaching that goal. Tax dollars need to be spent wisely. And an investigation by The Columbus Dispatch recently raises questions about whether hitting the goals became such a priority that good fiscal sense was abandoned. The paper found that the state used three minority-owned businesses to act as middleman to buy software, potentially costing taxpayers up to $427,000 more than buying the software directly. Catherine Turcer, a policy analyst with the government-watchdog group Common Cause Ohio, told the Dispatch the creation of a middleman doesn’t make sense: “What we want in government spending is for them to be sensible and as frugal as possible.” Ohio must create an environment where the 15% goal can be met without such extreme and expensive measures. The state has made great progress, but there’s still more work to do. Given the success already achieved, we have confidence Ohio can truly meet the 15% goal. And when it does, that will truly be an accomplishment worth celebrating.

FROM THE PUBLISHER

Make sure to notice pivot opportunities crative detour. (Sales of his invention Lonnie Johnson, a nuclear and aerohave topped $1 billion.) space engineer, loved to tinker at home It’s an important story. while his wife and kids slept. Most of us are so good at planning our One night in 1982, after his day job at businesses. We define a mission, perfect the Jet Propulsion Laboratory in Califora product or service, craft a budget, target nia, he began testing nozzles for an invena market and then go. tion — a refrigeration heat And as we go, we encounter pump — that he hoped could some distracting ideas — a use water instead of Freon. strong water spray, for exam“I was machining some nozple, or a new line of business or zles and experimenting at a new technology. When that home and shot some streams happens, the temptation is to of water into the sink,” Johnson stay the course and tell ourtold public radio last year. selves, “We don’t do that. “Then I turned and shot across That’s not us.” the bathroom where I was doBut in business, the best ing these experiments, and I JOHN places are often off the map. thought to myself, ‘Geez, this And you get there by having would make a neat water CAMPANELLI the courage to sometimes degun.’” viate from the plan. Johnson was smart enough to not let It’s worked for Cleveland attorney Phil the idea disappear down the drain, so to Ciano. When he and partner Andrew speak. He stopped work on the heat Goldwasser launched Ciano & Goldwasspump and began building a prototype of er in 2000, they planned to focus their law what would eventually become the Super firm on high-end personal-injury class Soaker. Johnson could have easily maractions. veled at that water spray, shook his head Three months in, a close friend, a sur… and then returned to his work on the geon, decided to switch hospitals and pump. That’s what most of us would have knew he’d need some legal help. done. Instead, he recognized an opportu“He said, ‘I want to hire you to do this. nity, pivoted and took a detour, a very lu-

It’s going to be contentious. But I know you’re my guy. I trust you,’” Ciano remembers. A tiny problem: Neither attorney had any experience in health care. Instead of saying, “We can’t do it. That’s not us,” they decided to ask themselves, “How can we do it? Can it be us?” Today, health care law is a core part of Ciano’s practice. The firm also does work in areas the founders never imagined, including business divorce and sports law. Each time, they were offered a detour. They pivoted, and they succeeded. “The stars keep moving and shifting,” Ciano says. “You keep working your butt off and then — boom — one opportunity leads to another.” The stories of “happy accidents” in business are sometimes held in awe, as if they are rare. Truth is, we are all presented with the “accidents.” It’s the ability to recognize an opportunity, jump on it and turn it into something “happy” that’s rare. Opening that part of the mind isn’t easy. But it’s crucial. Because if a competitor is somehow able to climb out of the weeds, spot a detour and seize an innovation, well, then we’re in a battle for our livelihood — armed with only a squirt gun.

LETTERS TO THE EDITOR A recent Crain’s write-up of Ohio’s employment situation data stated that Ohio’s labor market continues to outpace that of the nation. Using the unemployment rate to show the state is outperforming the U.S. is a particularly rosy read of the data. While Ohio’s rate of 5% is less than the U.S. rate of 5.3%, the difference is not one that actually makes a difference. According to the Department of Labor, Ohio’s unemployment rate is not statistically different than the U.S. rate. (See, Table A, http://1.usa.gov/1fttU5M). Further, while the number of unemployed Ohioans decreased over the month, as mentioned in the report, that decrease did not result in an increase in the number counted as employed (-6,000). The drop in Ohio’s unemployment rate reflects a decline in the labor force (-16,000), not workers finding jobs. Data from a separate survey of employers, the primary survey used to gage

job growth, show that Ohio has actually underperformed the U.S. in terms of job growth. Over the last year Ohio has grown by 1.1% while the U.S. averaged 2.1%. Ohio continues to make job gains and that is great for our state but our recovery has been exceedingly slow and, unfortunately, below average. — Hannah Halbert Policy Matters Ohio; Columbus For 100 years, Omnova Solutions and its predecessor companies have been producing industry-leading specialty chemicals and engineered surfaces. Our products are key elements in a variety of goods, including high-performance paints and primers, construction materials, hygiene products, oil and gas drilling fluids, hard case goods including tables and cabinets, and automotive seating, to name a few. The functional performance of our products and diverse customer base require our ability to access global mar-

kets. About 300 employees work in Omnova’s four Northeast Ohio facilities in Akron and Mogadore, and at our world headquarters in Beachwood. They create cutting-edge products sold to over 90 countries around the globe. Our exports support economic growth and job creation in Northeast Ohio. We appreciate Sen. Rob Portman’s key role in ensuring that Omnova’s Ohio facilities continue to thrive by supporting legislation reauthorizing Trade Promotion Authority (TPA). Passage of TPA was critical, allowing the U.S. to negotiate trade agreements that will level the international playing field by opening markets overseas for companies like ours. Sen. Portman’s understanding of, and dedication to, Ohio manufacturers helps more than 682,000 manufacturing workers in the state, and millions of workers across America. — Kevin McMullen Chairman and Chief Executive Officer; Omnova Solutions

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Re: Legalizing pot There is absolutely no doubt now that the majority of Americans want to completely legalize marijuana nationwide. Our numbers grow on a daily basis. The prohibitionist view on marijuana is the viewpoint of a minority and rapidly shrinking percentage of Americans. It is based upon decades of lies and propaganda. Each and every tired old lie they have propagated has been thoroughly proven false by both science and society. Their tired old rhetoric no longer holds any validity. The vast majority of Americans have seen through the sham of marijuana prohibition in this day and age. The number of prohibitionists left shrinks on a daily basis. With their credibility shattered, and their not so hidden agendas visible to a much wiser public, what’s left for a marijuana prohibitionist to do? Maybe, just come to terms with the fact that marijuana legalization nationwide is an inevitable reality that’s approaching much sooner than prohibitionists think, and there is nothing they can do to stop it! — Brian Kelly

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Issues including banking are exactly why it’s worth watching the marijuana legalization experiences in other states. Legalization is still in the experimental stages, so let’s see what data is generated over the next 10 years or so through the existing experiments. In the interim, there is data that supports changing possession of minor amounts to be akin to a parking ticket — including ensuring that it does not have to be disclosed in job applications — and allowing judges to set low fines for those with low incomes. — Michele Adams When ResponsibleOhio fails in its bid to legalize marijuana in the state — and it will — Ohioans can try to do it again next year the right way. You are going to need everyone onboard to get enough votes. When it is over, there will be only one group to blame for failure, one group to blame for denying those that need the medical aspect of the plant: ResponsibleOhio and its greedy investors. They alone created the wording that would create the monopoly. It was their choice. Not only will they end up losing their investment, they will be the bad guys. — rodb Issue 3 should be passed. Look at the bigger picture. People suffer on a daily basis; people who could really use access to marijuana. People suffering from epilepsy shouldn’t be denied access to medicinal marijuana that can substantially curb their seizures. People suffering from diabetes, cancer, and other issues causing them daily pain need this.

The state needs to stop spending millions a year on catching, and prosecuting people for unsubstantial amounts of personal use marijuana, too. It’s ridiculous. If it fails in 2015, then what? People have to wait longer for their medicine? For how long? What assurance can any other group seeking reform make that their solution will make the ballot in 2016? How about 2017? 2018? Look, I’ll be the first to admit that when I first read ResponsibleOhio’s ballot measure, I was firmly in the “No” category on this, but I changed my mind. I changed my mind because I know that Ohioans can pass Issue 3 and continue to take action against any negatives in the proposal while having legalized marijuana in the meantime. — Circuitbomb

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GOING PLACES

Voice of Reason

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AUGUST 31 - SEPTEMBER 6, 2015

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AKRON GENERAL PARTNERS PHYSICIAN GROUP: Sachin Gandhi, M.D., Matthew Martin, D.C. and Philip Wilcox, M.D., to medical providers. UNIVERSITY HOSPITALS COMMUNITY HOSPITALS: Donald S. Sheldon, M.D., to regional president. UNIVERSITY HOSPITALS ELYRIA MEDICAL CENTER: Douglas Sherlock, M.D., to medical provider, obstetrics and gynecology.

INSURANCE BRUNSWICK COS.: Adam Diamond to director, client manager; Barbara Kindel to manager, personal insurance; Tracy Ward to senior account executive, commercial/risk management; Karen January, Sandy Kruger and Karmen Wade to account executives. TRANSGLOBAL ADJUSTING CORP.: Renee Hayashi and Kris Fiander to claims adjusters.

Durr

Gandhi

Leonard

Sheldon

Leonard to associate.

development director.

WELTMAN, WEINBERG & REIS CO. LPA: Jeffrey Sobeck, Milos Gvozdenovic and Stefanie Kempfer Collier to attorneys.

REAL ESTATE

MANUFACTURING MOEN: Allan Gravely to senior director, brand communications. RPM INTERNATIONAL INC.: Rob Antonelli to director of consolidation systems; Ben Curtis to internal audit supervisor; Alecia Dailide to manager, legal and secretarial services; Sanja Drobnjak and Cosmina Pop to senior internal auditors; Malorie Duff to senior financial analyst; Tammy Kleckner to director, infrastructure support; Mark Rankin to director of digital services; Rob Soisson to senior software developer.

NONPROFIT BURTON D. MORGAN FOUNDATION: Treye Johnson to program officer.

LEGAL

CLEVELAND MUSEUM OF ART: Michael Ferry to corporate relations consultant.

FISHERBROYLES LLP: Donato J. Borrillo, M.D., to partner.

KOINONIA: Mike Farris to maintenance technician.

MARSHALL DENNEHEY WARNER COLEMAN & GOGGIN: Amelia J.

MENLO PARK ACADEMY: Judith E. Matsko to marketing and

CRESCENDO COMMERCIAL REALTY: Daniel Mayer to senior associate.

STAFFING WITT/KIEFFER: Morten Nielsen to global managing director, Life Sciences Practice.

TECHNOLOGY OECONNECTION: Marcus Helmbrecht to director, infrastructure and operations. SHAKER: Derek Mracek to analyst, research and development and client insights teams.

BOARDS NATIONAL WIRELESS SAFETY ALLIANCE: Jocko Vermillion (Safety Controls Technology) to inaugural board of governors.

AWARDS FIRST CHAIR: Jennifer M. Griveas (Eliza Jennings) received the 2015 First Chair Top General Counsel Award.

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20150831-NEWS--13-NAT-CCI-CL_--

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July figures fall again Employment in Northeast Ohio slipped another tick in July, as the region lost 3,495 jobs, or 0.3% of its total, since June. But the July job count, in the latest Ahola Crain’s Employment (ACE) Report, is still 9,128 higher than it was in July 2014, a humble 0.8% gain. Cleveland Heights economist Jack Kleinhenz, who created the ACE model, believes the numbers suggest that employment in the seven-county ClevelandAkron metropolitan area has hit a temporary plateau, in part because of weak consumer spending. “It is unclear and somewhat perplexing nationwide why, despite improving consumer fundamentals this year, a sustained pace of stronger spending consumer has not occurred,” Kleinhenz reported. “While demand has strengthened for selected manufacturing industries — auto and construction — it has been weak in general and more of the same is expected as firms experience more competition in part due to the stronger dollar, the recent devaluation of the Chinese yuan, lower crude oil prices and sluggish global growth,” Kleinhenz said. The ACE Report is based on payroll data from The Ahola Corp., a Brecksville payroll and human capital management firm, and by Kleinhenz’s analysis of other economic indicators, including construction data and retail sales. By contrast, employment across the state and the nation has been rising, however modestly. In July, the latest month available, employment in Ohio was up 0.3% between June and July and up 1.1% over July 2014. In the United States, employment was up 0.1% for July over June and up 1.7% for the 12 months. PNC Financial Services Group, in its third quarter “Northeast Ohio Market Outlook,” predicted that employment, and more broadly the regional economy, will continue to grow in an area that includes Cleveland, Akron, Canton and Youngstown. The pace of growth, though, will be less than the national economy because, PNC said, “continued population loss will cause Northeast Ohio to be a below-average performer in terms of job growth.” PNC is forecasting 1.4% job growth for its Northeast Ohio region, compared with 1.7% job growth in 2016 for the United States. The financial services company saw several risks that might impact its Northeast Ohio forecast. “Downside risks to the regional economy’s outlook come from a weak global economy and a strong dollar that could hurt exports more so than expected,” PNC observed. At least one other benchmark supports continued employment growth. Simply Hired, a Sunnyvale, Calif., company that operates job search engines in 24 countries and 12 languages, earlier this month reported 54,691 job openings in the ClevelandAkron region, a 1.8% increase over June. In line with other data, that’s modest growth when compared with the national jobs opening, which saw an increase of 4%. The operations with the largest number of postings in Northeast Ohio, according to Simply Hired, were Cleveland Clinic Foundation, University Hospitals, Giant Eagle Inc., Akron General Hospital and PNC. — Jay Miller

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AUGUST 31 - SEPTEMBER 6, 2015

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 New Wave Trading LLC 5500 Walworth Ave., Cleveland ID: 26-0532696 Date filed: June 9, 2015 Type: Employer’s withholding Amount: $280,423 Pain Management of Northern Ohio 34055 Solon Road, Suite 101, Solon Date filed: July 11, 2015 Type: Corporate income Amount: $150,388 Metro Cleveland Security Inc. 5627 Memphis Ave., Cleveland Date filed: July 11, 2015 Type: Employer’s withholding Amount: $136,171 Close to Home Child Development 4450 Cedar Ave., Cleveland Date filed: July 11, 2015 Type: Employer’s withholding, unemployment Amount: $113,979

Marengo Hyatt LLC 401 Euclid Ave., Suite 135, Cleveland Date filed: July 20, 2015 Type: Employer’s withholding Amount: $81,202 Search Circus Inc. 12181 State Road, North Royalton Date filed: July 11, 2015 Type: Employer’s withholding, unemployment Amount: $78,392 Park Place Enterprises Ltd. 3690 Orange Place, Suite 111, Beachwood Date filed: July 11, 2015 Type: Partnership withholding tax Amount: $73,955 E Oriani Landscape and Construction Inc. 919 Stevenson Road, Cleveland Date filed: July 11, 2015 Type: Employer’s withholding, failure to file complete return Amount: $62,633 Konstanzer Masonry Inc. 514 Dover Center Road, Bay Village Date filed: July 6, 2015 Type: Employer’s withholding Amount: $59,362 Obon Inc. Martins Trucking 14411 Caine Ave., Cleveland Date filed: July 11, 2015 Type: Employer’s withholding, unemployment Amount: $47,227 Inunison Ltd. 27899 Clemens Road, Westlake Date filed: July 11, 2015

Type: Employer’s withholding Amount: $44,388 First Fruits Child Development 21877 Euclid Ave., Euclid Date filed: July 11, 2015 Type: Employer’s withholding, unemployment Amount: $43,063 Shepherds Haven Youth Prep Center Inc. 17822 Euclid Ave., Cleveland ID: 34-1945621 Date filed: June 12, 2015 Type: Failure to file complete return Amount: $40,728 P A T Services 2000 LLC 24050 Commerce Park, Suite 100, Beachwood Date filed: July 11, 2015 Type: Employer’s withholding Amount: $40,176 Guarantee Product Specialties Inc. 21693 Drake Road, Strongsville Date filed: July 20, 2015 Type: Employer’s withholding Amount: $39,168 City Auto Wrecking Inc. 7902 Bessemer Ave., Cleveland Date filed: July 20, 2015 Type: Corporate income Amount: $36,716 Greenshare Partners Ltd. 4572 Renaissance Parkway, Suite A, Cleveland Date filed: July 11, 2015 Type: Employer’s withholding, partnership income Amount: $35,563

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Savor SH Inc. 20630 John Carroll Blvd., University Heights Date filed: July 11, 2015 Type: Employer’s withholding Amount: $34,234 Cleveland Deli Co. 12914 Broadway Ave., Garfield Heights Date filed: July 11, 2015 Type: Employer’s withholding Amount: $31,264 Save Local Now LLC 25 S. Franklin St., Chagrin Falls Date filed: July 20, 2015 Type: Employer’s withholding Amount: $29,519 Summit Plumbing & Mechanical LLC 14572 Hartford Trail, Strongsville Date filed: July 11, 2015 Type: Employer’s withholding, partnership income Amount: $28,696 Crossroads REO Inc. 17149 Southpark Center, Strongsville Date filed: July 11, 2015 Type: Employer’s annual federal tax return Amount: $27,210 Timeline Logistics Corp. 25838 Byron Drive, North Olmsted Date filed: July 11, 2015 Type: Employer’s withholding Amount: $25,334 Parma Fresh LLC Local Tavern 5513 Pearl Road, Parma

Date filed: July 20, 2015 Type: Employer’s withholding, unemployment Amount: $21,201 Parma Pre-School Inc. 5280 Broadview Road, Parma Date filed: July 11, 2015 Type: Employer’s withholding, unemployment Amount: $20,923 Anthony Group Inc. Dapper Dans 10703 W. Pleasant Valley Road, Parma Date filed: July 20, 2015 Type: Employer’s withholding, unemployment Amount: $19,280 Packaging Machinery Services Inc. 17877 St. Clair Ave., Cleveland ID: 34-1187804 Date filed: June 9, 2015 Type: Employer’s withholding, unemployment, corporate income Amount: $18,477 Rajendra K Mehta M.D. Inc. 6701 Rockside Road, Suite 370, Independence Date filed: July 11, 2015 Type: Employer’s withholding Amount: $18,138 Aeroclay Inc. 5040 Corbin Drive, Bedford Heights Date filed: July 11, 2015 Type: Employer’s withholding, unemployment Amount: $17,688 See TAX LIENS, page 26

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SCOTT POLLACK

SPORTS BUSINESS

MEDIA BLITZ Browns programming is everywhere, and a lot of it includes team branding By KEVIN KLEPS

s the Cleveland Browns’ senior media broadcaster, Nathan Zegura seems to spend more time in front of a microphone than a campaigning politician. He hosts a two-hour daily radio show and separate coach’s programs that air on television and radio. Zegura is also part of WEWS NewsChannel 5’s Browns pregame shows, is a co-host of “Dawg Pound Report” (one of the network’s new weekly programs), and appears on the team’s website and on the scoreboard during games at FirstEnergy Stadium. “We have a lot of content,” said Kevin Griffin, who oversees all of it as the Browns’ vice president of fan experience and marketing. There’s so much, in fact, that Vic Carucci, a former host of “Cleveland Browns Daily,” the in-house radio show that expanded from one to two hours with the addition of Zegura in July 2013, said the team’s all-encompassing media model is one other NFL clubs are attempting to emulate. “All they’ve done is gone on to add more programming,” said Carucci, who was hired by the Randy Lerner regime in 2011 and left for The Buffalo News in September 2014. “I think the Browns have excelled at this. “The on-field part has been a perpetual struggle,” Carucci continued. “But the off-field stuff, the digital media and stuff that helps generate revenue and con-

versation, I think they’re second to none in that area.” When the Browns agreed to a long-term partnership with WEWS last November, it brought with it the addition of a pair of year-round Sunday shows — “Inside the Cleveland Browns” and “Dawg Pound Report.” Coupled with the station’s preseason broadcasts and the innovative radio rights agreement that the Browns struck with three Cleveland radio stations in 2013, it’s difficult to find a day on the calendar that doesn’t include at least one official team program.

‘Good for both parties’ Steve Weinstein began his duties as WEWS’ vice president and general manager on Jan. 12 — almost two months after the Browns announced they had agreed to a “long-term” partnership with the local ABC affiliate. The deal has given the network an hour of programming during what Weinstein described as a longtime “bastion of infomercials” — the 11 a.m. to noon time slot on Sundays. The first of the two shows, “Inside the Cleveland Browns,” is produced and shot at the team’s headquarters in Berea. “Dawg Pound Report” is a Browns and WEWS co-production that airs from the latter’s studios on Euclid Avenue. WEWS’ contract also See BLITZ, page 20

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AUGUST 31 - SEPTEMBER 6, 2015

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Mike Jacobs said one of the first things he noticed when he walked in the Cleveland Cavaliers’ employee entrance at Quicken Loans Arena is one of team owner Dan Gilbert’s “-isms.” “Yes before no,” is among the ideals given to team members at Gilbert’s family of companies. For Tap.in2 co-founders Jacobs and Jordan Syms, the Cavs saying yes to their technology — which allows fans to order food, drinks, merchandise and in-venue experiences from their mobile devices — has eliminated “no” from a lot of their ensuing conversations. “We’ve gotten in front of a large amount of people before,” said Syms of the Cleveland-based company, which received a significant boost from Jacobs being a graduate of Bizdom, the startup accelerator founded by Gilbert. “The biggest issue we faced is people don’t like being guinea pigs,” Syms continued. “They want to see how it works.” During a 22-game trial run with the Cavs last season, the team became big believers in the technology. Fans in the lower bowl received their orders in an average of fewer than six minutes, and the technology was used by 25% of the 5,000 potential customers to whom the “Cavs Eats” function was available, Tap.in2 said. The company said 80% of the orders were beverages, and customers spent an average of $32 per game and placed 1½ orders per contest. “What we found last year was that the food and beverage items, a lot of that can move quickly,” said Mike Conley, the Cavs’ vice president of digital. “It really came down to work flow.” At some point this season, which will begin in two months with the Cavs as Las Vegas’ choice to win the championship, the team hopes to make Tap.in2’s technology available to each of the 20,562 seats at The Q. It’s yet another technological push for an organization that seems to enjoy new toys every bit as much as it does pregame hype videos.

‘Cool stuff’ on way There was a considerable challenge when it came to implementing Tap.in2’s mobile ordering system in 2015, and it had nothing to do with the 3-year-old company’s technology. “The big hurdle to overcome is we have a 22-year-old building, and that building was built with 22 years ago in mind,” Conley said. “The way the kitchens were positioned, they really weren’t meant to offer delivery to every seat in the arena.” Rather than roll out the Cavs Eats program to every seat at The Q, the team quietly tested the technology with a limited amount of seasonticket holders in the lower bowl and VIP sections last season. By the time the Cavs were playing the Golden State Warriors in the NBA Finals, a quarter of the arena

had the opportunity to eat and drink without leaving their seats. The Cavs will again make the mobile ordering system available to about 5,000 seats to begin the 201516 season, Conley said. But the goal is to broaden it to the entire arena later in the campaign. This year, fans who launch the Cavs Eats option from the team’s app will also have the chance to order merchandise and bid on such experiences as participating in a high-five tunnel with the players or getting to watch a postgame news conference. All money raised from the fan experiences will go to the Cavaliers Youth Fund, Conley said. There is a $3.50 delivery fee, which Conley said goes to Tap.in2, for fans who order food, drinks and gear from their seats. The Cavs also are exploring ways to get corporate partners involved, which could reduce or eliminate the delivery fee on certain occasions. Tap.in2, which has raised $550,000 in a $1.5 million round of equity funding, has another big backer in Aramark, the Cavs’ long-

time concessionaire. The Philadelphia-based company — which claims to serve more than 100 million people annually via its many partnerships with stadiums, arenas and theaters — is showcasing Tap.in2’s technology to the pro sports teams with which it does business, Syms said. As a result, Syms — who befriended Jacobs when they became unwitting roommates at the University of California, Berkeley in the early 2000s (“We wanted single rooms,” Syms said. “They put us in a triple”) — said Tap.in2 will soon announce partnerships with several NFL, NBA and NHL teams in the coming months. A deal with NASCAR could also be complete by year’s end. “Game over game, we have a very high repeat customer rate,” Jacobs said. That, along with a huge push from the Cavs, is why the cofounders believe the sky-high aspirations they discussed in college are on the verge of becoming a reality. “There’s some really cool stuff happening,” Syms said.

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Cavs tracking ahead of the competition The Cleveland Cavaliers took their use of court projection technology to a new level last season by implementing a tracking component for a few games at Quicken Loans Arena. The features allow the Cavs to display the court as a 94-foot-wide screen, with select fans as the pawns in an amusing video game. It turns out, the team liked Quince Imaging’s tracking technology so much they bought it. The Cavs already were one of three NBA teams — the Atlanta Hawks and Philadelphia 76ers are the others — to own Herndon, Va.based Quince’s court projection technology. The system, which requires a seven-figure investment to own, turns the court into a 3-D screen that is used for player introductions and other festivities. Now, the Cavs, according to Quince Imaging chief operating officer and co-founder Scott Williams, are the first professional sports franchise to go all in on the real-time tracking component. “They’re very progressive when it comes to trying to use this technology in new and exciting ways,” Williams said of the Cavs. The Cavs utilized the tracking component during a few breaks between quarters last season, said Tracy Marek, the organization’s chief marketing officer. During the Feb. 11 debut of the court tracking technology, two fans went head-to-head in an effort to collect more coins in a virtual arcade game. (The amusing video is available at vimeo.com/119349057.) “It was a lot of fun to watch, but even more fun to play with,” Marek said of the tracking component. This season, the Cavs will employ the technology more often, Marek said, but not so frequently that it “gets repetitious.” Quince’s tracking system is most commonly used in major theater productions, Marek said. For the Cavs, there is one difficulty in being ahead of the tech game among sports teams. “We’re really the first to do it, so we don’t have a lot of people to look at for other examples of how it can be done,” Marek said. One likely new twist this season: One tracking option allows teams to have fans play a video game version of basketball, with the system telling the players — whose movements are lit up for everyone to see — where to run on the court. “It’s literally endless,” Marek said of the Quince system’s possibilities. — Kevin Kleps

CONTRIBUTED PHOTO

The Cleveland Cavaliers debuted the tracking component of Quince Imaging’s court projection technology for a Feb. 11 game.

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20150831-NEWS--18-NAT-CCI-CL_--

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AUGUST 31 - SEPTEMBER 6, 2015

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CRAIN’S CLEVELAND BUSINESS

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MAC getting popular catchphrase more exposure By KEVIN KLEPS kkleps@crain.com

MACtion — the Mid-American Conference slogan that has taken on a life of its own on social media the last few years — is difficult to miss during the college football season. But what is it, aside from a cool hashtag on Twitter? MACtion “goes beyond football,” said Jon Steinbrecher, the Cleveland-based conference’s commissioner since 2009. “But we’ve never really formally defined it.” With the help of 160over90, a Philadelphia-based brand agency, the slogan now has a microsite — www.getsomemaction.com — and, after a year of work, a clear identity, according to its commissioner. “MACtion is a comprehensive thing,” Steinbrecher said. “It encompasses all 23 sports, it encompasses all 12 institutions, it’s about exciting play on the field, it’s about achievement in the classroom, and it’s about social awareness and community involvement.” The new website, which Steinbrecher describes as a collaboration between 160over90 and the conference, attempts to combine all of that into a portal that doesn’t feature scores and standings. (Those remain on the recently redesigned macsports.com.) Brendan Quinn, 160over90’s creative director, said the agency wanted to “showcase some different elements of the MAC” with getsomemaction.com. There’s a 60-second PSA emphasizing that “MACtion speaks louder than words,” stories on notable alumni who have achieved success away from the fields and courts, and a “MACTALK Generator” that produces memes, along with opportunities for smack talk between rival schools. “We wanted to show the MAC is successful on the field, yes, but it goes beyond that,” Quinn said. “There’s the life after college and the pride in the schools themselves.”

State and Michigan. During the 2014 fall semester, which featured a national championship by Ohio State’s football team, the Buckeyes’ athletic department racked up $69.3 million in revenue. That’s almost triple the average size of a MAC university’s athletic budget. Complicating matters is the cost of attendance, a stipend for student-athletes that many NCAA Division I conferences, including the MAC, are implementing in 2015-16. Steinbrecher said the measure will be adding between $400,000 and $800,000 to each conference member’s budget this year. “Yeah, it’s a time when money’s tight. But it’s always tight,” Steinbrecher said. “I don’t remember a

time ever in college athletics when everybody said they were flush (with cash). As a league, we’re growing our revenues.” The ESPN deal, and the exposure it generates, is a big part of that. In addition to the college football games that are a staple of the ESPN2 and ESPNU broadcast schedules during the fall (particularly on Tuesday and Wednesday nights in November), Steinbrecher said nine of the conference’s 12 full-time members are ready to produce their own live broadcasts in 2015. That’s triple the 2014-15 total, and the commissioner said all 12 schools are expected to be ready by 2016, which is a year ahead of schedule. Each of the nine institutions will

produce ESPN3 broadcasts for all men’s and women’s basketball games that aren’t scheduled to air on another platform, and they will pick and choose any other sports and games they want to showcase. Wrapping up such details has all been part of what Steinbrecher calls a “really hectic summer” — one that “beats the alternative.” Part of that time has been dedicated to the new microsite, which debuted during the MAC’s football media day on July 29 at Ford Field in Detroit. The website is covered with splashy graphics, but the conference’s leader has a much simpler goal for the “multiyear” branding effort with 160over90. “I hope it enhances what people

think about this conference,” Steinbrecher said. “By that, I mean (about) our member institutions. Again, it’s not just a football thing.” Quinn, 160over90’s creative director, mentioned the MAC’s “tradition of punching over its weight.” He didn’t refer to the conference as a midmajor. Instead, he lauded its willingness to think outside athletics. “They’ve been willing to try some things that are a little different than what you might expect from a college marketing perspective,” Quinn said of the MAC. Still, the slogan remains at the center of it all. “You can go anywhere in the country and say MACtion, and people get it,” Steinbrecher said.

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‘Tight’ times The MAC — which is known for such achievements as an Orange Bowl berth by Northern Illinois, the University of Akron’s national championship in men’s soccer and memorable Sweet 16 runs by several of its men’s basketball programs — is a lot of things. But there is one description of which Steinbrecher isn’t particularly fond. “I won’t call us a midmajor,” he said. Asked if he didn’t like that term, the commissioner said, “I really don’t. We’re an FBS conference. I don’t think we’re a midmajor.” Being part of the Football Bowl Subdivision has its perks — including a 13-year rights agreement Steinbrecher struck with ESPN just before kickoff of the 2014 football season. The deal reportedly increased the MAC’s annual TV haul from $1 million to about $8 million, and it was announced 11 months before The Hollywood Reporter said Disney is forcing ESPN to trim $100 million and $250 million, respectively, from its 2016 and 2017 budgets. “We thought then and think even more so now in light of what people have been reading of late that the time was right to try and rework our deal and get an extension (with ESPN),” said Steinbrecher, who agreed to an extension of his own in June (a three-year deal with the MAC that runs through 2020). And while the commissioner isn’t a fan of the midmajor label, there is no denying that the MAC is on a different playing field than the likes of Ohio

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allows it to air any preseason game that isn’t being shown by a national network, plus a 60-minute pregame block that was watched by 123,000 households prior to the Aug. 13 preseason opener against the Washington Redskins. The game broadcast that night generated a 22.6 rating, the best for a Browns preseason contest since 2011, and was watched by more than 450,000 households in the Cleveland designated market. Nearly 37% of the households in the region tuned in for at least some of the preseason opener. “It’s not that I’m making a huge sports push, but this is a way to generate revenue for some live televi-

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sion,” Weinstein said. “I hope for the staff it’s a build of morale. The Browns are huge for Cleveland. I think it’s been a real boost to the television station.” Weinstein said WEWS pays for the cost of producing the preseason games, and it shares some of the advertising dollars with the Browns. “The way we’re splitting the revenue, I believe it’s good for both parties,” he said. “I can’t get into numbers, but it’s certainly a tremendous generator of revenue during time periods when we wouldn’t normally produce a lot of revenue.” For Weinstein, who got his start in the business as an Emmy Awardwinning news photographer, the deal with the Browns has meant WEWS staffers such as sports director Andy Baskin appearing on camera wearing polo shirts that include Browns colors and a team logo.

Weinstein said he’s “comfortable” with Baskin and others sporting the orange and brown, but he insists the partnership doesn’t preclude the station from doing its job. “I’m a former news director,” Weinstein said. “Ethics and journalism are very important to us. Both sides have talked to each other about this, and at no time are they going to prevent us from doing any stories we want to do.” Griffin, a former journalism major at Ohio State, echoed those thoughts. Regarding the attire, the Browns VP said, “We prefer them to be in our gear if they’re not in a suit and tie.”

Imagine if they’re good Carucci also wore his share of Browns gear during his three-year

AUGUST 31 - SEPTEMBER 6, 2015

tenure as the team’s senior editor. He said he was assured he “would be given a lot of leeway” to discuss the team when “Cleveland Browns Daily” launched as a one-hour weeknight program on WKNR-AM, 850 in 2011. When Jimmy Haslam purchased the team the following year, Carucci said the message remained the same — only there was soon a lot more time to fill. In 2013, the Browns struck a unique radio rights deal, one that brought the team’s all-sports talk stations (WKNR and WKRK-FM, 92.3) together. Zegura, a former CBS Sports fantasy football analyst, was added, and “Cleveland Browns Daily” increased to two hours per day. The Browns also built a state-of-theart studio (one Carucci believes cost about $65,000) that resides near the offices of prominent team executives.

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Carucci said the original deal with WKNR, which didn’t include game rights, “was considered a best-practice model that a lot of teams inquired about.” The deals team president Alec Scheiner later struck with ESPN Cleveland, The Fan and WNCX-FM, 98.5, are viewed in NFL circles as “really favorable to the Browns, by all accounts,” Carucci said. When told of Carucci’s comment, ESPN Cleveland general manager Keith Williams said parent company Good Karma Brands is “really excited if the relationship is viewed that way around the league, as we set out to create the best deal any team had in the league. “We want all of our partners, including advertising partners, to view us as a valuable part of their team who is assisting the growth of their organization,” Williams said. “The Cleveland Browns have exceeded our expectations as a partner, and nothing would make us more proud than for this partnership to be viewed as a gold standard by the Browns and other teams in the NFL.” Prior to leaving the Browns early in the 2014 season for a job as a Buffalo Bills beat writer for The Buffalo News, Carucci said he had signed an extension with the Browns and was “looking forward to staying on another few years.” He had spent 17 years at the newspaper before joining NFL.com in 1999, and he called the offer to come back “extraordinary” and “out of the blue.” It allowed him to return to the Buffalo-area home he never sold after joining the Browns. (At the time of Carucci’s departure, his wife, Rhonda, was spending most of her time in New York as the primary daytime caregiver for the couple’s first grandchild, Emma.) Carucci admits fans and media outlets initially “were skeptical” that “Cleveland Browns Daily” would tell it like is, rather than give the Browns’ rose-colored view of the organization. “As time went on, that shifted” he said, “and people started to realize this wasn’t a typical team-run show.” Carucci’s former “Cleveland Browns Daily” co-host, Zegura, said he was also told by team management that he didn’t have to serve as a “rah-rah” voice of the organization. “One of the things that is really important to me is I look at this job as being able to connect the fans to the team in a way that a traditional journalist wouldn’t because of the access that I have,” Zegura said. He said he’s “earned a lot of trust in the building,” and has a keen understanding of “what information is publicly consumable.” That, Carucci said, is part of the “fine line” any team that also serves as a media producer must walk. Some information is meant to stay in-house, some news is broken by the club (the announcement of Brian Hoyer as the starting quarterback last year, for example) and a lot of the discussions are left to the many media outlets that cover the team. And that’s the thing with the Browns: Despite the losing, there’s always chatter. Only now, a lot of it — about 1,000 hours annually — carries with it official team branding. “It’s almost insatiable,” Zegura said of fans’ appetite for team-related content. “And think about it: It’s that way, and they haven’t won. When this team starts winning, it’s going to be unlike anything I think in the NFL.”

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INDIANS continued from page 1

and wealth of population. “So it’s no one’s fault,” Shapiro added. “It’s not bad fans. We have great fans. We proportionally have among the best fans in all of professional baseball, but recognize the numbers that we’re looking at.”

‘Net loss’ for Tribe? A number that Shapiro has often cited in reference to the Indians’ attendance decline is Cleveland’s downtown population, though increasing to a record level (it now exceeds 13,000 and is projected to rise to 23,000 by 2020, according to the Downtown Cleveland Alliance), still pales in comparison to most majorleague cities. Two other factors Shapiro mentions are the drop in Fortune 500 companies in Northeast Ohio, and how Greater Cleveland’s population stacks up with the other cities that have at least three major professional sports teams. A stat that jumps out to anyone who follows baseball is the eightyear broadcast contract MLB agreed to with Fox, ESPN and TBS — one that is worth a combined $1.55 billion per year until 2021. Divided by baseball’s 30 clubs, that would amount to about $51.7 million annually — but it’s not that simple, according to an industry source. After licensing and other expenses are deducted from the top, teams receive a “significantly lower” amount, the source said. The Indians get a reported $40 million in rights fees from Fox Sports Ohio, and Forbes estimates they bring in more than $20 million annually in revenue sharing. That

money, combined with the cash from the national TV deal, might, depending on how the broadcast dollars shake out, not equal the Tribe’s annual payroll. Prior to a series of trades before the July 31 deadline, the Tribe’s payroll had hovered in the $85 million to $88 million range for the last two seasons, and the club’s player expenses are significantly higher when signing bonuses and salaries paid to prospects are factored in. So is it possible the Indians really are losing money? “It’s very conceivable that the Indians could have had a net loss in 2014,” Forbes senior editor Kurt Badenhausen said. “Baseball is very healthy, but if you look at the Indians over the last couple years, their profits have been among the lowest in baseball if you exclude the teams that have gone really crazy with their payrolls.” Since starting at Forbes in 1998, Badenhausen has focused a lot of his efforts on the magazine’s annual franchise evaluations. Those, he admits, have “gotten some grief over the years” from teams that say the numbers aren’t accurate. Forbes estimated that the Indians had an operating income — which it defines as earnings before interest, taxes, depreciation and amortization — of $8.9 million in 2014. The year before, the Tribe’s operating income, according to the magazine, was in the red, at a loss of $1.9 million. But in 2012 and 2013, Forbes projected the Tribe’s operating income at a combined $53.1 million, including an MLB-high $30.2 million in 2012. Asked about Forbes’ estimates by Fox Sports Ohio after that season,

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Shapiro said the magazine is “taking an educated guess with part of the information, and they’re going to be partially right. “In our case,” Shapiro added, “the case of the Padres, they’re not right. They don’t have it right. They don’t have all the information and they’re trying to piece it together. That’s the simplest answer to that. I think most people actually understand that.” One of the reasons teams often dispute Forbes’ calculations, according to sources, is the EBITDA numbers aren’t a true indication of a club’s cash position, because the magazine doesn’t take into account such major expenses as capital repairs and debt payments. “There are expenses that are not factored into our profit number,” said Badenhausen, Forbes’ senior editor. “There’s no denying the Indians have certainly struggled.”

‘A good time to be an owner’ One very large caveat in all this is that while it’s easy to debate profits and losses in pro sports, there is no denying that franchise values have gone through the roof. In March, Forbes valued the Indians at $825 million, a 45% jump from 2014. The estimated worth is the sixthlowest in MLB, but is $502 million above the price the Dolans paid for the team. “It’s a good time to be an owner,” Badenhausen said. The Dolans also received a reported $230 million from Fox Sports for the December 2012 sale of SportsTime Ohio. That offseason, the Indians spent a combined $117 million on four free agents —

Nick Swisher, Michael Bourn, Brett Myers and Mark Reynolds. Each signing turned out to be regrettable, which Badenhausen said winds up being “a killer” for MLB teams in smaller markets. “The Yankees and Dodgers can absorb that as just a cost of doing business,” he said. “The Indians don’t have that (luxury).” The Dolans’ penchant of spending what they make, and not willingly absorbing the “huge losses” Shapiro said would result from major jumps in payroll, has a lot of frustrated Tribe fans calling for them to sell the team. Badenhausen said that doesn’t always produce the desired results. “When a guy puts down $600 million in equity to buy the team, you never know how much they would then invest in the team,” the Forbes senior editor said. “Buying into a major sports franchise right now is an expensive proposition. Some new owners like the Dodgers go berserk (with spending), and some are obviously more cautious.” Shapiro — who isn’t commenting on reports that he is being recruited by a club, the Blue Jays, that significantly added to their 10thranked payroll with a pair of major trades before the deadline — believes the Dolans get a bad rap. And he says their value goes way beyond what you see in the standings and payroll rankings. “I think they are people who care deeply about the community, which is not always the case in professional sports,” Shapiro said. “They want to win badly, but also just want what’s best for the city of Cleveland and the region of Northeast Ohio.”

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be able to recommend to clients who want to reach convention goers. “You’re going to see a lot of brands taking over specific spaces,” said Jim Ganzer, Adcom’s director of media strategy, thinking about the impact the MSNBC cable network had with its temporary studio on East Fourth Street during the recent debate. “I also would anticipate there is going to be a number of (cell phone) charging stations and other unique marketing executions that are also functional.” It’s still early, and 2016 marketing budgets are not yet set. But marketing strategists are thinking about tactics to help businesses make those decisions. A key focus will be on signage, which, because of zoning laws, will be in limited supply. UH spokeswoman Alicia Reale said the hospital is in discussions with RTA. “I can’t provide specifics beyond that,” she said. “But it is an exciting time for Cleveland and we are looking forward to our city being in the national spotlight.” Chylla already has a list of firms that may be useful to clients, including Cleveland Clinic, for everything from billboards to a firm that sells space on message boards that trail behind bicycles. Chylla said he expects that advertisers will do what they can to be visible at or around Cleveland Hopkins International Airport and from there along Interstate 71.

Where the action is Downtown will be ground zero, the place where, in addition to whatever politicking is still being done, marketers and issue advocates will have to get creative to break through the competing marketing efforts.

Some of the spending will be big and bold. Just getting a name on a sign will be a big part of the marketing push — just an image that establishes a presence in a consumer’s mind. Orange Barrel Media, a Columbus firm that specializes in largescale, one-of-a-kind outdoor displays, put signage atop or on the sides of buildings for earlier conventions in Denver and Charlotte, N.C. Among its signs in Northeast Ohio are the four-story sign on the west side of the Stark Enterprises headquarters in the Warehouse District and at Crocker Park.

“What kind of spending will there be during the convention? We’ve never had a convention here so we have nothing to go by.” – Dominic Mancuso general manager, WOIO-TV and WUAB-TV “We’re getting a lot of interest,” said company president Pete Scantland. “I’m sure you’ll see all sorts of inventive (signage) in Cleveland.” One obvious way marketers will make an impression and advocacy groups will make their points, is with billboards. David Yale, vice president of public affairs for the Cleveland division of Clear Channel Outdoor, expects many of the 1,000 billboards his firm has in the region — especially those between Cleveland Hopkins International Airport and downtown — to carry political or convention-related messages in July. He said it’s too early, though, to know exactly how many will fit that category. Because zoning laws limit most signage, firms like Clear Channel

can’t simply expand their business by putting up additional signs. That means that heavy demand will be met by substantial price increases instead of an increase in the supply of signs. Yale said he expects the rates for July to be at a premium. Scantland said he would expect costs to be double or greater than normal charges.

approved by clients he was serving through a brokerage called CT Securities. The association said Xinos “engaged in conduct unbecoming or contrary to the public interest.” He also served as CEO of a few tiny public companies, such as iBIZ Technology Corp., American Financial Seminars (which soon became Environmental Oil Technologies) and Mistral Ventures. Miller noted that Mistral did a few deals with other closely affiliated companies in 2007, while Xinos served as CEO. For instance, it invested in another Vancouver firm called Trustcash Holdings Inc., which was run by Mistral’s former chief financial officer. In 2013, an affiliate of that company, TCash Ads Inc., was sued by the federal government for running what it described as an “illegal virtual currency service.” Miller told Crain’s that he knew little about Xinos’ past when he began working with him in 2009. Xinos’ lawyer, Steve Jackson, said he was unaware of his client’s past dealings. Jackson argued that his past is irrelevant to the case.

Seeking answers Say for a moment that Xinos really was controlling the holding companies behind the loans. A few questions still remain: ■ Did Sonoro try to force Abakan to default on George Town’s loan? During a separate lawsuit against Abakan, Sonoro did file an emergency motion on April 23 in an attempt to stop the company from refinancing the loan from George Town. A week later, Sonoro said it would agree to a refinancing deal, but it made demands that Miller described as unreasonable. For instance, Sonoro would only agree to the refinancing deal if its terms could not be changed. The parties settled the Sonoro case in May. Now Abakan owes Sonoro $2.9 million, up from $2.1 million, excluding interest. By then, however, Abakan had defaulted on its loan with George Town. ■ Why did Abakan fail to file its quarterly report on time? Miller said the company wanted to close the Sonoro case first.

What’s in a Name? Everything!

Looking at the big picture The week is not likely to be a big moneymaker for the television stations, which usually suck up a lot of spending by marketers. “What kind of spending will there be during the convention?” asked Dominic Mancuso, general manager of WOIO-TV, Channel 19, and WUAB-TV, Channel 43. “We’ve never had a convention here so we have nothing to go by.” Micki Byrnes, president and general manager, of WKYC-TV, Channel 3, expects the station to do well financially next July — political ad spending will be gearing up for the November election, after all — but she doesn’t see the convention being a financial winner for the station, since any additional ad dollars will be eaten up by the added cost of the covering the city during convention week. “Do I want to win the 6 o’clock news rating that night? Of course I do,” she said. “But I think there is a much bigger picture here.” Byrnes believes that if the city leaves a good impression in the minds of visitors and even convention viewers, it will be good for her station. “If Cleveland is successful, the station will be successful,” she said. “If that leads to companies moving here, we will be successful. If people move here, we will be successful.”

MESOCOAT continued from page 3

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Sonoro wanted to hit Abakan with what he described as a “gigantic penalty” that would have driven the cost of the entire loan up to $4.4 million. He didn’t want that “ridiculous” cost to show up in a quarterly report. ■ What about the deal that caused Abakan and MesoCoat to get hit with a contempt of court violation? Miller said Abakan had regularly been increasing its stake in MesoCoat. Thus the transaction, in his view, was in the normal course of business and wouldn’t be affected by court’s preliminary injunction. George Town’s lawyers disagreed, to say the least. One of their main arguments focused on the fact that Powdermet planned to pay the company $1 million as part of the most recent share swap. And they didn’t expect George Town to get the money. “Defendants’ exchange bears all the appearance of a ‘fire sale’ of assets to permit companies in dire financial condition to survive a few months longer,” they wrote in a court document filed on Aug. 8.

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THE DISH

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Green City Growers, a 3.25 acre hydroponic greenhouse located off of East 55th Street in Cleveland’s Central neighborhood, is one of the largest urban greenhouses in the country. It employs 30 people and produces three million heads of lettuce and 300,000 pounds of herbs a year. Since opening two years ago, it has transformed a swath of the city dotted with vacant lots and dilapidated houses into a high-production facility with a devoted customer base. The greenhouse opened in 2013 as a venture of the Evergreen Cooperatives, a 7-year-old initiative to create new, worker-owned companies that would employ Cleveland residents. The facility is truly impressive. Inside its vast, brightly lit interior, rows of leafy, velvety greens float atop pools of nourishing rainwater. Although the venture has always been risky, sales have doubled within the past year, with GCG’s local greens available at Marc’s, Heinen’s, the West Side Market, Miles Road Farmers Market and Kroger, as well as many area restaurants. Nonetheless, to mature from a startup to a profitable company, the greenhouse must dramatically increase its sales volume. It is currently operating at 65% of capacity, and must reach 90% to make money, a challenging prospect given that it has higher labor costs and its greens cost 50% more than commercial lettuce. Yet company leaders say it’s doable, touting hydroponic greens as a less expensive, longer-lasting alternative to organic fare. “We believe we’re about a year

between romaine and iceberg lettuce. Yet McMicken knows that Green City Growers faces an uphill climb. It has been challenging to land the kinds of big customers that can ultimately help it become an urban success story. “The level of commitment from buyers is not as high as we thought it would be. Everyone talks about buying locally, but it’s a challenge to get the big guys who can move the needle,” McMicken said. “Either we’re not delivering the message, or they’re used to doing what they always do.”

Chilcote is a freelance writer and editor who has written for Modern Farmer, All About Beer, Belt, Agence France Press and other publications. He is managing editor of Fresh Water Cleveland and editorial director of Issue Media Group.

Longer shelf life

away,” said CEO John McMicken, stressing that he has spent the past year bringing in managers with industry expertise who are helping garner new customers and increase profits. Employees make a living wage of about $12 per hour and are provided with benefits. “We’re double where we were a year ago, and we almost need to double again.” GCG has a lot going for it: a great product and a great story, to boot. For example, the company’s trademark Cleveland Crisp, which was developed by a Dutch company and licensed exclusively to GCG for a year, is delightfully buttery and crunchy at the same time. The brand, which is sold at Marc’s, is considered a cross

Nonetheless, some of Green City Growers’ customers say they couldn’t be happier with the direction the company has taken. John Selick, executive chef at University Hospitals’ Ahuja Medical Center in Beachwood, first began purchasing GCG’s jewel leaf mix two years ago. He hasn’t been disappointed: The product is much better than what he used to carry, and its longer shelf life has helped offset costs. Recently, the product has gotten better, he says — the lettuce is darker and the jewel leaf mix now carries five to six different varieties, whereas it used to have two. “I’m paying more for my lettuce but I’m also getting more shelf life,” Selick said. “Some of that standard commodity lettuce would come in bagged, and there were times I would get two days out of it. With this lettuce, I can get two weeks. I would end up throwing (commodity

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b les sales, but needs to keep up pace lettuce) in the trash. So how much would it really cost me?” Selick, who grew up in Ohio City, relishes the ability to support a local company and spread the word about Green City Growers to his customers. “I put on the menu that we have East 55th Street Basil,” he said. “People are like, ‘East 55th, seriously?’ I’m like, ‘Yeah there’s a greenhouse down there.’ Cleveland’s on an upswing, and it’s cool that the food scene is a part of it.” Chad Witham of Premier Produce One, a distributor that sells Green City Growers’ leafy lettuce to college campuses and other institutional buyers in Cleveland, Dayton and Columbus, says his customers are typically willing to pay more for the product. “It takes a miniscule amount of resources to get to the end user, and the product is awesome,” Witham said. “It’s crisp and chefs love it.”

Incredible freshness One of the things that makes Green City Growers stand out is that it is a highly sustainable business operation. Whereas it requires 40 gallons of water to grow a typical head of iceberg lettuce, McMicken said, GCG only uses about one gallon. That’s because they capture 85% of the rainwater and snowmelt from the building’s roof to grow their greens. “This could be a real solution to the country’s drought problems,” McMicken said. The greenhouse also minimizes use of electricity. It has a high-tech

automated system that controls exposure to natural light, allowing plants to thrive year-round even in the gray Cleveland winter. “We had an amazing winter growing season last year, despite the cold,” McMicken said. Yet perhaps the most compelling argument behind GCG’s product is its incredible freshness. Most lettuce spends days on a refrigerated truck before reaching supermarkets, yet these greens are literally just picked before they end up in a salad somewhere. “It goes to a walk-in cooler within minutes, and less than 24 hours later, it’s picked up by a truck,” McMicken said. Other Evergreen Cooperatives’ companies have proved successful. Evergreen Laundry Cooperative and Evergreen Energy Solutions, launched in 2009, began sharing profits with employees last year. Ninety percent of Evergreen Cooperatives’ 120 employees live in Cleveland, 45% reside in the Greater University Circle area, and 38% are ex-prisoners. The greenhouse was an expensive venture that required $17 million of investment from the Cleveland Foundation, New Markets Tax Credits, University Circle institutions and the City of Cleveland. Yet McMicken said this potential economic engine will be worth it: “What was once an expensive, unsafe place for the city to maintain is now generating revenue and income.” To contact, send an email to clbfreelancer@crain.com. You also can follow Chilcote on Twitter @leechilcote.

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TAX LIENS (CONTINUED) Care the Wrightway Inc. 756 E. 185 St., Cleveland Date filed: July 11, 2015 Type: Employer’s withholding, unemployment Amount: $17,456 Livewire Productions Inc. 6932 Hillside Road, Independence Date filed: July 20, 2015 Type: Employer’s withholding Amount: $16,998 Taylor Made Rehab & Builders LLC 2186 Jackson Blvd., University Heights Date filed: July 11, 2015 Type: Partnership income Amount: $16,176 Advanced Billing Concepts Inc. 24500 Center Ridge Road, Suite 350, Westlake Date filed: July 11, 2015 Type: Employer’s withholding Amount: $15,924 Konstanzer Masonry Inc. 514 Dover Center Road, Bay Village ID: 34-0967162 Date filed: June 9, 2015 Type: Unemployment Amount: $15.733 Greene Arches 4962 Inc. 22801 Emery Road, Cleveland ID: 26-3494510 Date filed: June 9, 2015 Type: Employer’s withholding, unemployment Amount: $15,080 Security Management Group Inc. 3740 Euclid Ave., Cleveland Date filed: July 11, 2015 Type: Employer’s withholding Amount: $14,770

Edmund Z Sadowski M.D. LLC 12000 McCracken Road, Suite 155, Garfield Heights Date filed: July 6, 2015 Type: Employer’s withholding, unemployment Amount: $14,315 R Engineering Team LLC P.O. Box 91746, Cleveland Date filed: July 11, 2015 Type: Employer’s withholding Amount: $13,993

Metropolitan Food Services LLC Island Café 22901 Millcreek Blvd., Highland Hills Date filed: July 20, 2015 Type: Employer’s withholding Amount: $11,144 Enhydro Sewer and Drain LLC 1047 Oakes Road, Broadview Heights ID: 46-1461519 Date filed: June 12, 2015 Type: Employer’s withholding, unemployment Amount: $10,849

April Noelle Hart Co. LPA 2528 Canterbury Road, Cleveland Heights ID: 20-2458726 Date filed: June 9, 2015 Type: Employer’s withholding, failure to file complete return Amount: $13,945 ESS Cubed LLC 452 Forestview Road, Bay Village Date filed: July 11, 2015 Type: Employer’s withholding Amount: $13,886 Incredible Kids Childcare & Preschool Center 4651 Northfield Road, North Randall Date filed: July 11, 2015 Type: Employer’s withholding Amount: $12,731

Mic Ray Metal Products Inc. 9016 Manor Ave., Cleveland Date filed: July 20, 2015 Type: Employer’s withholding Amount: $11,384

Euclid Foreign Motors Inc. 20020 Saint Clair Ave., Cleveland Date filed: July 11, 2015 Type: Employer’s withholding, unemployment Amount: $10,840 MCM Euclid Square Mall LLC 13829 Euclid Ave., E Cleveland ID: 20-0909897 Date filed: June 12, 2015 Type: Employer’s withholding Amount: $10,785

Boffice Ltd. 1100 W. Royalton Road, Broadview Heights Date filed: July 11, 2015 Type: Employer’s withholding Amount: $12,116

Wonder Gro Inc. 26041 Cannon Road, Bedford Heights Date filed: July 11, 2015 Type: Employer’s withholding, unemployment Amount: $10,771

Parma Fresh LLC 5513 Pearl Road, Parma Date filed: July 11, 2015 Type: Employer’s withholding Amount: $11,848

Bajan Enterprises LLC 15700 Benhoff Drive, Maple Heights Date filed: July 11, 2015 Type: Employer’s withholding Amount: $10,583

Room to Grow Learning Center Inc. 87 A Northfield Road, Bedford ID: 76-0807542 Date filed: June 12, 2015 Type: Employer’s withholding Amount: $10,375

Brandall Graphics LLC 2530 Hamilton Ave., Cleveland Date filed: July 20, 2015 Type: Employer’s withholding, unemployment Amount: $9,386 Pistol Truck Service Inc. 5281 Engle Road, Brookpark Date filed: July 11, 2015 Type: Employer’s withholding, unemployment Amount: $8,581 Summit Plumbing & Mechanical LLC 14572 Hartford Trail, Strongsville Date filed: July 11, 2015 Type: Employer’s withholding Amount: $8,453

LIENS RELEASED A to Z Auto Service Inc. 13747 State Road, North Royalton ID: 13-4271845 Date filed: April 15, 2015 Date released: June 9, 2015 Type: Employer’s withholding Amount: $8,507 Lawrence Harris Construction Inc. 2410 Scranton Road, Cleveland ID: 31-1209545 Date filed: Oct. 25, 2005 Date released: June 12, 2015 Type: Employer’s withholding, unemployment Amount: $22,066

Montgomery Lynch & Associates Inc. 2940 Noble Road, Suite 101, Cleveland Heights ID: 34-1775337 Date filed: Sept. 6, 2005 Date released: June 12, 2015 Type: Employer’s withholding, unemployment Amount: $87,208 New Jersey Education Association, Custodians Maintenance & Bus Drive 3478 Ridge Park Drive, Broadview Heights ID: 22-2247096 Date filed: April 24, 2015 Date released: June 9, 2015 Type: Employer’s withholding, unemployment Amount: $11,256

Womens Professional Services Corp. 27991 Center Ridge Road, Westlake ID: 46-0922239 Date filed: Jan. 22, 2014 Date released: June 2, 2015 Type: Employer’s withholding Amount: $31,907 Womens Professional Services Corp. 27991 Center Ridge Road, Westlake ID: 46-0922239 Date filed: June 4, 2014 Date released: June 2, 2015 Type: Employer’s withholding Amount: $29,091 Womens Professional Services Corp. 27991 Center Ridge Road, Westlake ID: 46-0922239 Date filed: Aug. 19, 2014 Date released: June 2, 2015 Type: Employer’s withholding Amount: $16,204

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THE WEEK AUGUST 24 - 30

The big story: Cleveland State University and its 24-year-old downtown arena, the Wolstein Center, are getting an assist from the Cleveland Cavaliers. One of the perks of the partnership is that the Vikings’ men’s and women’s basketball teams will get to play some games at Quicken Loans Arena. Cleveland State will play five men’s basketball games and at least one women’s contest at The Q in 2015-16, beginning with a Dec. 5 doubleheader. The partnership also includes the Cavs taking over the bookings of the Wolstein Center for concerts, shows and other non-university events, plus using their powerful marketing arm to cross-promote Cleveland State basketball games.

Howdy, partner: After merely a year as a minority investor, Cleveland Clinic exercised an option to take on full ownership of Akron General Health System. Last year, the regional health care giant purchased a minority stake in Akron General — a deal that infused $100 million into the Summit County hospital system that now boasts operating revenue of close to $700 million. When the Clinic purchased a minority stake last year, Akron General CEO Dr. Thomas “Tim” Stover said that if it were up to him, the health system would become a full member of the Clinic enterprise shortly after its one-year anniversary.

WWW.CRAINSCLEVELAND.COM

This changes everything:

The Agnon School in Beachwood received a $17 million gift — and with it, a new name. The school received the gift from the Joseph and Florence Mandel Family Foundation. In recognition of the contribution, the school will be renamed the Joseph and Florence Mandel Jewish Day School. The gift is transformative for the school, which has an annual budget of around $4.5 million. The vast majority of the gift will go to an endowment for personnel and programs, the school said.

Snap to it: Sherwin-Williams Co. launched a system called ColorSnap to help simplify color selection for consumers and painting professionals. ColorSnap includes an in-store display, enhanced online and offline tools, and new colors. It has started rolling out and will be available in all 4,000 Sherwin-Williams stores across the United States and Canada by the end of January. Sunnier in Philadelphia?: Terry C.Z. Egger — the former publisher of The Plain Dealer who led the city’s effort to secure the 2016 Republican National Convention — was named publisher of the parent company of The Philadelphia Inquirer. Effective Oct. 1, Egger will take over as head of the Philadelphia Media Network, which includes The Daily News and Philly.com. He had served as president and CEO of the RNC host committee, but in April of this year, those responsibilities transitioned to David Gilbert, the president and CEO of Destination Cleveland and the Greater Cleveland Sports Commission.

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

A legal case for repairing some of the damage

disbursement of reparations, but it is focused on establishing that slave descendants are owed.” — Jeremy Nobile

Con artist pays a heavy Price

Reparations for descendants of AfricanAmerican slaves are 150 years past due, and a Cleveland lawyer is calling the tab. Ayesha Bell Hardaway, visiting assistant professor of law at Case Western Reserve University School of Law, says that establishing a common law trust relationship between the United States and African-Americans could be one legal avenue to secure those compensations. Her research on the topic, which began 12 years ago during her years as a Case law student, is outlined in the legal paper “The Breach of the Common Law Trust Relationship between the United States and African Americans — A Substantive Right to Reparations,” which will be published this year in New York University Review of Law & Social Change. Hardaway argues that a common law relationship was created with the ending of slavery and that compensation is still required. She compares Native American experiences to those of African-Americans and points out that existing Native American trust case law supports the idea that the breaching of such a relationship provides plaintiffs a right to an accounting from the government and a right to monetary damages. “It’s a controversial topic that presents important legal issues,” Hardaway said. “Some of the most brilliant minds have worked diligently to find the best legal approach to establishing the reparations claim. This is not a paper about how to fund and manage the

One open door leads to another

A Cleveland attorney is helping dozens of investors recoup millions lost in a plot orchestrated by Aubrey Lee Price, a former Georgia pastor turned stockbroker then drug dealer who was sentenced to decades in prison for his Ponzi scheme after faking suicide and getting caught by police in a Georgia traffic stop in December 2013. Chapman LLC’s John Chapman has represented nearly 70 investors so far in four group cases settled by the Financial Industry Regulatory Authority, or FINRA. The most recent case, resolved Aug. 11, netted almost $1.3 million for 13 claimants. FINRA ordered that sum, plus court costs, to be covered 100% by Georgia-based FSC Securities Corp., an investment adviser network Price was registered to whose brokers reportedly helped funnel investors to Price’s scheme. In that scheme, he falsified reports to cover up the more than $40 million he’s estimated to have embezzled through his PFG fund. Chapman said FSC argued others were at fault; they questioned Price on the stand for four hours. But a FINRA arbitration panel found FSC, which is owned by AIG, negligent of supervising the books, arguing more diligence could’ve caught the scheme. “In this case, arbitrators felt supervision was so bad, so lackadaisical, they felt it was appropriate to allocate the entire fault to (FSC),” Chapman said. “That’s very unusual.” Price is currently serving a 30-year sentence. — Jeremy Nobile

WHAT’S NEW

BEST OF THE BLOGS

Craig Marvinney embodies the collaborative spirit lawyers should have — at least that’s what the prestigious national Federation of Defense and Corporate Counsel thinks. Marvinney, a Cleveland partner at Walter | Haverfield LLP with 30 years of experience as a defense lawyer, secured membership with the invite-only federation 16 years ago. This month, he was elected as a board member for the 2015-16 year and also earned the annual FDCC Connect Award that honors members for exemplary efforts furthering the federation’s referral network that comprises some 1,400 defense attorneys. An example of those efforts involves a Canadian lawyer to whom Marvinney referred a case. The litigation “exploded,” he said, and the lawyer earned so much he left his firm to hang his own shingle. Marvinney said he was surprised by both honors, adding he’s “very thankful” for the recognition. “What’s fun about this is there’s a great deal of attention with some great contacts,” he said. “It opens doors for recommendations. If one is an attorney who sends business to another, and they’re known for that, odds are others will send business to them and their firm as well.” — Jeremy Nobile

Excerpts from recent blog entries on CrainsCleveland.com.

A solid foundation: The Richard J. Fasenmyer Foundation committed $18.5 million to support various research efforts at the Cleveland Clinic and Case Western Reserve University’s medical school and to foster the development of the next generation of immunology experts. The funding builds on the work of two renowned, Cleveland-based immunologists — the Clinic’s Dr. Leonard Calabrese and Case Western’s Dr. Michael Lederman — who were among the first researchers in the country to study HIV/AIDS. The funding, in particular, will support joint research efforts, physician recruitment and fund the Clinic’s Center for Clinical Immunology.

CRAIN’S CLEVELAND BUSINESS

J.R. with the assist

COMPANY: The OurPet’s Co., Fairport PRODUCT: Catty Whack The company received a new product showcase award for its Catty Whack at the recent SuperZoo pet supply industry trade show. Pet industry retailers in attendance at SuperZoo voted for the Catty Whack as “Best New Cat Product,” according to a news release from OurPet’s. The toy will be available to the pet specialty market in October, the company said. Gabriella DeSantis, vice president of marketing for OurPet’s, said Catty Whack “allows for pet parents to nurture their cats’ natural instincts and combine interactive play with independent play so your cat never feels alone.” The company describes Catty Whack as “an unpredictable game of hide and seek designed for cats of all ages.” It says cats “love the electronic RealMouse sound, and the erratic movement of the feather keeps your cat guessing as it darts in and out at random.” On top of the Catty Whack is a carpeted scratching area where cats can groom their claws. The bottom of the toy has non-skid rubber feet, which keeps the toy from sliding. There is also an auto-shut off feature, and a replacement feather prey wand is included. For information, visit www.ourpets.com.

J.R. Smith is an interesting guy in many ways, and it turns out the Cavaliers shooting guard was in the vanguard of a cultural movement. Futuristic self-balancing scooters — like the PhunkeeDuck-brand scooter Smith made famous as a method of arriving at an NBA Finals game — “are the newest statusaffirming accessory for young musicians, athletes and celebrities,” The New York Times said. Rapper Meek Mill is a big fan of the Skywalker scooter, which costs $850 and can travel 10 miles an hour. Others promoting similar scooters include Justin Bieber, Stephen Curry and Jamie Foxx. Matthew Waxman, a founder of PhunkeeDuck, which supplied scooters early on to Smith and Bieber, told the newspaper, “When we first started pushing to the public, that was our main route: connecting with these celebrities and these athletes. It was everything.” Unfortunately for PhunkeeDuck, the exposure from Smith wasn’t everything it could have been. “It would obviously have been much, much better if he had played well” in the finals, Waxman said.

Eternal flame Ever think to yourself, “What my next party could really use is a flamethrower?” A Cleveland startup might be able to accommodate you. CNNMoney ran a short feature on a company called Throwflame, which is selling flamethrowers for $1,599 that can shoot fire for 50 feet. The piece noted that a Detroit company, Ion Productions Team, is selling $900 flamethrowers that can eject flames for 25 feet. Both companies started selling them this year.

The flamethrowers “are marketed not as weapons, but as fun devices,” according to the website. “We always have the people who just want it for fun. Impress the neighbors at the BBQ,” Throwflame founder Quinn Whitehead told CNNMoney. Both Whitehead and Ion CEO Chris Byars “said their flamethrowers have caused no injuries, and safety is a priority,” according to the story. (Ion notes on its website that the flamethrower “may result in injury or even death.” No kidding.) The flamethrowers do have practical uses, both companies told CNNMoney. They said farmers “can use them to clear fields by burning unwanted brush, and fire departments can use them for controlled burns, to try and prevent accidental forest fires or to stop them from spreading.” The Feds don’t regulate them, but flamethrowers can violate state or local laws.

Anger management Ready to send that blistering email to your coworker/boss/spouse/friend etc. about something outrageous they’ve done? You might want to reconsider. The Wall Street Journal said the “e-vent” — expressing anger via email, text or chat, or on social media sites such as Facebook or Twitter — “can be hard to resist,” but research from various corners, including Ohio State University, shows unmistakably that “venting is bad for us.” In studies, the paper noted, “people report that they feel better after venting. But researchers find they actually become angrier and more aggressive. People who vent anonymously may become the angriest and most aggressive.” Brad Bushman, a professor of communication and psychology at Ohio State, told the newspaper, “Just because something makes you feel better doesn’t mean it’s healthy.” The Journal said Bushman “has conducted multiple studies that show that venting anger or frustration isn’t beneficial.”

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Nine times is deﬁnitely a charm.

THE BEST OF THE BEST, NOW NINE YEARS STRAIGHT. At Mercedes-Benz of North Olmsted, we pride ourselves on going above and beyond to satisfy our customers. These efforts have allowed us to receive the Mercedes-Benz “Best of the Best” Dealer Recognition Award for nine years in a row. The award reﬂects new and certiﬁed pre-owned vehicle sales, an exceptional service and parts operation, and most importantly—really, really happy customers! Mercedes-Benz of North Olmsted Best of the Best 2006-2014

Visit Mercedes-Benz of North Olmsted today, and see why going above and beyond your expectations will always come standard!

Certiﬁed Pre-Owned Sales Event

2011 Mercedes-Benz C300 4MATIC® Stock #m4540 33,515 miles $25,992

2013 Mercedes-Benz E350 4MATIC® Stock #m4623 52,020 miles $31,991

2012 Mercedes-Benz E350 Convertible Stock #m4493 21,000 miles $39,994

2013 Mercedes-Benz E350 Convertible Stock #m4498 21,884 miles $42,994

2014 Mercedes-Benz E350 4MATIC® Stock #m4475 22,674 miles $45,996

2015 Mercedes-Benz ML350 4MATIC® Stock #m478782 9,485 miles $50,996

2013 Mercedes-Benz S550 4MATIC® Stock #m4568 21,379 miles $61,992

2014 Mercedes-Benz S550 Roadster Stock #m024991 4,150 miles $88,992

*All cars featured—Certiﬁed Pre-Owned by Mercedes-Benz. Five year unlimited mile warranty included (from original service date).

Mercedes-Benz of North Olmsted 28450 Lorain Road .

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