Crain's Cleveland Business

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VOL. 36, NO. 45

NOVEMBER 9 - 15, 2015

35th Anniversary

MARKETING: De-Cluttering Microsoft filter is worth monitoring. P. 4

STURDY: Incubator grows America Makes sparks manufacturing. P. 6

BUSINESS OF LIFE

CLEVELAND BUSINESS

Company band has its share of fans. P. 54-55

Marijuana biz will get second shot Industry observers: Issue 3 was flawed from start BY JAY MILLER jmiller@crain.com @millerjh

Issue 3, which failed miserably on Nov. 3, was promoted by an Ohiogrown team of proponents seeking economic advantage for themselves in addition to legitimizing what has been an illegal activity. The next time around, whether it’s an initiative in the state Legislature to open up marijuana for medicinal use or some sort of citizen initiative, the effort to legalize the cultivation and sale of marijuana in Ohio will be different. The culture around weed is changing. What was once seen as a social

justice issue pushed by reformers — decriminalizing of the possession and use of pot — is being transformed into an economic issue: the development of a legitimate industry with vast growth potential. Marijuana Business Daily, an industry news source, projects that the marijuana industry will be a $23 billion to $29 billion segment of the U.S. economy by 2019, up from $11 billion in 2015. That industry, which did not broadly support the unsuccessful Ohio campaign, is quickly growing more powerful and more professional and likely will be more visible in Ohio in the future, based on interviews with a handful of industry SEE MARIJUANA, PAGE 57

Companies prepare to raise cash from masses BY CHUCK SODER csoder@crain.com @ChuckSoder

Today, if you want to invest in Cleveland Whiskey, you need to be a fairly wealthy individual. But that could change in mid2016, when equity crowdfunding is scheduled to become legal. Then companies like Cleveland Whiskey will be able to raise capital from almost anyone. A few local entrepreneurs — including Cleveland Whiskey CEO

Crain’s

52 Northeast Ohio might still be crawling out of the Great Recession, but that hasn’t stopped the region’s most creative business minds from bearing down and growing their enterprises. With Crain’s 52, we’re honoring some of the region’s fastest-growing businesses. In a nod to Cleveland’s iconic, 52-floor Terminal Tower, these future skyscrapers of business represent what is possible with a little Midwestern grit and plenty of determination. PAGES 18-26

Tom Lix — are thinking about raising capital under the new equity crowdfunding rules, which were finalized Oct. 30 by the U.S. Securities and Exchange Commission. A few others are developing products and services to help entrepreneurs raise capital under the new crowdfunding rules. In short, those rules will lower the barriers that for the most part prevent people who aren’t rich from investing in startups. Lix said he’s received “a tremendous amount of inquiries” from customers and other people interested

SEE CASH, PAGE 58

Entire contents © 2015 by Crain Communications Inc.

NICK ILUZADA

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

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52 TIPS FOR YOUR BUSINESS

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By The Numbers Retirement Savings

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Connection Calendar SMALL BUSINESS BOOT CAMP: BUSINESS MANAGEMENT AND GROWTH Join us as we dive deeper into all the ways you can manage and grow your business. You will have the unique opportunity to hear entrepreneur Blake Squires share his insight on growing several successful companies in Ohio. The second part of this event will include small group roundtables where you will have the opportunity to sit with business experts who will help guide you and give you the tools to launch a plan of success for 2016.

NOVEMBER 10 8:00 – 10:30 AM GE Lighting, Cleveland Cost: $25 for members, $40 for non-members Register at www.cose.org/events.

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DECEMBER 10 7:30 – 10:00 AM Indiana Wesleyan, Seven Hills Cost: $10 for members, $20 for non-members Register at www.cose.org/events.

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

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z NOVEMBER 9 - 15. 2015 z CRAIN’S CLEVELAND BUSINESS

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They never even made it into my inbox. Email blasts from local companies that I talk to regularly. Newsletters I asked to receive years ago. Messages from my own employer. Well over 2,000 messages, gone. Where did they go? They’re not in my junk folder because they’re not technically junk. They’re clutter, according to Microsoft. An aggressive new email filter could make life harder for email marketers who want to reach the 60 million people who use the business version of Office 365. On Aug. 15, Microsoft turned on the Clutter filter for the vast majority of those users. It’s designed to stop low-priority messages from landing in your inbox. Instead, they go into another folder called Clutter. Local email marketers aren’t freaking out, though. Several told me that they didn’t see any significant drop in the percentage of their emails that get opened. However, they say Clutter is something they need to pay attention to. And it’s probably going to become a bigger issue over time. The number of people using Office 365 has skyrocketed over the past two years, according to a San Francisco-based company called Okta, which analyzed data from 2,500 companies that integrate the apps they use with Okta’s software. The increase is partly the result of Microsoft’s push to convince customers that previously bought its traditional Office software products to switch to the cloud version, Office 365 (cloud meaning that customers access the software via the Internet). Matthew Seitz, senior marketing manager at Skoda Minotti, is certainly paying attention to Clutter. The Mayfield Village-based accounting and business services firm sent three of the 2,000-some emails in my Clutter folder. They weren’t overtly promotional emails, either. Two of them included links to blog posts about new tax policies, Obamacare and tips on how businesses can navigate

acquisitions. Why did Clutter grab those emails? For one, I hadn’t paid much attention to the company’s email blasts lately. And if you dozn’t read something very often, Clutter will grab it. Plus, all three emails promoted a “free” webinar, which could have raised a red flag, since Clutter does look for certain keywords (Microsoft hasn’t said which ones). It also looks at whether you’ve replied to a particular sender’s messages, forwarded them, deleted them or spent a long time reading them. And of course, mass emails are more likely to be labeled as Clutter (but individuals are not entirely safe — even if they’re your coworkers). Though Skoda Minotti’s emails ended up in my Clutter, the company’s open rate did rise throughout the summer, after it started writing more detailed subject lines and adjusted the way its emails appear on mobile devices. However, its open rate leveled out in September. Seitz said he wasn’t sure if Clutter was to blame. Still, the new filter makes it even more important that marketers send emails people might actually find useful — not just marketing messages, Seitz said. He added that marketers also should target emails toward specific groups of people. “Keep the message as timely, relevant and targeted as possible,” he said.

Open up Local organizations are well represented in my Clutter folder. For instance, even though I do open some of the mass emails I receive from BioEnterprise (an economic development group), Insivia (a digital marketing firm) and AtNetPlus (an IT services firm), some of their messages still got snagged. Even so, Clutter doesn’t appear to have dramatically affected AtNetPlus’ open rate, according to coowner Jay Mellon. However, he noted that it might have a bigger impact as more companies convert to Office 365. And they are converting, he said, noting that his Stow-based company does “a ton of Office 365 migrations.”

Several people told me that the launch of Clutter reminded them of when Gmail started separating emails into different tabs in 2013. The inclusion of a “promotions” tab may have had an impact on some marketers. Weekday open rates fell from roughly 13% to a little over 12% immediately after the change was made, according to an analysis of 1.5 billion emails distributed through Mailchimp before and after Gmail made the switch. Another study by marketing intelligence firm Return Path suggests that Gmail’s open rates have held up because some people use the promotions tab when they’re in the mood to shop — including my wife. In her view, however, the Clutter folder doesn’t hold the same appeal.

Don’t be annoying Neither filtering system has had a big impact on Avery Dennison’s label and packaging materials group, according to Rick Neiman, global director of digital marketing for the Mentor-based unit. That could be because the group takes great care to only email people who have shown an interest in the company and to create content they actually want. And if that fails? “After two or three non-opens, we’re not sending anymore. At that point, you’re usually just annoying people,” he said. Though open rates “haven’t cratered” because of either Clutter or Gmail’s promotions tab, Andrew Kraynak of the Adcom Group does consider “inboxing” to be a particularly important topic in email marketing these days. Kraynak, who is vice president of digital engagement at the Clevelandbased marketing firm, said other email providers like Yahoo! and Apple could eventually launch similar email filtering tools. But marketers will do OK if they can just stop selling for a while and focus on using email to create connections with potential customers, Kraynak said. Then maybe they’ll get their open rates up. And Clutter likes that. “So now you’ve opened three or four emails before you’ve decided to make a purchase. Guess where my emails are going — when the sale is important? Not into Clutter. Into your inbox,” he said.

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10:48 AM

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Youngstown incubator manufacturing results America Makes has had a national impact in short time frame BY RACHEL ABBEY MCCAFFERTY rmccafferty@crain.com @ramccafferty

America Makes has funded more than 50 projects in the three years since it was founded in Youngstown, helping companies and institutions learn more about the processes and materials used in additive manufacturing. The projects are helping to advance the study of additive manufacturing, or 3-D printing, across the country, but they’re also helping to create connections and boost the reputation of Northeast Ohio companies and colleges as experts in the field. America Makes, the National Additive Manufacturing Innovation Institute, was the first such publicprivate partnership to be granted initial federal funding — with matching funds from the consortium — in August 2012. The organization is run by the National Center for Defense Manufacturing and Machining, the Blairsville, Pa.-based nonprofit that received the funding to set up the institute. John Wilczynski, deputy director of technology development for America Makes, said the group originally was awarded about $30 million for a three-year contract, but that was extended to about $50 million for a five-year contract that runs through 2017. All of the projects America Makes funds follow its technology roadmap, Wilczynski said. The group’s roadmap guides the research toward technology maturation and addresses topics ranging from the straightforward, like processes and materials, to the more complex “additive manufacturing genome.” The early work funded by the institute focused on helping researchers understand how specific materials would work in particular processes. An example would be high-temperature polymers and alloys, which are useful in aerospace, Wilczynski said. The institute has close to 150 members, which includes businesses of all sizes, as well as universities and government agencies. There’s a lot of involvement from the aerospace and defense industry, and the automotive industry’s involvement has been growing, Wilczynski said. Instead of competition, the projects have tended to lead to collaboration. “The problem is too big for one of them to take on,” Wilczynski said.

Line in the sand America Makes focuses on precompetitive research, said Bill Flite, senior manager of advanced manufacturing for member company Lockheed Martin Corp. The Bethesda, Md.-based aerospace and security company has participated in projects on topics like process refinement for titanium and for a multiuse polymer, and those projects have benefited it and others by helping build base knowledge. The IP isn’t in the basic building

blocks of these projects, Flite said. The projects have helped Lockheed get involved more deeply with academia and small to midsize manufacturers, Flite said. And it brings people in the supply chain into the fold much earlier. “There’s a lot that you can do in a pre-competitive world,” Flite said. The Youngstown Business Incubator has been heavily involved in a project that Rich Lonardo, additive manufacturing program manager, said demonstrates the value of the public-private approach to technology transfer. The project Lonardo was speaking of is focusing on how to use 3-D sand printing in settings like foundries. The approach would allow companies to print a core from sand, instead of machining a tool that then needs to be filled with sand. Partners in the project include Youngstown State University, which looked at the economic viability; the University of Northern Iowa, which has the sand printer; and local pattern shops Humtown Products of Columbiana and XL Pattern Shop Inc. of Orrville. If one or two OEMs had tried to tackle the issue on their own, it wouldn’t have had a national impact or been able to lower costs so quickly, Lonardo said.

In focus For Euclid-based welding product maker Lincoln Electric Co., participation in the institute’s now completed laser hot wire project allowed the company to better evaluate the basic science involved in the process and compare its process to others, said Paul Denney, senior laser applications engineer. Denney said additive manufacturing has been around for a while, but there’s been a recent surge in attention in the field. And with the center and groups like Edison Welding Institute being located in Ohio, the state has become an area of focus, he said. Case Western Reserve University and additive manufacturing-focused engineering solutions company rp+m have been able to use their participation in America Makes’

projects to raise their own profiles in the field. Case has a long history in industry-focused research, said John Lewandowski, the Arthur P. Armington professor of engineering II and director of the Advanced Manufacturing and Mechanical Reliability Center. That history, coupled with the exposure it has received by doing presentations with the institute, has led the university to a number of independent projects for companies. Case has been involved in America Makes projects like those focused on repairing tooling, primarily for die-casting, and on finding faster ways to qualify materials and processes in powder-based additive manufacturing.

Meeting their needs For rp+m of Avon Lake, the company’s role has often been that of an “informed manufacturer” with 3-D printing expertise, said director of strategic programs Tom Santelle. Its responsibility has usually been to help take a new or novel material, determine what processes are needed to use it and figure out how to perfect that. Tracy Albers, president and chief technology officer of rp+m, said additive manufacturing remains underused. The America Makes projects give companies like rp+m access to the research so they can take it and apply it in a way OEMs can use. And that type of expertise helps grow rp+m’s business, she said. America Makes has made partnering with companies easy, said Prabhjot Singh, GE Global Research’s additive manufacturing lab manager. Membership in the institute is broad, he said, and there are agreements in place so companies don’t have to negotiate how to handle intellectual property. Singh said he hopes America Makes and similar institutes continue into the future. The partnerships it stimulates are valuable, and he thinks it’s a good way to distribute federal funding. “They understand our needs,” Singh said.

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Daily fantasy sports is difficult subject to tackle for many BY KEVIN KLEPS kkleps@crain.com @KevinKleps

As the president and CEO of Dix & Eaton, Chas Withers advises clients on public relations, marketing, branding and crisis communications. The latter makes Withers an especially interested observer of the multibillion-dollar daily fantasy sports industry, which has come under the scrutiny of the federal government and several states, and is the target of more than two dozen classaction lawsuits. “What’s surprising to me,” Withers said, “is how quickly and how enthusiastically these (professional sports) leagues have embraced what effectively is sanctioned gambling. For decades, these leagues have viewed gambling as the ultimate threat to the integrity of the game. And because there was a federal ruling that this was a game of skill, they pretty quickly said, ‘We’re fine with this.’ ” The industry leaders — FanDuel and DraftKings — have ties to almost every team in the NFL, NBA and Major League Baseball. The companies’ signage can be found in such prominent Cleveland spots as the court at Quicken Loans Arena, in the FanDuel fantasy lounge at FirstEnergy Stadium and on the tarp along the leftfield line at Progressive Field. FanDuel has lucrative partnerships, believed to be in the sevenfigure range, with the Cleveland Browns and Cavaliers. DraftKings, which includes MLB as one of its major investors, has a deal with the Tribe. FanDuel and DraftKings block players in six states — Arizona, Iowa, Louisiana, Montana, Nevada and Washington. Nevada was added to the list last month, after the Nevada Gaming Control Board ordered the companies to cease operations in the state, saying daily fantasy sports is gambling, not a game of skill. As the heat on two companies that have each been valued at more than a $1 billion has increased, the teams with which they do business are letting their respective leagues speak for them. Representatives from the Browns and Cavs each said their relationship with FanDuel hasn’t changed, even as a Northeast Ohio lawyer filed the first DFS-related class-action lawsuit in the state. “Business as usual,” said one team executive. That’s the approach Withers and legal experts with whom Crain’s spoke said they expect the teams to take. “I don’t know that they really have a choice because the leagues have clearly sanctioned the participation and sponsorship with the two big players in DraftKings and FanDuel,” Withers said. “The infusion of revenue there is not something teams are going to look a scant at. So until the leagues rule or look with a tighter eye, teams will continue to partner with it.” On Oct. 19, Beachwood-based attorney Tom Connick filed a lawsuit in U.S. District Court in Cleveland that says DraftKings and FanDuel are “each operating an illegal online sports betting business within the State of Ohio.” The lawsuit is filed on behalf of Scott Tyler of Mayfield and Owen Mc-

Grew of Olmsted Falls, who allegedly have incurred “economic losses and other damages” while playing daily fantasy sports. Questioned about the “other damages,” Connick said, “We’re not suing for emotional distress or anything like that.” Asked how much his clients lost on DFS, the principal at Connick Law LLC said, “We have to prove our damages, and I don’t have that information in front of me.” Proving that daily fantasy sports — which features players paying an entry fee that can range from $1 to a number in the low four figures, then selecting players based on the operators’ scoring rules and salary cap — is gambling is a tricky proposition in Ohio, said Daniel Wallach. Wallach, a sports and gaming attorney with Becker & Poliakoff, P.A., in Fort Lauderdale, Fla., said the Buckeye State applies the predominant factor test, which is the most DFS-friendly criteria that is used to determine whether a game is one of skill or chance. In states that use the predominant factor test, “You have to show chance outweighs skill,” Wallach said of lawsuits that allege DFS is gambling.

“The dirty word has moved from gambling to licensing.” — Daniel Wallach sports and gaming attorney, Becker & Poliakoff, P.A.

“That’s open for argument,” Wallach said, “but the prevailing sentiment among gaming industry observers is DFS has more skill than chance.” Regulation of the industry, which DraftKings and FanDuel have said they would support, “is happening,” Wallach said. What the companies don’t want is licensing regulations, he added. “The dirty word has moved from gambling to licensing,” Wallach said. “That carries significant consequences for the industry. You’re opening the door to being licensed just as other gambling operations. That would be expensive.” Since there have been class-action lawsuits filed against DraftKings and FanDuel all over the country, Wallach expects them to be consolidated and transferred to one federal judicial district — likely in the Southern District of New York or the District of Massachusetts. Connick also anticipates that his lawsuit will be part of a multidistrict legislation (MDL). He said such a classification likely will be “months down the line.” The case “could take anywhere from a year and a half to five years,” Connick said. That’s a much more drawn-out timeline than the warp speed at which the DFS industry has moved the last couple years. “I think it’s just amazing how quickly it’s grown and how much money is invested,” Dix & Eaton’s Withers said. “History has told us that’s not a good thing.”

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The Week THE BIG STORY

A NEW ERA IN AKRON

â&#x20AC;Ś AND IN WESTLAKE

NEED A JUMP?

SHUFFLING THE DECK

Buckeye State voters didnâ&#x20AC;&#x2122;t like the idea of limiting the cultivation of legal marijuana to 10 growers, so they soundly rejected Issue 3, which would have legalized the growing and sale of marijuana for medicinal and recreational uses. Voters rejected the measure by a 65% to 35% margin. None of the stateâ&#x20AC;&#x2122;s 88 counties voted in favor of Issue 3. Even so, itâ&#x20AC;&#x2122;s unlikely Ohioans have heard the end of the effort to legalize cannabis in the state. See related story, Page One.

Akron General Health System has officially joined the Cleveland Clinic. The Clinic announced Nov. 2 that state and federal regulators signed off on the deal. As part of the transaction, the Clinicâ&#x20AC;&#x2122;s system now includes Akron Generalâ&#x20AC;&#x2122;s flagship medical center, Lodi Community Hospital, the Edwin Shaw Rehabilitation Institute, its three health and wellness centers, Justin T. Rogers Hospice Care Center, Partners Physician Group and Visiting Nurse Service and Affiliates. The plan is to maintain the Akron General namesake in some capacity.

University Hospitals now is the sole owner of St. John Medical Center in Westlake. UH said Nov. 2 that it had satisfied all regulatory requirements to take on full ownership of the 204-bed, full-service hospital with which it has co-owned in a 50-50 joint venture with the Sisters of Charity Health System since 1999. UH and the Sisters announced the planned ownership shift in August. Under the agreement, St. John will remain a Catholic hospital.

The city of Cleveland and three private developers plan to invest in JumpStartâ&#x20AC;&#x2122;s Evergreen Fund, to help the nonprofit attract biomedical and other high-tech startups. The investment is part of what JumpStart expects will be a $2 million fund that will be used to attract companies to the growing business neighborhood between Cleveland State University and University Circle. The city is seeking approval of city council to invest $200,000. Cumberland Development Partners, the Geis Cos. and Premier Development Partners LLC each have pledged $100,000, and the Cleveland Foundation has pledged $500,000.

Rock Gaming is upping the ante on its properties in Ohio. The Detroit-based company will take over management of the Horseshoe casinos in both Cleveland and Cincinnati, as well as the ThistleDown Racino in North Randall, from Caesars Entertainment Operating Co. The transition â&#x20AC;&#x201D; including renaming the casinos â&#x20AC;&#x201D; will take place â&#x20AC;&#x153;in the coming months and is expected to be completed by mid-2016,â&#x20AC;? Rock Gaming said. As part of the transition, the casinos and Thistledown will no longer be part of the Caesars Total Rewards loyalty program. Rock Gaming said it will create a new loyalty program.

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Opinion Letters to the Editor

Editorial

Thanks for the light Congratulations, Ohio voters. You got a lot right on Elec-

tighten for recreational use, with 53% of Ohioans supporting

tion Day last week. You made it easier to curb gerrymander-

a law — but clearly not as it was written in Issue 3 — allow-

ing in the drawing of Statehouse districts. You protected the

ing adults to possess small amounts of marijuana for person-

state constitution from being hijacked by special interest

al use.

groups. And, most importantly, you rejected a flawed attempt

Now is the time for Ohio legislators to ramp up meaning-

to legalize marijuana by cutting through the marketing haze

ful conversations about legalizing marijuana. The General

to see what Issue 3 was ultimately about: enriching a small

Assembly must realize that Issue 3’s defeat serves as a wake-

group of investors who bankrolled the costly ballot effort.

up call that action is needed before another group comes for-

There should be no mistaking, however, that the thrashing

ward with another flawed plan to legalize pot. Ian James, ex-

Issue 3 took — Ohioans rejected it by nearly a 2-to-1 margin,

ecutive director of ResponsibleOhio, already vowed that he

with it losing in all 88 counties — had more to do with the

and his supporters would return in 2016 with a revised plan.

business model the initiative would create than with legaliz-

“This was the first step to legalization,” James said the day

ing marijuana. Ohio voters weren’t the only ones who

after the election. “We’re not going away.” Two other mari-

thought Issue 3 smelled bad. Even national marijuana reform

juana proponents, meanwhile, are already approved to col-

groups turned up their noses at ResponsibleOhio’s amend-

lect signatures for next year, according to The Columbus Dis-

ment, which would have restricted marijuana growing to 10

patch.

sites controlled by the issue’s supporters, who would have

Ohio House Speaker Cliff Rosenberger, a Clarksville Re-

also been the only ones who could have sold marijuana

publican, appears to have gotten the message. He told re-

wholesale in Ohio.

porters last week that state lawmakers will take a “measured

Like elsewhere in the U.S., the tide is turning in the Buckeye State toward legalizing pot for some uses. Several Quin-

approach” to considering the pros and cons of legalizing medical marijuana.

nipiac polls this year, for example, show that Ohioans over-

That makes sense. A measured approach, with robust dis-

whelming support legalization of medical marijuana. In the

cussion and a clear-eyed view of the way marijuana legaliza-

most recent survey done in October, 90% of Ohioans backed

tion has played out in other states, is needed. If Issue 3 helped

legalizing marijuana for medicinal purposes. The numbers

prompt that, well, it was good for something.

PUBLISHER: John Campanelli (jcampanelli@crain.com) EDITOR: Elizabeth McIntyre (emcintyre@crain.com)

CLEVELAND BUSINESS

MANAGING EDITOR: Scott Suttell (ssuttell@crain.com)

As the founder and CEO of AKHIA, you might think that the recent Crain’s article citing that women only comprise 13% of board positions at public companies would upset me. It does. But for a different reason than you may think. Women aren’t elected to board positions for one reason: There aren’t enough women in senior positions to select from. The problem doesn’t start at the board level. It starts in the CSuite. Now that’s upsetting. Public companies seek board members who have experience as company presidents, CEOs, COOs, CFOs and sometimes (more often at consumer companies) CMOs. But how many women do you know in these executive positions? When more women enter the C-suite, more will be selected to join boards at public companies. Until we shatter, unequivocally and irrevocably, the executive glass ceiling, we won’t solve the boardroom problem. The good news: I believe this will happen at an accelerated pace. Advances of every kind — from technology to human ideology — get exponentially faster each decade. Women are getting bolder about their achievements, demanding recognition. And in today’s lean organizations, it’s easier to spot and reward top performers — male or female — because there are no more hiding places around protected positions and corporate layers. All of this, combined with more education, more women in STEM fields (science, technology, engineering and math) and more exposure for our accomplishments will propel females into those C-Suite spots, which, in turn, will earn us more board seats. I work daily with women in my firm and as my clients who are brilliant. More than that, they are bold, determined and among the most capable people I know. I see every day how women are striding with purpose into the future. They know where they are going and they will be there sooner than later. Of this I am convinced. — Jan Gusich, CEO of AKHIA, Hudson My wife and I are frequent air travelers, and we recently returned from another out-of-town trip to yet another frustrating pickup at Cleveland Hopkins Airport. I understand that the city is working diligently to put its best foot forward for the Republican National Convention next year, and that’s a great thing for the city. However, the facelift being done on the arrival pickup portion of the airport is adding yet another level of frustration to an already frustrating situation. After 9/11, airports were far more diligent about cars parking in front of the terminal for any length of time. At Cleveland Hopkins, the police allow people to park their cars for extended periods, which totally clogs the traffic flow for those of us who are intelligent, efficient, law-abiding travelers. The police allow cars to sit for extended periods, some of which are abandoned while the driver goes into the baggage claim area to check on their arriving passengers. We have had a cell phone lot for some time now, and this is precisely what the lot was meant for. In our case, I normally go to the parking lot and retrieve our car while my wife collects the luggage at baggage claim and then texts me what door to pick her up at. With the construction, we are now limited to a much small number of pickup points. Recently it took me almost 20 minutes to get from the cell phone lot to door #5. When I arrived there, I had to double park because of the line of cars the police allowed to congregate the entire length of the curb. If the police did their job and kept everyone moving, the pickup process would go much more smoothly. It has been this way for years. With the facelift going on at the airport, our out-of-town guests will be facing an extremely frustrating arrival in our city this coming summer and, after all of the hard work done to get the convention, their first impression of Cleveland may well be one of frustration. — Jeff Kochy, Burton

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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CRAIN’S CLEVELAND BUSINESS z NOVEMBER 9 - 15, 2015 z PAGE 11

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Web Talk RE: ISSUE 3 FLAMES OUT I couldn’t care less either way, but the wording on the ballot for issues 2 and 3 could not have been worse. Whoever made that decision should be removed from their position immediately. — Scott Vranic Legalizing the use of marijuana should never be an easy or “comfortable” decision. Recreational use is completely different than medicinal use, and I’m convinced that it would send Ohio down the wrong path in the long run. Having a person legally get high on a joint should give people just as much pause as a person who drinks and drives. It’s also a huge tax revenue generator, and not for the economic benefit of Ohioans, as

some Issue 3 grifters have claimed. — Melvin Gaines

RE: CHANGES AT CLEVELAND CASINO Switching management to Rock Gaming from Caesars Entertainment will hurt them for sure. Many, including me, used the Horseshoe to boost our tier level in Vegas, and there is no way the new setup is going to encourage me to gamble. Thanks for saving me money, as the trips to the Horseshoe will go down a lot. Dumb move. — tonethebone I agree that Northeast Ohio is saturated with casinos right now. Rock Gaming is right to redirect development to mixeduse to further complement Tower City. I have always thought apartments there

would be terrific. Think of how convenient living there would be, especially being connected to Tower City, the rapid and The Q. It would be great in the winter. — James Shellenburger

RE: MAKING SENSE OF BROWNS MANAGEMENT To me, the interesting questions are: (1) would any more capable general manager or head coach be willing to work for the dysfunctional Browns organization? and (2) if not, how do you fire an owner? — Mark Wallach The only way to fix the Browns is to BOYCOTT them until they straighten out. 16 years is long enough. — Robert Fritz

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'ŽůĨ KƵƟŶŐƐ Ăƚ ŽƵůĚĞƌ ƌĞĞŬ 'ŽůĨ ůƵď

AFV associate Will Calhoun works at a pressure-testing station that analyzes natural gas fuel assemblies before they are shipped to customers. (Contributed photo)

AFV taking long view during trying times BY DAN SHINGLER dshingler@crain.com @DanShingler

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Just two years ago, Twinsburgbased AFV Natural Gas Fuel Systems was a brand new company in a burgeoning industry. It posted a profit in its first year, as it and the nation rushed to convert trucks and other vehicles from gasoline and diesel fuel to cheaper natural gas. Today, with gasoline and diesel fuel prices down sharply from their previous highs, the luster is gone from that industry, at least temporarily. But AFV remains — and says that like many of the fleet operators that rely on its fuel systems to make their trucks go, it’s in business for the long haul. “I can’t talk to you about great growth, I can’t talk to you about great hiring — although we did just hire another engineer and someone on the shop floor. “I can talk to you about how we’re trying to look at this for the long haul and play that long game — and try to help our customers play the long game,” said Kevin Dickey, general manager of AFV. To be sure, the road has had more ups and downs than the West Virginia Turnpike so far. “In 2013, this industry was humming. It wasn’t humming with a lot of companies, but the companies that were in this industry were humming. “So we had a very good year — and I was feeling pretty good about where we were at,” Dickey said. “It wasn’t until the next year that things started going on with oil and gas and eventually we got to where we are now, under $50 a barrel for

oil, gas prices at $2.10 a gallon and diesel at about $2.30,” he added. That’s a far cry from where some say prices need to be before natural gas will again become the darling of fleet operators, vehicle convertors and the industry’s Holy Grail — the OEM companies that make heavy trucks and other vehicles that could use the fuel. Dickey said some operators have said that diesel prices will need to go back to more than $4 a gallon before they’ll consider investing in natural gas fuel systems that can cost thousands of dollars per vehicle. But Dickey said he remains optimistic. He looks at the 30-year history of gasoline and diesel prices and the volatility they’ve historically presented — far more volatile than natural gas prices — and says it’s only a matter of time before natural gas regains its full price advantage. In the meantime, it’s still cheaper than gasoline or diesel — just less so than before — and it still burns cleaner and cooler than those other fuels as well. His optimism might be well founded, say some in the industry or others in the natural gas fuel business. “I agree with him,” said Shawn Bennett, executive vice president of the Ohio Oil and Gas Association. “The price of natural gas will remain depressed for longer than the price of oil.” That’s because U.S. drillers are producing more gas than oil, with no slowdown in sight, and natural gas prices aren’t affected as much by international markets, Bennett said. That’s bad news for his industry, even if it is good news for companies like AFV. “It’s a bloodbath out here, and I don’t see (natural gas) prices recovering any time soon,” Bennett said. Dan T. Moore, a Cleveland manu-

facturing entrepreneur who also has invested in natural gas fueling systems, says he also agrees and he too is sticking with the industry for the long term. The fuel systems and conversions he sells for heavy trucks are still selling, he says. Smaller vehicles aren’t as likely to use the fuel currently, but he’s still investing to develop a home-fueling station because he too believes natural gas will regain its full cost advantage over gasoline. “We’re not giving up at all,” Moore said. “In fact, we’re buying machine tools — and fancy machine tools.” Like Dickey, Moore said there’s just too much gas being produced and gasoline and diesel prices are still too volatile, so he sees little chance that natural gas will be abandoned as a vehicle fuel over the long term. While the industry waits for better conditions, AFV is finding new customers in Mexico and Latin America, where there is more infrastructure in place to fuel natural gas vehicles. At the same time, it’s continuing to invest and to improve its operations, Dickey said. “You do the things that business has to do. You watch cash very carefully, you make sure you’re spending money on the things that are most important to our business. “But we’ve never stopped getting the resources we need … we’ve never stopped giving raises and giving people some discretionary bonuses when they do extraordinary work,” Dickey said. “We’re trying to make sure that people understand we’re in the industry, we’re in this business and we’re willing to continue making the investments because we know it’s coming back,” he said.

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French honor is ‘personal’ for Knerly BY JEREMY NOBILE jnobile@crain.com @JeremyNobile

Josh Knerly’s father started a bridge connecting France to Cleveland sixty years ago. Then Knerly finished it. A Lakewood native, Knerly became the honorary consul of France in Cleveland in 1995 — a title he still holds — several decades after his father, Stephen, parachuted into Nazi-occupied France to battle alongside resistance fighters as part of Operation Jedburgh in World War II. On Friday, Nov. 6, Knerly, 65, was awarded the prestigious French Legion of Honor medal at the Consulate General of France in Chicago for his efforts to deepen FrenchAmerican relations. Those efforts include serving French citizens, fostering links to France between businesses, cultural organizations and other institutions, and promoting the sister city relationship between Cleveland and Rouen, France. The medal, most commonly awarded to veterans, is France’s highest honor. Its presentation to an honorary consul like Knerly is rare, said Vincent Floreani, consul general of France for the Midwest, and underscores Knerly’s dedication to furthering relations between the two countries. “Josh is a great friend of France. He’s represented the interests of France in Northern Ohio for more than 20 years, and that’s a very long time,” Floreani said. “He knows a lot of people and is very resourceful. He’s done everything he can to increase relations between us and France. He is a great asset for us.” For Knerly, emeritus managing partner at Cleveland’s Hahn Loeser & Parks LLP whose practice focuses on nonprofit corporate law, art law, international transactions and closely held and family-owned businesses, the award has special significance considering his late father’s role in World War II. “It’s very personal for me,” Knerly said, noting that his father, who received several decorations for his actions supporting the French resistance, passed away in 1987. “I was very touched by this. It was entirely unexpected.” Knerly, who isn’t French, took an interest in the country at an early age, but certainly not by accident. He began learning the language through a tutor at 3 years old. He lived with a French family for a short period as a teenager and went on to study Napoleonic history there for a stint during college. At 12, Knerly traveled to the country for the first time with his father, meeting friends he had made there during the war. Stephen’s celebrity preceded him. The local newspapers ran stories about the visit under a front-page headline that read, “Captain Steve Returns.” “It was that visit that really propelled my interest in France,” Knerly said. Between college and law school, Knerly studied at the Fletcher School of Law and Diplomacy at Tufts Uni-

versity, but said he “never really imagined” he’d actually become a diplomat. The opportunity to become honorary consul of France came two years after Knerly became managing partner at Hahn Loeser in 1993. He was recommended for the post by the outgoing consul, an attorney at Jones Day. “The French had been really quite good to me,” Knerly said. “I thought this was a way to sort of give something back and help the French who are living here or coming to visit. It was a way to pay back something I had gotten.” Two decades in the role has pro-

vided Knerly a wealth of diverse opportunities to enhance FrenchAmerican relations, although awarding the French Legion of Honor medal to veterans of both World Wars ranks among some of his proudest moments so far. The consulate job involves quite a variety of duties, from helping citizens who lost passports or ended up in jail to representing the French in media during major events — he did TV interviews when there were riots in France a few years back — to furthering relationships between businesses with French operations (like Lubrizol Corp.), universities and research centers. And the list goes on.

Knerly is quick to thank the firm he’s worked for his entire career for supporting his diplomatic efforts. “(Knerly’s) service to the French community of Northeast Ohio is to be admired,” said Hahn Loeser & Parks CEO Larry Oscar. “At Hahn Loeser, we can all take pride in the recognition of Josh and the important supporting role played by the firm.” But the award’s greatest significance to Knerly, personally, traces back to his father. “I know how really excited he would’ve been that his son got the Legion of Honor,” Knerly said. “It just would’ve meant a lot to him.”

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THE DISH

Market Garden flexes its growing brewing muscles Market Garden Brewery is putting the finishing touches on its new 35,000-square-foot, 35-barrel brewery in Ohio City. Before the end of the year, it plans to brew its first batch, and sometime next year, it will begin distributing kegs and bottles throughout Northeast Ohio. The brewery will produce about 6,000 barrels of beer in its first year

Lee Chilcote Chilcote is a freelance writer and editor who has written for Vanity Fair, Next City, Belt and other publications. He is managing editor of Fresh Water Cleveland. — triple its current capacity — but will eventually ramp up to 80,000100,000 barrels per year, or half the current output of beer behemoth Great Lakes Brewing Co. The brewery’s imminent opening is yet another big leap forward for Northeast Ohio’s beer industry, which has grown by leaps and bounds in recent years and now includes at least 35 breweries scattered across the region. Head brewer Andy Tveekrem, an Akron native who has also worked at Great Lakes Brewing Co. and Dogfish Head in Milton, Del., says custom-building the new brewery has been challenging but fun. “It’s really just a chance to create,” he said. “You add packaging, and sudden-

Mike Foran (left) Andy Tveekrem (middle) and Sam McNulty have big plans at Market Garden Brewery. (Lee Chilcote) ly your ability to tell that beer’s story is reduced to a label. But here, we have the chance to tell the beer’s story through the brewery.” Tveekrem knows something about building breweries — this is actually the sixth one he’s worked on. To build the new system, he hired German contractors Esau and Hueber, who flew two workers to Cleveland for a week to install and field-test it. Tveekrem and fellow Market Garden Brewery owners Sam McNulty, Mike Foran and Mark Priemer bought the dilapidated building at West 24th Street and Bridge Avenue

for $800,000 three years ago because they needed more room to brew beer. Although their original plan was to distribute the beer they made at the restaurant and brew house on West 25th Street, within weeks of opening back in 2011, they’d already maxed out the system. “We’re completely beyond capacity,” Tveekrem said. “That’s why we haven’t been distributing.” That shouldn’t be a problem at the new facility, a cavernous warehouse that was last used as a food production facility. It offers plenty of room to grow.

In the first year, Tveekrem says he’ll make one to two brews per day by hand until he feels like he’s mastered the new system. Eventually, he plans to automate the process and ramp up to six brews per day. The brewery will produce 10 beers, including popular styles like Citramax IPA, Progress Pilsner and Pearl Street Wheat. Market Garden Brewery and sister brewery Nano Brew will continue to produce specialty beers in a smaller capacity. “We start at Nano,” explained Tveekrem of the process of deciding which beers to make.

“If we really like it, then we do it at Market Garden. Then if that’s successful, we do it here.” The once-dumpy warehouse has been transformed by huge front windows that let in natural light and allow passersby a glimpse of the beermaking process. On the second floor, a dramatic catwalk will offer visitors a bird’s-eye view of workers adding ingredients to stainless steel kettles. For a nominal fee, visitors will be able to take a guided tour on weekends where they’ll be practically embedded in the facility. Of course, the SEE BREWERY, PAGE 59

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z NOVEMBER 9 - 15, 2015 z CRAIN’S CLEVELAND BUSINESS

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

Amount: $56,078

MAHARRIS GROUP LLC 17745 Brick Mill Run, Strongsville Date filed: Oct. 9, 2015 Type: Employer’s withholding, unemployment, corporate income Amount: $116,356

MARBLE BUILDER DIRECT 4100 Brookpark Road, Cleveland Date filed: Sept. 22, 2015 Type: Employer’s withholding, corporate income Amount: $46,320

LAGO FLATS LLC 1091 W. 10 St., Cleveland Date filed: Oct. 9, 2015 Type: Employer’s withholding Amount: $57,636

PAUL F. SMITH JR., D.D.S., INC. 20119 Farnsleigh Road, Shaker Heights Date filed: Sept. 22, 2015 Type: Employer’s withholding Amount: $41,851

GREENES AUTOMOTIVE SERVICE INC. 578 S. Green Road, South Euclid Date filed: Oct. 9, 2015 Type: Employer’s withholding

1701 EAST 12TH LLC SCHORCHERS DOWNTOWN CLEVELAND 1701 E. 12 St., Cleveland

Date filed: Sept. 22, 2015 Type: Employer’s withholding Amount: $37,077 COMPLETELAW-W WEB LLC 16781 Chagrin Blvd., Suite 336, Shaker Heights Date filed: Sept. 22, 2015 Type: Employer’s withholding, unemployment Amount: $35,532 ADVANCED BILLING CONCEPTS INC. 24500 Center Ridge Road, Suite 350, Westlake Date filed: Oct. 9, 2015 Type: Employer’s withholding, corporate income Amount: $35,159

GANEDEN BIOTECH INC. 5800 Landerbrook Drive, Mayfield Heights Date filed: Sept. 22, 2015 Type: CIVP Amount: $30,800 JWT & A L L C, AN LLC 3615 Superior Ave. Bldg 31 Ste 1J Date filed: Oct. 8, 2015 Type: Employer’s withholding, unemployment Amount: $25,787 MOBIL MARTIN INC. 1279 W. 73 St., Cleveland Date filed: Oct. 9, 2015 Type: Unemployment Amount: $22,806 UNION AUTO CARE INC. 12508 Oakview Blvd., Cleveland Date filed: Oct. 8, 2015 Type: Employer’s withholding, unemployment Amount: $22,620 LITTLE INSPIRATIONS CHILDCARE CNTR. 5304 Fleet Ave., Cleveland Date filed: Sept. 22, 2015 Type: Employer’s withholding, unemployment Amount: $21,659

Give your health coverage wings.

K KLASS MASONRY INC. 15293 Sandalhaven Drive, Cleveland Date filed: Oct. 9, 2015 Type: Employer’s withholding, unemployment Amount: $21,214 FIVE STAR MECHANICAL LLC 15599 NEO Parkway, Cleveland Date filed: Sept. 22, 2015 Type: Employer’s withholding, unemployment Amount: $19,318

Do you see a solution to the growing holes in your benefits? Your employees may.

STEEL SHEARING INC. P.O. Box 44342, Brooklyn Date filed: Sept. 22, 2015 Type: Employer’s withholding Amount: $19,237

It’s called voluntary insurance, and 70 percent of employees say they’re likely to purchase voluntary insurance if it were offered by their

LITTLE BLESSINGS ENRICHMENT CENTER INC. 7616 Union Ave., Cleveland Date filed: Sept. 22, 2015 Type: Unemployment, failure to file complete return Amount: $18,346

employers.1 In an ever-changing health care landscape, Aflac has offered voluntary insurance and nothing else for 60 years. And it shows. Only Aflac offers One Day PaySM, which allows your

RIGGEN ROOFING CO. 9635 Idlewood Drive, Brooklyn Date filed: Sept. 22, 2015 Type: Employer’s withholding, unemployment, failure to file complete return, corporate income Amount: $12,861

employees’ claims to get paid in just a day when they submit online.* Best of all, Aflac comes at no direct cost to employers like you. Just add a payroll deduction, notify your workforce and let it fly.

METHOD CONSTRUCTION LLC 3977 W. 157 St., Cleveland Date filed: Sept. 22, 2015 Type: Employer’s withholding Amount: $10,765

Call your local agent and visit aflac.com/smallbiz

MCGUINNESS LLC 27155 Schady Road, Olmsted Township Date filed: Sept. 22, 2015 Type: Employer’s withholding Amount: $9,606 2015 Aflac WorkForces Report, a study conducted by Research Now on behalf of Aflac, January 20 - February 10, 2015. Includes somewhat, very and extremely likely; of those employees who are not currently offered voluntary insurance benefits by their employers. *One Day PaySM available for most properly documented, individual claims submitted online through Aflac SmartClaim® by 3 PM ET. Aflac SmartClaim® not available on the following: Short-Term Disability (excluding Accident and Sickness Riders), Life, Vision, Dental, Medicare Supplement, Long-Term Care/Home Health Care, Aflac Plus Rider and Group policies. Processing time is based on business days after all required documentation needed to render a decision is received and no further validation and/or research is required. Individual Company Statistic, 2015. Individual coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, individual coverage is underwritten by American Family Life Assurance Company of New York. Worldwide Headquarters | 1932 Wynnton Road | Columbus, GA 31999

R & R MECHANICAL INC. 3519 E. 75 St., Cleveland Date filed: Sept. 22, 2015 Type: Corporate income Amount: $8,339

Z150675

ZORP CORP. 25975 Emery Road,

1

7/15

SEE TAX LIENS, PAGE 59

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BECAUSE WHEN YOU HAVE

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11/6/2015 4:12 PM

Cleveland trivia buffs know our city’s Terminal Tower was for years the tallest build ing in North America outside of New York City. At 52 stories tall, the iconic structure represents what can be accomplished when people dream big. With a nod to Cleveland’s greatest landmark, we’re telling the stories of Northeast Ohio’s future skyscrapers of business — the 52 fastestgrowing companies in the region.

52

Crain’s

CRAIN’S CLEVELAND BUSINESS

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NICK ILUZADA ILLUSTRATION

25

16 17 18 19 20 21 22 23 24

26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52

Bellwether Enterprise Ohio Real Title Agency SecureData 365 General Commercial Corp. World Synergy Skoda Minotti Olympic Forest Products Co. The Millcraft Paper Co. WTWH Media Cornerstone IT Foundation Software Magnus International Group Jakprints RDL Architects SC Fastening Systems Carver Financial Services Incept Alliance Solutions Group Simple Solutions RCF Group Alpha Imaging Selman & Co. Corrigan Krause CPAs ACU-Serve Corp. ThenDesign Architecture Fathom Suburban Manufacturing Co.

1:10 PM

Lighthouse Insurance Group Recess Creative Willory Content Marketing Institute Budget Dumpster Checkpoint Surgical ExactCare Pharmacy StreamLink Software Wireless Environment Proactive Controls Group Compass Self Storage Paragon Consulting Payroll4Construction.com Perfect Power Wash Christian Healthcare Ministries JS Paris Excavating Insight2Profit Direct Recruiters Bravo Wellness The SpyGlass Group Exscape Designs KHM Travel Group thunder::tech Keller Williams Realty of Greater Cleveland Asurint

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Eligible companies had to be privately held, at least 5 years old and located in Northeast Ohio. They must have posted at least $2 million in revenue in 2014 and should not have experienced more than one year of declining revenue in the last f ive years. Crainâ&#x20AC;&#x2122;s worked with Apple Growth Partners, an independent accounting and business advisory f irm with off ices in Cleveland and Akron, to verify revenue numbers and to compute revenue growth. Ranked in terms of f ive-year revenue growth percentages, here are Northeast Ohioâ&#x20AC;&#x2122;s entrepreneurial giants.

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z NOVEMBER 9 - 15, 2015 z CRAIN’S CLEVELAND BUSINESS

CRAIN’S 52 From the Publisher In one of my engineering classes in college, a professor told us about the 800-year-old stained glass windows in Europe’s ancient cathedrals and something peculiar going on. The glass in those majestic windows, the story goes, is now thicker on the bottom than the top. The theory is that over the centuries, the glass in the windows has slowly, oh-so-slowly, flowed — or “creeped” if you want to use the technical term — under the force of gravity. The recovery of the U.S. economy hasn’t been that slow … but it’s close. Two weeks ago, the government reported that GDP had grown at an annual rate of 1.5% during the third quarter. Media outlets described the news John using such words as “anemic,” “tepid,” Campanelli “cool,” “sluggish,” even “thud.” If business is a horse race, the nation’s economy appears to be a birthday-party pony, laboring and lumbering. But even as the overall economy shuffles along, there are companies that are, indeed, galloping like thoroughbreds. And the companies that make up the 2015 Crain’s 52 appear ready to speed alongside American Pharoah. The No. 1 company on the list — Lighthouse Insurance Group — saw revenue growth of 15,751% over the

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1. LIGHTHOUSE INSURANCE GROUP Independence www.lighthousequotes.com Revenue 2014: $9.7 million Revenue growth: 15,751% Year founded: 2009; Top executive: Jason Farro, CEO Number of local full-ttime employees (as of Aug. 11): 49; Number of worldwide full-ttime employees (as of Aug. 11): 119; Business description: Lighthouse is a fully integrated health, accident, life, senior and supplemental insurance agency.

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2. RECESS CREATIVE Cleveland www.recesscreative.com Revenue 2014: $2.4 million Revenue growth: 3,432% Year founded: 2009; Top executive: Chris Jungjohann, COO; Tim Zeller, CCO; Number of local full-ttime employees (as of Aug. 11): 15; Number of worldwide full-ttime employees (as of Aug. 11): 15; Business description: Recess Creative is a full-service digital advertising and integrated marketing agency.

3. WILLORY Bath; www.willory.com Revenue 2014: $3 million Revenue growth: 3,261% Year founded: 2010; Top executive: John Bernatovicz, founder and president; Number of local full-ttime employees (as of Aug. 11): 17; Number of worldwide fulltime employees (as of Aug. 11): 20; Business description: Willory serves clients worldwide with their human resources and payroll needs.

last five years! The top 10 companies each saw revenue jump at least 698%. The list is made up of diverse companies that specialize in everything from tech to travel and design to dumpsters. It shows that strong growth is possible in virtually any sector. And these sizzling companies are not the only ones benefitting. According to the data submitted, these companies employ a total of 3,213 people in Northeast Ohio, so the entire region is getting a jolt from the Crain’s 52. Why are we calling them the “Crain’s 52”? Is it because of the number of weeks in a year? The number of cards in a deck? Dick Ambrose’s uniform number with the Browns? No. For your answer look toward the downtown Cleveland skyline and the Terminal Tower. Our city’s iconic skyscraper stands 52 stories tall. Fifty-two remarkable stories. Each of the fastest-growing companies on this list has a remarkable story too — about great ideas, innovation, a successful product or service and, it almost goes without saying, talented and visionary leadership. It’s our job at Crain’s Cleveland Business to tell these 52 great stories to the rest of Northeast Ohio’s business community. Congratulations to them, and let’s make it all of our goals to somehow join this list in 2016.

For example, Willory provides temporary staffing, direct hire and consulting services.

4. CONTENT MARKETING INSTITUTE Cleveland; www.content marketinginstitute.com Revenue 2014: $6.8 million Revenue growth: 2,257% Year founded: 2007; Top executive: Joe Pulizzi, founder; Pam Kozelka, COO; Peter Loibl, publisher; Number of local full-ttime employees (as of Aug. 11): 14; Number of worldwide fulltime employees (as of Aug. 11): 25; Business description: Content Marketing Institute bills itself as the leading content marketing education and training organization, as it teaches brands how to attract and retain customers through multi-channel storytelling.

5. BUDGET DUMPSTER Westlake www.budgetdumpster.com Revenue 2014: $20.2 million Revenue growth: 1,937% Year founded: 2009; Top executive: John Fenn, Mark Campbell, co-founders; Number of local full-ttime employees (as of Aug. 11): 45; Number of worldwide fulltime employees (as of Aug. 11): 45; Business description: Budget Dumpster is a national dumpster rental company.

6. CHECKPOINT SURGICAL Cleveland www.checkpointsurgical.com Revenue 2014: $2.3 million Revenue growth: 1,610% Year founded: 2009; Top executive: Len Cosentino,

president and CEO; Don Hubbard, vice president of sales and marketing; Number of local full-ttime employees (as of Aug. 11): 12; Number of worldwide full-ttime employees (as of Aug. 11): 18; Business description: Checkpoint Surgical provides surgeons with technology to safely and cost-effectively help protect and repair nerves intraoperatively.

7. EXACTCARE PHARMACY Valley View; www.exactcarepharmacy.com Revenue 2014: $97.7 million Revenue growth: 1,572% Year founded: 2009; Top executive: Dale Wollschleger, president and CEO; Number of local full-ttime employees (as of Aug. 11): 200; Number of worldwide full-ttime employees: 275; Business description: ExactCare Pharmacy is a full-service, home-delivery pharmacy that provides a convenient, simpler and safer way to take medication for people juggling multiple prescriptions.

8. STREAMLINK SOFTWARE Cleveland; www.streamlinksoftware.com Revenue 2014: $2 million Revenue growth: 1,424% Year founded: 2008; Top executive: Adam Roth, CEO Number of local full-ttime employees (as of Aug. 11): 39; Number of worldwide full-ttime employees (as of Aug. 11): 39; Business description: StreamLink provides web-based grant management and board management software products, AmpliFund and BoardMax.

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9. WIRELESS ENVIRONMENT Solon; www.wirelessenv.com Revenue 2014: $10.2 million Revenue growth: 1,305% Year founded: 2006; Top executive: David Levine, president; Number of local full-ttime employees (as of Aug. 11): 11; Number of worldwide full-ttime employees (as of Aug. 11): 15; Business description: Wireless Environment creates and develops lighting that operates off the electrical grid. Mr Beams is its line of wireless, battery-powered LED lights.

10. PROACTIVE CONTROLS GROUP Cleveland www.proactivecontrols.com Revenue 2014: $5.1 million Revenue growth: 698% Year founded: 2007; Top executive: Peter Duggan, CEO and co-founder; Number of local full-ttime employees (as of Aug. 11): 3; Number of worldwide full-ttime employees (as of Aug. 11): 16; Business description:

Proactive is a construction consulting partner that works with clients to minimize risk and resolve issues pivotal to successful and complex building projects. 11. COMPASS SELF STORAGE Cleveland; www.compass selfstorage.com Revenue 2014: $29 million Revenue growth: 553%

PROUDLY SERVING NORTHEAST OHIO’S REAL ESTATE COMMUNITY SINCE 2005 www.ohiorealtitle.com

Year founded: 2009; Top executive: Todd C. Amsdell, president and CEO; Number of local full-ttime employees (as of Aug. 11): 25; Number of worldwide full-ttime employees (as of Aug. 11): 150; Business description: Compass describes itself as a self-storage industry leader providing self-storage and moving solutions nationwide. 12. PARAGON CONSULTING Mayfield Heights www.paragon-inc.com Revenue 2014: $10.4 million Revenue growth: 478% Year founded: 1993; Top executive: Mark Atwood, president; Number of local full-ttime employees (as of

CONGRATULATIONS TO THE OTHER MEMBERS OF THE 2015 CRAIN’S FAST 52 CLASS!

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CRAINâ&#x20AC;&#x2122;S 52 Aug. 11): 64; Number of worldwide full-ttime employees (as of Aug. 11): 70; Business description: Paragon is a 20-year veteran in .net development and custom software applications. 13. PAYROLL4CONSTRUCTION Strongsville; www.payroll 4construction.com Revenue 2014: $3.6 million Revenue growth: 362% Year founded: 2006; Top executive: Fred Ode, CEO; Mike Ode, president; Number of local full-ttime employees (as of Aug. 11): 13; Number of worldwide full-ttime employees (as of Aug. 11): 14; Business description: Payroll4Construction.com is a national payroll service provider just for construction. 14. PERFECT POWER WASH Norton www.perfectpowerwash.com Revenue 2014: $3.2 million Revenue growth: 358% Year founded: 2000; Top executive: Michael Palubiak, president; Anthony Spena, general manager; Number of local full-ttime employees (as of Aug. 11): 30; Number of worldwide full-ttime employees (as of Aug. 11): 30; Business description: Perfect Power Wash offers power washing, pressure cleaning

and exterior property restoration services.

www.insight2profit.com

www.bravowell.com

Revenue 2014: $11.1 million Revenue growth: 332%

Revenue 2014: $22.5 million Revenue growth: 267%

15. CHRISTIAN HEALTHCARE MINISTRIES

Year founded: 2006; Top executive: Keith Hohman, partner; Number of local full-ttime employees (as of Aug. 11): 50; Number of worldwide full-ttime employees (as of Aug. 11): 50; Business description: Using its expertise and technology, Insight2Profit, to analyze, recommend, implement and measure pricing strategies that deliver measurable and sustainable profit growth.

Year founded: 2008; Top executive: Jim Pshock, founder and CEO; Number of local fulltime employees (as of Aug. 11): 153; Number of worldwide employees (as of Aug. 11): 160; Business description: Bravo Wellness focuses on outcomes-based wellness plan design, administration and compliance architecture.

Barberton www.chministries.org Revenue 2014: $85.1 million Revenue growth: 356% Year founded: 1981; Top executive: Rev. Howard S. Russell, president and CEO; Number of local full-ttime employees (as of Aug. 11): 82; Number of worldwide fulltime employees (as of Aug. 11): 82; Business description: Christian Healthcare Ministries is a nonprofit voluntary medical cost-sharing ministry. 16. JS PARIS EXCAVATING

18. DIRECT RECRUITERS

Brunswick www.khmtravel.com Revenue 2014: $9.6 million Revenue growth: 231%

Revenue 2014: $10.8 million Revenue growth: 265%

Revenue 2014: $5.1 million Revenue growth: 281%

Year founded: 2001; Top executive: Brad Clark, co-president; Ed DeAngelo, co-president; Number of local full-ttime employees (as of Aug. 11): 89; Number of worldwide employees (as of Aug. 11): 100; Business description: SpyGlass provides a niche telecom cost-reduction consulting service to businesses of all sizes nationwide.

Year founded: 2002; Top executive: Rick Zimmerman, president and CEO; Number of local full-ttime employees (as of Aug. 11): 50; Number of worldwide employees (as of Aug. 11): 50; Business description: KHM describes itself as one of the nationâ&#x20AC;&#x2122;s fastest-growing host travel agencies, currently supporting more than 3,500 independent home-based travel agents across the country.

21. EXSCAPE DESIGNS

23. THUNDER::TECH

Chesterland www.exscapedesigns.com

Cleveland www.thundertech.com

Revenue 2014: $2.8 million Revenue growth: 252%

Revenue 2014: $5.4 million Revenue growth: 221%

Year founded: 2004; Top executive: William L. Dysert,

Year founded: 1999; Top executive: Jason Therrien,

Year founded: 1990; Top executive: James S. Paris Jr., president; Number of local full-ttime employees (as of Aug. 11): 70; Number of worldwide full-ttime employees (as of Aug. 11): 70; Business description: JS Paris is a contractor specializing in site development and utility work. 17. INSIGHT2PROFIT

19. BRAVO WELLNESS

Cleveland

Cleveland

Revenue 2014: $18.5 million Revenue growth: 335%

Westlake; www.spyglass.net

22. KHM TRAVEL GROUP

Solon www.directrecruiters.com

Year founded: 1983; Top executive: Dan Charney, president and CEO; Number of local full-ttime employees (as of Aug. 11): 32; Number of worldwide full-ttime employees (as of Aug. 11): 32; Business description: Direct Recruiters is a national executive search firm whose practice areas include automated material handling and packaging, automation sensors, controls and robotics, electronic security, energy management, health care IT, life sciences and others.

North Jackson www.jspexcavating.com

20. THE SPYGLASS GROUP

CEO; Number of local full-ttime employees (as of Aug. 11): 15; Number of worldwide employees (as of Aug. 11): 15; Business description: Exscape Designs develops and installs naturally unique landscapes and outdoor living spaces in conjunction with home owners, property managers, knowledgeable home builders and architects.

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president; Number of local full-ttime employees (as of Aug. 11): 47; Number of worldwide employees (as of Aug. 11): 47; Business description: thunder::tech is an integrated marketing agency specializing in branding, web, advertising, mobile, media relations, SEO, graphic design, social media and public relations services. 24. KELLER WILLIAMS REALTY OF GREATER CLEVELAND Cleveland www.KWCleveland.com Revenue 2014: $8.4 million Revenue growth: 219% Year founded: 2002; Top executive: Scott Phillips Jr., CEO; Number of local full-ttime employees (as of Aug. 11): 220; Number of worldwide employees (as of Aug. 11): 116,000; Business description: Keller Williams is a full-service real estate sales company. 25. ASURINT Cleveland www.asurint.com Revenue 2014: $20 million Revenue growth: 208% Year founded: 2006; Top executive: Gregg Gay, president; Number of localfull time employees (as of Aug. 11): 114; Number of

worldwide employees (as of Aug. 11): 146; Business description: Asurint is a full-service background screening and drug-testing provider. 26. BELLWETHER ENTERPRISE Cleveland; www.bell wetherenterprise.com Revenue 2014: $37.5 million Revenue growth: 184% Year founded: 2008; Top executive: Ned G. Huffman, president; Debbi Rogan, COO; Number of local full-ttime employees (as of Aug. 11): 55; Number of worldwide employees (as of Aug. 11): 141; Business description: Bellwether is a full-service commercial and multi-family mortgage banking company headquartered in Cleveland with 19 offices across the country. 27. OHIO REAL TITLE AGENCY Cleveland www.ohiorealtitle.com Revenue 2014: $7.2 million Revenue growth: 162% Year founded: 2005; Top executive: Manbir S. Sandhu, CEO; Number of local full-ttime employees (as of Aug. 11): 41; Number of worldwide employees (as of Aug. 11): 41; Business description: Ohio Real Title provides title and

closing services to the real estate community throughout Ohio. 28. SECUREDATA 365 Canton www.securedata365.com Revenue 2014: $3 million Revenue growth: 151% Year founded: 2006; Top executive: Ernie Blood, CEO Number of local full-ttime employees (as of Aug. 11): 16 Number of worldwide employees (as of Aug. 11): 16; Business description: SecureData 365 is a data center located in Canton and Cleveland. 29. GENERAL COMMERCIAL CORP. Sebring www.gcc-usa.com Revenue 2014: $9 million Revenue growth: 148% Year founded: 1946; Top executive: Damon S. Keller, president; Number of local full-ttime employees (as of Aug. 11): 15; Number of worldwide full-ttime employees (as of Aug. 11): 16; Business description: General Commercial provides marketing and sales of consumer durable goods throughout the United States, including custom promotional products.

30. WORLD SYNERGY

www.olyforest.com

Solon www.worldsynergy.com

Revenue 2014: $97.8 million Revenue growth: 118%

Revenue 2014: $2.2 million Revenue growth: 138%

Year founded: 1980; Top executive: Daniel Andrews, president; Number of local full-ttime employees (as of Aug. 11): 17; Number of worldwide full-ttime employees (as of Aug. 11): 22; Business description: Olympic Forest is a national pallet management service provider and sales company that serves single and multi-plant operations for diverse industries.

Year founded: 1998; Top executive: Glenn Smith, CEO Number of local full-ttime employees (as of Aug. 11): 17 Number of worldwide full-ttime employees (as of Aug. 11): 17 Business description: World Synergy provides integrated marketing, application development and managed IT services to small and midsize businesses.

33. THE MILLCRAFT PAPER CO.

31. SKODA MINOTTI Mayfield Village www.skodaminotti.com

Cleveland www.millcraft.com

Revenue 2014: $44 million Revenue growth: 126% Year founded: 2001; Top executive: Gregory J. Skoda, chairman; Number of local full-ttime employees (as of Aug. 11): 183; Number of worldwide full-ttime employees (as of Aug. 11): 247 Business description: Skoda Minotti is a business advisory firm that along with its accounting, financial and tax services, offers a complement of other advisory services. 32. OLYMPIC FOREST PRODUCTS CO.

Revenue 2014: $225.8 million Revenue growth: 113% Year founded: 1920; Top executive: Katherine M. Mlakar, chairman; Number of local full-ttime employees (as of Aug. 11): 65; Number of worldwide full-ttime employees (as of Aug. 11): 216; Business description: Millcraft is an independent, fourth-generation merchant serving the professional paper, packaging and graphic arts industries. 34. WTWH MEDIA Cleveland www.wtwhmedia.com

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CRAINâ&#x20AC;&#x2122;S 52 Revenue 2014: $8.7 million Revenue growth: 112% Year founded: 2006; Top executive: Mike Emich, co-founder, publisher; Marshall Matheson, executive vice president; Number of local full-ttime employees (as of Aug. 11): 33; Number of worldwide full-ttime employees (as of Aug. 11): 47; Business description: WTWH is a business-to-business media company serving the design engineering, renewable energy, fluid power and medical device markets. 35. CORNERSTONE IT Mentor www.cornerstoneIT.com Revenue 2014: $2.4 million Revenue growth: 112% Year founded: 2003; Top executive: Raymond J. Paganini, CEO; Number of local full-ttime employees (as of Aug. 11): 8; Number of worldwide full-ttime employees (as of Aug. 11): 8; Business description: Cornerstone IT is a full-service Microsoft partner and managed services provider for small and midsized businesses in Northeast Ohio. 36. FOUNDATION SOFTWARE Strongsville

www.foundationsoft.com

38. JAKPRINTS

Revenue 2014: $15.1 million Revenue growth: 106%

Cleveland www.jakprints.com

Year founded: 1985; Top executive: Fred Ode, CEO and chairman; Mike Ode, president; Number of local full-ttime employees (as of Aug. 11): 111; Number of worldwide full-ttime employees (as of Aug. 11): 116; Business description: Foundation is an author and developer of construction and accounting software.

Revenue 2014: $24.7 million Revenue growth: 94%

37. MAGNUS INTERNATIONAL GROUP Chagrin Falls www.magnusig.com Revenue 2014: $57.7 million Revenue growth: 104% Year founded: 2007; Top executive: Eric Lofquist, co-owner, president and CEO; Number of local full-ttime employees (as of Aug. 11): 57; Number of worldwide full-ttime employees (as of Aug. 11): 57; Business description: Magnus develops and manufactures one-of-a-kind products ranging from natural animal feed ingredients, and natural industrial and consumer waxes to customized fatty acids, biodiesel fuel feedstocks and other specialty chemicals.

Year founded: 2000; Top executive: Nick DeTomaso, CEO; Number of local full-ttime employees (as of Aug. 11): 206; Number of worldwide full-ttime employees (as of Aug. 11): 217; Business description: Jakprints manufactures and specializes in eco-friendly, custom full-color offset printing (paper products), custom screen and digital apparel printing, and sticker production. 39. RDL ARCHITECTS Shaker Heights www.rdlarchitects.com Revenue 2014: $4.6 million Revenue growth: 92% Year founded: 1994; Top executive: Ron Lloyd, president; Number of local full-ttime employees (as of Aug. 11): 30; Number of worldwide full-ttime employees (as of Aug. 11): 31; Business description: RDL Architects is an architecture firm, registered in 30 states, with experience in market rate housing, affordable housing, senior living, commercial and retail, interior design, site planning,

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mixed-use development and office. 40. SC FASTENING SYSTEMS Macedonia www.scfastening.com Revenue 2014: $2.7 million Revenue growth: 90% Year founded: 1999; Top executive: Scott Filips, president; Number of local full-ttime employees (as of Aug. 11): 12; Number of worldwide full-ttime employees (as of Aug. 11): 12; Business description: SC Fastening is an industrial/ construction supply distributor and sourcing specialist.

41. CARVER FINANCIAL SERVICES Mentor; www.carver financialservices.com Revenue 2014: $7.6 million Revenue growth: 90% Year founded: 1990; Top executive: Randy Carver, president; Number of local full-ttime employees (as of Aug. 11): 18; Number of worldwide full-ttime employees (as of Aug. 11): 18; Business description: Carver is a full-service financial planning organization that says it helps individuals and businesses realize their personal financial vision and goals.

42. INCEPT Canton; conversational marketing.inceptresults.com Revenue 2014: $12.5 million Revenue growth: 87% Year founded: 1993; Top executive: Sam Falletta, president and CEO; Number of local full-ttime employees (as of Aug. 11): 272; Number of worldwide full-ttime employees (as of Aug. 11): 272; Business description: Incept is a pay-forperformance contact center that uses a conversational marketing technique. 43. ALLIANCE SOLUTIONS GROUP Independence; www.alliancesolutionsgrp.com Revenue 2014: $44.7 million Revenue growth: 87% Year founded: 2001; Top executive: Aaron Grossman, CEO; Number of local full-ttime employees (as of Aug. 11): 73; Number of worldwide full-ttime employees (as of Aug. 11): 82; Business description: Alliance is the parent company of nine specialized staffing and recruitment companies. 44. SIMPLE SOLUTIONS Beachwood www.simplesolutions.org

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Year founded: 2003; Top executive: Carl Satterwhite, president; Number of local full-ttime employees (as of Aug. 11): 27; Number of worldwide full-ttime employees (as of Aug. 11): 81; Business description: RCF Group describes itself as a comprehensive workplace solutions provider in the furniture and facilities management industries.

Revenue 2014: $5.3 million Revenue growth: 85% Year founded: 2003; Top executive: Nancy L. McGraw, president and CEO; Number of local full-ttime employees (as of Aug. 11): 18; Number of worldwide full-ttime employees (as of Aug. 11): 18; Business description: Simple Solutions and Summer Solutions are supplementary workbooks in core subjects for students in kindergarten through eighth grade.

46. ALPHA IMAGING Willoughby www.alpha-imaging.com

45. RCF GROUP

Revenue 2014: $72.5 million Revenue growth: 77%

Cleveland www.thercfgroup.com

Year founded: 1986; Top executive: Michael Perrico, CEO; Number of local full-

Revenue 2014: $64 million Revenue growth: 84%

time employees (as of Aug. 11): 26; Number of worldwide full-ttime employees (as of Aug. 11): 77; Business description: Alpha Imaging is one of the United States’ largest distributors of medical imaging equipment. 47. SELMAN & CO. Cleveland www.selmanco.com Revenue 2014: $17.5 million Revenue growth: 74% Year founded: 1980; Top executive: David Selman, president & CEO; Number of local full-ttime employees (as of Aug. 11): 105; Number of worldwide full-ttime employees (as of

Aug. 11): 120; Business description: Selman & Co. provides administrative services related to life and health insurance and similar products. 48. CORRIGAN KRAUSE CPAS Westlake www.corrigankrause.com Revenue 2014: $5.8 million Revenue growth: 70% Year founded: 1989; Top executive: Thomas L. Harrison, managing director; Number of local full-ttime employees (as of Aug. 11): 42; Number of worldwide full-ttime employees (as of Aug. 11): 42; Business description: Corrigan Krause

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CRAIN’S 52 billing processes and comply with federal and insurance regulations. 50. THENDESIGN ARCHITECTURE Willoughby www.thendesign.com Revenue 2014: $6.2 million Revenue growth: 67%

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Year founded: 1989; Top executive: Robert Fiala, managing partner; Number of local full-ttime employees (as of Aug. 11): 33; Number of worldwide full-ttime employees (as of Aug. 11): 36; Business description: ThenDesign Architecture provides planning, architecture and interior design services.

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51. FATHOM Valley View www.fathomdelivers.com Revenue 2014: $18.6 million Revenue growth: 66%

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Aug. 11): 144; Business description: Fathom says it creates profitable growth through content strategy, digital marketing and sales/analytics consulting. 52. SUBURBAN MANUFACTURING CO. Eastlake www.submfg.com Revenue 2014: $11.3 million Revenue growth: 63% Year founded: 1979; Top executive: Richard Grice, president; Ronald Jech, general manager; Number of local full-ttime employees (as of Aug. 11): 78; Number of worldwide full-ttime employees (as of Aug. 11): 78; Business description: Suburban Manufacturing is a precision machining company certified in the aerospace, oil and gas, transportation and hydraulic markets.

Year founded: 1997; Top executive: Scot Lowry, CEO Number of local full-ttime employees (as of Aug. 11): 124; Number of worldwide full-ttime employees (as of

“REVIVAL IN THE RUST BELT” HALF OF CLEVELAND’S KIDS LIVE IN POVERTY

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Business of Life

Gabriel Partners band together by making music BY JEREMY NOBILE Like many rock bands, Standard Wang can trace its formative roots back to an idea spawned by two pals singing along to Led Zeppelin on a road trip. This group, though, played its first notes not in some suburban garage or converted warehouse practice space, but in the same office its members use for complex anti-money laundering and forensic accounting work. And it has grown into a local business’ way to entertain clients and employees while giving players an outlet while learning musical instruments. Standard Wang formed mostly as a way for staffers and executives at downtown Cleveland’s Gabriel Partners to indulge in a therapeutic release during an otherwise typical work day of crunching numbers. That same motivation to vent pent-up energy by banging on drums, wailing on guitars and belting out ’90s grunge rock brought the group together. “Work is stressful. It’s what you do all day. But when you look at the time, and realize we get to play some rock ‘n’ roll, it helps get you through the day,” said Chris Brauser, Gabriel Partners’ CEO and Standard Wang’s 6-and-a-half-foot tall, Mohawk-clad singer and frontman. “It gets you recharged.” While they have at least five dedicated members, the lineup has some transient players. The group invites all of Gabriel Partners’ more than 100 employees to jam during practice sessions, which typically take place during or after the work day, with or

without a couple drinks nearby. Staff learns about the sessions usually through officewide emails encouraging them to stop by. Inspired by groups like Alice in Chains, Stone Temple Pilots, Pearl Jam and Nirvana, the band plays mostly covers and a few originals. In the past two years, they’ve played around Cleveland bars and some venues like the House of Blues. They have the basics covered with drums, guitar and bass. They even have a cajon player (a drum that’s basically a wooden box the user sits on and taps, slaps and bangs rhythms on with hands and fingers). Some players come and go, but no one is discouraged from joining or jamming, even if they would be the fourth or fifth guitar player. “Hey, you can never have too many guitars,” Brauser said. Novices are in good company. Save for lead guitarist John Ellis, the other members brought no formal musical background before the company band. So they recruited Jim Miller, an accomplished Cleveland musician who currently fronts JiMiller Band, teaches music privately and directs the rock band at Hawken Lower School. He became Standard Wang’s music coach about two years ago and helps members hone their pipes, learn their chords and play the rhythms all while assisting them with working the gig circuit. “We said, ‘Hey let’s create a band.’ Except no one knows how to play,” Brauser said, “so Jim came in to teach everybody all

those pieces. It’s kind of the build-your-office-band kit.” The office band is also a great way for employees to get to know each other. Drummer Sam Rosenfeld was new to the Cleveland area and never played an instrument before Standard Wang. “It’s a good way of spending non-work time with the boys, and it’s actually a whole lot of fun,” he said. “Why wouldn’t you do it?” Employees and clients alike are invited to the band’s shows. “You can see the value in that,” Brauser said. “All of a sudden, clients are scheduling their visits to Cleveland around when we play so they can come out and have a good time with us.” There’s a goal of performing every six to eight weeks. Each member has a strong sense of humor, and no one in the group is shy about having fun. They’ve earned a couple bucks, but any money earned at a gig is always used to offset the bar tab. As far as the band name, well, that’s a different story. They tossed around a few monikers including the Urinal Cakes and the Jalapeno Hotcakes before settling on their current name, which stems from a lewd inside joke. The other story, though, holds that Standard Wang references an old computer language from Wang Laboratories, a computer company that peaked in the 1980s. “The whole point of this is if it sounds good, and we’re having fun,” Brauser said, “that’s all we really want.”

We don’t just see people for who they are; we see

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“All of a sudden, clients are scheduling their visits to Cleveland around when we play so they can come out and have a good time with us.” — Chris Brauser, CEO Gabriel Partners

In the past nine months,

98% of kids participating in United Way-funded literacy programs are now reading at grade level. From left, Chris Brauser, Jim Miller, Eric Fudo, Ed Ellis and Sam Rosenfeld of Gabriel Partners. Below, John Ellis, left, Ed Ellis and Brauser perform for Standard Wang. (McKinley Wiley, above; Dale McDonald Photography, below.)

them for who they can become.

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BUSINESS OF LIFE

Source Lunch Joe Calabrese wishes more people would use the RTA. Although it already provides a way for 50 million riders a year to get to a job, shopping or ball game, Calabrese, the CEO and general manager of RTA, wishes more people would use the system’s buses, rapid transits and its two bus rapid transit lines — the popular HealthLine and the new Cleveland State Line . To encourage new riders, the system is in the midst of a $100 million-plus capital improvement plan that is rebuilding rapid transit stations, buying new buses and improving major sections of its 34.3 miles of rail track. In August, Calabrese, a native of Utica, N.Y., helped cut the ribbon on the $15.6 million Little Italy-University Circle Station on Mayfield Road at East 119th Street. It’s RTA’s first new Red Line station in 46 years, replacing a little-used station a few blocks away on Euclid Avenue. Construction is underway on stations on the Brookpark Red Line station and on stations on the Blue and Green rapid lines.

Joe Calabrese TRANSPORTATION

— Jay Miller

What’s the biggest challenge RTA faces? The biggest challenge for all of us is to be able to invest funds to replace the equipment that is reaching the end of its useful life. Right now, we have $250 million in unfunded equipment to replace over the next five years. The second most important is keeping up with increasing demand without any increase in (financial) resources. The important thing is, if we do things right, customers will respond. You came to Cleveland in 2000 after growing up and working in upstate New York, for both transit systems and in the private sector. Why did you take the job in Cleveland? I came to Cleveland for the weather; it’s much milder than Syracuse (where he’d worked for the Central New York Transportation Authority). Seriously, I came to Cleveland for the experience, to be able to oversee a multimodal transit system with heavy rail, light rail and buses. There are only a couple dozen cities in the country that are truly multi-modal — and because the job was open.

Most large transit systems go through general managers in three to five years — because they’re fired, tired of the headaches or just move on. Why have you been able to stay here? We thought this would be a good jumping off point to something else. As my wife put it, if we knew we would be here this long, she would have used the good paint. (The Calabreses are empty nesters who have lived in the same Westlake home since they arrived in Cleveland.) But the real reason I’ve stayed here is because we’ve done good things. I’ve had great board (of trustees’) support and I have a great team. But more importantly, I see a community that has joined together like few communities do. When there is something to be done, like attracting the Republican presidential convention, this community comes together from every part of corporate and public life. They leave their titles at the door and work their tails off to get the job done and make Cleveland shine. The other reason you’ve stayed so long is you didn’t get fired. In fact, at trustee meetings I’ve often heard president George Dixon go out of his way — at least at public board meetings — to praise you. I am the most senior general manager of a major transit system in the country.

RTA, and public transit in general, are heavily subsidized — the RTA fares cover less than 20% of the cost of a ride. How do you justify that subsidy? I haven’t been able to prove it, but the investment in public transit more than offsets the expenses the government is paying right now, in terms of unemployment insurance, housing assistance, food stamps. But if people can get a bus to a job they can work and sustain themselves and pay taxes, that more than offsets the subsidy. Any things you haven’t been able to accomplish? Are you talking about my golf game? I’d like to expand the system, serve more people; we could get more people to work and reduce congestion. But with stagnant resources, it’s difficult to allocate resources and take advantage of new opportunities. The only way we can do something new is to cut something else. There are bus routes that are serving twice as many people as 20 years ago, like the HealthLine. There are lines carrying half the people they did 20 years ago. But we can’t cut that service out because those people are the most transit-dependent and they use that route to get to work. People ask, “Why do you run some lines 24 hours a day? I saw a bus this morning with only six people on.” Well, those six people need to get somewhere really important.

FOUR THINGS MET HIS WIFE?

We were high school sweethearts. She was on my paper route.

FAVORITE CAR?

A 1972 Porsche 911. The problem is, I didn’t buy it until 1990. My wife and son laughed when I had it towed home. My incentive for three years was to show them I could restore it. And I did.

RIDE THE BUSES IN OTHER CITIES?

I don’t take too many vacations. Recently, in Hilton Head, S.C., we rented bikes for the weekend because there wasn’t any viable public transportation. On business, when I’m in Washington, D.C., I take public transit. When I go to Columbus, I don’t.

RIDE RTA?

I use RTA about three times a week to commute. I’ll take the Red Line and the Cleveland State Line. And I use the downtown trolleys several times a week.

LUNCH SPOT Cleveland Chop 824 West St. Clair Ave. (216) 696-2467 www.clevelandchop.com

The meal Chicken piccata with mashed potatoes and asparagus, and a salmon BLT (no tomato) and French fries.

The vibe Dark wood and reds — it’s a steakhouse after all — and a popular patio.

The bill $35.25 + tip

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MARIJUANA CONTINUED FROM PAGE 1

leaders. The marijuana business coalition includes everyone from farmers to manufacturers of lighting and greenhouse products to insurance salesmen and venture capitalists. “I voted against it (Issue 3),” said Patrick McManamon, founder and managing director of Cannasure Insurance Services, a Westlake insurance brokerage that serves the growing national cannabis industry. “I’m glad it failed.” Cannasure insures marijuana-related businesses in states where the product is available for medical or recreational use. It will insure a grower’s crop against lightning and hail and a dispensary’s inventory against fire or theft. McManamon said the decision by ResponsibleOhio, the nonprofit created to get the issue on the ballot, to imbed exclusive marijuana growing rights to 10 groups into the ballot initiative and to seek to legalize marijuana for both medical and recreational use all at once soured him on the issue. He said it would have made more sense to legalize pot for medicinal use first, to give the public a chance to see marijuana used safely and responsibly. “From our standpoint, the initiative was a bad initiative,” McManamon said. “To be the first state in the country to allow recreational and medical use at the same time was suicide.” In most states that have started along the path to marijuana legalization, the first step was to allow its use for medicinal purposes for several years before seeking to expand into recreational use. Twenty-three states permit medical marijuana use. Alaska, Colorado, Oregon, Washington and the District of Columbia passed

laws allowing recreational use after a decade of medical marijuana experience. “Nevada has gotten it right,” said Derek Peterson, the CEO of Terra Tech Corp., a publicly traded company based in Irvine, Calif., that has been licensed to operate four dispensaries, two cultivation centers and two production facilities in Nevada. “It was the most entrepreneurially friendly process, an open-market process. Because of that, you had a high level of capital infusion,” Peterson said. A bill passed by the Nevada Legislature in 2013 gave the state health division the authority to license a limited number of marijuana cultivation facilities, dispensaries and testing labs. It also authorized licenses for business to produce edible marijuana products. Since 2000, patients who had written documentation from their physician could cultivate and possess marijuana. Legislation or a ballot initiative is expected to be advanced in Nevada in 2016. By contrast, Issue 3 tried to do all of that in one gulp. Eddie Miller, chief strategy officer of GreenRush, a San Mateo, Calif.-based firm that has created an online platform to connect medical marijuana patients with products and nearby dispensaries, supported the Ohio initiative but conceded it may have been “an overreach.” Miller did not contribute financially to the Ohio campaign, but he has contributed to others in the name of helping his business expand. The ResponsibleOhio effort was paid for by contributions of at least $2 million by each of the 10 Ohio-based groups that would have gotten the right to grow marijuana.

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“It’s a new industry. It’s a natural evolution,” he said. “At first it was super controversial, and for 20 years, grassroots organizations and celebrities like Willie Nelson were supporting the legalization and the social justice issue, which are all very important and have economic ben-

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efit,” Miller said. “But now there are industrial players — I’m not going to count myself out of that since we build technology for the cannabis industry — so it’s to our best interest that legalization pervades across the world.” Miller is building a marijuana conglomerate of sorts. He said he now has eight investments, including InvestinCannabis.com, a site that is a gateway to a variety of investment opportunities. It’s most likely that the next step in Ohio will begin with the General Assembly. State Rep. Mike Curtin, D-Columbus, last week told public radio station WOSU that there is bipartisan interest in legislation that would legalize medical marijuana and further decriminalization of marijuana possession. He said “chances are good” that a marijuana bill will be passed for Gov. John Kasich to sign. “We’ve had a lot of conversations over the last past few months over the need for the legislature to act,” he told the radio audience. “We did not do anything over the summer and fall because it would be seen as a diversionary tactic.” Ian James, the executive director of ResponsibleOhio, told Crain’s that his group might bring another proposal to voters. He’ll be traveling around the state to see what might work the next time around. “It’s not over and done,” said. “There is a way forward.” James sees the national interests looking at Ohio, but he believes a local effort is the best way to go. Part of his time will be spent building support with faith groups and with chambers of commerce. “Legalization is coming,” he said.

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UH pays $45.2 million to take over St. John’s

CASH

University Hospitals paid Sisters of Charity Health System $45.2 million for the Catholic health system’s 50% stake in St. John Medical Center in Westlake. The Sisters disclosed the size of the sale last week after it was approved by state regulators. A Sisters of Charity spokeswoman said “proceeds, after liabilities are taken care of, will be reinvested in our current Sisters of Charity Health System family of ministries. This will support vital services to address unmet health needs of our community.” Earlier this year, the Sisters of Charity also announced it planned to sell Providence Hospitals — its properties in South Carolina — to LifePoint Health, a publicly traded hospital chain. These deals will give the health system much-needed cash to invest in its other properties, most notably its 150-year-old flagship St. Vincent Charity Medical Center in downtown Cleveland. The health system also owns Mercy Medical Center in Canton. As for UH, the deal gives the growing health care system another solid anchor in Cleveland’s western suburbs in addition to its hospitals in Parma and Elyria. — Timothy Magaw

in investing in the company, which has found a way to age whiskey in a matter of days — not years. He might let those people buy stock. And not just because he wants to raise more capital. Selling stock to customers is a good way to build a closer bond with them, he said. That’s what happened when the NBA team from his hometown, the Boston Celtics, became a publicly traded company decades ago, Lix said. “People were so enthusiastic about it. … You could just see the level of involvement with that team go up,” he said. Flashstarts plans to take advantage of the new rules in a different way: The Cleveland-based startup business accelerator has formed a service designed to help companies raise money from individuals, with help from the Internet. Its first client is Cleveland Whiskey. Flashstarts helped the company create invest.clevelandwhiskey.com, a site designed to attract accredited investors — people who make at least $200,000 a year or have a net worth of at least $1 million, exclud-

CONTINUED FROM PAGE 1

ing their home. Flashstarts CEO Charles Stack thinks that a lot of companies will want to raise money from unaccredited investors, too. He argues that entrepreneurs are hungry for capital, but laws have prevented them from using the full power of the Internet to find it. Those laws changed when the federal government passed the Jumpstart Our Business Startups Act in 2012. As a result of the JOBS Act, the SEC previously released rules making it legal for privately held businesses to publicly announce that they are raising money from investors — which makes it legal to raise equity capital via the Internet. The JOBS Act also pushed the SEC to let more people invest in startups. Today, many entrepreneurs who want to raise money from the masses turn to Kickstarter and Indiegogo, websites where people give money to companies and projects, in exchange for products and other rewards. “A lot of these things that are on Kickstarter today will become crowdfunding projects next year,” Stack said. The new rules require that all equity crowdfunding projects be conducted through online portals or broker dealers. Cleveland has one portal that already serves accredited investors: Vestor.co, which is designed to help individuals invest in real estate projects. The startup company might broaden its focus to include unaccredited investors. Though the new rules prevent companies from raising more than $1 million from unaccredited investors over 12 months,

NEW RULES Soon, equity crowdfunding will be legal. So it’ll be much easier to invest in startup companies, even if you’re not rich. But you’ll have to follow new rules set by the U.S. Securities and Exchange Commission. Say your net worth and your income both exceed $100,000. In that case, take the lower of the two dollar figures. You can invest up to 10% of that amount over a 12-month period. If you don’t meet both the net worth and income standard, the percentage falls to 5%. At a minimum, however, you can invest up to $2,000. There’s also a maximum: You can’t buy more than $100,000 worth of shares during that period through crowdfunding, even if they’re spread across multiple companies.

that limit is workable for some projects, said Vestor CEO Matthew Moss. Companies also are allowed to raise money from other investors who wouldn’t be subject to that dollar limit.

An easy 686 pages Moss said it probably won’t be too hard for companies and individual investors to comply with the new rules, which will make them want to try equity crowdfunding. Though the rules are 686 pages long, they seem to be fairly clear and not too burdensome, said Moss, who was still sifting through them last week. For instance, the rules don’t require companies to hire someone to audit the financial statements they distribute to investors.

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However, companies that do larger crowdfunding rounds are required to have an auditor conduct a less-intensive review. “I personally think it could work,” Moss said. Crowdentials CEO Rich Rodman is banking on it. The company’s software helps portals verify whether an individual is an accredited investor. But ever since the JOBS Act was passed three years ago, he’s been planning to develop software for equity crowdfunding. Crowdentials — which has three employees, including one in Cleveland — is developing four new software tools that would take advantage of the new equity crowdfunding rules. One is designed to help portals raise capital from both accredited and unaccredited investors at the same time without running afoul of regulations. Not wanting to tip his hand, Rodman wouldn’t describe the others.

‘Hot’ stock tips Not everyone likes the idea of equity crowdfunding. When the JOBS Act was passed three years ago, several local investors told Crain’s it would lead to uninformed investors getting ripped off. The SEC does require portals and broker-dealers to have “a reasonable basis for believing that a company complies” with the regulations, according to an online SEC document summarizing the law. Still, Jeffrey Kadlic isn’t a fan. The cofounder of Evolution Capital Partners, a private equity firm in Beachwood, likes that the law prevents unaccredited investors from putting more than 5% or in some cases 10% of their wealth on the line. However, he thinks broker-dealers will have an incentive to take advantage of people, since they’re not required to hold equity in the companies they promote. Stack, of Flashstarts, isn’t too worried about fraud. He thinks the online portals that thoroughly vet companies will attract the vast majority of individuals looking to make investments. Some people will lose money on companies that fail, but they should be allowed to make those investments, Stack said. “There are way more controls on crowdfunding than there are on gambling. … This is going to be less risky,” he said.

Volume 36, Number 45 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2015 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. 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) 4460450 (all other locations), or fax 313-446-6777.

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idea is to whet their appetites for more beer. “At the end, they’ll be funneled into a bar area where they can enjoy a sample pint or two. “It’s analogous to the open kitchen concept in restaurants,” explained Sam McNulty during a recent walk-through. “Every aspect of the process is open to anyone. It’s like an open kitchen for brewing. There’s a sense of theatre.” “In so many ways, this is a manufacturing facility,” added Mike Foran. “We want people to still see the romance of the process, that it’s still a manual process at the outset. We’ve all been on brewery tours where it’s just an ugly, dirty, dusty warehouse. “It’s cool, but it’s just not that exciting. We want our visitors to see some of the character.” The new Market Garden Brewery facility will also have a retail shop where visitors can purchase sixpacks, kegs and apparel, among other things. McNulty expects the new brewery tours to be very popular, adding to the growth of beer tourism in Cleveland. “People are banging down the doors of the existing brewery to get in,” he said. “This space has been designed from day one to accommodate and encourage tours. People can stop at Nano, then have dinner at Market Garden, do a tour and leave with a Tshirt or a six-pack.” The two-year process of renovating the building has been full of surprises — some fun and some not so fun. Much of it was in such poor

TAX LIENS CONTINUED FROM PAGE 16

condition that it had to be demolished, yet as the crew unraveled it, they uncovered remnants of old houses built in the 1800s. Workers exposed an original brick wall in one section, including the lintels of windows, and left it for visitors to see. “Over the decades, people literally built around the old houses,” McNulty said. “We found an old home hearth and a wall with six layers of wallpaper. That was the last thing we expected. I can just picture an old family sitting around that fireplace in the 1880s. They’d never expect that this would be here!” The design of the new facility has repurposed elements of the old property. For example, an old streetcar rail that was used as a lintel in one of the old houses will become a footrest for the new bar. The bar itself comes from the former Speak in Tongues club on Lorain Avenue. Although these design elements give a nod to area history, the new brewery is very high-tech. Tveekrem has a QAQC lab where his beer will be tested for safety and quality. The facility is highly energy-efficient, and radiant heat runs through the floors to keep it warm and dry. McNulty believes that the new Market Garden Brewery facility will add to what makes Ohio City a special place — its artisanal culture. “The maker culture here is what sets us apart from other restaurant and entertainment districts in the city,” he said, citing the West Side Market and Mitchell’s Ice Cream, among others. “We’re makers.” To contact Lee, send an email to clbfreelancer@crain.com. You also can follow him on Twitter @leechilcote.

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