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CLEVELAND BUSINESS ADVERTISING
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VOL. 37, NO. 37
SEPTEMBER 12 - 18, 2016
Source Lunch
Business of Life
Dave Johnson, public relations director He speaks for convention center and Global Center for Health Innovation. Page 24
The List
NEO’s largest foundations Page 27 REAL ESTATE
CLEVELAND BUSINESS
Lou Tansky is king of Uncle Ben’s Pawn Shop Page 23
FOCUS: SMALL BUSINESS | PAGES 15-21
EDUCATION
Lakewood housing market is ‘insane’
Colleges aim to aid ITT Tech students
By STAN BULLARD
By RACHEL ABBEY MCCAFFERTY
sbullard@crain.com @CrainRltywriter
rmccafferty@crain.com @ramccafferty
When Patrick and Tricia Nieser, both natives of Cleveland’s east suburbs, moved back to Northeast Ohio last month from Cincinnati’s Hyde Park neighborhood, they bought a $270,000 house on Belle Avenue in Lakewood. Looking at further outlying suburbs on either side of town was not an option, because the couple sought the same walkable, close-toactivities location they had in the Queen City. They looked at 15 houses — twice the national average — and passed on several because they were overpriced and lost out on others because they were outbid. When the 1908-vintage charmer came on the market, they relied on photos of the property and tours by family members as they bid on the three-bedroom home — sight unseen, as they were out of town. They landed what Patrick Nieser called “a fair deal.” Welcome to post-housing bust Lakewood as the streetcar-era innerring suburb is embraced by a new wave of buyers and benefits from the pent-up demand of the long housing bust. In Lakewood, old dive bars have been replaced by cool ones. A resurgent downtown has given birth to multiple eateries. The suburb’s walkability, its ample and charming front porches, a reputation for good police and strong — and recently, extensively renovated — schools have given its home market a surprising boom. Moreover, the suburb shows the impact that declining inventory of existing homes has on the market. Scott Phillips, CEO of Keller Williams Greater Cleveland, said, “A ‘stable’ market is six months of inventory. A ‘hot’ market is three months. This is an ‘insane’ market.” That is because there is less than a month of inventory of Lakewood single-family homes in the $100,000-to$250,000 price range, the range for a typical first-time home-buyer. In Cuyahoga County as a whole, there is 2.5 months of such inventory.
Following the sudden closure last week of ITT Technical Institutes — one of the nation’s largest for-profit education chains — local community colleges and other area schools are making an effort to serve displaced students. The school’s students have already started their path to a certificate or a degree, said Cindy Kushner, director of marketing and outreach initiatives for Lorain County Community College in Elyria. And the school wants to see them continue that journey. “We want them to achieve that success,” she said. ITT’s closure was both abrupt and foreseeable. ITT — which had campuses in Akron, Strongsville, Warrensville Heights and Youngstown — had been under scrutiny for its financial and operational activities for a while. In late August, the U.S. Department of Education banned Indiana-based ITT Educational Services Inc., the school’s parent company, from enrolling new students who were using federal financial aid funds, along with other restrictions. Prior to that decision, the department reported that the school’s accreditor, the Accrediting Council for Independent Colleges and Schools (which is itself under review by the department), had determined that ITT was not in compliance with its standards. So, on Tuesday, Sept. 6, ITT shut the doors on the institutes, blaming the department’s sanctions and its “complete disregard” for due process. Specifically, the school pointed to the requirement that would cause it to pay for students’ Title IV aid up front and get reimbursed later, as well as the one that required it to put more money into its surety funds to cover costs if the college closed. “We had no intention prior to the receipt of the most recent sanctions of closing down despite the challenging regulatory environment that now threatens all proprietary higher education,” the statement read. A
SEE LAKEWOOD, PAGE 26
Up in arms at the market West Side Market vendors say the allure of Sunday business hours is long gone. (Ken Blaze for Crain’s)
I
t’s been about f ive months since the city of Cleveland broke a century-old trad ition and decided to open the West Side Market on Sundays. Many of the market’s vendors still haven’t cozied up to the change and say the move has hurt their bottom lines. Now they hope the city will reconsider. Ivalee Brasky weighs bacon at the Pork Chop Shop.
STORY BEGINS ON PAGE 15
SEE ITT, PAGE 7
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Bachelor’s in nursing is becoming a must Health systems are encouraging — and often requiring — nurses to get a BSN By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre
Anna Marie Luzar, nurse director of St. Vincent Charity Medical Center’s Spine and Orthopedic unit, decided in 2011 that she was ready to return to school to get her bachelor of science in nursing. When explaining why, Luzar proudly reads from what she wrote for school about her return: “There is much I do not know, have not taken into consideration or addressed from nursing school 30 years ago. It is the right time physically and emotionally in my personal life to commit to a program to learn what I do not know.” Luzar, who received her BSN in 2014 from Ohio University, is one of many nurses taking advantage of RN-to-BSN programs across the region and country that have been cropping up to help registered nurses with diploma or associate degrees take the next step in their education as hospitals increasingly expect higher skill levels. “The hospitals at least in our area aren’t hiring the associate degree prepared nurses, or they would prefer to have a BSN,” said Linda Linc, dean of the Byers School of Nursing at Walsh University in North Canton. “So you’re seeing more individuals going right into a BSN program, and there are a lot of them in Northeast Ohio.” Many Northeast Ohio health sys-
tems are looking only to hire nurses with a BSN. Those with an associate’s degrees are often asked to sign a contract that they’ll get their BSN within a certain timeframe after employment. Following a 2010 report from the Institute of Medicine, health care providers across the country pushed forward initiatives to get more of their nurses baccalaureate-trained. “The Future of Nursing: Leading Change, Advancing Health” recommended that 80% of the nursing workforce have a BSN by 2020. The report stated that the health care system doesn’t provide sufficient incentives for nurses to further their education and get additional training. “Everyone has taken that very seriously, knowing that health care reform requires nurses to be front and centered and that they need to be well-educated,” said Joan Kavanagh, associate chief nursing officer for the Office of Nursing Education and Professional Development at Cleveland Clinic. Patricia Sharpnack, dean of the Breen School of Nursing at Ursuline College, said she’s seeing an uptick in the number of students looking to complete their BSN “Initially there wasn’t as great of a push by the hospitals or the acute care agencies to really mandate this,” she said.
Hiring preferences MetroHealth prefers that recent graduates it hires have a BSN, but it makes exceptions for current em-
ployees, such as medics, working through school. For more experienced nurses without a BSN, there’s a ticking clock to get one. Earlier this year, the system dropped its timeframe from the three-year requirement it started with in 2013 to a two-year window for nurses to get their bachelor’s, “knowing that the year 2020 is creeping up on us,” said Melissa Kline, vice president and chief nursing officer at MetroHealth. In the past three years, the number of MetroHealth’s nurses who are baccalaureate-trained has increased from 48% to 65%, and at any given time, another 13% to 15% are en-
“We’re knowledge workers. We’re constantly wanting to be able to supply the resources and the support to our nurses so that they can continue to develop, whether that’s with a bachelor’s or a master’s or a doctorate.” — Joan Kavanagh, associate chief nursing officer for the Office of Nursing Education and Professional Development at Cleveland Clinic
rolled in a program. Although achieving the goal of having 80% of nurses baccalaureate trained by 2020 isn’t specifically tied to funding or reimbursement, Kline said, evidence that a higher level of nursing education is connected to better outcomes was encouraging enough for hospitals to head in that direction. In 2013, the Clinic moved to have all nurses who join the system sign a contract that they will attain their BSN within five years. While Kavanagh emphasizes the Clinic is appreciative of and welcome nurses who graduated from diploma and associate degree programs, the goal is that they will get a bachelor’s degree. The extra training brings additional skills of leadership, strategic thinking and research that simply cannot be covered in shorter programs, she said. Diploma and associate degree programs prepare nurses at the micro level, but further education to understand the big picture of systems and how teams work together is increasingly important as health care changes. “We live in a day where there’s more to be known than can be known,” Kavanagh said. “We’re knowledge workers. We’re constantly wanting to be able to supply the resources and the support to our nurses so that they can continue to develop, whether that’s with a bachelor’s or a master’s or a doctorate.” Summa Health also no longer hires nurses without a BSN. (A few exceptions are made, but the nurse has two years upon employment to attain their BSN.) “I wanted to make sure that I didn’t hire non-BSN nurses into Summa who would be competing with those
loyal diploma nurses who were at a stage in life, who weren’t going to go back and get their BSN,” said Lanie Ward, Summa’s senior vice president and chief nursing officer. “I didn’t want new nurses to be in the 20% number of non-BSNs in 2020.” Summa is well on its way to achieving its goal. At present, 77.4% of its nurses at Summa Akron City and St. Thomas hospitals have a BSN, up from 60% when the report came out in 2010.
Putting patients first Tracey Motter, associate dean for undergraduate programs at Kent State University’s College of Nursing, said she believes all nursing education should be at the baccalaureate level, considering the amount of responsibility and demands on nurses in hospitals today. But she recognizes that that can be challenging, time-consuming and cost-prohibitive for many students who traditionally go the associate’s degree route. “A lot of them choose the (associate’s degree in nursing) because it’s cheaper and quicker, and that really isn’t a good reason when we’re looking at patient outcomes,” said Motter. The RN-to-BSN programs, like the one at Kent State, can be a good fit for those students facing those challenges. She’s also seeking grants to help support such students. Kavanagh of the Clinic emphasized that a bachelor’s degree is in no way the end of the line. “It’s really all in the name of increasing quality of care for our patients, increasing the access and the coordination, and all of that requires ongoing and lifelong learning,” she said.
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A pint-sized parcel in downtown Cleveland — owned since 1991 by Westlake-based Richard E. Jacobs Group for a proposed parking garage to serve the never-built 60-story Ameritrust Center skyscraper — has just changed hands for $1.4 million for another big proposed development. Through 411 St. Clair LLC, Warrensville Heights-based Weston acquired the L-shaped 1/5th of an acre parcel — with just 26 feet of frontage on St. Clair Avenue — on Aug. 22, according to Cuyahoga County land records. Weston, in a partnership with Cleveland-based Citymark Capital, plans to erect on the southeast corner of St. Clair and West Sixth Street a mixed-use complex with an eight-story building on the corner that provides a transition to a 23-story apartment tower. The complex would house 352 apartments, parking space and service retail. A Weston spokeswoman said the acquisition completes site assembly for the first phase of the project Weston and Citymark proposed last November. That project, on a long-term basis, would add as many as 1,500 suites in multiple buildings on the vast parking lots west of Public Square with the corner building going in first. The spokeswoman said the real estate developers are continuing to work on the planned project, but she had no other comment. When Weston and Citymark unveiled the master plan, T.J. Asher, Weston CEO, described it as “what’s next” for downtown after July’s Republican National Convention, with construction starting in 2016. At that time, Asher pooh-poohed acquiring the parts of the block it did not own because the firm had agreements to buy them. Another Weston affiliate bought other parking lots in June on the same block from other sellers. One beacon of activity on the site has gone dark, although the parking lots remain busy. Three shipping containers on the corner of St. Clair and West Sixth sit empty. They are the basis of a Historic Warehouse District Development Corporationled effort to install pop-up stores in the district. Thomas Starinsky, Warehouse district associate director, said the local development group has a nocost lease on the site of the containers through the end of 2016. Starinsky said he hopes to find another site for the containers to move them at some point. As yet, he has not found a new home for them on similar terms. “They were designed to be kicked out,” Starinsky said. “Weston has been amazingly generous to donate space for the containers.” Asked if the containers would house a new trio of retailers for the holidays, Starinsky answered, “Let’s hope.” Jacobs Group, now known as Jacobs Real Estate Services, pulled the
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plug on the 60-story Ameritrust Center in 1992 in the recession following the first Persian Gulf War and the merger of Ameritrust Corp. with Society Corp., now KeyCorp. Both the Warehouse District site and the actual site of the skyscraper on the west side of Public Square have served as parking lots ever since. Doug Miller, president of Jacobs Real Estate, did not return three calls on the sale of the parcel at 411 St. Clair.
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Web.com Tour, RPM up ante for new NEO event By KEVIN KLEPS kkleps@crain.com @KevinKleps
The Web.com Tour returned to Northeast Ohio last week with a different tournament sponsor, a new location, and during an even more hectic time on the sports calendar. The 2016 DAP Championship, a four-round event that teed off Sept. 8 at Canterbury Golf Club in Beachwood, also raised the stakes — with a $1 million purse and the first of four spots on the tour’s Finals schedule. All of those changes occurred after RPM International Inc. decided to double its golf game. The Medinabased company saw to it that two of its most popular consumer brands, Rust-Oleum and DAP, were the title sponsors of a pair of Web.com events in 2016. Thus, what at first appeared to be bad news for the local golf schedule — last October’s announcement that the Rust-Oleum Championship was moving from Lakewood Country Club to Ivanhoe Club in Illinois, which is closer to the company’s suburban Chicago headquarters — turned out to be a very good thing. Northeast Ohio’s spot on the Web.com Tour schedule is now secured through at least 2018, and it’s guaranteed to be one of the Finals events — the tournaments that determine which 25 players earn PGA Tour cards for the following season. “It’s twice the investment,” said Ronald Rice, RPM’s president and chief operating officer. Jon Wagner, whose Westlakebased Milestone Sports Management operates the two Web.com
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The DAP Championship teed off Sept. 8 at Canterbury Golf Club. Tour events sponsored by RPM brands, said “the dream” of his company, along with that of RPM CEO Frank Sullivan, was to bring the Cleveland Open back to Northeast Ohio. They did in 2014, seven years after the Nationwide Tour (the Web.com Tour’s former signature sponsor) was played at StoneWater Golf Club in Highland Heights. Once RPM decided it made more sense to hold the Rust-Oleum Championship in Illinois, where that brand had a much more powerful presence, Miller had a challenge for Wagner and his six-person team at Milestone: “Frank said, ‘I’m going to challenge you to find something that’s s Cleveland Bus sines ss Volume 37, Number 37 Crain’s (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 441131230. Copyright © 2016 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 s Cleveland Bus sines ss, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 212-2 210-0 0750
bigger and better,’ ” Wagner said. “I said, ‘The only thing that is bigger is a Finals event,’ and Frank said, ‘Then you know what you need to do.’ ” Enter Canterbury, which is one of only two clubs that has hosted all five of the men’s major championships that rotate sites (the U.S. Open, PGA Championship, U.S. Amateur, the U.S. Senior Open and the Senior PGA Championship). And enter LeBron James.
‘The real deal’ The $1 million purse for the DAP Championship is a 67% increase from the $600,000 that was up for grabs during the Rust-Oleum Championship in June. 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.
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A seven-figure purse “takes a significant commitment from a title sponsor to get us to the place we need to be for charity,� said Dan Glod, the Web.com Tour’s chief of operations and soon-to-be president. (Glod will take over for the retiring Bill Calfee on Jan. 1.) That’s not all on RPM — the event’s pro-am on Sept. 7 was sponsored by Oswald Companies, for instance — but the Medina company
is making quite an investment in a tour whose alumni have gone on to win 425 PGA tournaments. RustOleum also has an endorsement deal with Sam Saunders, a 27-year-old grandson of Arnold Palmer and DAP Championship participant. Rice, RPM’s president and COO, says the company has a different dollar figure in mind — the money that a successful event can raise for charity. The 2015 Rust-Oleum Championship at Lakewood Country Club, which was beset by poor weather, raised $100,000 for Cleveland Clinic Children’s Hospital and $20,000 for Cleveland Indians Charities. “The objective is to make an impact,� Rice said. “This is our first year here, and I think the event will just get bigger and bigger. And the bigger the event gets, the more impact we’ll have for LeBron James and what he’s doing with his organization.� Wagner, a former co-managing director of IMG Golf’s North American business, said a crucial part of RPM’s plan to make the DAP Championship as big as possible was to partner with James’ foundation, which works with more than 1,000 Akron Public School students. During the tournament’s final round on Sept. 11, the foundation’s 330 Ambassadors — high school students who serve as mentors for younger students — were scheduled to wear “We Are Family� T-shirts and serve as the round’s standard bearers. Michele Campbell, the executive director of the LeBron James Family Foundation, said the partnership with the DAP Championship is “ben-
eficial on many levels.� Those perks include behind-the-scenes access the students received during the tournament, plus the sizable donation the tournament is planning to make after the final numbers are tabulated. Wagner, whose company is in charge of making sure the tournament runs smoothly and raises as much money for charity as possible, borrowed one of James’ favorite words when talking about how competitive Milestone gets when it comes to measuring its events against others. “No matter what we do, whether it’s the Rust-Oleum or DAP Championship, the players that we work with, the companies we consult with, you gotta chase greatness every day,� said Wagner, whose company represents more than 30 golfers, including Luke Donald, Sean O’Hair and Kevin Na. DAP, which manufactures products for contractors and do-it-yourselfers, had some of its employees, plus customers, suppliers and vendors, at Canterbury last week. Its logo was also all over the Golf Channel broadcasts, and it couldn’t be missed on the historic course. That’s obviously good for business, and can be impactful on a larger level. “We need Cleveland, as they do, to rally around a big event,� Rice said. “The more people we get out here, the more companies that want to get involved and be connected to what is a great event and be connected to LeBron James and his foundation, it’s an opportunity. This is the real deal.�
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As of Sept. 8, medical marijuana is permitted in Ohio, but whether attorneys can, or should, provide legal services to enterprises supporting that industry remains hazy. The Ohio Supreme Court, which sets rules for lawyer behavior, has acknowledged this. That’s why the court recently said it’s reviewing the rules of professional conduct for lawyers, potentially amending them to clarify ethical responsibilities under House Bill 523, Ohio’s new medical marijuana law. In an announcement by the court, Chief Justice Maureen O’Connor emphasized the need to move quickly yet diligently in updating behavioral rules. The intent is to collect commentary on the issue through Sunday, Sept. 18. “We will revisit the issue after examining public comments, which serve as a backstop to identify any unintended consequences that haven’t been uncovered so far,” O’Connor said in the August announcement. HB 523 includes language encouraging professional service providers, from attorneys to accountants, to work with businesses affiliated with medical marijuana by suggesting they wouldn’t get in trouble for doing so, despite the drug’s federal prohibition. However, the state Legislature doesn’t set the rules for lawyer behavior. The high court does. And an August advisory opinion from the court’s committee overseeing lawyer conduct effectively established that there are certain things lawyers shouldn’t do, said Thomas Haren, an associate with Seeley, Savidge, Ebert & Gourash Co. LPA in Westlake. Haren is also affiliated with the National Organization for the Reform of Marijuana Laws, a nonprofit better known as Norml. Attorneys can provide some degree of counsel and help clients generally understand (currently unclear) marijuana laws — Gov. John Kasich has mandated that over the coming months and years, more regulations will be established — but precluded actions including negotiating leases for potential growers or sellers, helping someone apply for licenses to grow or sell, or enabling entrepreneurs to form companies. It’s not a legally binding opinion, but it still carries a lot of weight. After all, a lawyer disciplined by the court for violating conduct rules could face sanctions that, in extreme cases, could include disbarring. As a result, many Ohio attorneys understandably are leery of getting involved with clients tied to the legal cannabis industry here. “Right now, our concern is complying with the ethical responsibilities,” Haren said. Haren and his firm want to develop a marijuana practice, but they don’t want to face any seemingly unnecessary risk. His firm, notably, requested the Supreme Court to clarify its rules. “We take the approach that if our licenses are in jeopardy, then we can’t protect our clients,” he said. “And if we don’t have the judgment
to protect ourselves, why would clients think we have the judgment to protect them?”
Varied perspectives Kevin Murphy, a partner with Cleveland-based Walter | Haverfield LLP, has been working with clients in the legal marijuana industry for about seven years. That includes work both in and out of Ohio. His clients include dispensaries in some of the various states where cannabis is legal in some form and some local companies like Westlake-based Cannasure, which insures companies working in the marijuana industry and related products. “I’m glad the court is revising its advisory opinion because you’re going to have clients looking for guid-
“I’m glad the court is revising its advisory opinion because you’re going to have clients looking for guidance on how to navigate these laws and (the court is) effectively advising lawyers not to represent these clients. And that’s a problem.” — Kevin Murphy, a partner with Walter | Haverfield LLP ance on how to navigate these laws and (the court is) effectively advising lawyers not to represent these clients,” Murphy said. “And that’s a problem. That’s what lawyers are there for.” As far as the state’s advisory opinion, and prior ethics rules that preclude lawyers working with clients in this industry — The American Bar Association, for example, prohibits lawyers from engaging in illegal conduct and accepting money earned through illegal means — Murphy hasn’t been worried. With those advisory opinions, you can “choose to take the advice or not,” he said. Haren doesn’t share quite the same perspective. “That cavalier attitude, especially with the advisory opinion, that makes us nervous,” Haren said. “This is not an industry to be cavalier in.” Murphy, though, points out that lawyers themselves never actually touch the plant. They’re just providing legal help. “I felt the need to advise clients in this industry is so compelling that it’s unrealistic and unreasonable to think you could just essentially bar Ohio lawyers from representing clients,” he said. “The advisory board is saying they don’t recommend that lawyers in the state help with navigating state law because this is prohibited under federal law. That’s the big conundrum in this industry. It’s a tug of war between state and federal law. So at
what point does the federal government change this law?” James Simon, a partner at Akronbased Buckingham, Doolittle & Burroughs LLC, said he and his colleagues are following the marijuana laws closely because of the implications it could have for various clients, including employers in general and clients in health care, like doctors who could prescribe marijuana. But as far as working with a grower or dispensary, the firm doesn’t plan to get involved until ethics and conduct rules are clarified and more regulatory laws are passed. “The point is, we have a law that doesn’t answer all these questions,” Simon said. “We are waiting to see what regulations are promulgated that could clarify some of the law.”
Legitimizing the industry According to an August report by Marijuana Business Daily, Ohio’s medical marijuana industry eventually could generate $200 million to $400 million in annual retail sales through dispensaries alone. Attorney ethics aside, a lack of legal support could effectively stymie that production. So for Ohio’s medical cannabis industry to flourish, and for the legal sector to truly develop effective and expectedly lucrative marijuana practices, clarifying attorney conduct in this space is seemingly crucial. Many lawyers have been reluctant to get involved in the marijuana industry for reasons beyond state conduct rules, though. Naturally, the drug’s federal classification will still keep some people away. Bruce Reinhart, a partner with McDonald Hopkins who co-chairs the firm’s government compliance, investigations and white collar defense group, has said many firms — including his — will provide advice to a business regarding the legal climate they’re facing because that’s OK. They won’t, however, help with actual legal work, like negotiating operating or lease agreements. There’s also a sense that some lawyers — particularly those at large, national law firms — are staying away because of concerns over their reputations and whether working in that industry could impact their relationships with high-profile clients. It’s not uncommon to hear attorneys talking about forming a marijuana practice to half-jokingly emphasize the unsolicited caveat that they aren’t going to be the “Bob Marley” firm, or rename their firm “Cheech and Chong.” Coincidentally, the bulk of the lawyers in Ohio involved with the marijuana industry today seem to operate solo practices or belong to relatively small, local firms. That’s something attorneys listed on Norml’s website generally have in common. It’s worth noting that any attorney can appear on that list if they pay a fee to Norml. Ultimately opening up conduct rules to permit attorneys to work in the marijuana industry will add more teeth in legitimizing the legal marijuana sector overall. “So that’s definitely a good thing for the industry,” Murphy said. “The more professional service you have in the industry, the more legitimate it becomes.”
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ITT CONTINUED FROM PAGE 1 representative of the company said in an email that ITT would not be providing further comment. The immediate question after the ITT closure becomes what happens to the thousands of students who were enrolled there. ITT’s website had a message as of Friday, Sept. 9, noting that online students in its July 2016 academic term were expected to be able to finish the term, which ends in mid-October. It also listed schools with which it has articulation agreements. Overall, students have two main options — apply to get their federal loans discharged or enroll in another school to finish their current education path. U.S. Education Under Secretary Ted Mitchell said in a conference call with reporters that the department has been contacting former ITT students and directing them to resources for more information. The department has also reached out to community colleges in ITT’s service area and encouraged them to open their doors, he said. The schools have certainly heeded that call in Northeast Ohio. Lorain County Community College tries to be “super responsive� when there are events like major layoffs, putting together programs to help those out of work, Kushner said. The ITT closure is a similar situation, and the school will be working to serve those students. LCCC offers a number of programs, like software development or nursing, which ITT offered at its nearby Strongsville campus. The school has sessions starting near the end of September and in October, and it will be keeping track of student needs to try to help students continue their education as seamlessly as possible in that October session, she said. The school is also hosting two “ITT Path to LCCC� information sessions in September. Cuyahoga Community College began its outreach before ITT’s closure, when it heard the school was no longer going to accept new students, said Lisa Williams, vice president of learning and engagement. Tri-C wants to work with students to help them transfer credits and find the proper program alignment so they can finish and get jobs in the region. The school has a dedicated website for former ITT students highlighting Tri-C’s different programs and its financial aid options, as well as other benefits. And it’s not just the community colleges prepping for possible enrollees from ITT. Nonprofits Herzing University and Indiana Wesleyan University, out-of-state colleges with local campuses, contacted Crain’s to highlight their efforts to reach former ITT students. The large state institutions in the region didn’t report any concentrated outreach efforts to former ITT students, but that doesn’t mean they aren’t considering the ramifications of this closure. Ron Cole, public information officer for Youngstown State University, said in an email that it was too late in the semester for the school to accept ITT students. But the situation made the school realize the process for approving credits from for-profit schools is not as consistent “as it needs to be,� he said, so it’s undergoing a review to develop more consistent procedures. The goal is for those new procedures to be in place for the start of the spring semester.
Looking forward Whether ITT’s closure is a harbinger of more to come depends on whom you ask. John Ware, executive director of the State Board of Career Colleges and Schools, doesn’t think it is, in part because there aren’t many schools left of its size. The board primarily oversees for-profit schools in Ohio, as well as a small number of non-profit, non-degree-granting schools. As of March 2016, there were 45 registered career colleges and schools in Cuyahoga County and 12 in Summit listed in the board’s searchable database. The other Northeast Ohio counties in the Crain’s coverage region had five or fewer schools each. There have been a significant number of these kinds of closures in
recent years, but the “magnitude� of this one and the school’s inability to finish teaching its students before closing makes it notable, Ware said. Other schools have tended to teach out students, or allow them to finish their education. He said there were about 2,000 students enrolled at Ohio’s nine ITT campuses when it closed. The for-profits have been closing because of financial issues and a fear of not being able to meet federal regulations, especially the one for gainful employment, Ware said. He described that as a debtearnings ratio, which can be a problem in fields with low starting salaries or unreported income. While most of the independent schools have been able to make it in the new regulatory environment, the large chains have struggled, he said.
For-profit schools grew rapidly in the 2000s, garnering a lot of attention, much of it negative, said Kevin Kinser, a professor and head of the department of education policy studies at Pennsylvania State University. Kinser has been studying for-profits since the 1990s. For-profits have been around for a long time, he said, and most were tied to local workforce needs, focusing on non-degree credentials. The problem came when the business model of the large schools got disconnected from the academic model, and the current regulatory environment is trying to “permanently link� the two, he said. Sen. Sherrod Brown said in a conference call that ITT’s closure sends a “strong message� to other schools that may not be acting up to standard, and that the political environ-
ment is more aggressive now. Under Secretary Mitchell, who was also on the call, said taxpayers and students deserve better. “We will aggressively pursue bad actors in the space,� he said. But Kent Trofholz, executive director of the Ohio Association of Career Colleges and Schools, said the rest of its member schools — mostly for-profits — won’t face the same challenges as ITT. He’s “saddened� by the school’s closure, but doesn’t think it’s indicative of future closures of other members. The schools are highly regulated, he said, and turning out students that secure employment shortly after graduation. The schools are good partners to the workforce. “At the end of the day, I know what our schools produce,� he said.
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Q & A: Kip Bollin Cleveland partner at Thompson Hine LLP and Federal Bar Association treasurer With a downtown renaissance underway, a recent Republican National Convention that went off smoothly and a long-awaited national sports championship notched in our belts, Cleveland has spent much of 2016 basking in the limelight. That momentum continues this week as the Federal Bar Association (FBA) comes to town for its annual meeting, in its first trip here in 16 years. The meeting will take place over four days, Wednesday, Sept. 14, through Saturday, Sept. 17, at The Westin Cleveland Downtown. If you’re not an attorney or judge, you may not even know this is happening. However, much like the RNC was an opportunity to show off Cleveland on a national stage regardless of politics, the bar association event is a chance for the legal community to do just the same for scores of visiting judges and attorneys, many of whom have never been to the city before. Crain’s spoke with host committee organizer Kip Bollin, a Cleveland partner at Thompson Hine LLP and current bar association treasurer who will be named the organization’s president-elect this week, about the event and why it’s so meaningful to the Cleveland legal sector. — Jeremy Nobile Much like planning for the RNC, I imagine getting Cleveland to host the Federal Bar Association must’ve been quite an undertaking in its own right.
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We had our first planning meeting in January 2015. But the (Northern District of Ohio Chapter) actually applied to host this convention four-and-a-half years
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So what’s the purpose of the FBA event? What usually happens during these meetings? The purpose is three-fold. One is to provide opportunities for national members to network. Second is to provide some quality legal education opportunities for attendees. Third is the running of the organization. We’ll have a national council meeting, vote on governance matters and determine the direction of the organization of the coming year. That all sounds rather routine. But in reality, this is practically the same as bringing the equivalent of your own RNC to the city, isn’t it? That’s exactly right. We are looking forward to an opportunity to show off Cleveland both as a city and a legal market. It’s a great town with great sophisticated businesses and legal practices. When we were reaching out to land this convention, it was very much our goal to reintroduce the hundreds of folks attending from across the country to Cleveland. Many haven’t been here in decades, or never been here at all and have no clear perception of what the town is like these days. We have so much going on and we’re really excited to show it all off to our national colleagues. It does seem Cleveland has been slow to shake off some negative stigmas, at least in the minds of some outsiders. When I talk to folks from out of town about the city, it’s so common for them to respond to me and say, “Wow, I really like Cleveland,” as if that would be news to me. It’s because of an outdated perception. People think back to events from the 1960s — there’s always the burning river. My canned response to them these days is that happened before I was born, so I can’t tell you about that. But everything is coming together right now. There’s a great belief in ourselves. I want people to go back where they came from and talk about what a great town Cleveland really is. What do you have planned for fun? What are some places in town you’ll be showing off? We’ve got a lot of events planned, starting with a welcome reception on Wednesday in the fantastic lobby at Calfee (Halter & Griswold LLP). For Thursday, we’ve rented out the Alley Cat in the East Bank of the Flats so we can show off the view of the river in the renovated Flats. Friday night, there’s going to be a big party that we’re throwing for everybody at the Rock and Roll Hall of Fame. We’ll also have a local band of attorneys, The No Name Band, who will get to play at the Rock Hall. If someone is reading this who isn’t signed up and wants to go, is it too late? The online sign-ups are over. But you can still sign up by walking up or contacting the FBA directly by phone or by email. You can check out an online itinerary at www.fedbar.org/FBACon16. Well I can tell you’re excited and maybe a little anxious to get things kicked off. I’m just so glad for the opportunity that the FBA has provided to me and the opportunity to give back to the FBA by hosting a great meeting in one of America’s great cities.
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Smithers’ Popio gains insight from time in UK By DON DETORE Rubber & Plastics News
It was a nearly three years ago when Jim Popio took on the challenge of becoming the vice president and general manager of Smithers Rapra and Smithers Pira in the United Kingdom. A longtime Smithers manager with particular expertise in tire performance, characterization and method development, he had been asked to learn new businesses within the growing global portfolio of Akron-based Smithers Group Inc., most of which deals little with the tire industry. The global customers that Popio had come to know so well — tire companies, automotive original equipment manufacturers, government agencies — would not be part of his new experience. That meant that while he took his bags to England, Popio had to leave his baggage behind. “A lot of what we do (in Akron) is support our core product, our tire analysis report,” said Popio, who since has returned to Smithers’ Akron facility, serving as vice president of operations, North America, of Smithers Rapra and Smithers Pira Ltd. “But when I’m so focused on the tire industry or the automotive industry, it’s tough to get outside of it,” he said. “This was a great opportunity to put on a new hat.” Popio, who had brief stints at Bridgestone and Goodyear before joining Smithers in 2000, said he was the first person from Smithers Scientific Services Inc. — the predecessor of today’s more diversified Smithers Group — to be sent abroad.
Expanding reach The testing firm, which was founded in 1925 and grew primarily into a testing service business for the tire industry, has expanded its reach over the last decade and a half. It has acquired numerous businesses abroad, including Smithers Rapra (an acronym for Rubber and Plastics Research Association) and Smithers Pira (Print Package Research Association), companies that test a range of goods including, among other things, medical equipment, packaging, credit cards, ink and passports. Popio said the work included dealing with consumer product producers in the supply or distribution chain. “If you’re shipping laundry detergent from point A to point B, it needs to get there,” he said. “The label needs to be on it, the boxes need to not break, or the containers need to not break, whatever it might be. It needs to be wrapped properly, or minimally.” The work there also tested plastics- and polymer-related goods that serve the medical industry. For example, the U.K. operation has a leachable and extractable lab that evaluates prefilled syringes and other medical devices, and it tests stoppers for the syringes and the interaction between the stoppers and the medicine. “You want to make sure that if you prefill a syringe, there is no interaction between the medicines and the polymer used in the container itself or the rubber stopper,” Popio said, “whether there are things that come out, or things that go in, or it changes the property or the effectiveness of the medicine.” Tests are conducted to determine how time, travel and packaging af-
“I was able to dispel myths. When you sit in your own little office — I’m guilty of it — you can create a reality that isn’t real, a Pokemon reality. So that by going there, I could answer their questions and say, ‘That’s not how I understand it.’ ” — Jim Popio, vice president of operations, North America, Smithers Rapra and Smithers Pira Ltd. (Don Detore/Rubber & Plastics News) fect the potency of the medicine. Does the container start to break down? Do bacteria start to grow? Does the label remain affixed? “We even look at the inks they use on the package, the film over meat packaging and the requirements on that, especially in Europe,” Popio said. The European arm of the company also analyzes films in aerospace, as well as other polymers in other applications, including corrosion protection in deep sea applications, or plastic pipes, “anything where rubber and plastics are used would show up,” he said. Popio said Smithers’ businesses evaluate all kinds of other materials in medical or in food-related industries, such as the effectiveness of containers or packages as they age in humid environments. Can you open them? Do the medical devices stay sterile? “It’s amazing the amount of work that goes on behind the scenes for all of these brand owners,” Popio said. “Most consumers have no idea the amount of evaluation these products have done.” While learning the business was important, he said it was equally important for employees there to hear the parent company’s perspective directly from a longtime employee. “I was able to dispel myths,” he said. “When you sit in your own little office — I’m guilty of it — you can create a reality that isn’t real, a Pokemon reality. So that by going there, I could answer their questions and say, ‘That’s not how I understand it.’ “So from a growth perspective or a Smithers perspective, I hope it was a good strategy for us going forward.” While the science, engineering and services the firm provides remain the same across the globe, Popio said it took six months for him not only to meet customers and visit labs, but also to understand the nuances of the position and the difference in culture and communication styles. Popio spent more than two years in England, leaving in late 2013 and returning to the states by January 2016 in order to start his newest position. He said he returned to the United States with newfound enthusiasm. “What’s interesting is I come back with a lot of insight from the team over there, and a lot of relationships,” he said. “I saw some of the things that they do that would be nice to do here, and I took over there some of the things that we do that would be nice to do there.”
Back in the U.S. Popio, a University of Akron graduate, is back in familiar territory with a global perspective. And he is keeping busy. He and three Smithers co-workers will participate in the International Tire Exhibition & Conference. The
three-day event, which focuses on tire makers and suppliers to the industry, will be held Sept. 13-15 at the John S. Knight Center in Akron. He will serve as a panelist on the “Future of Tire Testing Panel,” while co-workers Nat Leonard, president of Smithers Rapra and Smithers Pira,
is speaking on global trends affecting the tire industry and what they mean for current and future tire testing; Bruce Lambillotte, general manager, Akron Laboratories & Tire Services, will discuss “Zinc Oxide Usage in Rubber Compounds;” and Madhura Rajapakshe, test research and development project engineer, will present “Using Rating Systems to Assist Consumers Select Fuel Efficient Tires and Protect Environment.” Popio said he has seen tire technology improve exponentially in his time in the industry. As new research and development centers open and new technologies evolve, he said treadwear, traction and rolling resistance continue to improve. “At the end of the day, there is some unbelievable stuff that happens every day, all day, whether you’re in the raw materials side of it or you’re in the design side,” he said. “The tire companies continue to work on new concepts, new materials, new ideas, but they are working and reacting to the needs and desires of their customers, the OEM.”
Detore is managing editor of Rubber & Plastics News, a sister publication of Crain’s Cleveland Business.
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Opinion
From the Publisher / Editor
Wells Fargo ad campaign errs by undervaluing arts
Editorial
Get in the game At one point in this election cycle, the U.S. Senate race between Republican incumbent Rob Portman of Cincinnati and former Democratic Gov. Ted Strickland was considered a toss-up, and one that was pivotal to determining which party would control the Senate next year. That seems like a long time ago, as poll after poll has shown Portman with a commanding lead as the GOP stalwart has outworked his Democratic challenger, shown a greater command of issues and dominated at the fundraising game. Recognizing this, the Democratic Senatorial Campaign Committee and its aligned super PAC canceled some planned TV advertising in support of Strickland, a sign that they’re looking to move on to candidates with better prospects for winning. A week after Labor Day, the traditional start of political campaign season, Ohio seems poised to have yet another dud of a statewide race for high office, following the disaster that was Democrat Ed FitzGerald’s 2014 challenge to Gov. John Kasich. And that doesn’t serve Ohio’s voters well. We’re not making an endorsement now — that will come in October — but we’re imploring the Strickland camp to raise its game and make this a competitive, substantive election. Ohio is a swing state in presidential elections, but in state races in recent years, the Democrats have been hopelessly overmatched, unless Sen. Sherrod Brown is on the ballot. Ohio is too large, and too diverse, a state to have only one fully functioning statewide party. As its standard-bearer this year, it’s up to Strickland to make the case for his party’s approach to governing on taxes, trade, environmental regulation, gun control and immigration, among other issues, and to contrast it with the Republicans’ ideas. So far, he hasn’t been up to the task. Strickland is at a severe money disadvantage. According
to reports filed with the Federal Election Commission, Strickland had $3.7 million in cash on hand at the end of June, compared with $13.2 million for Portman. As if that’s not bad enough, The Washington Post reported that outside interest groups so far this year have spent $39.8 million on the Senate race in Ohio — with $24.4 million of that backing Portman. The money edge has helped Portman define Strickland as a failed governor and a poor steward of taxpayer money. But it’s not just money that has given Portman the advantage so far. He’s a canny campaigner, the most successful Republican so far in establishing a safe distance from the party’s divisive presidential nominee, Donald Trump. He also has focused on local issues that resonate with Ohio voters, touting, for instance, his work fighting algae blooms in Lake Erie, and in addressing the state’s epidemic of deaths from heroin and other opioids. Portman has run the kind of detailed campaign that voters notice and appreciate. It’s not too late for Strickland to make this a race, but he has to sharpen his focus and highlight the significant differences between the candidates, particularly on trade. Portman served as both the U.S. Trade Representative and the director of the Office of Management and Budget for President George W. Bush. Surely there’s some space for Strickland to examine Portman’s record in those roles. Strickland will have to work smart, since that money gap isn’t closing significantly before Nov. 8. There will be three debates between the candidates, starting Oct. 14, but Strickland has to step up immediately — with a more active campaign schedule, sharper rhetoric, better use of social media, and more — to give Ohio voters the race they deserve.
PUBLISHER AND EDITOR: Elizabeth McIntyre (emcintyre@crain.com)
CLEVELAND BUSINESS
MANAGING EDITOR: Scott Suttell (ssuttell@crain.com) SECTIONS EDITOR: Timothy Magaw (tmagaw@crain.com)
Wells Fargo recently unveiled a print advertising campaign for its Teen Financial Education Day on Sept. 17. A smiling young woman in a science lab appears in one ad above the words: “A ballerina yesterday. An engineer today.” In another, a teenage boy happily holds a beaker with the tagline: “An actor yesterday. A botanist today.” Under both ads, Well Fargo implores: “Let’s get them ready for tomorrow.” Get them ready for tomorrow? Does tomorrow not include the arts and the creative people who practice them? Who enrich their own lives and ours? And is tomorrow not meant for people who studied liberal arts and applied their skills to other work disciplines? The ads raised questions about how we value, or devalue, the arts and, by extension, a liberal arts education and sparked a social media storm over Labor Day weekend. Broadway artists such Elizabeth as Tony winner Cynthia Erivo and Anthony Rapp McIntyre took to Twitter to express their outrage. One of the most vocal advocates on my social media feed was Lisa Jebsen, a Columbus native with a thriving career in the arts alongside her husband, Tim, who is the executive director of the Midland Community Theater in Texas. She offered these thoughts on Facebook: “So sad that part of our culture doesn’t get it. Repeat after me everyone: Arts have value. Boundless, limitless, infinite value.” Lisa is one of many friends of mine who are arts aficionados and practitioners. I freely admit my bias on the subject. I was a journalism major with a theater minor in college and was lucky enough to earn an acting scholarship, like Lisa did, that paid a sizable part of my tuition through my years at Bowling Green State University. I never intended to practice my acting skills professionally. For decades, however, I have applied the lessons learned from instructors who taught me acting, stage managing and set-building techniques. Believe it or not, I can talk a good game when it comes to basic construction (a rabbet here, a dado there) but don’t ask me nowadays to execute them successfully. And the skills I learned in acting — the preparation, the live performance, the collaboration, the trust — played a big role in preparing me for my career. Wells Fargo has recently apologized for the campaign, and rightfully so. There is no need to denigrate one career choice or academic pursuit to build up another. This isn’t to say we don’t need more scientists and engineers. We do, but there is equal value in living in a society that nurtures and supports the arts and those who devote their professional lives to creating them. And scientists and engineers who have a firm foundation in the arts? That’s a combination that can only make society better. Equally important, the pursuit of a liberal arts education prepares young adults for the types of skills that employers need in today’s marketplace: critical thinking, problem solving, communicating. Sandy Rapp, vice president and chief information officer for the Timken Co., spoke to this issue last week during the OHTec CIO Symposium. More and more, Rapp said she is looking to hire non-traditional candidates. “We’re finding that you don’t necessarily have to be a computer science technician,” she said. “You can have a liberal arts degree and that is, how can you understand and interpret situations, how you analyze things and come up with solutions.” Young adults who have studied philosophy, sociology and psychology have the knowledge and critical thinking skills for most careers. And that, Wells Fargo should note, makes them ready for tomorrow.
WRITE US: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Cleveland Business, 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113, or by emailing letters@crain.com. Please include your complete name and city from which you are writing, and a telephone number for fact-checking purposes.
SOUND OFF: Send a Personal View for the opinion page to emcintyre@crain.com. Please include a telephone number for verification purposes.
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Personal View
What’s ailing the ACA: Insurers or Congress? BY J.B. SILVERS
New, complicated landscape
Since the Affordable Care Act — or what many call Obamacare — has been labeled a failure since the day it started, according to some political types, it’s difficult to know if the recent defections by large insurance companies are really a death knell or just growing pains. Aetna dropped a bombshell Aug. 15 when it announced that it was pulling back dramatically in the individual market, dropping coverage in about twothirds of the 778 counties throughout the U.S. in which it has offered coverage. UnitedHealthcare announced in April it was pulling out of most Affordable Care Act marketplaces that offer health insurance plans, mostly where there were few enrollees or their market share was very low. This has led critics and even those who support the ACA to wonder if this could be the beginning of the end for the ACA. The answer is: We don’t know yet, but reports of its demise are greatly exaggerated. As someone who has spent years researching health insurance and who has testified before Congress, as well as being CEO of a health insurance company, I hope I can offer some insights that may not have surfaced in recent discussions. Here’s what explains theses defections and what I think all Americans should know about the debate: In addition to insurers backing out, Congress has failed to support the law in ways that could help insurers. Congress is supposed to help insurers cover their losses and thus be more likely to stay in the market.
Insurers file preliminary premium and plan design proposals with federal and state governments in May of each year for the coming year’s open enrollment. They have until Oct. 1 to finalize these. The facts are that almost all insurers on the ACA exchanges pull some of their plans by the October deadline. UnitedHealthcare and Aetna are just more public and extreme than most. This is because insurers have almost no information in May from the current year’s enrollment to know how to set premium prices for the next year. The companies state that they end up pulling back because of major losses on some of their plans. That is true. But every company lists more plans in the spring than they intend to offer in November enrollment. This is because of the lack of data in May. In other words, as experience reveals actual costs, each company will cut some losing plans. More promising ones survive. This culling is a normal reaction to timing problems imposed by government deadlines. That said, there are also more serious problems behind withdrawals.
In your Sept. 5 editorial (on hiring set asides for construction projects), you write, “One day of work can dictate whether someone’s children go to bed hungry.” Please, can you be more melodramatic? And don’t workers in Parma, Bedford Heights, Garfield Heights and other struggling neighborhoods in NEO have JUST as much right to that job paid for by STATE funds as workers in Cleveland? The bottom line is a 20% mandatory earmark for Cleveland residents is unfair to those competing for a job outside of the city limits. What happened to free and open competition for work? — Jack Desmondi
Re: FirstEnergy HQ valuation Maybe they can keep the coal plants open, which, by the way, is the cheapest form of energy. We should be making sure families are fed from the income of the wage earner who is working, vs. getting Obama aid. — Ohio Land Man
Re: Alternative energy in Ohio Contrary to the Sept. 5 Personal View by Josh Knights, the executive director of The Nature Conservancy in Ohio, wind energy should have no meaningful role in powering Ohio. The land use consequences are enormous in a populated state, and those who presume to be protectors of the land have an obligation not to mislead the public. Opposition to the pursuit of wind power in Ohio is, in the words of Sierra Club founder John Muir, “‘not blind opposition to progress but opposition to blind progress.”
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Riskier business The fact is that Obamacare is forcing insurers to take on far more risk than they previously did. They must offer insurance to more people who didn’t have health insurance previously. They must cover pre-existing conditions, and they must offer less of a SEE ACA, PAGE 13
Web Talk Re: Crain’s editorial ‘Hometown fight’
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Safety, Service and Professionalism 10, 25 and 50-hour Jet Cards available To understand the scale of the wind, Kevon Martis, director of the Interstate Informed Citizens Coalition, likes to illustrate the issue this way: All of Ohio’s current power generation facilities can fit into one Ohio township. To replace the power generated by these facilities with wind would require two 2MW wind turbines every square mile across 40 counties. Because Ohio is such a populated state, and because wind is such an inefficient power generator, the industry has to site them in ways that are harmful to people and to wildlife. They refuse to disclose wildlife mortality at Blue Creek, and most of the developers have “gag orders” in their contracts so people cannot complain about adverse effects to humans. Yet, the wind industry is relentless in trying to overrule local citizens trying to protect their families through sane setbacks. The industry has even suggested the state overrule local governments so that they can literally carpet bomb Ohio with this laughable technology. The media reports that are coming out rapid fire are intended to build pressure on legislators to lift the freeze and roll back current setbacks. But the lobbying by those who presume to be protectors of our environment is truly repugnant. — Truth Seeker
Re: Support the Indians A Sept. 2 SportsBiz blog by assistant editor Kevin Kleps noted about the Indians, “Only 26 of the 65 home games have been played before a crowd of 20,000-plus.” Clevelanders seem to take the Indians for granted. I’m not so sure that confidence is warranted. The fact that Indians owner Paul Dolan felt the need to take on an additional investor to shoulder some of the financial risk is a caution flag. — Lyn Anderson
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Mantua-based Mantaline adds new plant
Injection molding and thermoplastic extrusion facility in Hiram expected to be at full capacity by mid-’17 “This facility allows us to work around the clock with new capabilities and add new products to our portfolio.”
By MIKE McNULTY Rubber & Plastics News
Mantaline Corp. has expanded its operation and manufacturing capabilities with the addition of a new plant and equipment in Hiram. Its newest facility, called the Thermoplastic Extrusion and Injection Molding Innovation Center, spans about 30,000 square feet and sits on an 8-acre site, which gives the company the needed space to expand if the business grows, according to President and CEO Mark Trushel. He estimated the cost of the new plant at $1.6 million, adding that Mantaline is spending another $1 million to add an extrusion line with three extruders, presses and other equipment. A grand opening was held Aug. 17. “We expect the line to be at full capacity in mid-2017,” he said, “so we could add another line at the plant by mid-next year. We have two injection presses in operation at the plant and two on order.” About 18 are employed at the Hiram factory, currently working in two shifts. Trushel said the firm is in the process of hiring additional personnel. Located about 15 minutes from the company’s headquarters in Mantua, the new plant opens the door for the firm to branch out into the thermoplastic elastomer and thermoplastic extrusion and injection molding sector, said Tom Mlinar, president of business development. Mantaline, which primarily produces goods made with rubber and silicone, will extrude thermoplastic materials — TPEs, thermoplastic
— Tom Mlinar, president of business development, Mantaline
Mantaline Corp., which is headquartered in Mantua, opened a $1.6 million facility in Hiram. (Contributed photo) vulcanizates and thermoplastic polyolefins — to produce products at the factory, which is air conditioned to keep materials and equipment moisture free. It said the first of what will be several extrusion lines at the site is outfitted with two state-of-the-art quality assurance digital comparators. That gives employees the ability to monitor products being formed by
three extruders in-line, in-process so the real time quality is baked into the products. “With this facility, we harness ‘best available’ technology,” Mlinar said. “Our goal is to deliver strategic componentry that enhances automotive safety as well as improves the aesthetic beauty to the end product. “This facility allows us to work around the clock with new capabili-
ties and add new products to our portfolio.” Thermoplastics have a lot of attributes and can be formed economically in a number of processes, and “we can accomplish more with the materials,” Trushel said. The corner molding the firm is doing with the various TPEs provides for a quicker cycle time and any scrap — of which there is very little — is recyclable, he said.
“We’ve been in the rubber world since 1964 (when the company was formed) and at one time we looked at thermoplastics as a threat to rubber,” he said. But after further review, he said, the company now views thermoplastics as a complement to rubber. “There are some things that are only suited for rubber. For other things, only plastics are a fit,” Trushel said. Employee owned and operated, Mantaline is a Tier 1 supplier to the global commercial vehicle market, especially heavy trucks, and a Tier 2 supplier to the automotive industry. It designs, develops and produces molded and extruded components, primarily seals and gaskets, for a variety of industrial markets. In addition to its facilities in Mantua and Hiram, the company has plants in Monterrey, Mexico, and San Antonio. The company employs about 175.
McNulty is a senior reporter at Rubber & Plastics News, a sister publication of Crain’s Cleveland Business.
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ACA
CONTINUED FROM PAGE 11 differential among premiums for individuals than ever before. Most insurance in the U.S. has been offered through employers, Medicare or Medicaid. Having large numbers of people within a group plan allows insurers to spread the risk among a large group of people. The switch to covering millions of people individually is unprecedented. This creates a new landscape for insurance companies, who survive by the balancing of risk among large groups. It is an entirely new business model. Think of past experiences in areas devastated by floods or hurricanes, where insurers drop coverage or raise rates. Or, consider your homeowner’s insurance, and the increase in premiums you are charged if you file too many claims.
are bandied around in the press but net costs after subsidies, as a fixed percentage of income. Net premiums that enrollees actually pay are the objective of the law. Affordable premiums range from 2% of income at the bottom to 9.5% at the top. Subsidies are varied to reach these objectives. Thus, the higher premiums being sought now will result in larger subsidies for most out-of-pocket expenses relative to income. The problem is that not all people receive these variable subsidies. Young people have low premiums to begin with since they use little health care and thus have low subsidies, while those in higher age brackets benefit greatly. The problem is that insurance company premiums must rise to reflect the overall risk of the population rather than the lower level for some groups.
Those with higher incomes not receiving subsidies at all see a net rise in cost. Thus, while most in the market benefit, it is undeniable that some pay more — and they are not happy about it. But that’s what insurance is supposed to be all about — sharing the risk across everyone in the insured population. It’s just that we didn’t do that prior to the ACA. And all the good things that people actually do like (guaranteed insurability and fixed premiums regardless of age or gender, no pre-existing conditions, etc.) aren’t possible unless everyone is in the pool together.
In this together, or going alone? Fundamentally, this is a clash between the rugged individualist view of self-sufficiency and a collabora-
tive view of the responsibility of the group for shared objectives. You can’t have both, although the ACA tries to balance the two. We have to share the risk, but we still have choice of plans. But the balancing act fails when it appears there will not be enough players to provide the choices promised. This is why the loss of choice of plans in many areas of the country is a serious challenge, although a dominant insurer actually may be able to negotiate lower payments from providers and pass it on in lower premiums, as is the case in several states. So is the sky falling on the Affordable Care Act or not? Making this model work in all areas of the country has always been a challenge, especially where there is a single hospital or dominant provider system or where one insurer has an over-
whelming market share. This is where a “public option” or “Medicare for All” might help keep everyone honest. As Medicare is more aggressive about fostering change and efficiency, it may be that the most innovative payer is the government. On the other hand, competition has worked well in most sectors of the economy, although it is less clear the marketing and administrative overhead that comes with it here is worth the gain. This should be the debate — whether we want to provide access to insurance for all — rather than knee-jerk political responses.
J.B. Silvers is professor of health finance at the Weatherhead School of Management at Case Western Reserve University.
Congress has not kept its bargain There’s another problem that is not often discussed when the insurance companies announce their premiums and their coverage areas. Obamacare offers payments to insurers to offset their losses in covering high-risk individuals. Congress is not living up to this part of the law. These payments, called premium stabilization features, are part of the law. Republicans in Congress who are opposed to Obamacare, however, last year allowed only 12% of the compensation for early losses promised by the ACA. The ACA law says insurers are due the full amount, but the courts say any shortfalls must be appropriated by Congress, rather than just taken from other funds. This was adjudicated in the courts after the ACA was passed, and initial premiums were set based on this safety net. Because Congress has only allowed 12% of the amount due to insurance companies, the premium stabilization features have been insufficient to limit losses as the law envisioned. This gap was not anticipated in prior-year rates by insurers, but it is built into the premiums this year. That’s part of the reason for the increases. This higher risk, coupled with enrollment that was less than anticipated and biased toward those with poorer health, resulted in much higher than anticipated costs for insurers. Although insurers are in the business of managing risk, it is the unexpected nature of these changes that have made them much more cautious. The nature of the insurance market for individuals and the requirement that no one can be turned away creates large and ongoing insurance challenges. Historically, people who posed too high a risk were routinely turned away. Without the ACA, premiums for these previously uninsured people would have to rise to outrageous levels to cover their costs.
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What is affordable, anyway? But having everyone in the pool and reducing out-of-pocket costs to “affordable” levels via sliding-scale subsidies allows differences in net premiums to vary only by income levels, not age or other normal factors insurers use. The “affordable” in the ACA is not based on the gross premiums that
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TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.
LIENS FILED Network Providers Associates PC 6200 Oak Tree Blvd., Suite 200, Independence Date filed: July 21, 2016 Type: CIVP Amount: $83,954 Fess Inc. 3303 Superior Ave., Cleveland Date filed: July 21, 2016 Type: Employer’s withholding, unemployment Amount: $60,337
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Carnegie Cedar LLC 19904 Cottonwood Trail, Strongsville Date filed: Aug. 4, 2016 Type: Partnership Amount: $15,893 R.J. Mascia Corp. P.O. Box 42296, Brook Park Date filed: July 21, 2016 Type: Employer’s withholding, unemployment Amount: $11,490
Will Repair Inc. 2901 E. 65th St., Cleveland Date filed: July 21, 2016 Type: Employer’s withholding Amount: $57,096
Watsons Funeral Home Inc. 10913 Superior Ave., Cleveland Date filed: July 21, 2016 Type: Employer’s withholding, unemployment Amount: $10,906
Horizon Electric Co. 15100 Arden Ave., Lakewood Date filed: Aug. 4, 2016 Type: Employer’s withholding, unemployment Amount: $29,702
SMJ Growth Corp. 23800 Commerce Park Drive, Suite A, Beachwood Date filed: July 21, 2016 Type: Employer’s withholding Amount: $10,011
Mathews Metal Works & Ornamental Concrete LLC 7831 Clinton Road, Cleveland Date filed: July 21, 2016 Type: Employer’s withholding, unemployment Amount: $25,578
Dunham Auto Body Inc. 5452 Dunham Road, Maple Heights Date filed: Aug. 4, 2016 Type: Employer’s withholding Amount: $8,674
LIENS RELEASED 7910 U.S. Rt. 30 East LLC 161 Crocker Park Blvd., Apt. 303, Westlake Date filed: Dec. 11, 2015 Date released: July 21, 2016 Type: Partnership withholding Amount: $307,134 AKA Construction Management Team Inc. 15508 Miles Ave., Cleveland Date filed: Aug. 27, 2013 Date released: July 14, 2016 Type: Employer’s withholding Amount: $157,570 Inner City Development & Personal Growth Foundation 6816 Superior Ave., Cleveland Date filed: Feb. 22, 2012 Date released: July 21, 2016 Type: Employer’s withholding Amount: $92,083 Center Cleaning Services Inc. 34100 Mills Road, Avon Date filed: May 7, 2014 Date released: July 21, 2016 Type: Employer’s withholding Amount: $29,166
A&J Engineering LLC/Arrow Metal Forming 8219 Almira Ave., Unit E, Cleveland Date filed: July 21, 2016 Type: Employer’s withholding Amount: $25,157
Cell One Communications Inc. 5342 Northfield Road, Maple Heights Date filed: Aug. 4, 2016 Type: Employer’s withholding, unemployment Amount: $7,330
Madison Avenue Family Dentistry Inc. 15509 Madison Ave., Lakewood Date filed: June 15, 2016 Date released: Aug. 4, 2016 Type: Employer’s withholding, unemployment Amount: $26,325
Hometown Building & Restoration Inc. 4448 Columbia Road, North Olmsted Date filed: Aug. 4, 2016 Type: Corporate income, employer’s withholding, unemployment Amount: $19,270
Precious Medical Health Services 25000 Euclid Ave., Suite 200, Euclid Date filed: July 21, 2016 Type: Unemployment Amount: $5,462
William Wolf & Co. 20000 Miles Road, Warrensville Heights Date filed: June 22, 2016 Date released: July 21, 2016 Type: Employer’s withholding Amount: $15,368
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TAX TIPS - P. 18 | Q&A - P. 19 | ADVISER - P. 20
David Gentile and Haidir Abou, 9, work the stand at Brothers Produce at the West Side Market on a recent Sunday. Sunday hours have been in effect for five months. (Ken Blaze for Crain’s)
Day of rest? Not at the market
Some West Side Market vendors are still salty over Sunday hours By MARK OPREA clbfreelancer@crain.com
F
or more than a century, the West Side Market, Ohio’s only municipally owned market of its kind, has been relatively unchanged. Of course, full chickens were once hawked with feathers still attached, and vegetables were sold under tarps instead of in an Lshaped interior. Analog winders had to be scrapped for a d igitized clock tower. But the market’s overall aim — to serve unique, local foods to the Cleveland public — has really not.
It has been five months since the market endured one of its most rousing changes since its debut in 1912: opening officially on Sundays. Though there was experimentation with late hours (until 10:30 p.m., one time), and full weekends in the 1970s, this April was the first time ever of adopted weekly Sunday openings. And it was hit. Tourists and locals alike, with music from the Cleveland Cello Quartet, packed the hall the first Sunday, as 64 vendors welcomed what could have been the busiest market day this year. “We were booming, man,” said David Gentile, of Brothers Produce, recalling profits on April 3. “They put me on camera, on every channel in Cleveland. And I’m like, ‘Yeah! We’re finally doing it! We’re finally doing it! Sunday is the bomb.” Itching for that kind of praise, Mayor Frank Jackson assembled a West Side Market Centennial Commission in the spring of 2011 to revitalize the city’s “crown jewel” in light of its 100th birthday. Partnering with the Ohio City Near West Development Corp., Jackson devised a full-on market overhaul, from repurposing barren locker rooms to hiring a nifty social media team (@WestSideMarket on Twitter). Along with a facelift, the commission aspired to adapt to the latest public shopping trends following, according to their March 2011 report, “an opportunity to SEE MARKET, PAGE 16
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evaluate a better solution for hours and operation that would benefit customers and vendors.” The answer: Open on Sundays. To make it fair, the city made it optional. However, when officials announced the new hours in March — along with a 10-month parking lot expansion — the change sparked an unforeseen debate amongst vendors. Where some saw increased foot traffic, others saw a waste of time and money. Being “optional” isn’t as just as it sounds for dissenters. The city, they assert, still raised their rent despite opting out of Sunday hours. And then there’s the compulsion, which produce vendors like Gentile and partner Eddie Abou said they face: If everyone else is open, then why shouldn’t we be as well? A petition to go back to “normalcy,” signed by Abou and all fellow produce hawkers, presented to the city in early September, aims to combat this. A city spokesman, meanwhile, declined comment for this story, saying it was premature to give a proper review of the market’s Sunday hours. “We’re going to say we don’t want to open on Sundays,” Gentile said. “It’s killing our business. We just want to bring back our regular customers like we have in the past 100 years.”
‘Getting in with the new’ On a Monday in late August, the corridors of the West Side Market’s produce section were oddly scarce. There was a college-aged duo of girls admiring the large beets of one ven-
dor. A family in town from Texas checked out the plastic jars of a nearby fruit stand. After 22 Sundays open, the stars of Brothers Produce, Gentile and Abou, idled at their stand. A patron passed, and Gentile offered his latest deal: bargain produce for a dollar a basket. Afterward, he explained. “How long could you let lettuce sit out on your counter?” he said, holding up a bulb. “We have 24 heads in a box. We pay $20. So, we make $4 if we sell them for a dollar. So, we get stuck. It hurts us.” Though Gentile was initially enamored by the market’s change in April, a run of bad business changed his mind by early June. Claiming a near 400% drop in advancements, Gentile blames the saturation caused by Sunday hours, that which takes away from peak shopping he sees the rest of the week. Tourists, he said, shop Sundays, not actual buyers of weekly produce. “They just come here to see the market,” he added. “They go inside, where three-quarters of the place is closed. They don’t want to shop on Sundays. Our goal? We want to bring them back on Saturdays.” Though the estimates differ depending on which vendor you ask, it’s common gossip that anywhere from 70% to 90% of them, from tea makers to candied popcorn, dislike the change (contrasted with the reported 70% who in March favored the move). Many do, however, accept it as a necessity. Don Whitaker, owner of D.W. Whitaker meats, said that though the new schedule was odd at first, he’s well-adjusted after five months, and has even witnessed an upturn in business (He and Kate’s Fish both report about a 20% increase in sales). He’s given several new jobs to col-
Jose Reyes cuts a strudel at K&K Bakery. (Ken Blaze for Crain’s) lege students to work the stand on extra hours. And the negativity about tourists? Better to complain about than no patrons at all, Whitaker argued. “I’ve seen a ton of new faces,” he said wearing a white apron and specs behind his counter he’s run for
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25 years. “Regulars are trickling in, and we’re asking them, ‘You usually come on Saturdays, and you came on a Sunday?’ And a lot of are like, ‘Well, I would have had to wait another week.’ What it does is given people the option.” About five stands south, holding a
vintage butter slicer made from piano wirer, is Diane Dever, of Irene’s dairy. Notable for her dissent, Dever is understanding of the appeal for new shoppers, those with tight schedules, travel baseball plans. Still, she’s worried that the city is neglecting the strenuous work reserved for
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Clockwise, from top: Handmade sausages from J&J Meats; cream swans from Euro Sweets; Eric Rivchun shops for fruit on a recent August Sunday afternoon.
off-days, like Sunday. How are vendors, she said, different than those working City Hall? “For me, Tuesdays and Thursdays aren’t free days,” Dever said. “We pick up pierogies, make our own almond butter. And that’s all I’ve ever known. People are saying, ‘You got to get in with the new!’ But for somebody at a desk deciding
the hours we put in? They don’t have a clue.”
A new market devotee So, when do Americans generally shop these days? A 2008 study by the U.S. Department of Labor found that 41 million people, on average, do their grocery shopping on Saturdays (when the
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market draws roughly 10,000), while only 33 million prefer Sundays. Millennials shop more whimsically, more so based on value and convenience. Minding that one in three Americans today don’t work the traditional 9 a.m. to 5 p.m. schedule, the Cleveland self-employed can shop virtually any day of the week — a stark change from the
ritualistic market visits of the Greatest Generation. It’s just this goal of drawing dedicated, local shoppers that councilmen and district heads believe will sustain the market for its near future. For them, it’s not Sunday per se. It’s what added awareness can do, especially in light of competition with the ubiquitous Walmart or Heinen’s. “The number one thing we must do is maintain the market as an authentic grocery store,” said Tom McNair, executive director of Ohio City Inc., “which it’s been for 100 years. Yet, you can’t look at the market in a vacuum, and say that every condition of 1912 is going to be the same in 2016.” The 800 new units opening up around the Market district and West 25th, McNair added, aren’t just new homes for Ohio City folk (9,500 as of today). Combined with the average 1.8 million visitors to the market an-
nually, more open days, in theory, mean more opportunistic devotees, even area residents. “Those are people who could all be daily shoppers of the market,” he said. “Ultimately, that’s the goal. You can call them tourists if you want, but they’re also potential customers.” In the months that lead up to the new 600-space lot, vendors like Gentile and Abou will continue to protest an alteration they feel is imbalanced. Most of the 64 vendors open on Sundays will remain open, some who will see better business, some worse. Even if the market reverts back to its time-tested days, wide-eyed newcomers snaking through its hundred plus stalls — buying tilapia, testing corn salsa, munching on brats — will experience the same spirit of what was fundamental purpose of “Cleveland’s gem” in the first place: to simply buy food. That is, just one day more.
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SMALL BUSINESS Tax Tips: Peter A. DeMarco
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Small business owners can expect a new rhythm around some of their annual tax compliance activities after Congress adjusted deadlines for some key income tax filings. As a result of legislation enacted in 2015, deadlines for a number of common filings and related schedules will be adjusted beginning with the 2016 tax year. That will generally mean a new schedule in 2017 for when many types of business owners will find themselves gathering documentation and either preparing their filings or providing information to their tax preparers. The legislation does not affect the deadline most familiar to Americans, the April 15 due date for personal income tax returns. Instead, the biggest changes are for owners of partnerships and C corporations, although there are adjustments that could touch on any type of taxpayer. Here’s a review of the more common small business return deadlines: Returns for partnerships and limited liability companies shift forward from April 15 to March 15. When those taxpayers file for extensions, the six-month extension period will expire Sept. 15. Returns for S corporations will follow the same pattern, due on March 15 with a six-month extension to Sept. 15. That is unchanged. Returns for C corporations with a calendar year-end, which have long been due on March 15, will be due on April 15 under the new deadlines, with extensions granted to Sept. 15. The extension deadline will shift to Oct. 15 for tax years beginning after 2025 under the legislation. Returns for trusts and estates will
Peter A. DeMarco is vice president and director of tax services at the regional accounting and consulting firm Meaden & Moore, headquartered in Cleveland.
be due April 15, as always, but extensions will be allowed to Sept. 30. That’s an extra 15 days compared with the current extension allowance. Returns for employee benefit plans will be due July 31, with extensions to Oct. 15, and returns for nonprofit organizations will be due May 15 with extensions to Nov. 15. As a result of those new filing deadlines, the timelines for a number of related forms typically included with the federal form also are affected. It’s not yet clear whether state and local authorities will adjust their filing deadlines to correspond to new federal deadlines, but it’s logical to expect that will happen. Tax and accounting professionals have been advocating for changes to filing deadlines for several years, looking for a smoother flow of tax information among related entities. Where information from one type of return is required to be provided for purposes of another type of return, the filings deadlines simply didn’t allow enough time for those transfers to occur. For example, partnerships are required to provide information to their
individual owners regarding their portion of partnership income that must be reported through their own tax returns. Depending on the nature of a given partnership, that could mean reporting income out to any number of individuals, trusts, or perhaps other S corporations or C corporations. If a given partnership does not file its return and report that information out to related entities until it is literally due, that creates almost an impossible filing situation for those related entities waiting for that information for their own returns due the same day. In complex, tiered business structures, it is impossible to file timely under those conditions, and the inevitable filing-day rush is an obvious invitation to error. New deadlines will improve the flow of tax information among related entities, but it means business owners will need to adapt to a new seasonality about when they prepare their tax information for filing. For calendar-year companies doing business as a partnership or limited liability company that are accustomed to filing on time without extensions, the window of time available to prepare for that filing will be 30 days shorter in 2017. That leaves less time after closing the books until the tax filing must be ready to submit to the IRS. Companies that prepare their own tax filings will need to assure their tax staff is prepared for the deadlines. Companies that rely on tax preparers will need to expect earlier due dates by which those preparers will need the necessary financial information to complete the filing.
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Q & A: Charity D’Amato Founder, Studio Chartreuse For 14 years, Studio Chartreuse founder Charity D’Amato has been creating visual brands for clients of all sizes, with Moen and Hinkley Lighting highlighting the larger portfolios and CLE Juice Box and Brucato Gourmet making up the smaller artisanal side. No matter the client, the boutique design studio owner and her team aim for a fun collaboration that does its part to “beautify” Cleveland. D’Amato’s design-centric iheartcleveland.com blog, meanwhile, connects readers to both her Lakewood-based firm as well as various Northeast Ohio hotspots. — Douglas J. Guth Can you give me an example of an interesting collaboration with a client? Ritzman Pharmacy came to us two years ago for a total rebrand. We were able to pitch for the project and were psyched when we got it. The pharmacy has been around for 65 years, and wanted to play up being an ‘apothecary pharmacy’ that works with customers to maintain their health. We helped Ritzman design their logo and did their branding for a line of prepackaged supplements and vitamins. We also did physical space design and signage, along with tradeshow design for a large conference. It’s been fun to be a part of their team. What’s the most exciting project you’ve worked on this year? We did invitations for all of the Cleveland Museum of Art’s big donor events. There were four separate events, so we did four separate designs, all exquisite and beautiful. These were for
invitees being pitched for funding left and right, so invitations were high-end foil with gorgeous engraving, really rich papers and metallic envelopes. These are elements we don’t use much, but it was very appropriate for the art museum. How did you become an entrepreneur? It was sort of organic and not something I really set out to do. I was at a downtown design firm (Doner) with a great job. I had a fancy cubicle with the special Herman Miller chair everyone envisions themselves sitting at. I was working on fun projects with great budgets, but they didn’t tug at my heart strings. I started freelancing and the work grew and grew, with relationships I’d formed giving me a shot at bigger projects. But I couldn’t stay with the freelance mentality of working until 2 a.m. and sleeping in until 10. I launched Chartreuse in 2002 with Moen as my first client.
What was your initial vision for your firm, and how did that vision change over time? My vision of doing great work with great people, and having fun while doing it, still stands to this day. My (three-person) staff is lucky to have fun together as well as with the clients we’re helping to grow in some way, shape or form. We can be creating invites or telling a company’s shareholders what their stock looks like in an annual report. It’s fun working with big companies, but getting down on paper what a startup wants is enjoyable, too. How does a smaller design studio separate itself from the pack? There’s a ton of competition locally, whether from other studios or freelancers. Clients come to us for our unique look and feel, but you can also separate yourself by getting involved in the community. I was a member of the Junior League of Cleveland for eight years, and have been on the board of Lakewood Arts Festival and the Lakewood YMCA. I taught
a spinning class to keep active. It’s about meeting people, getting out there, volunteering your time or doing pro bono design. When you give back to organizations, things will come back to you. We’ve had educational events at the studio and had (Lakewood Mayor) Mike Summers here to talk about businesses on the street. You can have beautiful style and do professional work, but companies will buy from you if they like you. What has been your biggest challenge in running a smaller studio? Finding a balance between being a business owner and a mom is a challenge. This is a business with three employees and myself, and I could work on Chartreuse morning, noon and night. I love the work. But I’m also raising my (twoyear-old) son, Max, so there’s a balance when you have a family. Something has to give. Fortunately, I have a really great team. Everyone is working on every project in studio, so even though there are specific processes and guidelines in place, we’re also open to evolving and changing. We work as a small team, and if someone needs time off, someone else is there to pick up the work. You have to be flexible in life. What can you tell me about your blog? I started the blog seven years ago when I was working at Doner. I was
in my late 20s, and many of my girlfriends were leaving work to have kids. I was sending emails to friends about restaurants and the social scene downtown as a way to keep them from slipping away. My emails got forwarded to ‘mommy groups’ around town, so I got on Blogger and posted my usual emails in blog format. Now I generally write about happenings or cool things in Cleveland, like finding pillows at Arhaus Loft. I’m a huge cheerleader for this city. And blogging has gotten us leads for design projects. I’ll post an organization’s event, and the marketing director will keep me and my studio in mind for future work. Hopefully I’m creating a brand that people will associate with me and Chartreuse. What inspires you most as an entrepreneur? I’m constantly inspired by other entrepreneurs to think bigger, to dream bigger, to have more fun or appreciate my work more. We have a great community here with that Midwestern mindset of pitching in and helping each other out. Seeing our client and friend Anne Hartnett (founder of Harness Cycle) make it is so inspirational. I’ve always liked Martha Stewart, too, just the way she took everyday objects and made them beautiful. I also love the fashion world, and the way interior design bloggers find inspiration in how they approach texture, color and scale. Really, anytime I step outside, I get inspired.
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SMALL BUSINESS Adviser: Michelle J. Sheehan
Watch out — you may be deemed a joint employer If you hire a company to provide a service or work for your operations such as cleaning or repairing your facility, and the company hires, trains and supervises the employees to provide that service, you may be deemed a joint employer according to the National Labor Relations Board’s (NLRB) revised definition of “joint employment.” Why do you care? Because a joint employer can potentially be held liable for violations of employment laws such as allegations of discrimination, collective-bargaining obligations or the recent changes coming with regard to overtime obligations set forth in the Fair Labor Standards Act (FLSA). The NLRB, the administrative agency charged with enforcing federal labor laws, overturned more than 30 years of precedent by redefining “joint employer” status in the case of Browning-Ferris Industries of California Inc., 362 NLRB No. 186 (2015). Now, according to the NLRB, indirect control — including potential contractual authority — can result in joint employment. If Browning-Ferris survives judicial review, it will have a tremendous impact on virtually every employer utilizing subcontractors, franchise agreements, staffing agencies, or other similar relationships. Under the Fair Labor Standards Act, two or more employers can simultaneously employ someone. This is significant because joint em-
Michelle J. Sheehan is a shareholder at Reminger Co. LPA.
ployers are “individually and jointly” liable for violations of federal labor and employment statutes, such as the act’s requirements, including overtime and minimum wage requirements, as well as Title VII, age discrimination, etc. Historically, an employer had to have direct and immediate control over the “essential terms and conditions of employment,” which typically involved hiring, firing, discipline, supervision and exercising discretion. Possible, limited or routine control did not traditionally cross this line. The new standard articulated by the NLRB, expanded the test and now indirect or potential control over the terms and conditions of employment may result in a finding of joint employment. For example, if a contract to provide services contains language that a company “reserves the right” to exercise control over a subcontractor’s employees or franchisees, etc., the company may be liable as a joint employer. The NLRB held it was necessary to revisit the joint employer standard
because of the “changing patterns of industrial life” and in particular the increased “procurement of employees through staffing and subcontracting arrangements, or contingent employment.” Gauging the full impact of Browning-Ferris will take years. The new standard is already starting to creep into other federal agencies’ perspectives of a joint employment relationship such as the Occupational Safety and Health Administration, the Wage and Hour Division of the Department of Labor, which administers the Fair Labor Standards Act and the Family Medical Leave Act, amongst others. How the courts interpret the NLRB’s new definition has yet to be fully developed. When interpreting labor laws, courts frequently consider how other courts and agencies interpret and apply similar language to particular facts in employment-related litigation. Admittedly, it could take years for the issue of what constitutes a joint employer to be redefined by the courts. But if Browning-Ferris survives judicial review and the political battlefield, it could inject companies into unforeseen national labor disputes, stifle flexibility with contractual arrangements, expand collective bargaining, invite affiliated-employer influence and expand personal jurisdiction over businesses. Ultimately, businesses and industries relying on
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contractor-subcontractor, franchisorfranchisee, lessor-lessee or parentsubsidiary relationships could potentially face an entirely new legal landscape, especially in the fast food and retail industries, where franchise growth is on the rise. For now, employers must understand the uncertainty over the employment relationship and the potential liability for unforeseen employees, especially when negotiating written contracts for services provided by other companies. This issue is expected to directly impact the hundreds of unfair labor practice complaints against franchises such as McDonald’s as well as disputes over the employment status of individuals working for Uber, Lyft, TaskRabbit, Handy and other online platforms that provide consumers direct access to services. Online platform-type companies are already embroiled in disputes regarding whether the drivers or service providers are “employees” or independent contractors and the issue of joint employment only muddies the water. Thus, the importance and farreaching impact of this issue is still evolving. While Browning-Ferris makes its way through the courts, employers must be especially mindful of their direct, indirect, actual or potential control over workers — who are otherwise subject to contractual arrangements. Employers should clearly define those relationships in writing and be careful not to overstep the boundaries of the contractual relationship by assuming additional control over workers. Employers must also adapt by reevaluating their policies and practices with this decision in mind.
Packing hometown pride in a box By DOUGLAS J. GUTH
Cleveland in a Box offers a number of products to make even the most homesick exClevelander feel better. “We’re selling little pieces of the city that people can use even if they’re not from here,” says cofounder Nick Sword. (Contributed photo)
clbfreelancer@crain.com
Northeast Ohio pride has become a selling point for a region boasting LeBron James, Michael Symon and, most recently, the Republican National Convention. Two area companies are literally boxing up and shipping this local good will to a growing customer base. Cleveland in a Box founders Allison Tinerello and Nick Sword provide a plethora of city-made products out of a temporary storefront at The Arcade. The young entrepreneurs, who previously offered their Cleveland-centric goods online only, have increased revenue by 60% since moving into the Euclid Avenue shopping center in June. They hope for a further evolution upon taking their business to a larger space at the 5th Street Arcades before the end of September. Through partnerships with nearly 30 area merchants, the gift box company sends care packages containing an assortment of food items and other Cleveland essentials, from bottles of Bertman’s Ball Park Mustard to souvenir guitar picks from The Rock and Roll Hall of Fame. No alcohol or larger items are allowed, but such restrictions haven’t deterred the nascent shop owners. “We’re selling little pieces of the city that people can use even if they’re not from here,” Sword said. The service is aimed at homesick ex-Clevelanders as well as visitors who enjoyed their stay. About 70% to 80% of shipments are sent out of state, including to expatriates in countries such as Australia, China
and the Netherlands. “Now that Cleveland is going through a renaissance, that feeling of homesickness is stronger than ever,” Tinerello said. “Or we have people here sending boxes to friends and family who moved away.” Tinerello and Sword, a pair of 22year-olds who met as students at Olmsted Falls High School, say the concept for Cleveland in a Box blossomed during college when they would mail local foods and other fun merchandise to loved ones. “We realized it wasn’t the first time we had done this,” Tinerello said. “People were trying to find local products, so why not bring those items to them? The idea snowballed from there and
we jumped in with both feet.” Individually packed boxes contain five to 10 items each, with prices ranging from $30 to $50. Shipping is free domestically and to military addresses. Customers may ask for prepackaged boxes based around various holidays, but most like to choose the contents themselves. Ashleigh Vasi, a real estate agent with Keller Williams, primarily uses the service as a “thank you” to agents for giving her referrals. Carmel corn and gourmet chocolate are favorites among her recipients. “I change it up with every referral,” Vasi said. “It’s something ‘Clevelandish’ to remember me by. Everyone I send boxes to absolutely loves them.”
Unbox Akron was conceived in 2015 as a service that collects products from around town and ships them to subscribers for $25.99 monthly. Founded by Chris Horne, proprietor of The Devil Strip altweekly and website, the company exists to promote a metro on an upturn, said chief curator Roger Riddle. “This is a beautiful region and city,” Riddle said. “There’s a chipon-the-shoulder pride here that makes Unbox Akron work so well.” Riddle moved to Akron last year from Macon, Ga., where he lived with Horne while working for a restaurant group. “Chris told me about this project he had and it sounded like such a fun idea,” said Riddle, a Detroit native. “I was open to try something new, so that convinced me to head to Akron.” A year later, Riddle knows his adoptive city enough to pack boxes with well-loved wares from Norka Sparkling Beverages and Rubber City Clothing. Other customers may get a book about Akron holiday icon Archie the Snowman, or tickets to a Rubber City Shakespeare production. “Each box’s contents are a secret,” said Riddle. “I hear over and over again that it’s like having Christmas every month.” A bit of civic pride can go a long way in reflecting regional expansion, particularly when it comes to supporting small businesses, added the company curator. “We see these businesses growing, and that’s something we can expose through our gift boxes,” Riddle said. “Akron is coming to life again. Sharing items we find help people tell the story of what’s happening here.”
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Walter & Haverfield LLP is pleased to announce that Ronald S. Nolan has joined the firm as a patent agent in its Intellectual Property Group. Ron has years of experience in preparing and prosecuting patents (domestic and international) in the electrical and mechanical arts. His practice spans a range of IP areas, including support in patent and trademark portfolio development, and patent and trademark infringement analysis. For more information, visit www.walterhav.com
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D. Peter Hochberg Partner and Chair of the International Patent Group Walter & Haverfield LLP Walter & Haverfield LLP is pleased to announce that D. Peter Hochberg has joined the firm as a Partner and Chair of the International Patent Group. Peter has prepared, filed and prosecuted countless patent and trademark applications in the United States and foreign countries. He has also been deeply involved with patent, trademark, copyright and trade secret licensing and litigation, and counseling in all phases of intellectual property law. For more information, visit www.walterhav.com
T. Ted Motheral Partner
Walter & Haverfield LLP is pleased to announce that James J. (Jamie) Pingor has joined the firm as a Partner and Chair of its new Intellectual Property Practice Group. Jamie focuses his practice on intellectual property matters with a specific specialty on domestic and foreign patent preparation, prosecution, procurement, and litigation, as well as trademark analysis, clearance procurement, cancellations, oppositions, and litigation matters. For more information, visit www.walterhav.com
Namit Bhatt
Walter & Haverfield LLP Walter & Haverfield LLP is pleased to announce that T. Ted Motheral has joined the firm as a partner in its Corporate Transactions Group. Ted focuses his practice on mergers and acquisitions, as well as private debt and equity financing. He has experience in leading transactions for multi-million dollar acquisitions and has represented borrowers and lenders in multi-million dollar debt offerings. For more information, visit www.walterhav.com
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Patricia Murphy Walter & Haverfield LLP
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Walter & Haverfield LLP is pleased to announce that Kaitlin L. Corkran has joined the firm as an associate in its Corporate Transactions Group. Kaitlin focuses her practice on a wide range of corporate and business matters, including new business formation and development, mergers and acquisitions, stockholder arrangements, and reorganizations. She also counsels lenders and borrowers in commercial finance transactions. For more information, visit www.walterhav.com
Walter & Haverfield LLP is pleased to announce that Namit Bhatt has joined the firm as an associate in its Intellectual Property Group. He focuses on patent law, including preparation and prosecution of patent applications in the U.S. and international, rendering opinions on infringement and validity, and client counseling on IP strategy with an emphasis on electrical systems, telecommunications, software, medical devices, and mechanical devices. For more information, visit www.walterhav.com
Sean F. Mellino Partner Walter & Haverfield LLP Walter & Haverfield LLP is pleased to announce that Sean F. Mellino has joined the firm as a partner in its Intellectual Property Group. Sean has filed, prepared and prosecuted numerous patent and trademark applications in the U.S. and around the world, with a focus in the mechanical, pharmaceutical, chemistry and biochemical fields, as well as design patents. He also advises clients on strategic management of intellectual property. For more information, visit www.walterhav.com
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Business of Life
Uncle Ben’s Pawn Shop occupies 2,500 square feet on St. Clair Avenue in Cleveland. (Dan Shingler)
Pawn shop is the ‘real’ deal
DAN SHINGLER Long before most people ever heard of Las Vegas’ Pawn Stars or Detroit’s Hard Core Pawn crew, Lou Tansky was already living what would become a reality show for most of us. For more than 50 years, he’s been working at Uncle Ben’s Pawn Shop in Cleveland, a business his father started in 1947. It’s not that Tansky’s old — he’s just 59 — but he got an early start. “I have memories of being 6 years old and coming to work with my dad, earning a nickel a day,” Tansky said. “It was more work for my father to have us down there, I’m sure,” His father, Ben, was just out of the service, having spent more than three years in combat during WWII. He had a $500 GI loan and, coincidentally, an uncle, Sam, who taught him the pawn business at another shop in Cleveland. Ben figured he could make a go of it on his own, and he set up shop at East 49th Street and Payne Avenue, where he did business for 47 years before the store moved to its current, 2,500-square-foot store on St. Clair Avenue. Ben’s been gone since 1994, but the business remains in Lou’s blood,
“I have memories of being 6 years old and coming to work with my dad, earning a nickel a day,” says Uncle Ben’s Pawn Shop owner Lou Tansky. At right is a bust of George Washington, the oldest item in the store. and he says he still loves going to work every day. He says there’s lots to like about the pawn business, especially for a history buff like him. It really is true about pawn brokers never knowing what’s going to walk in the door, and on a recent August afternoon, Tan-
sky was showing off some recent prizes, including a validated signature of George Washington. Tansky already had a John Quincy Adams and a James Munroe signature, but this was a first. Coincidentally, a plaster bust of Washington, removed from a demolished home back in the 1950s, is the oldest resident of Uncle Ben’s Pawn Shop. It still sits in the front of the shop, and the boy who brought it in recently returned as a grown man and laughed when he saw it, Tansky said. The rest of the store is stuffed with all sorts of eclectic items. Expected things, like jewelry, musical instruments and electronics, share space with all sorts of art work, a stuffed coyote, beer tap pulls and compound bows. There’s even an oscilloscope sitting in one of the cases. “Somebody once pawned a monkey to us; they pawned it to my father. It was a squirrel monkey … I think he traded like a guitar for it, knowing my dad,” Tanksy said, recalling some memorable pawns. But there’s another aspect of the business that Tansky likes, in addition to all “the cool stuff.” He likes the people. While some reality shows might give the impression that pawn store
customers are one-and-done, Tansky says that’s not always the case. “I have people that have been pawning the same item over and over for years,” Tansky says. “We have many, many customers that are second generation, third generation, even a few fourth generation customers, believe it or not — people that dealt with my dad.” Pawn is a financial tool for many, and Tansky said he even sees other business people in his shop. “I have business people, folks that own businesses, that come in to me on a regular basis in order to make payroll,” he said. “They might pawn the same item 10 times in a 12- or 18month period.” Pawn is about relationships, Tansky said. That’s why he said he always tries to treat customers with courtesy and to make them feel safe. No one wants to come into a pawn shop because they need money, he says, so it’s his job not to make the situation more difficult. And these days, he also has a few tourists, thanks to the recent TV shows. “We do have lots of folks that have never seen a pawn shop, except on TV, and now they want to see a real pawn shop,” Tansky said. “We think we are a real pawn shop, and it’s a cool place to be.”
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BUSINESS OF LIFE
Source Lunch Except for six months in 2015, Dave Johnson has been the public face of what is now called the Huntington Convention Center of Cleveland and the Global Center for Health Innovation since March 2010. Back then, it was just an idea called “the medical mart.” Johnson has had six bosses in that time, and for most of that run he has been director of public relations and communications. He has worked for both companies that were hired by Cuyahoga County to build and then run the complex — first it was MMPI Inc., the Chicago real estate firm, and now it’s SMG Convention & Exhibition Centers of West Conshohocken, Pa. It has been Johnson’s job to explain the twists and turns of an idea of a few politicians and civic leaders that became a construction project and now as a functioning convention and visitor complex. Johnson left Cleveland in May 2015 for a job as associate vice president for strategic communication at California State University, San Bernardino. That decision, the Illinois native realized very quickly, was a mistake. He was back in Cleveland, in his old job, by Christmas 2015. — Jay Miller
You were born, grew up and went to college in central Illinois. You met your wife, Libby, at the University of Illinois there and lived there until you came to Cleveland in 2010. What did you know about Cleveland back then? The weird connection is my grandmother was born here. My great-grandfather was a Swedish Baptist minister. The church asked him to move to Cleveland (from Duluth, Minn.) and start a church in Cleveland. He moved here in 1899 and stayed until 1902. When I moved to Cleveland, my father said, “Can you go find grandpa’s church?” I did. The building is still there, four or five blocks from League Park. (It’s now the Alpha Baptist Church at 5701 White Ave.) That was a Swedish neighborhood. The convention center and Global Center, then called the medical mart, were only ideas when you arrived and you watched as the plans were hatched, construction got underway and was completed. Now the complex is up and running. You’re the only person who’s been active in the project for that whole time. What has that progression been like for you? I call the building one of my kids since I’ve been around it since before the county got started on it. For a long time, I was so focused on building the building, but now it’s more about outreach.
It’s getting out and sharing the message of the Global Center. I enjoy going out, and I’m usually on the road two days a week speaking to some group. As you recall, at first there was a plan for something called a medical mart, a sort-of mall marketing and selling medical equipment and supplies. Now the building is called the Global Center for Health Innovation. Explain what that is.
Dave Johnson COUNTY GOVERNMENT
the health care community. The second part of programming is creating programming that benefits Northeast Ohio. We want to get people down to the building, create programming that benefits consumers. You could get a free blood pressure screening or get your diabetes checked or you can get a stress test. What we want to become is an actual health care resource in the community. Also, we (want to have) job fairs for health care.
“The most misunderstood building in Cleveland is the Global Center.”
Last year you left. Why? We had two hard winters in a row. I remember Libby and I sitting in our basement in West Park. It was so cold, so cold. So we looked at each other and I said, “You know, let’s see if there’s (a job opportunity) somewhere.” That’s when we moved to California. We got to California and the people out there were wonderful, the job was good.
The most asked question in Cleveland is, “What is the Global Center” and the most misunderstood building in Cleveland is the Global Center. It’s very simple. It’s a place dedicated to — and showcasing how to — improve (hospital) patient outcomes and lowering costs. That’s what the building is all about.
What drew you back to Cleveland? I left Cleveland in May 2015. We knew by June that we really missed Cleveland. We missed our friends, we missed Cleveland. (California) didn’t feel like home. Then, in November, Mark Healy (general manager for SMG of the convention center and Global Center) called. He said, “I wasn’t able to find the right mix. I was looking for you. Would you be interested in coming back?” I’d known since July I wanted to come back. This is where we’re going to live the rest of our lives.
Where does your outreach go from here? The next step is to greatly expand the educational program. We want to begin to create programming that resonates in
FIVE THINGS: DESCRIBE INLAND CALIFORNIA So much of that part of the state looked like the set of a John Wayne western movie.
FAVORITE THINGS ABOUT CALIFORNIA
LUNCH SPOT
On the weekends, we could have our feet in the sand at Huntington Beach (on the Pacific Ocean) in an hour.
The Big Egg 5107 Detroit Avenue Cleveland 216-281-1600 thebigeggcleveland.com
NEXT CLEVELAND HOUSE
The meal
Avon or Avon Lake. I like being near water.
FAVORITE THINGS TO DO IN CLEVELAND
Season tickets to the Broadway series at Playhouse Square, lawn tickets at Blossom Music Center for the “the greatest orchestra in the world,” and partial season tickets to the Indians.
SUNDAY ROUTINE
Lunch at The Big Egg after services at Old Stone Church
Corned beef hash, fried egg and coffee for one. Hamburger, French fries and a Diet Coke for the other.
The vibe The reputation, since it took its current name in 1970, is 24-hour greasy spoon. But that’s not fair, or even accurate. You know that it’s not Michael Symon, Doug Katz or one of the city’s other top chefs in the kitchen, but the diner fare didn’t hinder the conversation and, besides, it’s only open 24/7 two nights a week.
The bill
$20.48, plus tip
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REAL ESTATE
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LAKEWOOD
mance of Lakewood streets typically don’t look at it. “If they want a backyard deck instead of a front porch, they’re already in Westlake or Bay Village,” Robinson said.
CONTINUED FROM PAGE 1 Michael Boich, a Keller Williams agent who lives in Lakewood’s “Birdtown” neighborhood — so named thanks to street names such as Thrush and Lark — confirmed that the city has little inventory in the first-time buyer price range. “Listings on some properties last for days, if not hours,” Boich said. “It’s selling close to or above the asking price. The biggest qualifier for Lakewood is if it’s done right and priced right. Just being old is not enough. It has to be updated and relevant for the next 50 years.” Advising clients on pricing also is tough. Agents say they see houses constantly sell at higher-than-expected prices that they considered overpriced, and worry rising prices will cool things down. “They say you don’t want to be the highest-price house in the neighborhood or on the street, but that number keeps changing,” Boich said. For instance, an investor-remodeled Elbur Avenue colonial that Boich listed for $336,900 and thought would take 40 days to sell went for $10,000 above asking price in two days. “They have to be immaculate,” Boich added. “They have to be priced right, but there’s a changing of the guard underway in Lakewood.” He considers Lakewood a microcosm of Northeast Ohio, noting that within its 6-mile length, home prices range from as low as $20,000 to $1 million.
Not just kids
The Niesers looked at 15 houses — twice the national average — before buying this early 1900s Belle Avenue home. Lakewood afforded the same walkable amenities they had in Cincinnati. (Contributed photo)
The need for speed Maggie Robinson, an agent at Howard Hanna’s Warren Road office in Lakewood, recalled living in an apartment in the suburb in the 1970s, when many young people were living there. She said she’s astounded by the velocity of today’s
Patrick and Tricia Nieser, with their daughter, appreciate Lakewood’s close proximity to downtown and the lake. (Contributed photo)
market and on Sept. 1 took her first day off work since March. “If a house has been listed for 30 days, you’ll start getting lower offers,” Robinson said. “If you’re not off the market in 10 days, there’s a perception something’s wrong with the house.” Although the Northeast Ohio Multiple Listing Service showed 149 houses in the $100,000 to $250,000 price range listed as of Sept. 2, Robinson said the market for buyers in the entry-level price range often boils down to seven bidders looking at one property that’s perfect and priced right. The six who get beat the first time won’t let it happen again. Also, seasonality is beginning to creep in as fall looms and school has resumed.
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“You have seven buyers now instead of 15,” she said. However, this generation of buyers is different beyond embracing the virtues of the older, walkable community. “This is a very visual generation,” Robinson said. “They can’t see beyond the clutter in a house. If you’ve got wallpaper and it’s not an eyecatching accent wall, you’ve just lost $10,000 on your house.” She maintains most buyers want houses that don’t need lots of work, noting, “They don’t have time to mess with it. They work more hours than I did at the same age and they want the perfect house to put in the big-screen TV and immediately entertain.” Buyers who don’t like the ro-
While most buyers are young, Robinson said she also has sold to several couples who are emptynesters. “I sold to a couple from Avon Lake whose kids are in college,” she said. “They did not want to cut the grass anymore. They were tired of the crazy commute downtown.” The price run-up is significant in some cases. Robinson remembers one unmarried couple that bought what she felt was the perfectly priced house on a nice street. But they broke up, and the house was back on the market again, Robinson said — and it sold for $20,000 more than the last time. In a sign of how much the market has changed, Boich said his clients tend to consider outlying suburbs as a third choice. Many younger clients settle in Lakewood because they see the value for their money: They get a yard, a two-car garage and enough house to last them for a long time. “It’s not uncommon for me to begin with buyers looking at Tremont and Ohio City,” Boich said. “They look at $200,000 or more for a small place in the city, sometimes without parking, and they appreciate the value Lakewood has. It has that urban feel.” In the Niesers’ case, they did not look first in Tremont or Ohio City. If the 30-year-olds were 10 years younger, they might have considered it. Instead, they were attracted by Lakewood’s family-friendly atmosphere, and Tricia Nieser, a Shaker Heights elementary school teacher, was pleased by the number of activities for children and how pleasant it is to be near Lake Erie.
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The List NAME THIS ADDRESS YEAR PHONE/WEBSITE
LARGEST GRANTMAKING FOUNDATIONS Ranked by Amount of 2015 Grants 2015 2015 2014 2015 LARGEST ASSETS GRANTS GRANTS (MILLIONS) (MILLIONS) (MILLIONS) GRANT ($)
2015 SMALLEST GRANT ($) LARGEST GRANTS
YEAR FOUNDED TOTAL TOP EXECUTIVE STAFF TITLE
Cleveland Foundation 1422 Euclid Ave., Suite 1300, Cleveland 44115 (216) 861-3810/www.clevelandfoundation.org
$95.0
$98.2
$2,103.6
5,500,000
51
1
Cleveland State University Foundation (CSU-NEOMED partnership), Cleveland Center for Arts & Technology dba NewBridge, Case Western Reserve University (community greenway), Ideastream (health programming)
1914 73
Ronald B. Richard president, CEO
2
The George Gund Foundation 45 Prospect Ave. West, Suite 1845, Cleveland 44115 (216) 241-3114/www.gundfoundation.org
$31.8
$25.8
$519.4
5,000,000
1,000
Cleveland Metropolitan School District, Downtown Cleveland Alliance, Foundation Fighting Blindness, Fund for Our Economic Future, Playhouse Square Foundation
1952 12
David T. Abbott executive director
$13.0
$12.4
NA
1,400,000
500
3
KeyBank Foundation 127 Public Square, Cleveland 44114 (216) 689-7397/www.key.com/foundation
Cuyahoga Community College Foundation, Cleveland State University Foundation, Cleveland Clinic Foundation, Case Western Reserve University, United Way of Greater Cleveland, Friends Of Ginn Academy Corp.
1969 6
Margot James Copeland Chair
4
Akron Community Foundation 345 W. Cedar St., Akron 44307 (330) 376-8522/www.akroncf.org
$9.7
$9.2
$182.0
250,000
60
City of Akron Neighborhood Partnership Program, AMHA Early Learning Project, Akron Children's Hospital, Summit Education Initiative, Akron Art Museum
1955 15
John T. Petures Jr. president, CEO
Saint Luke's Foundation of Cleveland 11327 Shaker Boulevard, Suite 600W, Cleveland 44104 (216) 431-8010/www.saintlukesfoundation.org
$9.3
$11.6
$171.9
699,148
1,400
5
Western Reserve Land Conservancy, Thriving Communities Institute, Neighborhood Family Practice, Esperanza, Health Policy Institute of Ohio, Domestic Violence and Child Advocacy Center
1997 10
Anne C. Goodman president, CEO
Eaton Charitable Fund 1000 Eaton Blvd., Cleveland 44122 (440) 523-5000/www.eaton.com
$9.1
$9.4
NA
853,000
250
6
United Way of Greater Cleveland, Salvation Army, American Red Cross Disaster Relief Fund
1953 NA
Taras G. Szmagala senior vice president, Public & Community Affairs
7
Nordson Corporation Foundation 28601 Clemens Road, Westlake 44145 (440) 892-1580/www.nordson.com
$8.6
$7.5
$24.5
510,000
2,000
Second Harvest Foodbank of North Central Ohio, CollegeNow, Boys and Girls Club of Trenton, Friends of Breakthrough Schools, Invent Now!
1988 6
Cecilia H. Render executive director
8
Stark Community Foundation 400 Market Ave. N, Suite 200, Canton 44702 (330) 454-3426/www.starkcf.org
$8.5
$7.9
$220.2
415,000
100
John H. and Evelyn L. Ashton Preservation Association; Canton Classic Car Museum; United Way of Greater Stark County; ArtsinStark; Canton Student Loan Foundation
1963 13
Mark J. Samolczyk president
9
Community Foundation of Lorain County 9080 Leavitt Road, Elyria 44035 (440) 984-7390/www.peoplewhocare.org
$8.2
$4.3
$117.9
977,020
50
Mercy Health Partners Foundation, Lorain County Health & Dentistry, Common Ground, Nativity of the Blessed Virgin Mary Parish
1980 10
Brian R. Frederick president, CEO
10
The Kelvin & Eleanor Smith Foundation 30195 Chagrin Blvd., Suite 275, Cleveland 44124 (216) 591-9111/www.kesmithfoundation.org
$7.6
$8.3
$150.4
1,000,000
5,000
Case Western Reserve University, Cleveland Museum of Art, Fund for Our Economic Future, Hawken School
1955 2
Ellen Stirn Mavec chairman, president
11
The Youngstown Foundation P.O. Box 1162, Youngstown 44501 (330) 744-0320/www.youngstownfoundation.org
$6.1
$4.2
$110.0
1,680,000
1,000
The Public Library of Youngstown and Mahoning County; Easter Seals/Youngstown Hearing & Speech Center; Potential Development; YMCA
1918 3
Janice E. Strasfeld executive director
12
Mt. Sinai Health Care Foundation Allen Med. Library Bldg., 11000 Euclid Ave., Cleveland 44106-1714 (216) 421-5500/www.mtsinaifoundation.org
$6.1
$15.5
$136.0
NA
NA
Jewish Federation of Cleveland, Case Western Reserve University School of Medicine, MetroHealth, University Hospitals Harrington Discovery Institute, Bellefaire
1994 5
Mitchell Balk president
13
Parker Hannifin Foundation 6035 Parkland Blvd., Cleveland 44124 (216) 896-3000/www.parker.com
$6.0
$8.5
NA
NA
NA
United Way, Friends of the Breakthrough School, Museum of Natural History, CWRU, Cleveland State University, Cleveland YMCA, Ursuline College
1953 0
Thomas L. Williams chairman and CEO
14
Nord Family Foundation 747 Milan Ave., Amherst 44001 (440) 984-3939/www.nordff.org
$5.7
$6.3
$111.7
284,000
50
Lorain County Health & Dentistry, Cleveland Public Theatre, United Way of the Midlands, Oberlin Early Childhood Center
1988 6
John Mullaney executive director
15
FirstEnergy Foundation 76 S. Main St., Akron 44308 (330) 384-5780/www.firstenergycorp.com/community
$5.6
$5.5
$34.0
1,000,000
100
University of Akron Foundation, Musical Arts Foundation, United Way of Greater Cleveland, United Way of Summit County, Choose New Jersey
1961 6
Dolores J. Lowery president
16
Burton D. Morgan Foundation 22 Aurora St., Hudson 44236 (330) 655-1660/www.bdmorganfdn.org
$5.3
$6.7
$149.2
1,000,000
500
Case Western Reserve University, BioEnterprise, Team NEO Foundation, Conservancy for Cuyahoga Valley National Park, Western Reserve Historical Society
1967 7
Deborah D. Hoover president, CEO
$5.2
$5.8
$100.8
250,000
1
17
Community West Foundation 800 Sharon Drive, Suite C, Westlake 44145 440-360-7370/www.communitywestfoundation.org
Fairview and Lutheran hospitals, Greater Cleveland Foodbank, Northeast Ohio Coalition for the Homeless, North Coast Health, Lakewood Community Services Center, Second Harvest Food Bank
1997 8
David T. Dombrowiak president, CEO
18
In His Steps Foundation P.O. Box 23455, Chagrin Falls 44023 (330) 528-1785/www.ihsfound.org
$5.2
$5.1
$25.8
350,000
75
CBN, CRU, Parkside Church, The Chapel, World Help, Youth For Christ
1998 2
Robert S. Cathcart executive director
19
GAR Foundation 277 E. Mill St., Akron 44308-1735 (330) 576-2926/www.garfoundation.org
$5.2
$8.0
$150.9
350,000
30
Akron Public Schools, Fund For Our Economic Future, United Way of Summit County, Greenleaf Family Center
1967 6
Christine Amer Mayer president
The Lubrizol Foundation 29400 Lakeland Blvd., Wickliffe 44092 (440) 347-1797/www.lubrizol.com
$4.5
$3.1
$19.6
1,000,000
260
20
Case Western Reserve University think[box] innovation lab; United Way of Greater Cleveland; United Way of Lake County; Cleveland State University; Great Lakes Science Center; The Cleveland Museum of Art
1952 1
J. Mark Sutherland president
21
William J. and Dorothy K. O'Neill Foundation 7575 Northcliff Blvd., Suite 205, Cleveland 44144 (216) 831-4134/www.oneill-foundation.org
$4.3
$3.4
$94.0
100,000
100
Care Alliance, Neighborhood Family Practice, Orlando Neighborhood Improvement Corp., Community Connections for Youth
1987 2
Leslie Perkul president and CEO
22
The Kent H. Smith Charitable Trust 1375 E. Ninth St., Suite 900, Cleveland 44114 (216) 696-4200
$4.2
$8.3
NA
1,015,000
1,000
Case Western Reserve University, University Circle Inc., Fund for Our Economic Future, Group Plan Commission, Playhouse Square
2005 NA
Phillip A. Ranney secretary, trustee
Char and Chuck Fowler Family Foundation 5885 Landerbrook C/O Cornerstone Family Offices Mayfield Heights 44124 (216) 906-4578/www.fowlerfamilyfdn.org
$3.9
$8.2
$42.0
500,000
4,000
23
Land Studio, Case Western Reserve University, MetroHealth System, Cleveland Institute of Art, Cleveland Clinic Foundation
2003 1
24
The Margaret Clark Morgan Foundation 10 W. Streetsboro St., Suite 200, Hudson 44236 (330) 655-1366/www.mcmfdn.org
$3.8
$3.7
$84.3
300,000
2,000
OH Criminal Justice and Behavioral Health Initiative, BeST Center at NEOMED, YEPAW, Active Minds, Treatment Advocacy Center
2001 4
Rick Kellar president
25
Veale Foundation 30195 Chagrin Blvd., Pepper Pike 44124 (216) 255-3179/vealeentrepreneurs.org
$3.5
$6.3
$127.3
2,445,000
5,000
CWRU, American Foreign Policy Council, Veale Youth Entrepreneurship Forum (17 high schools)
1964 4
Patricia Wade Executive director
RESEARCHED BY CHUCK SODER Information is supplied by the companies. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in future editions. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com.
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z SEPTEMBER 12 - 18, 2016 z CRAIN’S CLEVELAND BUSINESS
The Week: Sept. 5-11, 2016 THE BIG STORY
BIOGEN IS MOTIVATED
University Hospitals is dropping “Case” from the name of its flagship hospital near University Circle under its renewed affiliation agreement with the Case Western University School of Medicine. UH Case Medical Center, named such in 2006 when the two signed a 50-year affiliation agreement, now will be known as UH Cleveland Medical Center. The renegotiated affiliation agreement sets out a multi-affiliation standing, giving both organizations the latitude to pursue other partnerships.
Pharmaceutical giant Biogen Inc. is expanding its relationship with BioMotiv LLC of Shaker Heights and plans to invest another $10 million in the therapeutic accelerator company associated with The Harrington Project for Discovery & Development at University Hospitals. BioMotiv announced Sept. 6 that its strategic partnership with Cambridge, Mass.-based Biogen now includes the ophthalmology therapeutic area, in addition to an existing neurology partnership. Biogen plans to invest the $10 million over five years. Biogen last year announced it would invest $15 million in BioMotiv over five years.
ROUNDING INTO SHAPE
NOT JUST FOR THE
Fortune 500
The $60 million remaking of the Cleveland Athletic Club as apartments and an events center is poised to begin. A reconstituted ownership group that includes new investors such as the Bobeck familyled GL Housing Group of Cleveland and DiGeronimo family-led Precision Environmental Group of Independence has closed on the purchase of the building, 1118 Euclid Ave., and financing for the makeover. If construction goes as planned, the long-languishing redo will make the 15-story building dating from 1911 ready for its first residents in 2018. The club closed in 2007.
JUST FOR FUND JumpStart Inc. finished raising a $20 million for-profit venture capital fund — and several local corporations contributed capital. The fund already has invested in eight companies, four of which had previously received investments from JumpStart’s original nonprofit investment fund. Investors in the new fund include six private companies: Medical
A shift in ownership has revived plans for the on-again, off-again repurposing of the Cleveland Athletic Club. (Stan Bullard) Mutual of Ohio, Lubrizol Corp., Oswald Cos., Westfield Insurance, Geis Cos. and Cleveland Development Advisors, a company affiliated with the Greater Cleveland Partnership.
ADDING MORE COMPONENTS Aircraft components supplier TransDigm Group Inc. of Cleveland acquired Young & Franklin Inc., a Liverpool, N.Y.-based maker of proprietary valves and actuators, for $260 million. The purchase includes the Young & Franklin subsidiary Tactair Fluid Controls Inc. TransDigm said in a regulatory filing that the purchase price “includes approximately $73 million of tax benefits to be realized by TransDigm over a 15-year period beginning in 2016.” TransDigm expects to finance the acquisition through existing cash on hand. The deal is expected to close in the fourth quarter of fiscal 2016.
HAVE A HARTE Dr. Brian Harte was named president of Cleveland Clinic Akron General and the Southern Region, effective Sept. 26. Harte, who has worked with the Clinic since 2004, has been president of the Clinic’s Hillcrest Hospital in Mayfield Heights for the past three years. Before that, he served as president of the Clinic’s South Pointe Hospital in Warrensville Heights. Harte takes over for Janice Murphy, a longtime Clinic administrator who since May had been serving as acting president of Akron General following the resignation of Dr. Thomas “Tim” Stover.
CHANGE AT THE TOP Nancy Tinsley, president of University Hospitals Parma Medical Center, is resigning effective Sept. 16 and has accepted a leadership role in New York as president of Rochester General Hospital. Tinsley has been with UH for 14 years. Kristi Sink, who joined UH Parma as chief operating officer in July, will serve as interim president as UH begins its search for a successor.
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