VOL. 40, NO. 24
JUNE 17 - 23, 2019
Source Lunch
Karen Dethloff, VP of facilities management, MetroHealth Page 23 DEVELOPMENT
Big service expansion is set for Ohio City
Akron
CLEVELAND BUSINESS SPORTS BUSINESS
STATION BREAK?
Binary Defense surges amid cyberthreat awareness. Page 20 MANUFACTURING
The fifth Smucker has made his mark
By Stan Bullard
By Dan Shingler
sbullard@crain.com @CrainRltyWriter
dshingler@crain.com @DanShingler
A jaw-dropping expansion of the Special Improvement District providing clean and safe services in Cleveland’s Ohio City neighborhood will expand its borders far beyond the West Side Market’s immediate vicinity. Approval of the plan by 72% of the affected property owners means the expanded district will stretch south to Detroit Avenue and then west to West 33rd Street and west on Lorain Avenue to West 50th Street, the western edge of the Ohio City Inc. neighborhood development group that is orchestrating the effort. Legislation to expand the district is pending before Cleveland City Council and is backed by Kerry McCormack, the councilman whose Ward 3 includes Ohio City. More than 215 property owners are affected by the plan — and would share its costs. Ashley Shaw, director of neighborhood planning and economic development at Ohio City Inc., said the nonprofit had debated where to put the western boundary of the Lorain expansion as multiple businesses have gone into operation the past few years on the avenue and new developments have opened up. “Do we stop at Fulton Road? Do we stop at West 41st Street? Do we stop at West 50th Street?” Shaw said the petitioners asked themselves about the expansion, which coincides with the renewal of Ohio City’s current SID. “We kept getting calls from people further west asking to be included until we found ourselves at West 50th Street.” A big factor in that, she said, was that St. Ignatius High School and the Urban Community School — which both have large campuses within the expansion area — both bought into the plan.
So far, so good for Smucker 5.0. That would be Mark Smucker, the fifth generation of his clan to serve as CEO of Orrville’s famous J.M. Smucker Co., which has grown from a jelly- and jam-maker into an all-around food giant. Since taking Smucker over three years ago, Smucker has altered the company’s product mix while significantly amping up and reorganizing its marketing efforts. He now says he’s got the company about where he wants it and in a position to grow. “It took three years … but we surprised ourselves with how quickly we were able to do it,” said Smucker, who took over as CEO on May 1, 2016. The company grabbed headlines with some of its transactions, which Smucker said were transformational by design as the company shifted its product mix. In April 2018, Smucker announced it was purchasing Ainsworth Pet Nutrition, a premium pet-food maker with products such as Rachael Ray Nutrish pet foods, in a $1.9 billion transaction. Then, in July 2018, Smucker announced it was selling its baking business to a private equity firm for $375 million. That unloaded some famous legacy brands — including Pillsbury, Martha White and Hungry Jack — and took the company out of a major food category. It’s all about knowing and meeting consumer demand and preferences, Mark Smucker said. “We’re making sure we were in the right categories,” he said. “That’s why we upped the ante in pet and acquired another high-growth brand we can bolt into our pet business. That’s the Rachael Ray Nutrish brand. And the second thing is we divested the baking business, because the consumers were shifting away from baking — doing much, much less of it — and that category was in decline.”
SEE OHIO CITY, PAGE 22
Jim Donovan and Doug Dieken form a popular team on Cleveland Browns radio broadcasts. (WKYC)
With limited number of Cleveland contenders, Browns are entering last year of unique radio deal By Kevin Kleps kkleps@crain.com @KevinKleps
The Cleveland Browns — win or (more often than not) lose; good or (more often than not) bad — are frequently the talk of the town. And for the last six years, team-branded programming has been almost as omnipresent as a quarterback debate or draft-related discussion. That likely won’t change, but the Browns’ radio home could, depending on how things play out in the coming months. The unique radio rights deal that the Browns struck in 2013 with CBS Radio (now Entercom Communications) and Good Karma Brands is set to expire after the 2019 season. At stake are about 1,000 hours of annual programming, including “Cleveland Browns Daily,” a twohour show that has become a key asset for the team. The Browns, according to sources, are still exploring
Entire contents © 2019 by Crain Communications Inc.
their options and haven’t yet solicited proposals for programming that is split by Cleveland’s two all-sportstalk stations: WKNR-AM, 850 and WKRK-FM, 92.3. The 2013 deal produced the NFL’s first game-day triplecast, with WNCX-FM, 98.5 (like WKRK, an Entercom affiliate) joining ESPN Cleveland and The Fan as a flagship station. It also expanded “Cleveland Browns Daily” to two hours, moved the show to an early afternoon time slot (1-3 p.m. on ESPN Cleveland), added a coach’s show and other shoulder programming, and generated a combined six hours of team-affiliated preand postgame shows. By all accounts, the radio deal is team-friendly. The Browns, according to sources, get the vast majority of the advertising revenue. In return, there isn’t a large rights fee, which puts the onus on the club and its partners to sell a product that was coveted during decades of losing and could be nearing an apex with the likes of Baker Mayfield, Odell Beckham Jr. and Myles Garrett. SEE BROWNS, PAGE 19
Focus: Prep and Parochial schools << Teaching
the next entrepreneurs. Page 12 Welsh Academy readies for launch. Page 16
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SEE SMUCKER, PAGE 21
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SPONSORED CONTENT
June 17, 2019
aSk ThE PROfESSiONal
a window into the desirable industrial landscape
Commercial real estate broker sheds light on regional market trends
T
he Greater Cleveland industrial market is a big deal right now. This market segment reached a historically low 5.2% vacancy rate in the first quarter of 2019. As such, demand is high for existing big-box/modern distribution facilities and the construction of new properties. “Space of this type is at a premium,” says Terry Coyne, vice chairman of Newmark Knight Frank. “The trend has necessitated the need for companies to either build their own or for investors to meet the need by constructing speculative facilities that growing companies — or companies that are establishing a presence in Cleveland for the first time — could make their own.” Coyne has been involved in the sale or leasing of nearly $2 billion in commercial real estate, having specialized in large, complex industrial deals for the majority of his career. He shares with Crain’s Content Studio — Cleveland his thoughts on the status and outlook of Northeast Ohio’s industrial market. What parameters make up big-box/modern distribution facilities? We use the following parameters to categorize a big-box/modern distribution facility: 1) it has at least 32-foot-clear ceiling heights; 2) it was built after 2000; 3) the warehouse portion has Early Suppression Fast Response (ESFR) fire sprinkler systems; and 4) the facility is 50,000 square feet or larger. These facilities also often feature 50-foot-by-50-foot wide-column spacing, a modern truck court and nearby highway access.
Why are these facilities desirable? These types of facilities increase storage and operational efficiency, leading to tenants getting more value per square foot of leased space. In addition, ESFR fire sprinkler systems are one of the best solutions to protect warehouse inventory from fire and are often required by tenants seeking warehouse space. Overall, big-box/ modern distribution facilities are in high demand due to the surge of e-commerce and, in particular, Amazon’s continued expansion. Online retailers are trying to keep
up with consumer demand for faster delivery times, which necessitates new supply chain models and customized, build-to-suit warehouse space. Traditional manufacturers are also seeking more modern industrial facilities, placing even heavier demand on big-box buildings and buildable industrial land.
Where have you seen the heaviest industrial leasing and construction activity in Northeast Ohio? The most prolific industrial submarkets in recent years in terms of both leasing and construction have been the Northeast (which includes Mentor/Lake County, Euclid, North Randall and Warrensville Heights); Southeast (which includes Twinsburg, Bedford Heights, Solon and Macedonia); and Southwest (which includes Strongsville, Brook Park, Berea and Medina). Currently, all six industrial submarkets of Cleveland have facilities under construction — the Southeast leading the pack with about 1.1 million square feet, followed by the Northeast (985,576 square feet) and Southwest (542,000 square feet).
What submarkets are ripe for new inventory or speculative construction, and why? If we simply analyze vacancy rates, the Southwest is the tightest submarket, at 2.8%, as of the first quarter. Although 500,000 square feet of construction is underway there, and another 500,000 square feet of construction has been proposed or planned, there could still be room for new inventory. The Northwest submarket, on the other hand, is the second-tightest in the market, at 3.5%, but also has the least amount of inventory. Additionally, the Northeast and Southeast are two of the most active industrial submarkets in the region and have been a popular location for speculative construction projects.
What are the current overall industrial market statistics? As of the first quarter, the Greater Cleveland industrial market achieved a historically low 5.2% vacancy rate. Helping the market reach this milestone was 215,991 square feet of positive absorption in the first quarter, the fourth consecutive quarter of positive absorption. For comparison, the big-box/ modern distribution market is even tighter, with vacancy totaling just 2.3% for facilities boasting 24-foot-clear and above ceiling heights. For facilities with 32-foot-clear ceiling heights and above, the vacancy rate is 0%. Furthermore, select new construction warehouses are seeking rental rates of more than $6 per square foot. As vacancy dipped, the average overall industrial asking rental rate was similarly affected, as it reached an industrial market record high of $4.74 per square foot in the first quarter. New and prospective products continue to push rents higher, and the growth of e-commerce has clearly changed the market.
which delivered this past quarter; and at a distribution center in the Southeast submarket’s Cornerstone Business Park. If Amazon’s Rolling Acres project comes to fruition, the company will occupy more than 2.5 million square feet of space in Northeast Ohio. Cornerstone Business Park in Twinsburg has a second spec building under construction, and 96,000 square feet of that 276,000-square-foot facility is preleased. Also under construction in this 167-acre industrial park is a 404,000-square-foot O’Reilly Auto Parts distribution center. New facilities in Mentor recently delivered and measure nearly 320,000 square feet in total. Mentor is also home to an 87-acre land parcel off Heisley Road that has been earmarked for a new industrial park. My team is marketing this property to potential local, regional or national users looking to build facilities from
100,000 to 800,000 square feet. Available land this size is very rare for Mentor and Lake County.
What is the outlook for the Cleveland industrial market big-box/modern distribution facilities? E-commerce is here to stay, which bodes well for the future growth and occupancy of big-box/distribution facilities and the industrial market as a whole. Industrial in the near future should remain hot, with most of the new construction necessary for the market due to low vacancy rates. In the intermediate future, once all of the new construction delivers, the market should flatten out but still remain competitive. As technology evolves, industrial facilities could still be important, though automation will surely develop further and will disrupt commerce.
What projects are the highest profile in the area? Northeast Ohio could soon see another Amazon facility, this time a 695,383-square-foot distribution center on the site of the former Rolling Acres Mall in Akron. Amazon has already established operations in the Northeast submarket in North Randall, as well as Euclid’s Bluestone Business Center II and on the site of the former Euclid Square Mall,
This advertising-supported section is produced by Crain’s Content Studio-Cleveland, the marketing storytelling arm of Crain’s Cleveland Business. The Crain’s Cleveland Business newsroom is not involved in creating Crain’s Content Studio-Cleveland content.
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Cleveland LGBT center rises into the light By Lydia Coutré lcoutre@crain.com @LydiaCoutre
The Lesbian Gay Bisexual Transgender (LGBT) Community Center of Greater Cleveland’s move from a basement office to a newly constructed two-story facility in the Gordon Square Arts District opens a world of possibility for the 44-year-old nonprofit organization. Funded by an anonymous $4.9 million gift, the center’s new home — a 15,500-square-foot building that opened June 14 — will enable it to expand its services and programming and increase its role in serving the community at large. “Here, we’re going to be able to do things that we’ve never even thought of before, and of course the wheels are already in motion in terms of what the rest of this year is going to look like,” said board member Jason Buitrago. “And as the dust settles both figuratively and literally, (we’re) getting a chance to really use this space to bring in the entire community in various different ways — both members of the LGBT community and also our allies who want to be a part of this. That, before, was a little tricky to navigate.” The center aims to serve the city and region with more diversity and inclusion training programs for businesses, public-use event spaces and support for other marginalized societal groups, including sex workers and the homeless, according to the center’s news release. The new facility increases staffing and program capacity, which will mean a significant expansion of education and advocacy efforts, health services and support for the community. Punctuated by bright colors throughout, the new building offers an abundance of natural light, eight meeting rooms with movable partitions to facilitate various group sizes, a teaching kitchen, an outdoor terrace, health space to bring in a clinical partner and more. For more than 30 years, the center has offered a “living room,” originally founded to provide support and a safe space for people living with HIV/AIDS. The tradition was carried over into the new building via a second-floor room with floor-to-ceiling windows and modern furniture. “We really wanted to create a lightfilled, transparent building that really reached out into the community … especially with the center having leased space predominantly underground,” said architect David Thal of
Phyllis Harris, executive director of the LGBT Community Center of Greater Cleveland, is shown with David Thal, an architect with Weber Murphy Fox, on the main staircase of the new center. The new building supports the nonprofit organization’s efforts for the lesbian, gay, bisexual and transgender community through advocacy, education, collaboration and celebration programs and events. (Photos by Peggy Turbett for Crain’s)
The new LGBT Community Center of Greater Cleveland, located at 6705 Detroit Ave., opened Friday, June 14.
Cleveland firm Weber Murphy Fox. About seven years ago, after it was decided the LGBT center didn’t have the resources for a planned renovation of its existing space, an anonymous donor reached out to the center’s executive director, Phyllis Harris, and offered an initial $1.8 million to invest in a new facility. Harris knew that a building wouldn’t be enough: The center also
needed resources to keep that building running long into the future. The LGBT center was able to secure a $500,000 match grant from The Milton and Tamar Maltz Family Foundation and raised the funds for an endowment that is now at the Cleveland Foundation to help maintain the building into the future. As for the new facility, after weighing the options of renting, owning or rent-
ing-to-own, the center settled on constructing a building from the ground up in the Gordon Square Arts District. As the plan evolved, the anonymous donor continued to grow their donation. A master staircase in the front of the building would be a better, more unifying option for the center than one enclosed in a rear hallway, but it costs more. Such was the case for a retractable glass wall on the second floor. In these and several other design decisions, the donor raised their contribution, which eventually totaled a $4.9 million gift. Since Harris became leader of the center seven years ago, it has seen significant growth. She started with a staff of three, which has tripled since. When she began, the center had an operating budget of $268,000, she said. Today, that’s $1.1 million and growing, thanks to a diversification of the center’s funding mix, including producing the city’s annual Pride event. To bring in new revenue, Harris helped build a training program in which the center goes into the community to teach workshops on LGBTQ inclusion and diversity. The new center offers more space for in-house training programs. On the first floor of the center is a small-business space that entrepreneurs can lease “very inexpensively,” Harris said, to gain access to center amenities and all of the traffic along
Detroit Avenue. Karen Williams, founder and CEO of the HaHA Institute (the International Institute of Humor and Healing Arts), will be the first business in this space. Williams offers workshops on the healing power of humor, humor and stress management in the workplace and a diversity training program. Since the institute was founded in 1988, Williams has traveled the country and world offering her seminars. “It’s a virtual institute right now, and that’s what’s so exciting about me having an office in the built-fromthe-ground-up LGBT Center,” Williams said. “That will be my brickand-mortar home.” After 30 years on the road, the new space will help her ground herself in the Greater Cleveland community and create a client base in the broader region (she notes that there are roughly 20 major cities in manageable driving distance for her to continue to travel to). The LGBT center is important to the community in a number of ways, said Jeff Ramsey, executive director of the Detroit Shoreway Community Development Organization. First, it represents a nearly $5 million investment along Detroit Avenue that enhances the aesthetics of the community. Plus, it can help bring people to the community to shop, eat and potentially live in the neighborhood. “I think important to us is that it represents the values of what we stand for as an organization in our community: tolerance and diversity, respect and care for people from diverse backgrounds,” said Ramsey, who also serves on the LGBT center’s board. “And the services that are provided by the LGBT center, their computer lab and many of their programs — you don’t have to be LGBT to go to the center. They’re open to everybody in the community. ... So we think it’s really important and we are just thrilled that they chose to stay here in Gordon Square and invest in the community.” When Harris started in 2012 with an operating budget of a little over $250,000, only $30,000 of that was grant funding, she said. The rest came from individuals, to whom she gives a lot of credit for where the center is today. Clevelanders, she said, should be proud of the individuals who have sustained an LGBT center in the community for decades. They’ve been invested in and committed to the center and this shiny new building on Detroit Avenue is their legacy, not hers, she said. “They are the trailblazers,” Harris said. “And I’m saying to them, ‘Come in. Look at what you’ve built.’ ”
Tappan apartments on tap for Tremont Opportunity Zone By Stan Bullard sbullard@crain.com @CrainRltywriter
Following the closing of a financial package primarily composed of funds from an investor under the new federal Opportunity Zone program, construction crews are starting work on the $23 million Tappan apartments in Cleveland’s Tremont neighborhood. About 80% of the project’s cost is financed by the Opportunity Zone investment, according to Josh Rosen, a principal of Sustainable Community Associates. He’s one of a trio of principals with Naomi Sabel and Ben Ezinga. They form the now Cleve-
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land-based development group undertaking its fourth project in the city after cutting their teeth on a retail project in Oberlin, where they attended college together. Funding so much of the project’s cost from a single source is new for urban development projects in Cleveland. Affectionately termed “baklava,” financing in the city typically reflects a capital stack with multiple layers, sometimes as many as a dozen. In Tappan’s case, it’s a short capital stack. The other components are a $3.8 million traditional construction loan from PNC Bank, according to Cuyahoga County mortgage records, along with a $500,000 loan from the city of Cleveland. The four-story complex with 95 apartments that will
rise on Scranton Road between Auburn Road and Branch Avenue also benefits from the city’s typical nonschool tax increment financing and a 15-year property tax abatement. Rosen said he’s “not at liberty” to identify Tappan’s Opportunity Zone investor. Ohio incorporation records show a “Tappan Opportunity Zone LLC” was formed by the law firm Sustainable Community Associates typically uses, reflecting the investor’s status as a partner in the Tremont project. The only other known Opportunity Zone investment so far in the city is the purchase and planned renovation of a downtown office building at 1020 Bolivar Road near Progressive Field by Somera Road, a New York
City-based real estate investor. Opportunity Zones were created by the Trump administration as part of the most recent revision of the federal tax code. Long-term investors may shelter capital gains from federal taxes by investing in businesses, including real estate projects, in designated areas of economic distress. Even though Tremont is now thought of as a home for trendy restaurants and bars and high-priced new homes, its long-term low-income demographic makeup allowed it to qualify for the program. Opportunity Zones have created a level of excitement in the nation’s well-heeled set and tax advisers not seen in decades. It rivals the full deductibility of passive losses in real
estate investments of the Reagan administration’s tax plan. The losses fueled the nation’s 1970s-to-1980s office boom. Its revision in 1986 created an office glut and fiscal problems for developers that lasted through the late 1990s. However, Sustainable Community Associates prizes the new Opportunity Zone program for how it allowed the firm to shape the project rather than its profits. Sabel said the Opportunity Zone Investment “helped make the project possible and allows us to create a workforce housing program (60% of the units) within a market-rate building, as well as allowing us to invest” in the retail component of the project. SEE TAPPAN, PAGE 19
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Bober Markey Fedorovich launches cybersecurity practice
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Bober Markey Fedorovich is building a cybersecurity consulting practice around its director of IT in what appears to be a unique foray into an increasingly high-demand service. The firm recently launched a Cyber Technology Group that will be its arm for formalized cybersecurity advisory. The group is being led and developed by managing director Chad Voller, who joined the firm as its director of IT three years ago. He’ll manage both roles simultaneously and look to grow his three-person team as business builds up. As a member of groups like the Project Management Institute, CSO xChange, ISC2, Infragard and chair of the technology committee for accounting firms association Allinial Global, Voller brings considerable experience to running the new practice for BMF. He previously oversaw managed service operations at MCPc. BMF executives had asked Voller when he first joined the firm about applying his work to clients dealing with cybersecurity issues of their own, developing that into its own practice. But those efforts began in earnest about two years ago as clients continued to ask about cyber concerns while the firm worked with them on other things, such as internal controls, where technology is a significant component. “I honestly think that with just a little sprinkling of success that this could be a really fantastic revenue opportunity for the firm going forward,” Voller said. “It is so relevant for every business out there that we could see this turning into one of the leading books of business within the landscape of the firm.” Like many businesses anchored by accounting services, it’s a logical evolution for BMF considering the work it already does. “We’re already partners with our clients’ senior management on financial, tax and compliance matters, so in many cases we already understand how their business runs and where top vulnerabilities are likely to be,” said Karyn Sullivan, BMF’s chief operating officer and chief financial officer.
Sullivan
Voller
For a number of reasons, it’s also a particularly trendy business to be in for a CPA firm. In an increasingly tech-based world, cyberattacks are more and more common. Symantec reports the United States leads the world in ransomware attacks with more than 18% of all detected attacks occurring here, compared to China, which in the runner-up spot fields about 12% of attacks. So the cybersecurity industry is on a path of astronomical growth. According to research firm Cybersecurity Ventures, the global cybersecurity market carried an estimated value of $120 billion in 2017, marking growth of 35 times over the prior 13 years. Today, the company projects that spending on cyber products and services will exceed $1 trillion in just the five-year period between 2017 and 2021. As Sullivan indicated, CPA firms are well-positioned to deliver those services because of their intimate familiarity with their clients’ businesses and the data they hold on to — which spur the need for cyber protections within those groups themselves. That spells opportunity. But that opportunity feels more urgent today considering the outlook for the accounting sector. According to Accounting Today, industry research projects that robotics could replace 40% of all basic accounting work, such as auditing, in 2020. “I don’t necessarily buy that will happen next year, but it will happen in the next couple years,” said Allan Koltin, CEO of Koltin Consulting Group. “What I say is, assume that five years from today, 50% of the compliance work you do will no longer be done by humans but by robots. What that means really is that revenue will simply evaporate because compliance as we know it is a commodity service.” That’s driving industry groups like the American Institute of Certified
Public Accountants to push accounting firms toward new business services, namely cybersecurity. Sullivan is acutely aware of this. “If you are a CPA firm that isn’t thinking about innovative advisory service offerings beyond compliance, you are not going to be relevant in a short period of time,” Sullivan said. The Big 4 and other major players in the industry are already there, although the bulk of the top 100 largest accounting firms are still trying to figure out how to develop the practice. A common approach is to buy a cybersecurity company. This market saw one of those deals when national accounting firm RSM US bought Cleveland’s SecureState in January 2018. (Koltin advised both companies in that transaction.) Midsize accounting firms may offer cybersecurity services to clients or will write about the cyber landscape to educate their customers, but may not promote it as a practice group. In efforts to win customers, some are offering trials of their cyber services as part of a package buy for other work, Koltin said. BMF has 110 people between Cleveland and Akron and is the 12th-largest accounting firm in Northeast Ohio by number of in-market CPAs, according to Crain’s research. Its CTG group is marketed with a package of services that includes IT readiness assessments, cybersecurity program management and IT executive coaching. “The motivation was more from the perspective of what you know is better than what you don’t know,” Sullivan said as to why the firm didn’t make an acquisition of its own. “You can do due diligence on an acquisition, but when you see the deliverable and value that your internal team has brought, it makes it much more comforting and much less risky than rolling in another organization.” For BMF to get into the business shows it’s ahead of the curve, Koltin said, considering many firms larger than it aren’t as far along. “BMF, to their credit, they are ahead of the eight-ball on this,” Koltin said. “They are actually running ahead of a significant number of top100 firms. If they execute on that strategy, that’s pretty cool.”
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Strike Force could land at industrial park By Stan Bullard sbullard@crain.com @CrainRltyWriter
A deal is being struck that could give the federally backed law enforcement Strike Force in Cleveland a home of its own on the last parcel in the Jennings Industrial Park near the Jennings Freeway. Sharing intelligence and resources to fight serious crime is the central tenet of the Cleveland Strike Force launched last October by the U.S. Department of Justice, and the proposed 45,000-square-foot office building at 4781 Hinckley Industrial Parkway would be designed to aid that effort. Legislation pending before Cleveland City Council, which was introduced June 3, would authorize a nonschool tax-increment financing package for the proposed structure and a $500,000 forgivable city loan to reduce rent costs for the proposed headquarters. Both are aimed at driving down the rent cost for the build-to-suit structure, according to a briefing letter for city council by the Cleveland’s Economic Development Department. Michael Tobin, spokesman for Justin Herdman, the U.S. Attorney for Northern Ohio, said in an email that “locating members of these agencies in the same building will increase sharing of intelligence so we can more quickly and effectively target drug-trafficking organizations and the groups responsible for armed robberies, shootings and other violent crime in Cleveland and the outlying suburbs.” Participating agencies include the Federal Bureau of Investigation; the Drug Enforcement Administration; Homeland Security; the Internal Revenue Service; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; Cleveland police; the Cuyahoga County Prosecutor; the U.S. Postal Inspection Service; the U.S. Border Patrol; the Ohio State Highway Patrol; the Ohio High Intensity Drug Trafficking Area; and the Independence police. Several other area law enforcement agencies have agreed to participate in the Strike Force as well, Tobin said. The U.S. Attorney serves as chair of the executive council of the Strike Force,
Correction JJA Page 20 article in the June 10 edition of Crain’s Cleveland Business contained incomplete information about the build-out of the new esports facility at the Bounce Innovation Hub in Akron. New Territory identified and installed needed equipment for the venue. The University of Akron contributed to the original facility design and helped with technical specifications, UA director of esports Michael Fay said. Both entities will use the venue for their esports programs. The project was funded with about $200,000 in state grant money, Bounce chief operating officer Jessica Sublett said. That money had been allocated to the city’s Bits and Atoms Innovation Center and then to the University of Akron, which transferred it to Bounce for the project. The story also contained incorrect information about New Territory’s location and its leagues. The company resides on the sixth floor of Bounce. It will start leagues for specific games at the firstfloor venue in September.
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which is led jointly by the FBI and DEA. The Strike Force is no small coordinated undertaking. The city’s briefing document stated that the Fogg building will be home to as many as 143 staffers, with 25 of them new to the city and the rest being relocated from other Cleveland locations. Tobin said the Strike Force is operating but from multiple locations. The city estimates the payroll for personnel based at the property to be $11.8 million, including additional payroll of the new jobs at $2.5 million
and producing more than $62,000 in additional city income tax. The federal government is footing the cost. The Justice Department even spoke to the design of the operation when it announced Cleveland had won a Strike Force designation. The release stated that “police officers, agents and both federal and state prosecutors will work together in open workspace. Both the physical and organizational structure will lead to collaborative, centralized intelligence sharing. Wire rooms will also be located at the building so intelligence and information can be shared in real time.” Ray Fogg Jr., president of Ray Fogg Corporate Properties LLC of Brooklyn Heights, said in an interview last Thursday, June 13, that he is excited
about the project because it will deliver on what his father, Ray Fogg, and the late Julius Paris envisioned for the parcel at Hinckley Parkway and West Schaaf Road when they launched the park 40 years ago. “It’s a high-profile corner suitable for an office building,” Fogg said. “It has a great view of downtown. It’s close to the city’s center and a hop, skip and a jump from the suburbs.” The parcel, owned by his and the Paris families, is the last piece of developable ground in the 80-acre industrial park. The central location is not only near the Jennings Freeway and I-480 but owes its very existence to the highways. Dirt excavated by Great Lakes Construction Co., an original member of the development team, was used to smooth the slope of the
site to make it suitable for large industrial buildings. Even so, Fogg said the parcel for the proposed Strike Force structure became an office site because it has too much of a shift in elevation for large trucks to maneuver it. Most of the structures in Jennings, a mix of rental office/warehouse properties owned by the developer and buildto-suit properties, were constructed in the 1980s. All told, there are currently 27 structures in the park. Although the building will be designed with “unique features” that Fogg would not describe for its law enforcement clientele, he said it will be designed so that it could be converted to commercial use at a later time. He declined to disclose the proposed rent.
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For years, manufacturers have said they struggle to find reliable workers who can show up on time, day after day. As the labor market tightens, there are efforts underway across the region to examine the root cause of workers’ transportation challenges ● Premium Warehouse and begin looking for solutions. Brianna Schultz, vice president of Space workforce development at Manufac● Local Cartage, turing Works, said she thinks transportation is the “biggest barrier” to brokerage & supply employment — as well as to recruitchain fulfillment ment and retention — right now. ● Pick & Pack, Transportation problems can make expedite & “otherwise reliable people look unreliable,” Schultz said. de-vanning services A lot of the available manufacturing Certified to handle any jobs in Northeast Ohio are in the area product regardless of size, around the Collinwood neighborfield of industry or scope. hood and the suburbs of Euclid and Solon, Schultz noted. But most unemployed or underemployed individuals Call now to discuss your live in the city center, where many reswarehousing and logistics needs! idents rely on public transportation. 216.378.7100 ● Bedford, OH ● www.candorlogistics.com More manufacturers are beginning to realize the role transportation plays in the lives of their employees, but that recognition is still not widespread yet. Schultz said a manufacturer in Solon might not think transportation is a barrier to its workforce. Candor Logistics Ad-4-8.indd 1 3/28/19 9:34 AM But if the company has trouble getting applicants for a job opening, it could be because people who live farther away aren’t even applying. Bethia Burke, vice president of the Fund for our Economic Future, said the fund has seen companies start to connect the dots between employer complaints and root causes in real time. A staff member was speaking to a CEO at a small manufacturer in the suburbs about transportation challenges. The CEO didn’t think anyone in their plant took the bus. But when they went on the shop floor, the first person they asked had taken the bus to work that day. And he typically had to leave home two hours before his Tffikiffigffiffioffiffiffiboffiffiffiioffiffiiffiffiffiommffiffiffiiffiffiffi shift to get to work on time. ffiffiffiffiffiffiffiffiffiffiffiffiffioffiffiffiffihoffiffiffiffiffiffiffiffiffivffiffi. Transportation challenges can lead to employees being let go or left CoffiffiffiffiffiffiuffiffiffioffibffigiffiffiffiouffiffiSVN®ffiffiffioffiffi:ffi out of particular jobs, Burke said, but they can also mean an employee is 3009ffiSmiffihffiRoffiffi,ffiSuiffiffiffi25ffi|ffiAkffioffi,ffiffiHffi44333 spending time commuting instead of ffi234.231.0200ffi|ffiffiffiffi.ffivffiffiummiffiffiommffiffiffiiffiffi.ffiom upskilling. “And that person who’s making all of that effort has demonstrated the AffiffiffiSVN®ffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi kinds of characteristics and qualities
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that companies say that they want in people that they’re looking to promote,” she noted. The fund is currently running an open competition called the Paradox Prize to seek potential solutions to what Burke calls the “mobility paradox.” “The paradox is: No car, no job. No job, no car,” Burke said. Transportation challenges are widespread, Burke added, but they present differently in different places. The challenges facing Cleveland are different from those facing Wayne County, and there won’t be one solution that works everywhere. In Akron, Metro RTA has seen an “uptick” recently in the number of businesses, particularly in manufacturing and light industry, reaching out for help getting employees to work, said Valerie Shea, director of planning and strategic development. The public transportation agency serves all of Summit County, and it’s looking into whether traditional bus service is the best way to do that, she said. While nothing has been implemented yet, Metro RTA is actively discussing options with businesses. One option might be to create a “trunkline” service, Shea said, which would drop riders off at a collection point instead of individual stops. That option would also require Metro RTA to find a way to then get those employees from the collection point to their employers. Shea added that Metro RTA is looking for ways employers could partner with the agency.
Looking for solutions The transportation barrier isn’t an easy problem to solve. The nature of manufacturing doesn’t lend itself to flexibility, said Pete Accorti, president of Talan Products. Accorti said the metal stamper is located in Cleveland in part for access to workforce, which minimizes the possible transportation issues the company faces. Still, he has seen transportation present hurdles to employees when they’re without a
car or when they have to take multiple buses to get to the plant. But manufacturing doesn’t give a lot of leeway when it comes to start times for shifts, Accorti said. Talan Products runs multiple shifts, and each shift has an expected amount of work to complete on each piece of equipment before it gets handed over to the next shift. “You have to be able to get to work on time, somehow,” Accorti said. County services like Metro RTA have “finite resources” and federal regulations to follow, Shea said. Plus, the agency serves a broad area. “It’s not going to be an overnight solution,” Shea said. “We’re going to be looking to test out some different pilot projects over the next year or so. And we’re very interested in partnering with businesses who have identified this as a problem and seeing how we can work together to find a solution. It’s going to be a group effort.” Workforce Connect is another group looking at transportation challenges as a barrier to employment. As part of the initial work of the group’s manufacturing sector partnership, manufacturing leaders have been meeting and discussing challenges that potential employees may face. Transportation and mobility were cited again and again, said Adam Snyder, managing director of the manufacturing sector partnership at Magnet, which is leading the effort with Greater Cleveland Partnership. The group is working on possible strategies to address some of these barriers. Snyder wasn’t able to share specifics yet, but said geography was being kept front of mind. Employers have to either be strategic in where they recruit, he said, or they have to include mobility solutions as part of their plans. Instead of just focusing on transportation-based solutions, another way to solve this problem could be working with employers and employees to create better matches between skills and nearby jobs, said Grace Gallucci, executive director for the Northeast Ohio Areawide Coordinating Agency. The agency has been collecting data on the skills people have in the region and how far they live from the available jobs. NOACA has found there are a lot of people with the right skills near available jobs, Gallucci said, but also that a lot of people have to travel significant distances to work.
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Defense abuses like TransDigm Group’s huge markup on parts are targeted in a new bill BLOOMBERG
Defense contracting abuses the Pentagon says are “gouging” U.S. taxpayers are being targeted in proposed amendments to the $733 billion defense bill working its way through Congress. The amendments, sponsored by U.S. Reps. Ro Khanna and Jackie Speier of California, would give military and civilian contracting officers more authority to demand disclosure of pricing data from sole-source parts providers. That would help them determine if markups are reasonable or inflated. The amendments were introduced last Wednesday, June 12, by the two Democrats during consideration of the House Armed Services committee’s fiscal 2020 defense policy bill. The move comes in response to markups of as much as 4,451% for 46 parts sold from 2015 through 2017 by Cleveland-based TransDigm Group Inc. and disclosed in a February report by the Pentagon’s inspector general. That report and a subsequent congressional hearing highlighted that the Pentagon could end up paying TransDigm $91 million in coming years for parts valued at $28 million. “Getting contracting officers more discretion to get certified costs” and putting “a cap on some percentage” of allowable price increases are key principles of the amendments, Khanna said in an interview. Kevin Fahey, assistant defense sec-
The company emerged in recent years as a key sole-source provider of spare parts for airplanes and helicopters, including the AH-64 Apache, F-16 Fighting Falcon and the CH-47 Chinook. From Oct. 1, 2014 through April 11, 2019, the Pentagon executed 4,697 contract actions with TransDigm and its subsidiaries valued at $634.7 million. After a congressional uproar over the pricing revelations, TransDigm management agreed May 24 to provide a $16 million refund for overcharges linked to 2015-2017 purchases. Pentagon officials say they are increasing oversight on a current $59 million contract that has the potential for more overcharges, including payments of $4,361 for a half-inch “drive pin” that should cost $46, or a markup of about 9,400%. TransDigm provides spare parts for the AH-64 Apache. (U.S. Air Force)
Requirement lacking
“This amendment does so by empowering contracting officers to obtain information needed to ensure the Defense Department is paying a fair price.”
Khanna’s amendment targets a shortfall identified in the Pentagon inspector general’s report. It found that “statutory and regulatory requirements discourage contracting officers from asking for uncertified cost and pricing data.” When a contractor refuses to provide more information, “there is no specific requirement” to compel disclosure of the data, according to the report. Khanna said Deputy Defense Secretary David Norquist “encouraged giving contracting officers more flexibility” as a means of countering abuses.
— U.S. Rep. Jackie Speier of California
retary for acquisition, described TransDigm’s policies as “gouging” and “immoral and unconscionable” in a statement last month to the the House Committee on Oversight and Reform. He said a lack of historical cost data left contracting officers with little to go on in determining whether the Pentagon was being fairly charged. Liza Sabol, a spokeswoman for TransDigm, said last month that the company “has been and remains committed to conducting business within the framework of applicable laws and regulations.”
“This amendment does so by empowering contracting officers to obtain information needed to ensure the Defense Department is paying a fair price,” Speier said in a statement. Another proposed amendment to the defense bill would reduce the threshold for requiring cost and pricing data to $750,000 from the current $2 million threshold established in the fiscal 2018 defense bill raised the threshold to $2 million. Rep. Mac Thornberry, the top Republican on the House panel, told reporters on Tuesday, June 11, that he would review any TransDigm-related amendments without committing to support them. “In general, the IG did a pretty good job of looking at this and in making recommendations, but it’s also true that contracting officers have the authority now to get that contract and pricing data,” he said, referring to the inspector general’s report. He said he was wary of proposing a fix that addresses one “bad actor,” but then results in “a new law, a new regulation that puts additional requirements on everybody.” “That’s part of what’s gummed up the acquisition process and made it harder to have competition,” Thornberry said. “The key is you need the tools to go after those bad actors without punishing everybody and making it harder for people to do business with the Department of Defense.”
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Opinion Personal View
Fire anniversary is reminder of water’s economic importance By Bryan Stubbs
Editorial
Listen up A new initiative from some of the most prominent institutions in Cleveland correctly diagnoses at least part of the city’s and region’s big problem. Are they also offering a cure? That will require a lot of work, greater collaboration than typically takes place here and a change in mindset. Some of that, we’re glad to say, already is on display. The Cleveland Innovation Partnership is backed by the Greater Cleveland Partnership, the Fund For Our Economic Future, the Cleveland Foundation, JumpStart Inc. and Team NEO. Its admirable goal: to “stimulate innovation to drive inclusive economic growth.” The effort understands that the region’s economy is not keeping pace even with peer metros, let alone the country’s star performers, and is not generating sufficient opportunity to lift standards of living. These kinds of things invite skepticism. Countless plans over the years haven’t had a big impact on driving greater economic growth. Cleveland also has a taste for top-down economic development efforts, and this one, with the involvement of five power players and a steering committee with a lot of CEOs, isn’t an exception. We understand that skepticism. We share some of it. This city/region doesn’t do the basics all that well — from primary education to solving the lead-paint problem or figuring out financing challenges for a public transit system — so it’s natural to wonder if we’re up for the complicated task of turning around a metro economy. (Memo: Keep working on some of these basics along with the innovation agenda.) It’s encouraging, though, that this effort starts with a focus on listening — specifically, by gathering data from interviews with 250 companies and organizations of all sizes, and more than 400 individuals. The real test of that data will be what’s done with it, and if this effort is to have any chance of success in coming up with a strategy to foster broad-based growth, we hope Cleveland Innovation Partnership leaders are careful listeners. And that those interviewed aren’t holding back about the changes we need.
Those working on the innovation effort also will need to be nimble in complementing, rather than stepping on, existing efforts to make the economy more dynamic, which include the Workforce Connect initiative, Team NEO’s research around the Internet of Things and the Blockland Cleveland effort. We look forward to a progress report.
Staff report
The Cleveland Cavaliers probably won’t be a good basketball team in the 2019-20 season. But their approach to hiring coaches points to an organization that’s willing to think unconventionally about leadership and opportunity — offering a lesson for organizations of a decidedly lower profile that constantly are searching for top talent, but might not be considering all their options. The Cavs last week hired Lindsay Gottlieb, the head women’s coach at the University of California, Berkeley, to join the staff of their new head coach, John Beilein. Gottlieb, 41, is the first women’s collegiate head coach recruited to an NBA staff. She led Cal to seven NCAA tournament appearances in eight seasons and had drawn the attention of NBA teams including the Golden State Warriors, where, ESPN reported, she was a “regular visitor” to practices as a guest of GM Bob Myers and coach Steve Kerr — the league’s gold standards in those jobs. Beilein, 66, was himself an unexpected choice, but he comes to the Cavs with a stellar reputation as a teacher from his days at college programs including Michigan and West Virginia. In Gottlieb, the Cavs added someone whose “stature and coaching credentials are unprecedented among women’s coaches in the NBA,” as ESPN put it. The NBA has been the most forward-thinking U.S. pro sports league about recruiting more women’s coaches into its ranks, though it can do better. We’re Cavs fans, obviously, and we hope Gottlieb not only helps the team improve quickly but also paves the way for more talented women to rise in this field.
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This week, Cleveland has a tremendous opportunity to show the nation — and the world — the great progress our city has made since its infamous Cuyahoga River fire of 1969. June 22 marks the 50th anniversary of the last burning of the Cuyahoga River, and Cleveland is remembering that history with a week of events celebrating our water. The Cleveland Water Alliance, a nonprof- Stubbs it partnership of businesses, public utilities and research institutions that I lead, is honored to be a significant part of this celebration in an exciting way: by hosting Erie Hack, a technology-driven competition that features teams from around the Great Lakes region pitching their innovative ideas to help solve Lake Erie’s biggest challenges. Several winners will be chosen from the final nine teams competing at our June 20 Erie Hack Water Innovation Summit, and they will share the $100,000 in cash and support services to help take their ideas to market. Teams include a broad range of talent from around our city and region, including students from John Carroll University; students and faculty from Case Western Reserve University and the Cleveland Institute of Art; and engineers, entrepreneurs and more from Toledo; Detroit; Windsor, Ont.; Erie, Pa.; and Buffalo, N.Y. One Cleveland-based team, TACSO, was inspired by the design genius of the geodesic dome. Its Erie Hack entry is intended to catch trash that’s washed out through stormwater systems. TACSO’s resilient cages are designed to serve smaller communities that don’t currently have a solution to this problem. Another local team, made up of researchers from the University of Akron, is using a UV absorption device to analyze the chemical content of soil. The goal is to intelligently monitor and manage agricultural nutrient management, brownfield remediation and beneficial reuse of dredged material. These efforts are part of CWA’s goal to create the first Smart Lake and position Cleveland as the leader in water technology and innovation. It’s a goal every business leader and resident in Northeast Ohio should care about because: JJWe rely on our lake for safe, plentiful drinking water. We need look no further than Toledo and the algal blooms crisis of 2014 to know how quickly and dramatically our drinking water can become unsafe if we don’t carefully monitor and protect our water. JJMore and more businesses, from health care to manufacturing, need water for their operations and products. We have one of the largest bodies of freshwater in Lake Erie in our backyard to meet this need. JJBusinesses and regional governments are constantly seeking innovative, tech-driven, cost-effective ways to monitor, protect, deliver and capitalize on our water source. We have the expertise to provide this. In short, water is our future and the way we protect it and capitalize on it could greatly benefit Cleveland. So it’s time we all started thinking about water in terms of economic development and not just environmental impact. We’re already seeing a significant uptick in jobs around water. SEE STUBBS, PAGE 9
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 ClevEdit@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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JOBS Act is investment in workforce development By Craig Dorn
On May 6, Bloom Bakery was buzzing with energy. Community-based workforce development organizations, youth participants and employers gathered to share experiences and ideas to strengthen credential training programs in Northeast Ohio. U.S. Sen. Rob Portman joined the conversation to champion the Jumpstart Our Businesses by Supporting Students (JOBS) Act, legislation he introduced with U.S. Sen. Tim Kaine of Virginia. Currently, the federal Pell Grant program can be used only to offset the cost of programs spanning more than 600 hours or at Dorn least 15 weeks in length, leaving short-term programs that provide high-quality skills training ineligible for funding. In tandem with Congress’ efforts to reauthorize the Higher Education Act, the JOBS Act makes Pell Grants accessible for individuals participating in short-term occupational training programs that lead to industry-recognized certificates. These accreditations are necessary when entering technically demanding fields. Here in Northeast Ohio, credentials in the fields of manufacturing, health care and technology will equip our workforce with qualified individuals to help bridge the widening skills gap. This bipartisan legislation will not only expand Pell Grant eligibility, it will identify the standards for high-quality postsecondary credentials as outlined
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STUBBS
The water-related industry is one of the fastest growing segments of the economy in Cuyahoga County, according to a recent report by the Ohio Aerospace Institute. Nearly 1,000 new water cluster jobs (929) were created in Cuyahoga County from 2013-2016, according to the report. This growth was significantly more than in aerospace, advanced manufacturing, energy and biohealth. And this growth is leading to well-paying jobs, where in some segments of the industry wages range from $65,000 to upward of $108,000. This water industry growth also exceeded the national average for the Blue Economy, a term often used to describe the use of natural water resources for sustainable economic development. Earlier this year, I was appointed by the U.S. Secretary of Commerce to serve a two-year term on a national committee that will develop recommendations to expand U.S. exports of environmental technologies, goods and services and products. This appointment to the Environmental Technologies Trade Advisory Committee (ETTAC) reflects my leadership in the water segment of the environmental cluster. Cluster sounds like a wonky word, but simply put, a cluster is a partnership that allows its members to share research, technology and workforce. It’s an established economic development model that leads to more effective funding power and increased wages. My role on ETTAC is in line with CWA’s daily work with companies, researchers and startups focused on finding tech-driven, marketable solutions to innovate our lake. Hosting events such as Erie Hack brings together our partners and aspiring entrepreneurs to do just that. All of these efforts are contributing to our goal to create the first Smart Lake. In addition to Erie Hack, we’re excited to directly support, with our partner at the Great Lakes Observing System, the unveiling of a prototype of an algal bloom early warning system that will feed data to water treatment plants. That means a water treatment operator can receive a text on his smartphone that
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Acknowledging the 50th anniversary of the 1969 Cuyahoga River fire — and the good that came from it — could be an important step for Cleveland. (Getty Images/National Geographic Creative)
warns of a harmful algal bloom approaching. It can detect how long it will be before it arrives at the treatment plant, providing critical time to prepare treatment solutions to keep the water safe. Ultimately, this early warning system could provide real-time alerts to swimmers, sailors and others using the lake, too. I am encouraged that Ohio Gov. Mike DeWine has referred to Lake Erie as Ohio’s “crown jewel” and supports significant public funding (approximately $900 million) through his H2Ohio Initiative. We want very much for him and our other Ohio public leaders to ensure a chunk of that money will be earmarked for innovation and the Blue Economy. For decades, our city hasn’t been able to shake the searing images of the Cuyahoga River burning. But we hope the 50th anniversary of that historic day not only marks an important remembrance of our past, but an inspiring springboard for an innovative future around water. Stubbs is the executive director of the Cleveland Water Alliance.
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Personal View
Environmental impact statement needed for Icebreaker By Michelle Burke
It’s becoming rough sledding for Icebreaker, the proposed wind turbine farm in Lake Erie off Cleveland by the Lake Erie Energy Development Corp. (LEEDCo), as more groups are calling for a full environmental impact statement (EIS) to be undertaken before final construction permits are issued. LEEDCo’s application is now before the Ohio Power Siting Board (OPSB). It has already received a thumbs-up from several federal, state and local agencies. But new information now coming to light has business, sportsmen and environmental groups saying these agencies, including the Ohio Department of Natural Resources and the U.S. Fish and Wildlife Service, among others, have failed in their responsibility to demand an EIS before any permits can be given. An EIS, under U.S. environmental law, is required by the National Environmental Policy Act (NEPA) for any actions “significantly affecting the quality of the human environment.” An EIS is a tool for decisionmaking. It describes the positive and negative environmental effects of a proposed action and it can list alternative actions to those proposed. The purpose of the NEPA is to promote informed decision-making by regulatory agencies by making “detailed information concerning significant environmental impacts” avail-
able to both agency leaders and the public. The NEPA was actually the first piece of legislation that created a comprehensive method to assess potential and existing environmental risks at once. LEEDCo has submitted an environmental assessment (EA), which is a smaller, shorter document created by its paid consultant to justify the wind farm in the lake. And, not all proposals require a full EIS. If the proposed action will not cause a significant impact, the smaller, shorter EA document can be acceptable. In other words, if the EA indicates no significant impact is likely, then there can be a “finding of no significant impact” (FONSI) and the project can move forward. Most EAs result in a FONSI. However, such a conclusion in Icebreaker’s case simply doesn’t stand up to scrutiny. Indeed, as far back as a year ago, even the OPSB staff found more than 35 potential problems with it and suggested any approval of LEEDCo’s application must contain myriad conditions. But in recommending conditions the staff was just looking the other way regarding the needed full EIS, which LEEDCo does not want to undertake. There are many reasons for demanding the EIS, which LEEDCo is trying to prevent. Icebreaker is being touted as “just a six-turbine demonstration project” off Cleveland’s shores. But the truth is it’s intended to trigger construction of 1,400 or
Turbines like these at an offshore wind farm in Rhode Island have been proposed for Lake Erie. (Eric Thayer/ Bloomberg)
more turbines in the lake. LEEDCo’s recent response on Cleveland’s public radio by its vice president of operations referring to an EIS: “If more are going to be built, an EIS could be done then.” Sure, that will make it somebody else’s problem. But just the prospect that hundreds of spinning turbines could blight our lake demands a full EIS now, before Icebreaker. Further, LEEDCo’s plan to build turbines in the source of drinking water for millions of Cleveland-area residents cannot be taken lightly. It is a fact, for example, that dredged materials from the Cuyahoga River containing carcinogens — including PCBs, dioxin, mercury, cadmium, lead and arsenic — have been annually dumped in the lake off Cleveland for more than 100 years. That accumulation rests on the bottom of the lake. Clearly, the detailed analysis in an EIS of any effects on our drinking
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water supply during turbine construction and the laying/maintenance of miles of transmission cables back to shore is the minimum needed to protect the public. But there’s more. Wind turbines often explode. The Icebreaker turbines will each contain more than 400 gallons of lubricating oils and fluids. The prospect of gear boxes throwing flaming blades and hundreds of gallons of oil into our drinking water supply would be a direct violation of the nation’s Clean Water Act. Oh, but there’s more. It’s believed Icebreaker will violate the U.S. Endangered Species Act as well as the Migratory Bird Treaty because Lake Erie is a nationally recognized flyway, according to the National Audubon Society, American Bird Conservancy and the Black Swamp Bird Observatory. Spinning 300-foot turbine blades are certain to slaughter countless birds and bats.
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CHRISTINE AMER MAYER
founder and executive director, HOLA Ohio
What does swimming in bird carcasses floating into Edgewater Beach do for you? To avoid this, LEEDCo has proposed a one-year radar monitoring program for modeling patterns of migration and bird slaughter. But the truth is there’s currently no radar or monitoring system in the world that can detect an endangered species, or even non-endangered species. LEEDCo has also suggested it could shut down the turbines during peak bird migration periods. However, turbines don’t produce power when they’re not spinning. And wind being generally unpredictable is why rate-payers can expect to pay 550% more for the power from Icebreaker when it is turning than the same power available from the grid. Lake Erie was once called a “dead lake.” But it’s now our source of good drinking water, a thriving fishery, home to countless waterfowl including the comeback of bald eagles along our shoreline, and a magnet for millions of dollars in tourist money spent in Ohio each year. Still, the lake is a fragile ecosystem and the call for a full EIS to determine the true impact of turbines in it should be the right action for the Ohio Power Siting Board.
president, GAR Foundation
Cleveland Foundation Women of Note Legacy Award Winner MARGOT JAMES COPELAND, chair and CEO, KeyBank Foundation; executive vice president of corporate philanthropy and civic engagement for KeyBank
FOR TICKETS AND INFORMATION visit www.crainscleveland.com/crains-events
LORI MCCLUNG
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JILL RIZIKA
executive director, Towards Employment
ILENE SHAPIRO
Summit County executive
VANESSA L. WHITING
president, A.E.S Management
Wednesday
July 17
11:30 a.m. – 2 p.m. PUBLIC AUDITORIUM
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DrAfter123 via iStock
Instilling a mindset that will serve students in all aspects of their lives By Bob Sandrick clbfreelancer@crain.com
A
n initiative launched in 2012 to fund entrepreneurship programs for students in Northeast Ohio parochial and private schools has broadened its reach and expanded into public schools. Meanwhile, other area schools have begun offering entrepreneurship training on their own. In 2014, the Veale Youth Entrepreneurship Forum, financed by The Veale Foundation, gave $10,000 grants to nine parochial and private schools, not only to teach entrepreneurship in the classroom but to help students
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“It’s about getting them to think like an entrepreneur, because the 21st century is not like the 1950s and ’60s, when workers retired after working for one company. Kids today will have many jobs and will have to take ownership of their careers.” — Greg Malkin, founder and director of the Young Entrepreneurs Institute
write business plans, network with small business owners and even start their own small businesses. This past school year, Veale awarded grants to 21 schools, including 12 public institutions, some in Cleveland's inner city. Veale partnered with Youth Opportunities Unlimited — a Cleveland nonprofit that assists young people in economically distressed areas — in eight of those 12 public schools. In addition to supporting programs within individual schools, Veale organizes its own entrepreneurial events, and two years ago opened those events to any Northeast Ohio school, educator or student desiring to participate, regardless of whether they’re grant recipients. SEE VEALE, PAGE 18
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PREP & PAROCHIAL SCHOOLS
Buck starts here at Western Reserve Academy By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty
Suzanne Walker Buck values “practicing imperfection.” That’s a quality she plans to model for the students at Western Reserve Academy, where she’ll take over as head of school in July. It’s more important to Buck that she be present and engaged rather than accomplishing everything perfectly. “By being present, kids learn from you. If they see that I’m at a game with wet hair but that I’m at the game, they know it meant enough to Mrs. Buck to forgo blow-drying her hair after a run to be present and be cheering,” she said. Ultimately, Buck wants to create a culture where students can both strive for excellence and learn flexibility and resilience when things don’t go as planned. Western Reserve Academy in Hudson offers boarding and day school options for students. The academy expects to enroll about 400 students for the 2019-2020 academic year. Head of school Christopher D. Burner announced his plans to step down from that role back in March 2018, and Buck was named his successor in October 2018. She’ll officially take over in July. Buck joins the private high school
“Everything within the school speaks to making sure young people are armed with the skills and the tools to be successful in the here and now and in a rapidly changing world.” — Suzanne Walker Buck, Western Reserve Academy head of school
during a time of change. WRA has been updating its curriculum to give students more college-level courses
and to teach life skills. It recently completed an $80 million fundraising campaign, which helped to update its facilities. Buck will be the academy’s 32nd head of school, and the first woman to hold that role, a news release stated. Buck attended boarding school herself and found it to be a “transformative experience.” “It was a place where I could be involved in so many different realms,” Buck said. “And it was an environment where I was encouraged to discover my passions.” For her, that meant athletics, leadership and community service. And she valued the relationships that grew between students, faculty members and staff in that environment. After graduating with an anthropology degree from Connecticut College, she chose to pursue a career in boarding schools. Buck said she thinks the opportunities that take place outside of the classroom are critical, and she appreciates getting to teach students in what she calls a “context of community.” She also thinks boarding schools have the chance to teach empathy in a meaningful way, as students have to learn how to navigate different personalities and points of view in a residential environment. Buck “brought a real passion, a real sense of leadership and focus”
to her interviews, said Tim Warner, co-president of Western Reserve Academy’s board of trustees. Warner was co-chair of the search committee, which included members representing the board, parents and alumni. Buck’s experience in the boarding school community and in leading a school made her a good choice to be WRA’s next leader, Warner said. Buck started her career in boarding schools at Westminster School in Connecticut. While there, she worked in the admissions office, coached field hockey and lacrosse and served as a dorm parent. Having that kind of “multifaceted role” was fulfilling, she said. The dorm role brought out a counseling aspect for Buck, while the athletics side had a focus on strategy and teamwork. Her role in admissions exposed her to curriculum and a school’s financial needs. The “backbone” of her career started there and grew, she said. After Westminster, Buck went to graduate school, earning a degree in clinical social work from Columbia University and a degree in education from Harvard University. She worked at Fay School in Massachusetts and New Hampton School in New Hampshire before joining Chatham Hall in Chatham, Va., where she served as head of school. Western Reserve Academy interested Buck for its community, but
also for the way it balances its history with innovation. Instead of simply holding to tradition, its curriculum and programming demonstrates the academy’s commitment to the future. “Everything within the school speaks to making sure young people are armed with the skills and the tools to be successful in the here and now and in a rapidly changing world,” Buck said. The domestic boarding school market has been on the decline in recent years, in part as the pool of high school-age students shrinks, Buck noted. Part of the work of boarding schools and the associations that serve them is improving the marketing of boarding schools, making students and their families more aware of available financial aid and the model’s overall value proposition. At Western Reserve, Buck said she will be looking for which programs make the academy unique and how it sets students on the “trajectory for success.” Buck is familiar with such work, having taken on the enrollment challenge at other schools where she’s worked. She’s also currently on the boards of the Enrollment Management Association and the Association of Boarding Schools. Initially, Buck will focus on better understanding and getting to know Western Reserve Academy, so she can best shape the strategic direction going forward.
Congratulations Class of 2019
tock
*Graduates of the IB Diploma Programme
WOMEN WHO WILL CHANGE THE WORLD
100%
GRADUATION RATE AND COLLEGE ACCEPTANCE
$11.2 MILLION MERIT-BASED SCHOLARSHIPS RECEIVED
216.325.1661 I Beaumontschool.org
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PREP & PAROCHIAL SCHOOLS
Competition doesn’t slow growth for single-gender schools By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty
The number of high school students isn’t increasing any time soon, and the number of high school options in the Cleveland market doesn’t appear to be shrinking. That means competition for students is high. But the region’s private, singlegender schools aren’t struggling to fill their seats. In fact, many have been hitting or exceeding their enrollment goals in recent years. The schools have found ways to differentiate themselves in a crowded market. At Laurel School, that might be its Butler campus. At Hathaway Brown, it could be the chance to focus on specific academic areas. At St. Edward High School, it’s the International Baccalaureate program. And there are the particular qualities they offer just by being an allgirls or all-boys school, although serving only half the population may present at least one significant challenge, in that it narrows the potential student pool. All-boys schools often tout the fellowship they instill. All-girls schools speak about relationships, too, but also the ways a curriculum designed for girls can better support them. “It’s the girls seeing girls as their role models,” said Elizabeth Pinkerton, di-
assi
The benefits of an all-girls setting are part of Hathaway Brown’s message to prospective parents and students. (Hathaway Brown School)
Beaumont School’s Ursuline values are one of the qualities it uses to differentiate itself in competing for students. (Contributed photo)
rector of enrollment management for Hathaway Brown in Shaker Heights. All-girls schools give those young women the chance to be the science
researchers, the athletes and the coders, she said, and to push back against stereotypes. Hathaway Brown draws girls from
public, private and parochial schools across the region, in addition to its own middle school. At its upper school, Hathaway Brown intentionally maintains an enrollment of about 380, Pinkerton said, which has remained consistent. Hathaway Brown presents prospective students and their families with research on the benefits all-girls schools can offer and, specifically, the benefits of Hathaway Brown’s academic offerings. Students in the high school, for example, have the chance to focus on particular academic areas, such as citizenship, engineering or business, in addition to their more traditional studies. The market is competitive in Northeast Ohio, even just among the all-girls schools, noted Kathryn Purcell, associate head of school at Lau-
Since 2010, the Catholic, all-boys St. Edward High School has seen its enrollment grow by 18%. (St. Edward High School)
rel School in Shaker Heights. There are fewer students in the region, and tuition and available financial aid are big parts of the discussion. “So because of that, schools really need to figure out who they are, what their school identity is and what differentiates them in the market,” she said. That often has to go beyond academics. For example, Purcell said, Laurel’s intentionally small size — 65 to 70 girls to a grade at the high school level — serves as a differentiator. So does what the school calls its Butler campus: 150 acres filled with a fitness center, athletic fields and an adventure course, as well as its Laurel Center for Research on Girls.
A Heig fere Bac offe preB grow 2017 prin 2020 to e den see abo men H reas goo “I elev the
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At Beaumont School in Cleveland Heights, its Ursuline values are a differentiator, as are its International Baccalaureate diploma program and offerings in fields as diverse as pre-engineering and studio art. Beaumont has seen enrollment grow by 6% from the beginning of 2017 to the beginning of 2019, said principal Nick Beyer. In the 20192020 school year, Beaumont expects to enroll about 320 students. President Wendy Hoke said she’d like to see Beaumont continue to grow to about 350, with a maximum enrollment of around 400. Hoke said she thinks part of the reason for the growth is that it’s a good time to be an all-girls school. “I think the emphasis on women elevating their voices has highlighted the importance of them having that
Growth by Design
opportunity at a younger age, so single-sex high school is really well positioned to do that,” she said. There’s a lot of research around the opportunities all-girls schools can offer young women in terms of academics, civics and social development, Hoke added. However, communicating what makes Beaumont different can be a challenge. As “a Catholic school with limited resources,” the school has to use its funds efficiently, Hoke said. It’s updated its website and revamped the way it uses social media, focusing more on what Hoke described as a campaign approach. The school uses hashtags to brand its materials and aims to share more of what the students are doing in real time. Finding ways to communicate and
Northeast Ohio’s economic development engine at work
Hoke
McKenna
strengthen a school’s vision has been a focus for St. Edward High School in Lakewood in recent years, too. A full grade for St. Edward High School is 250, and the school has been meeting or exceeding its enrollment target in recent years. But that wasn’t the case before 2010, said KC McKenna, the school’s new principal. “We work in the only business in the world where we’re asking people to pay a premium for something that they have access to for free,” McKenna said. “And so it’s a big challenge. You have to really have a strong brand and something that really differentiates itself.” The school added its International Baccalaureate program in 2010, enriching its curriculum, and has specialized programs in engineering, data science and film. Since 2010, the Catholic, all-boys high school has seen enrollment grow by 18%, McKenna said, adding
Pinkerton
that he thinks the school has done a good job communicating its vision, which is based on the Holy Cross values of humility and relationships. St. Edward High School shares weekly updates with its community, as well as investing in digital marketing. But even if the schools are doing well now, that doesn’t mean they can stop innovating. One challenge Ryan Ryzner, incoming principal at Benedictine High School in Cleveland, sees is the “dwindling number” of students at Catholic elementary schools. Those schools long served as a natural pipeline for high schools such as Benedictine, but now, more of its prospective students are coming from public schools. Benedictine currently has about 340 students on campus. Ryzner said that’s a bit low for the all-boys school, which typically enrolls between 375 and 400. He added he thinks the school needs to place a stronger fo-
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cus on retention. President Mary Ann CorriganDavis of St. Joseph Academy in Cleveland has also noticed the Catholic elementary school pipeline weakening as Purcell schools close. The academy tries to partner with those schools and create stronger relationships. St. Joseph Academy has seen its enrollment grow in recent years, Corrigan-Davis said. The allgirls school had 650 students in the 2010-2011 academic year and more than 700 in the 2018-2019 academic year. In addition to demographic challenges, schools have to be prepared to work with a new generation of parents. That might mean shifting “tried and true practices” to meet their expectations, Hoke said. Millennial parents are very involved in the process, but also let their daughters have a significant say in the decision. Beaumont’s Beyer noted that parents today don’t view location as a big barrier. They’re also more willing to send their children to different schools to ensure the best fit for each one. “You can’t take anything for granted,” Beyer said.
Girls K–12 / Co-ed Early Childhood Shaker Heights, Ohio
And off she goes to change the world Congratulations to the Class of 2019! HB GRADUATES ARE ATTENDING THE FOLLOWING COLLEGES AND UNIVERSITIES:
Attend the July 17 event from 8 a.m. to 10:30 a.m. at Corporate College East for an overview of the 2019 update of the Aligning Opportunities report (an in-depth look at the supply-and-demand imbalance of our region’s workforce), and learn about solutions that are being implemented to keep our region competitive.
American University (3)
Denison University
Manhattan College
Trinity College Dublin
Auburn University
Duke University (2)
McGill University
Tufts University
Bard College Berlin
Emory University
Miami University (3)
Tulane University (3)
Boston College
Franklin and Marshall College
Middlebury College (3)
University at Albany State University of New York
Boston University (2) Brown University Canisius College Carnegie Mellon University
FEATURING KEYNOTE SPEAKER JIM TRESSEL, PRESIDENT, YOUNGSTOWN STATE UNIVERSITY
Case Western Reserve University Centenary University Colby College Colgate University College of St. Benedict Colorado College (2)
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Furman University George Mason University George Washington University (2)
Northeastern University (3) The Ohio State University (7) Ohio University (2)
Georgetown University
Otterbein University
Harvard University (2)
Pitzer College
Hobart and William Smith Colleges
Princeton University
Howard University Johns Hopkins University
Columbia University
Kennesaw State University
Cornell University
Kenyon College (3)
Dartmouth College
Lafayette College
Davidson College
Marymount
Purdue University Saint Louis University Santa Clara University Smith College (2) Spelman College (2) Swarthmore College Texas Christian University
University of Cincinnati (2) University of Notre Dame (2) University of Pennsylvania University of Pittsburgh University of Richmond University of South Carolina (3) University of Southern California University of Tampa Villanova University Wake Forest University (2) Yale University
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PREP & PAROCHIAL SCHOOLS
www.us.edu
Different Colleges & Universities
CLASS of
2019
from
California to
ext!
on e what you d e s o t it a w We can’t
Maine & abroad in Scotland!
St. Ignatius opens Welsh Academy for low-income students By Allison Carey clbfreelancer@crain.com
94%
accepted to one or more of their top-choice institutions
14%
commit to becoming collegiate athletes
Over $9 Million awarded in scholarships
Most Popular Areas of Study: Biology/Pre-Health Sciences, Business, Computer Science, Economics, Engineering
MEET YOUR TARGET AUDIENCE WITHOUT EVER LEAVING THE OFFICE. MORE INFORMATION: Lisa Rudy • lrudy@crain.com
When the inaugural sixth-grade class of The Welsh Academy on the campus of St. Ignatius High School walks through the doors of the newly founded middle school in August, it’s likely they won’t know what went on over the last 26 years to get them there. The school is named after Rev. Robert J. Welsh, who was president of St. Ignatius from 1979 until 2000 and left behind several legacies. One of them was his idea for a middle school based on Jesuit ideals and Catholic theology aimed at helping boys from families of modest economic means. Welsh believed a St. Ignatius education could change their lives and in the 1990s he focused on finding a way to provide it for them. The 82-year-old died last August, months after learning that his decades-old plan was coming to fruition and after the current president, Rev. Raymond P. Guiao, asked him if they could name the school after him. The humble Jesuit balked, preferring to name the school after Óscar Romero, the fourth Archbishop of San Salvador in El Salvador, who was assassinated in 1980 and had worked against poverty and social injustice. Recognizing the importance of Welsh’s connection to the community, Guiao pushed for a name that landed closer to home. In the 1990s, Welsh and a team researched how to fund his idea. “It just wasn’t ready yet,” said Mary Ann Vogel, the academy’s founding principal. “It didn’t happen, but the middle school idea stayed on the strategic plan. Four years ago, Father Guiao saw the plans and began the feasibility studies.” After more research and planning,
Welsh
Vogel
“Students don’t have to be Catholic and will come from Cleveland and the inner-ring suburbs. They’ll come from working families that are financially stressed and stretched, families of modest economic means.” — Mary Ann Vogel, founding principal of The Welsh Academy
the St. Ignatius Board of Regents decided to move forward in May 2018. “They’re getting it up and running in a year, which fits the norm,” said Vogel, who’s had a career in urban and Catholic education and was first hired as the implementation director. “When the Jesuits were called here in 1886 by the bishop of Cleveland to start a school for the Irish and German immigrants in this neighborhood, they only had six months to open St. Ignatius, which also taught and changed the trajectory of the lives of boys from modest economic means.” The Welsh Academy will open with a sixth-grade class of about 20 boys. Eventually, the school will include sixth through eighth grades with 25
These kids are going places.
27 student-athletes committed to compete
71 colleges and universities
10M+
$
in scholarships
Gilmour Academy is an independent, Catholic, coed school in the Holy Cross tradition. Montessori (18 months - Kindergarten) and Grades 1-12 gilmour.org
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Rendering of a second-floor learning studio at The Welsh Academy (Fielding Nair International)
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At left is a before image of the church at the corner of West 32nd Street and Carroll Avenue on the St. Ignatius campus. Built in 1863, it’s being refurbished into The Welsh Academy and will look like the illustration on the right when complete in July 2020. (DLR Group | Westlake Reed Leskosky) Grad_Ad_2019_Crains.qxp_Layout 1 6/3/19 2:26 PM Page 1
de18. ning Voand ired ctor. e in d to man ood, n St. and es of ns.” with oys. ude h 25
students per grade. “We will grow the school one grade at a time so all of the students will experience three years in the school,” explained Vogel. “Students don’t have to be Catholic and will come from Cleveland and the inner-ring suburbs. They’ll come from working families that are financially stressed and stretched, families of modest economic means.” When construction is complete in July 2020, The Welsh Academy will reside in the renovated Foursquare Church at the corner of West 32nd Street and Carroll Avenue. For this year, students will have classes in other St. Ignatius buildings. The school bought the empty church in 2012. It was built in 1863, became the First Hungarian Reformed Church in 1889 and was later San Juan Bautista, the first Roman Catholic parish for the Hispanic community in Cleveland. With a $6.5 million budget, the plan is to restore the building, keep-
ing as much of the original exterior intact as possible, including uncovering the original red-brick facade. The interior will include 11,600 square feet over two floors and a mezzanine level, creating a state-ofthe-art learning environment. Tuition is estimated at $20,000 per student per year, but it will be free for the students and include meals. “We have been blessed by an unbelievably robust philanthropic community,” said Vogel. “The very first class of boys — and already boys in the second class, and we don’t even know who they are yet — have had their three-year education with us endowed by donors. There are people out there who have paid $60,000 for one of our students to attend for three years.” School days will run from 7:30 a.m. to 5:30 p.m. from mid-August until the end of May. Vogel said the purpose of the longer day is to give students a more well-rounded
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education throughout the day in an enriched learning environment. They’ll be better able to balance the academics with essentials such as physical education, performing arts and foreign language. They will also have time for homework, recess and extended learning time for humanities, arts and science. Vogel said the focus of the faithbased school is to deliver an integrated, multidisciplinary, experiential learning experience. “People ask what kind of school I want to create,” she said. “I answer that I want a school where students get to dig in, explore, find some joy in learning, build things, break things down and have someone tell them ‘Good start — let’s think of some other ways to make this happen,’ as opposed to being told to sit in their desk and wait for the bell to ring.” St. Ignatius students will be on hand to mentor the younger academy students and help them prepare for the future. “We hope that the boys will discover that they do belong and they have every right to be the change for their own future,” Vogel said. “Our goal is to eventually have 75 boys that stay for all three years, with at least 80% going on to the high school — and if they don’t, that they at least feel academically prepared for wherever they choose to go.”
Forever green and white. No matter what colors come next.
est . 1896
Congratulations to the Laurel School Class of 2019.
Bryn Mawr College • Bucknell University • Case Western Reserve University (4) • Colby College • Cornell University • University of California, Los Angeles • University of Cincinnati (2) • University of Dayton (2) • Dickinson College • Drexel University • Eugene Lang College of Liberal Arts, The New School (2) • Georgetown University • Hamilton College • Howard University (2) • University of Iowa • Kenyon College • Lafayette College • Marquette University • University of Miami • Miami University, Ohio (5) • University of Michigan (2) • Morgan State University • Northeastern University (3) • Northwestern University • Ohio University • Occidental College • Parsons School of Design • University of Pittsburgh • University of Rhode Island • Rochester Institute of Technology • Saint Louis University (2) • Savannah College of Art and Design • University of South Carolina • Southern Methodist University • Stanford University • Syracuse University (3) • The George Washington University (2) • The Ohio State University (5) • University of Toronto • Tulane University • Washington and Lee University • West Virginia University • Western (Ontario) University • Wittenberg University •
LYMAN CAMPUS One Lyman Circle, Shaker Heights BUTLER CAMPUS 7420 Fairmount Road, Russell Twp.
Girls Kindergarten-Grade 12 and Coed Pre-Primary 216.464.0946 LaurelSchool.org
/LaurelSchool
@LaurelSchool
Dream. Dare. Do.
College choices as of June 5, 2019.
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PREP & PAROCHIAL SCHOOLS
VEALE
2018-2019 Veale Youth Entrepreneurship Forum schools
For example, in spring 2018, Veale established an annual thinkBIG! Innovation Challenge & Summit, a business-plan competition in which students pitch ideas to panels of professionals. About 350 students, vying for $9,000 in prizes, took part in this year’s challenge in May at Case Western Reserve University. In November, Veale organized its first Young Women’s Day at John Carroll University to nurture female entrepreneurs. Also, Veale and The Burton D. Morgan Foundation fund Youth Entrepreneurial Markets, where students can sell products at farmers markets in Shaker Square, Crocker Park and the city of Aurora. Brant Fairchild, executive director of The Veale Foundation, said more than 1,000 students participate in Veale entrepreneurial programs every year. “All of our student events were at capacity,” Fairchild said. “We had wait lists.” University School in Hunting Valley and Shaker Heights is a charter member of Veale and helped start the forum seven years ago. Veale and Morgan grants fund the Young Entrepreneurs Institute, a nonprofit on the campus of, but separate from, University School. “Our goal isn’t to have all kids become businesspeople,” said Greg Malkin, founder and director of the Young Entrepreneurs Institute. “Not all kids will. It’s about getting them to think like an entrepreneur, because the 21st century is not like the 1950s and ’60s, when workers retired after working for one company. Kids today will have many jobs and will have to take ownership of their careers.”
(*Indicates Youth Opportunities Unlimited school)
CONTINUED FROM PAGE 12
JJBeaumont
The Hoover High School team from North Canton were finalists in Veale’s thinkBIG! event. (Black Valve Media)
Dramatic growth
Bobby Housel of University School was another finalist in the thinkBIG! Summit in March. (Black Valve Media)
For more than 129 years, Saint Joseph Academy has served as an inclusive and caring environment where young women flourish and are empowered to become global compassionate leaders. To learn more about Summer Camps or Admission, please visit www.sja1890.org. 3470 Rocky River Drive, Cleveland, OH • www.sja1890.org • 216.251.4868 Sponsored by the Sisters of the Congregation of St. Joseph
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School High School JJChagrin Falls High School (public) JJCuyahoga Falls High School (public) JJGilmour Academy JJGlenville High School* (public) JJHarvey High School* (public) JJHathaway Brown School JJHorizon Science Academy* (public) JJJohn Adams High School* (public) JJJohn F. Kennedy High School* (public) JJJohn Marshall High School* (public) JJLaurel School JJLincoln West High School* (public) JJMagnificat High School JJSt. Edward High School JJSt. Ignatius High School JJShaker Heights High School (public) JJShaw High School* (public) JJUniversity School JJWilloughby Eastlake-Northern Career Institute (public) Non-forum schools participating in events JJChaviva High School JJCleveland Early College High School JJGlenOak High School JJHawken School JJHoover High School JJOlmsted Falls High School JJOrange High School JJBenedictine
The Young Entrepreneurs Institute’s growth since its founding has been dramatic. It still provides entrepreneurial classes for University School high school students, showing them how to start and run their own businesses. More than half the high schoolers at University School study entrepreneurship. But Malkin said that’s just 5% of what the institute does. It has also organized entrepreneurial competitions for students throughout Northeast Ohio and provided professional development for educators and organization leaders. The institute works with any group, from the Cleveland Metropolitan School District to the Boy Scouts and Girl Scouts. Over the past 18 months, the institute has extended its offerings nationally and even globally. One example of that growth is its annual Enspire Conference, where attendees are shown how to introduce entrepreneurship into their curricula and programs. At the first conference five years ago, fewer than 200 people came, mostly from Northeast Ohio. The 2018 conference, held in Beachwood, drew 700 from across the U.S., with some arriving from other countries. Today, the institute works with nearly 500 organizations affecting more than 10,000 children, Malkin said. Another longtime Veale school is Hathaway Brown in Shaker Heights, which uses a Veale grant for its Center for Business & Finance. The center, like the institute, has grown over the years, said Molly Krist, center director. Initially, the center provided Hathaway Brown students with classroom instruction, entrepreneurial competitions and business-plan-development training for grades 10 and 11. Now, all four high school grades are involved. In addition to learning marketing, pricing and other aspects of business, students study investing and the center provides $20,000 to invest. In 2016, they opened the student-run Hath Caff café on campus. The center also offers internships and speaker series. Hathaway Brown is now working with lower grades, participating in Lemonade Day, a national program that teaches young children entrepreneurial values. Krist said she has seen the effect the center has had on students. “One young woman visited me
and said she changed her college major to economics because of the center,” Krist said. “She was so far ahead of her classmates.”
Independent efforts Archbishop Hoban High School in Akron is not connected to the Veale forum but in 2019 developed its own entrepreneurship program for students. The McCool Center for Entrepreneurial and Leadership Studies is a natural outgrowth of Hoban’s innovation center, created two years ago to give students space to invent products, said Jason Dzik, center director. Students can now market and sell those products through the McCool Center. So far, the center, funded by individual donors, consists of one experimental class in which students prepare business plans and pitch ideas to classmates, faculty and about 30 local businesses. They can win cash prizes. “It was great to see how eager community members and local businesses are to give up some time to work with students on developing these types of skills,” Dzik said. Two years ago, Padua Franciscan High School in Parma established a program called My Track to help students find a career path. One My Track option is business and entrepreneurship. About 40 students have signed up so far. In addition to classroom instruction, business-entrepreneurial students in My Track join a business club. In the program’s third year, students will draft business plans, enter competitions and shadow professionals. “We are strengthening our relationships with local companies because they want to be guiding leaders,” said Padua principal David Stec. “The brain drain is real, and they want to keep talent in Cleveland.”
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Is iHeart a contender?
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“My guess is that bidding (for radio rights) will be pretty competitive, given that the Browns are all the buzz in Cleveland,” said Mark Biviano, senior vice president of Rubber City Radio Group. Biviano said he was basing that opinion on the interest Browns programming is already drawing from advertisers for two Rubber City affiliates (WONE-FM, 92.3, and WAKRAM, 1590) that are part of the team’s radio network. The Browns’ 29 radio affiliates — which span 20 cities and five states — carry the ads that come with the programming, Biviano said. The stations can then slot in some of their own ads within or adjacent to the team shows. The structure, multiple sources said, is similar to the manner in which the Browns set up their preseason TV contract. Those rights, which moved from WKYC to WEWS in 2015, are also set to expire after the 2019 campaign. A lot has changed in the radio industry and, more broadly, the media landscape, since the Browns surprised many by bringing ESPN Cleveland and The Fan together for an expansive deal. CBS Radio was acquired by Entercom, creating the nation’s third-largest radio company, in 2017. A few months after that deal was finalized, iHeartMedia, the biggest U.S. radio operator, filed for bankruptcy to ease a debt load of more than $20 billion. What hasn’t changed, said John Gorman — a former WMMS program director who helped launch oWOW, an internet rock station, in 2015 — is the importance of team affiliation to all-sports stations such as ESPN Cleveland and The Fan. “Sports talk has become one of the best-performing formats on terrestrial radio, and having broadcasting rights helps the sales pitch dramatically,” Gorman said.
The Cleveland radio market, with about 80 FM and AM stations within 50 miles of the city, is such that there is a very limited group of contenders outside of the incumbents for Browns radio rights. “I see iHeart as the only (other) possibility,” said Gorman, who spent a couple decades working for the company during the glory days of Clear Channel. IHeart, which shed almost $10.4 billion in debt during its bankruptcy, owns seven stations in Cleveland. Two — WTAM-AM, 1100 and WMMSFM, 100.7 — serve as the flagship homes of the Cavaliers and Indians.
“Usually, possession is nine-tenths. If you do a good job, they’re going to stay with you.” — John Gorman, former WMMS program director
Some inside the Browns organization, according to a radio source with knowledge of the proceedings, expect iHeart to make another run at the Browns rights it lost to ESPN Cleveland and The Fan in 2013. Doing so would be complicated, though, because of potential conflicts with Indians and Cavs programming, along with the Browns making “Cleveland Browns Daily” an important show that features their top corporate partners. WTAM, for instance, likely wouldn’t bump Rush Limbaugh’s show in favor of the Browns’ twohour afternoon program, though Gorman, should a deal get struck, said he could envision “Cleveland Browns Daily” airing on WMMS. Aside from iHeart and Entercom, the only other companies that own at least three radio stations within 50 miles of Cleveland are Radio One, Salem Communications, Rubber City Radio Group and Media One Radio Group. Of those
four, only Radio One and Salem have at least three stations in Cleveland. All of which is why industry observers with whom Crain’s spoke view the race for Browns radio rights coming to down to the incumbents and iHeart. The rights seem more crucial to ESPN Cleveland and The Fan than they might for iHeart, which is one of the reasons Gorman thinks WKNR and WKRK will extend the deal. “Usually, possession is nine-tenths,” Gorman said. “If you do a good job, they’re going to stay with you.” The Browns, sources said, are pleased with how the current deal has worked, and the status quo would keep its seven-days-a-week programming power intact. “Cleveland Browns Daily” is also streamed live on the team’s website, social media feeds and YouTube channel, and the audience has steadily increased during a period in which the hype is the highest since the Bernie Kosar days. In a statement released to Crain’s, Sam Pines, a Good Karma Brands vice president and ESPN Cleveland’s market manager, said he couldn’t comment on contract negotiations with the Browns. But, he added, Entercom and the team have been “great partners over the years,” and “ ‘Cleveland Browns Daily’ has given the fans the local content they want, and the Browns have made that show a fun addition to our lineup that continues to evolve.” Representatives from Entercom and iHeart declined comment. Another intriguing piece to the Browns’ radio deal is the presence of longtime play-by-play voice Jim Donovan, who is very popular with fans and appears on quite a bit of the team-branded programming. “You hear about people watching Browns games and listening to them at the same time on NCX, The Fan or KNR just because of Donovan’s great delivery,” Gorman said. “I doubt very much that there are better guys to call a game. That’s a unique element that the Browns have.”
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Doug Dieken, left, and Jim Donovan call Browns games for 29 stations. (Cleveland Browns)
Browns radio highlights GAME DAY There are a pair of two-hour pregame shows — one that begins four hours before kickoff and one that starts two hours before the game. Both air on WKNR-AM, 850, and the Browns’ radio network. The second also is broadcast on WKRK-FM, 92.3, and WNCX-FM, 98.5. The game airs on WKNR, WKRK, WNCX and the Browns’ radio network. There’s also a Spanish broadcast on La Mega FM 87.7.
A two-hour postgame show airs on WKRK and the radio network.
WEEKLY A one-hour preview show airs at 7 p.m. on Tuesdays during the season. It’s on WKNR, WKRK and the radio network. A one-hour coach’s show airs at 7 p.m. on Wednesdays during the season. It’s also on WKNR, WKRK and the radio network.
A two-hour “best of” show airs Saturday mornings at 6 on WKRK and the radio network.
DAILY “Cleveland Browns Daily” airs from 1-3 p.m. weekdays on WKNR.
In this case, workforce housing means tenants with incomes in the $40,000 to $50,000 range may afford to rent in the place for $200-$300 less than its market-rate rentals. Sustainable Community said that’s possible because of the lower rate of return the investor was willing to accept, although the firm would not disclose that figure. The workforce units will be at the low end of the project’s rent range, Ezinga said, which is $1,000-$1,400 monthly. He said the project is scheduled to open in 2020. Councilman Kerry McCormack, whose Ward 3 includes Tremont, said he prizes the addition of workforce housing in the project. He said the city needs to see such projects as well as low- and moderate-income projects and the more costly market-rate ones. Sabel said the Opportunity Zone investment also means the project can incorporate the addition of a retail space in the complex that will be outfitted for a startup bakery. The business will be on Tappan’s side facing Scranton, a key access to both Tremont and downtown-bound commuters. Tappan is a few blocks south of Sustainable Community’s Fairmont Creamery project, also in Tremont. Both are in part of Cleveland’s old South Side that had little redevelopment action before Fairmont opened in 2014. On one level, Tappan allows Sustainable Community to build upon land that was purchased as part of its Wagner Awning project across the street, which converted an old industrial building to apartments and offices. On another level, Rosen said, “We like to think we are investing in the long-term health of a neighborhood, and being able to strengthen the Scranton corridor felt like a meaningful opportunity for us. The idea of creating a activity on both sides of Scranton appealed to us since it can create a natural gateway into Tremont.”
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Cyber firm surges amid threat awareness By Judy Stringer clbfreelancer@crain.com
Business leaders not yet snagged in the talons of a ransomware gang likely don’t realize just how crazy things have gotten, said Binary Defense CEO Mike Valentine. Today’s savvy malware perpetrators offer customer-support lines to help their victims figure out how to buy cryptocurrency, like bitcoin, to pay the ransom. They often will negotiate ransom fees or files to be decrypted. Some offer immunity packages to ensure victims can’t get hit again. “We can actually advise businesses on the probability of getting their data back after payment based on the customer-service rating of the attacker,” he said. Relatively new to the wacky world of cybercrime himself, Valentine aims to keep executives out of this situation altogether. In 2014, the retired logistics chief teamed up with security guru Dave Kennedy, founder of Strongsville-based consultancy TrustedSec, to build out Binary Defense, which provides cybersecurity services by subscription. The company started in a 4,000-square-foot historic bank building in Hudson but doubled its footprint earlier this year, moving to a 10,000-square-foot suite in Stow. “We were busting at the seams,” Valentine said. “In January 2018, we probably had 30 folks, and we are up over 80 now and hiring.” The new headquarters includes a cutting-edge Security Operations Center (SOC), where analysts — many of them military-trained — assess cyberthreats around the clock and alert and engage clients when necessary. Binary Defense also opened a sales office in Fort Myers, Fla., last year and plans to add satellite operations on the West Coast and in Europe in 2020, if not before. The private company does not divulge revenue, but in 2018 alone, Valentine said, income surged by 85%. He expects to see another 50% bump
Binary Defense Systems CEO Mike Valentine, left, and chief security officer Dave DeSimone stand in the company’s Security Operations Center, where analysts — many of them military-trained — assess cyber threats around the clock. (Shane Wynn for Crain’s)
this year. Increasing awareness of the digital danger, particularly on the part of its big corporate clients, accounts for part of Binary Defense’s growth, according to Kennedy. Large companies today know they need to keep tabs on the rapidly evolving threat landscape but often struggle to find the skilled manpower to do it on their own, he said. “This industry is a new one and there are not a lot of folks with a lot of experience working in it, so big corporations can’t staff appropriately for cybersecurity,” he said. Another factor in its expansion is homegrown. While Binary Defense’s traditional managed services monitor data streaming to and from a company’s computer infrastructure via third-party security applications
like AlienVault, Valentine and Kennedy focused internal development on the creation of the company’s own security platform, called Binary Defense Managed Endpoint Detection and Response (EDR). It was released last year. Valentine said Managed EDR involves “nano-agents,” which are deployed on corporate laptops, desktop terminals and servers throughout an organization. The software identifies suspicious digital behavior and allows companies to remotely lock down any endpoint that might be compromised. A repeated password usage attempt, for instance, might trigger an alert to Binary Defense’s onsite SOC for escalation to the customer. The endpoint offering makes effective cybersecurity a more affordable
option for small and medium-size companies, according to Valentine, because the software is faster and easier to install than complex security infrastructure platforms. Installation of the latter can take weeks or months, he said. Binary Defense recently deployed Managed EDR on 2,200 endpoints for a client in about 25 minutes. “As soon as it is deployed, we can see all the IP addresses across the organization, and once those are seen, the security team in here is monitoring all those computers,” he said. The increased ease and affordability of endpoint platforms like Managed EDR has resulted in proactive security upgrades among some businesses, Kennedy said. A market report by Gartner found that while only 5% of organizations
use managed endpoint technologies today, 15% are expected to do so by 2020. Still, many of the industry’s new customers are reactive, noted Kennedy. “They get hacked, it causes a lot of pain in the corporation and they don’t want to get hacked again,” he said. And there’s one big reason why, Kennedy added: Most small and midsize organizations rely solely on antivirus for protection. Antivirus tools block malware based on known signatures, but increasingly sophisticated versions of malware can change their signatures to avoid detection. “Instead of looking for a signature or some other identified marker, we’re looking at the behavior some device exhibits,” Kennedy said. “Like, for example why is your computer now communicating with an IP address out of China when it never has before? That is unusual behavior.” Contrary to its name, Binary Defense has a third service offering, which, Valentine said, involves “scraping” the clearnet (aka nondark web), dark web and social media to identify information that might be harmful to its clients. The counterintelligence team also performs threat intelligence, working with the FBI and other security outfits to identify new or evolving cybercriminal tactics and feeding that information back into its SOC to stay ahead of possible breaches. That all may sound like supercomplicated work, but Valentine said educating companies about the danger of depending on antivirus alone is perhaps Binary Defense’s biggest challenge. “Larger companies, really any organization with a security team, are aware of where the exposures are and they’re trying to get budget and the people to fill those gaps,” he said. “But when you move into the small and midsize — and there’s a lot more of those out there — there is a much greater lack of understanding of how exposed they really are.”
REDIzone is helping to turn research into reality By Karen Farkas clbfreelancer@crain.com
Biomedical innovations — including stimulating bone formation, improving wound treatment and creating surgical mesh — are among the success stories emanating from an unassuming corridor of labs and offices at the Northeast Ohio Medical University (NEOMED). The REDIzone, which opened in 2014, has drawn startups to rural Portage County because it provides space, amenities and connections to a network of investors, executives and organizations that support innovation. And — in what may be its best draw — it offers access to Northeast Ohio’s only animal testing center available to independent researchers. “It has well exceeded our expectations,” said Elliot Reed, executive director of the center, officially called the Research, Entrepreneurship, Dis-
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covery and Innovation Zone. The center has more initiatives in the works, too. REDIzone’s mission is to attract and house early stage biomedical companies. Researchers can use NEOMED services and receive advice and guidance from faculty and staff. All startups, including those that do not need a physical space, are connected to entrepreneurial support and funding opportunities. The center currently houses seven companies, and there is space for one more, Reed said. Several requests are being evaluated.
Inspiring innovation REDIzone has spurred NEOMED faculty to turn research into reality. Reed said REDIzone’s university commercialization impact includes six faculty companies, 19 patient applications and one exclusive license (for a method to screen tinnitus patients).
Elliot Reed is the executive director of Northeast Ohio Medical University’s REDIzone, the school’s incubator that looks to attract early stage biomedical companies. (Contributed photo)
Faculty, who focus on research and hadn’t considered how their inventions could be commercialized, are encouraged by Reed to move
their ideas out of the lab. He cited Fayez Safadi, a professor of anatomy and neurobiology, who had developed a method to stimulate
bone formation. Reed investigated ways that the product could be commercialized, including whether it would help racehorses. “We found one procedure that had incredible value,” he said. The product can be used for spinal fusion, which can reduce the time needed for physical therapy, potentially saving patients money. The REDIzone corridor is connected to the university’s Research and Graduate Education Building. “Every day I would cross the REDIzone hallway to get to my lab on the other side,” said Dr. Vahagn Ohanyan, a researcher and assistant professor in the Department of Integrative Medical Sciences. Ohanyan, who had been conducting mouse microsurgery workshops, said he had been asked by participants whether he could collaborate with them on projects. But he did not have the space and the companies did not want to give up intellectual rights to NEOMED. SEE NEOMED, PAGE21
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honest about what morning looks search shows that food and beverage like. That would be one example,” manufacturing has grown 85% in Smucker said. Northeast Ohio in the past decade, To place your listing Cleveland eds, To sayin thatCrain’s he feels a little pressure to Classifi while only growing by about 46% nathe company alive and thriving sjanik@crain.com tionwide. During that same time, emcontact Suzanne Janikkeep at 313-446-0455 or email would be an understatement — some- ployment in the industry in Northeast thing even Smucker conceded. He Ohio jumped from about 5,000 people doesn’t live in a big place like New York to more than 23,000 workers. That happened while other manuCity; he lives in Orrville, where folks recfacturing jobs lagged and still have ognize him when he goes to the store. They also recognize the importance failed to reach their pre-recession of the Smucker company to their highs, he noted. community, which goes beyond any “The interesting thing about food local agricultural products it buys. and beverage is it just keeps adding “I don’t think you could find a jobs. It’s really the only sector that’s nonprofit board anywhere in Wayne not only replacing jobs but adding County that’s not involved with new ones,” Duritsky said. Orrville-based J.M. Smucker Co. has transformed its business with Smucker’s,” Tom Pukys, president of Food processing is a great industry several notable moves in the last couple years. (Contributed photo) the Wayne (County) Economic De- to have, too, because it’s generally “Large transformational acquisi- ed nearly all of its advertising work velopment Council, said. “They really not affected as much by recessions or tions? We won’t do those for a couple with Paris-based Publicis Groupe, do give their time, talent and trea- cyclical sales the way automotive or of years because we’re really focused one of the world’s largest agencies sures. It’s not just the impact they other industries are. And it typically on paying down debt and returning with operations around the world, have on the food industry in Wayne provides good jobs that local workers cash to our shareholders. So it’s go- including in the U.S. County, it’s the overall impact on the are prepared to handle. “It just plays to a lot of the strengths This year’s marketing budget will entire community.” ing to take a couple of years before be about $550 million, up from about The company employs about 2,000 we have here: good logistics, a good urwe do something big,” Smucker said. people in and around Orrville, Pukys banized labor force and just to the south But that’s OK, he added, because $500 million last year, Smucker said. “It’s a significant increase,” he said. said. It’s a number Smucker said has we have a lot of great natural resources, with its current mix of companies and more money going toward mar- “I think the more important number is held steady in recent years. Pukys like great dairy farms,” Duritsky said of keting and consumer engagement, that we’re trying to make sure that as a also uses it routinely as an example of the Smucker company’s business. As for Mark Smucker, his strategy there’s plenty to do to increase sales benchmark we’re spending 6% to 8% of how the city and county can support net sales on marketing. We saw mar- a Fortune 500 company. appears to be gaining traction. The of existing brands. “Not only are they great at brand- company has beaten analyst estiThat’s been tough in recent years keting erode over, let’s call it eight to 10 as consumers have faced an increas- years, and dollars shifted to in-store ing products, they help brand our mates for its earnings twice in the past four quarters, posting adjusted ing array of brands and product support, like marketing displays.” community,” Pukys said. choices. They’ve also changed their Advertising also will be a bit more The company also is a critical cog in earnings of $2.08 per share for its eating habits. But Smucker thinks edgy than some might remember what’s becoming an increasingly im- 2018 fiscal year. from the days when the company portant manufacturing sector — food That was up from $1.93 in the prehe’s got the formula to succeed. He’s reorganized the company’s used towheaded child actors to por- processing — in Northeast Ohio, said vious year, and the markets rewarded marketing functions into brand-spe- tray family members in Norman Jacob Duritsky, vice president of strat- the company. The company’s share cific “pods,” each with its own dedi- Rockwell settings. egy and research for the economic de- price was beaten down in 2018 from $125 to fewer than $100 per share as “Historically, Folgers advertising velopment agency Team NEO. cated experts in things like public relations, digital engagement and has celebrated the perfect morning. The Smucker company is one big it reorganized its product offerings, Let’s be honest: Mornings aren’t per- reason the region punches above its but this year the stock has bounced advertising. The company also has consolidat- fect. So, we’re going to be a little more weight, Duritsky said. His recent re- back to about $125 per share.
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CLASSIFIEDS
At the same time, the company is exploiting new ways it has found to sell some of its traditional food items, such as peanut butter. In that category, sales of jars of peanut butter have been fairly flat, but not so for ready-made sandwiches. The company makes 2.3 million of them a day at its Uncrustables factory in Kentucky, and that’s not nearly enough, Smucker said. “We made over 650 million sandwiches this past fiscal year that just ended,” he noted. But that plant is unable to keep up with demand, Smucker said, even without the marketing and advertising the company plans to soon put behind Uncrustables. So J.M. Smucker broke ground on a new, $340 million plant north of Denver, which is expected to open this year and eventually employ about 500 people making sandwiches. The company said sales jumped from $10 million a year in 2000 to $200 million in 2016, and then to $250 million in 2018. “The reason we’re building that plant is there’s so much demand for the product. We could easily double the business … and we haven’t needed to advertise the product, because as soon as we did, we couldn’t keep up with demand. … So it’s been almost nothing,” Smucker said. Now, the CEO says the company has the right product mix — at least for the moment. It also is not in a position to do another big deal, he noted, because it needs to digest the pet food transaction and ramp up in Colorado.
NEOMED
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So Ohanyan, encouraged by Reed, created Ohan Cardiovascular Innovations, a contract research organization that offers cardiovascular research for therapeutic development companies. Those companies have access to the organization’s labs at REDIzone and NEOMED resources. Reed, who is an attorney, also can connect business clients and REDIzone tenants to investors, lawyers and other services for startups, Ohanyan said. “And the animal facility is a big plus for all the incubator companies,” said Ohanyan, who developed and patented a procedure to intubate mice and rats, which can be used by researchers. Reed also cited the success of REDIzone tenant BioMendics, which developed TolaSure, a patented topical gel that has been shown to cut wound healing time in half. The business, a JumpStart client company, raised more than $6 million and is currently completing a Phase I clinical trial.
Making an impact The center’s economic impact includes more than 60 companies that have engaged with REDIzone, contact with more than 270 companies, 119 patent applications and more than $36 million in funding provided to startups. Reed, whose salary is primarily funded by JumpStart and Ohio’s Third Frontier Fund, provides support to companies that do not need a physical space. Testing their product on sheep at NEOMED was critical to the development of a collagen-based surgical mesh by CollaMedix Inc., said Subba Shankar, founder and chief technology officer, and CEO Donna Richardson. The mesh, which could replace
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CLASSIFIEDS To place your listing in Crain’s Cleveland Classifieds, contact Suzanne Janik at 313-446-0455 or email sjanik@crain.com Dr. Vahagn Ohanyan, right, founder of Ohan Cardiovascular Innovations at the REDIzone, works with Dr. Tatevik Hakobyan, a research scientist and secretary at the company. (Contributed photo)
polypropylene mesh, needed to be tested on sheep for six and 12 months. Shankar and Richardson contacted Reed in early 2018. They initially were concerned about the distance from company headquarters in Shaker Heights to NEOMED but soon realized the value of the REDIzone. They received help from Reed and the center on pitching their product and applying for funding and grants. “The people at REDIzone were extremely helpful in getting the project set up and the people at the animal facility were incredibly gracious and helpful,” Shankar said. Because of the positive results of the sheep research, the company is concluding a licensing agreement with Case Western Reserve University and University Hospitals and is actively seeking investors to finish product development. They plan to meet with the U.S. Food and Drug Administration and hope to get the product to market in 2021.
The future REDIzone has more things in the works, too. Reed cited several new
initiatives that have recently evolved from REDIzone’s success. JJNEOMED is seeking $1.5 million in funding to construct a 15,000- to 25,000-square-foot building to house six to 10 growth-stage companies. The building is expected to open in 2020. Reed said current REDIzone tenants are supposed to move out of the incubator space after three years. He wants to offer long-term space to successful companies. JJNEOMED has established a research award program. Last fall, three faculty members each received a $10,000 award. JJThe Pharmaceutical Proof of Concept Center, which will support small to medium-sized drug development companies, recently opened in the REDIzone. JJNEOMED hired its first research scientist to work directly with the REDIzone and client companies. NEOMED is collaborating with Aultman Hospital in Canton, which plans to open a center for athletic performance and safety in the future Hall of Fame Village. Future plans include opening a REDIzone incubator in Canton.
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Conversely, the area on the north end of West 25th at Detroit was undergoing so much change two years ago it was not included in the last renewal. Now, the district would stretch past The Quarter at the intersection of West 25th and Detroit and out that thoroughfare, past other new apartment developments on the street, to West 33rd. It ends there, Shaw said, because Detroit west of there is in such redevelopment flux, with various properties possibly changing hands, and it generally lacks the pull that stakeholders on Lorain exerted. In a sign of the times, Shaw posted a tweet that listed the signatures of those supporting the plan. Ohio law governs the organization of SIDs and allows for a stakeholder group, in this case The Ohio City Improvement Corp., to assess for the services based on the amount of frontage and the
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An ambassador from Ohio City’s special improvement district greets visitors to the neighborhood’s commercial district. (Contributed photo)
property tax value of the property. The proposed budget for the SID is $570,000, more than double its current budget, she said. Sam McNulty, a member of the
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Advertising Section
PEOPLE ON THE MOVE To place your listing, visit www.crainscleveland.com/people-on-the-move or for more information, please call Debora Stein at (917) 226-5470 or email dstein@crain.com. ENGINEERING & CONSULTING
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Safety Controls Technology (SCT) proudly announces the promotion of Jonathan Corrigan to Vice President of Health Services. Since joining SCT in April 2018, Corrigan has overseen the rapid expansion of SCT’s Occupational Health Services that now includes three locations in the Cleveland area. SCT provides world-class health and identity services including TSA PreCheck, physicals, vaccinations, employee drug and alcohol testing, Red Cross First Aid/CPR/AED training, and audiometric testing.
We are pleased to announce that Ms. Vanessa King has joined Ancora as a Vice President and Financial Planner. Vanessa will provide personalized planning services to Ancora’s individual and family wealth clients. Prior to joining Ancora, Vanessa served as a Client Wealth Advisor for Gries Financial Partners where she provided a variety of planning services. Vanessa is a recent MBA graduate from Case Western Reserve University’s Weatherhead School of Management. We happily welcome her to the Ancora team.
Gallagher Sharp announces that Jody Perkins Ryan has joined the firm as Of Counsel. Jody is responsible for the oversight and defense of her clients’ workers’ compensation matters, from the initial investigation to resolution, and in administrative hearings and litigation. Jody counsels management in various areas of employment law, and advises employers with corresponding business concerns such as subrogation, contract, restrictive covenants, and unemployment compensation.
Lutheran Metropolitan Ministry Lutheran Metropolitan Ministry (LMM) is excited to announce the addition of Marcella J. Brown, MNO, as Vice President of Development & Communications! Marcella combines her seasoned experience in fund development and donor relations with a significant background in strategic communication and public relations. Marcella comes to LMM from the Black Professionals Association Charitable Foundation where she has been the Executive Director for the past seven years.
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Home Savings Bank Home Savings Bank is pleased to announce the addition of Don Hayes as Senior Vice President, Cleveland Commercial Market President. In his new role, Hayes will work to grow, develop and retain new business relationships within the Cleveland market; ensuring the combination of local decision making, delivery and personalized service from his team which will be a key component to building longterm relationships with clients.
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McCarthy, Lebit, Crystal & Liffman McCarthy, Lebit, Crystal & Liffman welcomes Frank George to the firm as an associate. George is a member of the firm’s Litigation Group with an emphasis on employment law. He will focus on being an advocate and trusted advisor to victims of discrimination and other unlawful behavior. George earned his Juris Doctorate from the University of Akron School of Law in May, 2018 and ranked #1 in a class of 119. He also made significant and lasting contributions to the Akron Law Review.
MANUFACTURING
REAL ESTATE
Kichler Lighting
Crescendo Healthcare Realty Advisors
Ravi Ponnaganti joins Kichler Lighting as vice president of information technology. Most recently, Ravi led the digital transformation efforts at Henkel Corporation. Throughout his career, Ravi has held roles of increasing responsibility within Henkel, Mead Johnson Nutrition and Wolverine Worldwide. Ravi earned an MBA from the Kellogg School of Management, Northwestern University and a Master of Science in electrical engineering from the University of Cincinnati.
Crescendo Healthcare Realty Advisors welcomes Ryan Skubic as Senior Associate. Crescendo provides real estate brokerage and consulting services exclusively to the healthcare industry. The addition enhances the firm’s capacity to serve its growing clientele and enter new markets. Ryan earned his MBA at the Fisher College of Business at The Ohio State University and brings extensive institutional real estate consulting, investment planning and portfolio analysis experience to Crescendo.
SID board and partner in the Bier Markt and associated West 25th Street ventures, said in a phone interview June 13 that the changes the SID produced made it possible to expand, from the impact of having clean sidewalks to the safety ambassadors who patrol the area. “I’ve never felt unsafe in Ohio City in all the years I’ve lived here,” McNulty said, “but it feels more secure with them here.” For his part, McCormack said, “People notice the difference in the part of the neighborhood with the SID.” Shaw, who met with the more than 200 property owners in the expanded district, said she’s found over time that when new businesses want to locate in the neighborhood they want to be located within the SID. She said retail vacancy in the Market Square District has fallen to 2% since the original SID went into force in 2012, when it was more than 30%. The larger budget means the Ohio City SID can contract with Block by Block, the Denver-based provider of safety and security services, through Downtown Cleveland Alliance, to double the staff assigned to Ohio City from the current seven. Ohio City will also hire a full-timer to manage the expanding SID. Part of Shaw’s pitch to property owners was the ability to target services to the needs of specific areas. For example, the SID will hire additional security from either a vendor or off-duty police to investigate problems such as broken windshields in the lower Detroit area. The Market Square area benefits from programs the SID’s safety ambassadors offer to help with directions or concerns, including accompanying patrons and employees to their cars at night. The Lorain area will benefit from the sidewalk cleaning and graffiti removal effort. Security cameras that Ohio City operates in the area of the SID will also be updated so they can be accessed instantly. Shaw said that will allow police from the city’s Second District to pull up video online to analyze areas where a crime occurred and even, if a bank is robbed, look for the robber in real time. Snow removal will also be undertaken throughout the district. That, Shaw said, improves the walkability of the neighborhood for businesses and residents. “AS the SID grows, it means the surrounding neighborhood will also benefit,” she said, “or a resident of the Federal Knitting Mills who wants to be accompanied home from the ABC Tavern can get an ambassador to do that.” Tom McNair, executive director of Ohio City Inc., worked on the original SID there seven years ago. “This is far beyond our wildest dreams,” he said.
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Karen Dethloff Vice president of facilities management, MetroHealth Karen Dethloff started her college career at Ohio State University hoping to be a veterinarian. When that didn’t work out, she looked to Cleveland State for her master’s degree in electrical engineering, which, combined with her knowledge of anatomy and physiology from her bachelor’s in animal science, gave her a strong base for clinical engineering. The health care industry, she said, feels like “the right thing for me to be doing.” Before joining MetroHealth 14 years ago, Dethloff spent 16 years working in construction at Case Western Reserve University. For years, her role has been growing as MetroHealth grew. She was initially director of facilities management for the main hospital, then oversaw the satellite skilled nursing facilities, the former HealthSpan locations and more. She became vice president of facilities management in January. Dethloff sat down with Crain’s to discuss her work. The conversation has been edited for clarity and length. — Lydia Coutré
The Dethloff file Hobbies Boating, hiking, wildlife photography
Favorite music Light classical (Beethoven, Chopin), Big Band (Glenn Miller), Bee Gees
Skill you wish you had Shorthand
Childhood dream jobs Veterinarian, Olympic equestrian or concert pianist
Top of your travel bucket list Vienna, Austria
Lunch spot The South Side 2207 W. 11th St., Cleveland 216-937-2288
The meal Two orders of mac ’n’ cheese
The vibe Located in Tremont, The South Side offers up American fare inside or outside on its large patio.
The bill $29.30 with tip
What do you enjoy about health care? I had an affinity for medicine. Ever since I decided I wanted to be a veterinarian, I had pursued things clinical. And I just feel it’s what fulfills me, and I believe I make a difference. You entered the field when there weren’t a lot of women and minorities in the field. How has that changed since then? There are more women doing the work. A lot of them come from the military, and they come in from that perspective. We still are a minority. There are also more women in clinical engineering, and some of those people migrate over into facilities. What does that mean for you as a woman leader to be leading at a time when women are still the minority in the field? I guess I don’t see myself defined by that. I’ve always been told I could do whatever I wanted to do, and so I just went forward. I try to be an advocate for our profession with others when I have the opportunity. I’ve been asked to speak at a couple of women’s events and Career Day events and things like that. And so largely, our profession, facilities management, is a little bit not on the radar screen; it’s under the radar screen, because it’s not one that is promoted a lot. Like you might go into engineering or architecture, but you don’t realize that there’s this profession that’s designated to keep facilities running. Because in a sense, if it’s working, you don’t see them. Absolutely. If we do our jobs as well as we can, you don’t know we exist.
We’re behind the scenes, keeping everything running: the lights on, the plumbing working, the air conditioning working properly, all that. But the truth of the matter is it is a very large job. In health care especially, there are a lot of codes and standards that we have to follow, and we have to document everything we do. We keep those records for our accrediting agencies. In some respects, women are very well-suited for that because women can be — not always — but can be more detail-oriented than men. So they don’t have a problem keeping all those detailed records. Obviously, the campus transformation is replacing some very old facilities for MetroHealth. What has it been like running facilities management for such old buildings that come with a lot of character, and problems? A lot of character. People would call it antiques in some cases. It’s been a challenge. My work history has very well prepared me for the challenge. When I worked at Case, obviously there are some old facilities there as well, but I was involved in new construction, so I got to see both sides of it. And coming to MetroHealth, I knew what had to be done to keep the place running effectively, efficiently and safely until we could get into the new hospital. So I put those programs and processes in place to keep everything running safely. And with the experience, we know what has worked well and what hasn’t worked well, and we’re planning a
new facility that we feel will take advantage of everything we know that works really well. What opportunities does building a new hospital create for you? What excites you and what opportunities do you have when they’re building from scratch? So when you’re adding buildings over time, the infrastructure tends to end up being distributed throughout the whole hospital. So I will have air handlers on top of every building. I’ll have chillers and cooling towers in various areas throughout the hospital. Same for emergency generators, and occasionally that may happen with boilers as well. With the new hospital, we can have what is almost — it’s a true central utility plant, where all the boilers, the chilling and cooling towers for air conditioning, and the emergency generators and other main systems are located in a central utility plant that can be serviced from one location. We still have air handlers that are distributed in the building, but I may have air handlers in several locations instead of right now I have 80 major air handlers throughout the main hospital. In the new hospital, I’ll have less than 20. So there will be efficiencies in servicing that equipment. I won’t have as much equipment to maintain. What keeps you passionate about what you do? I keep a very challenging situation running, and running effectively. We do our jobs properly so that the hospital can take care of patients. And that’s what keeps me passionate.
CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310 Cleveland, OH 44113-1230 Phone: (216) 522-1383 www.crainscleveland.com Twitter: @CrainsCleveland Publisher/editor Elizabeth McIntyre Group publisher Mary Kramer Managing editor Scott Suttell Sections editor Michael von Glahn Creative director David Kordalski Web editor Damon Sims Associate editor/Akron Sue Walton Assistant editor Kevin Kleps Senior reporter Stan Bullard, Real estate/construction Reporters Jay Miller, Government Dan Shingler, Energy/steel/auto/Akron Rachel McCafferty, Manufacturing/ energy/education Jeremy Nobile, Finance Lydia Coutré, Health care/nonprofits Senior data editor Chuck Soder Cartoonist Rich Williams Sales and Events coordinator Megan Lemke Integrated marketing manager Michelle Sustar Managing editor custom/special projects Amy Ann Stoessel Associate publisher/Director of advertising sales Lisa Rudy Senior account executives Dawn Donegan, John Petty Account executives Laura Kulber Mintz, Loren Breen People on the Move manager Debora Stein Office coordinator Denise Donaldson Pre-press and digital production Craig L. Mackey Media services manager Nicole Spell Billing YahNica Crawford Credit Thomas Hanovich Crain’s Cleveland Business is published by Crain Communications Inc.
Chairman Keith E. Crain Vice chairman Mary Kay Crain President KC Crain Senior executive VP Chris Crain Secretary Lexie Crain Armstrong CFO Robert Recchia G.D. Crain Jr., Founder (1885-1973) Mrs. G.D. Crain Jr., Chairman (1911-1996) Reprints: Laura Picariello, 732-723-0569 or lpicariello@crain.com Customer service and subscriptions: 877-824-9373 Volume 40, Number 24 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for the last week of December, at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2019 by Crain Communications Inc. Periodicals postage paid at Cleveland, OH, 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, MI 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, MI, 48207-9911, or email to customerservice@crainscleveland.com, or call 877824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.
THE WEEK Opportunity knocks
parks and water parks agreed to buy, for $261 million in cash, two water parks and one resort in Texas: Schlitterbahn Waterpark and Resort New Braunfels, and Schlitterbahn Waterpark Galveston. The seller is Schlitterbahn Waterparks & Resorts, which is based in New Braunfels, Texas. Cedar Fair also said it has the right to buy a Schiltterbahn property in Kansas City, Kan., for $6 million. The transaction is expected to close during the second quarter of 2019.
The Greater Cleveland Partnership, the region’s chamber of commerce, through its Cleveland Development Advisors affiliate, plans to launch a $50 million fund geared to gaining more Opportunity Zone investments in the region. GCP said it expects the fund to leverage as much as $700 million in investments in targeted distressed areas. “This is an opportunity for all of us to step up and work together as a community by helping finance well-conceived projects that can create jobs and improve residents’ lives,’’ said Joe Roman, president and CEO of GCP.
Taking the offers
More fun Cedar Fair Entertainment Co. is expanding to Texas. The Sandusky-based operator of regional amusement
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Treehouse Luxury Suites at the Schlitterbahn Waterpark and Resort New Braunfels is one of two Texas properties Cedar Fair Entertainment Co. agreed to buy. (Schiltterbahn website)
Forty-one faculty members will leave the University of Akron as part of the most recent Voluntary Separation or Retirement Program. The faculty members will remain with the university through May 2020, the end of the next academic year. About 46%
of the university’s 726 full-time faculty were eligible to participate in the program. About 12% of eligible faculty, or 5.6% of all full-time faculty, are taking the university up on its offer.
Better access Cuyahoga Community College is working to bring its services into more locations across Northeast Ohio. The college aims to bring more education and job-training resources to neighborhoods in poverty. Tri-C will work with Esperanza Inc. and Olivet Housing and Community Development Corp. to open what it’s calling Tri-C Access Centers. Proposed services for the sites include college and career readiness workshops, English as a Second Language courses and the college’s Women in Transition program.
6/14/19 12:35 PM
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