Issuu

VOL. 40, NO. 39

SEPTEMBER 30 - OCTOBER 6, 2019

Source Lunch

Akron Chamber is amping up its diversity efforts. Page 18

The List

Christopher Hartley, director of cybersecurity, Sikich Page 22

Top employers in two NEO counties Page 17

GOVERNMENT

SEPARATION ANXIETY Temporary concrete barricades known as Jersey barriers have bisected Public Square since the spring of 2017. A plan to replace them with bollards is pending funding. (David Kordalski)

A plan to fix Public Square barriers is ready, but funding is not By Kim Palmer kpalmer@crain.com @kimfouroffive

A few years ago, a relatively small stretch of public street in the center of Cleveland became a veritable hotbed of passionate disagreement. When the dust cleared, there were Jersey barriers. “They are officially called Jersey bar-

riers and were created by the New Jersey department of transportation in the 1950s,” said Steve Rugare, associate professor of architecture and environmental design at Kent State’s Cleveland of Urban Design Collective. “The idea was that they bounce cars back onto the road and reduce the damage to the cars. I do not know how well it works, but it is better than hitting a sheer wall.” Recently, the Group Plan Commission, the same team of urban land-

FOCUS

scape designers, planners and other stakeholders responsible for the revitalization of Public Square, reconvened to take a crack at making everyone in Cleveland happy with a new design that rids the square of those ugly concrete safety barriers. The new goal is to marry pedestrian safety with the existing design, but most importantly to tackle the large expanse of gray concrete.

60 fixed bollards Extend curb 8 removable bollards

SEE SQUARE, PAGE 22

JAMES CORNER FIELD OPERATIONS

EDUCATION

Enrollment a balancing act for area colleges, universities

By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty

Most of Northeast Ohio’s colleges and universities saw enrollment drop again this fall, though the declines were small for many. The schools face a common demographic challenge of fewer high school students in the potential enrollment pool, which has been an issue for years. The question today is

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what schools are doing to try to stem the declines and overcome that trend. Crain’s collected headcount enrollment for the public and private colleges and universities in Northeast Ohio, as well as for the community colleges in the region. Some of the schools noted that numbers for 2019 weren’t yet finalized. The community colleges fared well this year, with all seeing small increases or decreases of less than 4% in either direction.

At the four-year public schools, the University of Akron was the only school with a drop greater than 5%. UA saw enrollment fall by about 6.5%. The only public school that saw an increase this year was the Northeast Ohio Medical University, which saw its nondual enrollment — or enrollment that doesn’t count students multiple times if they’re in multiple programs — grow by nearly 2%. SEE ENROLLMENT, PAGE 21

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CONTENT

SPONSORED BY

NEWS AND TRENDS FROM NORTHEAST OHIO’S TECHNOLOGY SECTOR

TECH MATTERS A FOCUS ON AKRON SCHOOLS’ CAREER PATHWAY ON-RAMPS

STUDENT SPOTLIGHTS

he processes of choosing a pathway among the more than 50 offerings at College & Career Academies of Akron begins in seventh and eighth grade, when Akron Public Schools students enroll in two semester-long courses that help them explore careers and reflect on their own strengths and interests, director Rachel Tecca said. A one-year seminar then helps freshmen target an academy for their sophomore through senior years. Once in an academy, students take one to two pathway-specific courses each year along with the required school curriculum. Tecca Even those core courses are infused with information or experiences tailored to their pathway choice, “so that learning is relevant and meaningful, and they can see where that content is actually used in life outside of the classroom,” Tecca said. Two North High School seniors share their stories:

PHOTO PROVIDED BY AKRON PUBLIC SCHOOLS

These students are enrolled in the IT Support and Services and Programming and Software Development pathways. The pathways are part of the Academy of Global Technology and Business at North High School in Akron.

hen Akron Public Schools students returned to school earlier this month, sophomores through seniors reported to one of eight College & Career Academies. The 2019-2020 school year marks the inaugural wall-to-wall implementation of the career academy model in Akron, which means every student in the school system’s three highest grades are enrolled in one of 57 career pathways, said Rachel Tecca, director of the College & Career Academies of Akron. The pathways allow students to learn around a career theme. Students work closely with business and university partners that not only have a presence in the school but also offer off-site experiential learning opportunities. “The goal is to really transform the high school experience so that students are learning all of the transferable skills necessary to be successful in life after graduation,” Tecca said. Two years ago, the Akron school network became part of the Ford Next Generation Learning community — a national initiative, backed by Ford Motor Co., that is pushing more schools to become career-oriented academies. The Cleveland Metropolitan School District also is a part of this initiative. To facilitate this new learning model, Akron Public Schools worked with ConxusNEO, a nonprofit Summit County workforce development group, to develop the 57 career pathways — most of which align with locally based high-demand, high-wage occupations identified through market labor data. Tecca said a few of the current pathways, such as performing arts offerings,

CALENDAR OF

EVENTS A PRODUCT OF

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did not “hit those indicators,” but were determined to be “huge interest areas of our students.” IT pathways, ranging from computer programming and software development to advanced manufacturing and engineering technology, are offered at each of the academies. Several include health care-related career focuses, reflecting the region’s need for highly skilled workers, said Sue Lacy, president of ConxusNEO. The nonprofit, she said, not only helps inform the pathways but also facilitates industry sector partnerships to support those learning tracts. North High School alone has upwards of 70 such partnerships. “North has the greatest number of partners because it has been piloting the model since 2016,” said Michelle Collins, vice president of ConxusNEO. “Today, there are business partners for each of the pathways.” Bethia Burke, vice president of Fund for Our Economic Future, said industry involvement is one of the most promising aspects of the career academies’ vision. “It essentially allows for employer input into the curriculum in a way that seeks to make sure the skills that students are learning in high school are relevant to either their ongoing education or the job market,” Burke said. Lacy foresees the academies plugging holes in the region’s talent pipelines as early as this spring, when many of their IT pathway students will be prepared to earn CompTIA A+ certification, which will qualify them to apply for entry-level computer support openings. “It’s going to be a nice pipeline,” she said.

Kimberly Foster has loved drawing cartoons and animation for about as long as she can remember. By elementary school, Foster already had targeted graphic design as “a dream job” and elected programming and software development at North’s Global Technology and Business Academy. Last year, as part of her academy Kimberly experience, Kimberly shadowed employees at the University of Akron IT department, getting a firsthand glimpse of the inner workings of the university’s WiFi infrastructure. It was one of the most powerful learning experiences of her high school career, she said. “They warned me that the coding was a little bit hard to learn, but the more you practice, the better you get,” she said. “I took a lot of notes so that later on in the future, if I have problem with technology or coding I can say, ‘Now I know what to do.’” Mia Clarke’s career aspirations have changed through the years, but being immersed in North’s Global Technology and Business Academy has solidified her interest in technology and marketing. Coming to Akron Public Schools from Cuyahoga Falls High School as a junior, Mia quickly joined North’s Girls Who Mia Code Club, working alongside her peers to learn the tools and techniques that have given rise to independently published video games. One day, she’d like to produce her own video game, but would also be happy exploring the creative side of advertising, such as photography. “I didn’t transfer here knowing that it would be a better fit, but the academy has provided me more exposure to specific ways that I can move toward my career goals,” she said.

OCTOBER 5

OCTOBER 17

OCTOBER 22

PITCH U: ELEVATOR PITCH COMPETITION: 9 a.m. to 4 p.m., CLEworx, 1400 E. 105th St., Cleveland. Presented by Case Western Reserve University and Burton D. Morgan Foundation, this competition invites current and recent graduates to learn how to pitch their business idea to a panel of investors. eventbrite.com/e/pitch-u-elevatorpitch-competition-tickets-64530873580

OHTEC SALES & MARKETING SPECIAL INTEREST GROUP: 5:30 p.m. to 8 p.m., OEC, 4205 Highlander Parkway, Richfield. This event will feature discussions from industry professionals on how to best integrate and align marketing and sales efforts. gcpartnership.com/Events/ October-2019/Oct-SIG

LINKING TALENT TO OPPORTUNITY IN IT AND CYBERSECURITY: 1:30 p.m. to 5 p.m., I-X Center, 1 I-X Center Dr., Cleveland. This is a free internship and job fair for college students, recent graduates and job seekers to connect with Northeast Ohio employers in the IT and cybersecurity sectors. Registration deadline is Oct. 1. noche.org/_modules/form.php?id=59

This advertising-supported feature 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 content.

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CRAIN’S CLEVELAND BUSINESS

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First Mutual Holding preserving mutual banking Parent of First Federal Lakewood helps its smaller affiliate banks offer more products and larger loans By Jeremy Nobile jnobile@crain.com @JeremyNobile

With only 490 left today, more than 90% of the country’s mutual bank charters have evaporated in the past 50 years. Helping the holdouts not just survive, but thrive, is where First Mutual Holding Co. (FMHC) and its CEO, Tom Fraser, come in. “I think it’s possible we could eventually see half of those other guys affiliate with us,” Fraser said. “By affiliating with us, together, mutuals can stop that trend and keep our charters intact.” That may even create some heightened competition for other banks as FMHC grows in size, enabling its smaller, affiliate banks to offer more products and larger loans than they could have otherwise, from home loans to retail products. “Mutuals have long had a reputation for maybe being sleepy and narrow in our approach,” Fraser acknowledged. “We hope that by injecting scale and products into this banking model that we serve customers better because we don’t have outside shareholders. I think if we can inject some life and wake the model up a bit, that will be good for customers and good for local communities.” Consolidation has been the trend in banking for decades, but mutuals have faded at an even faster clip than their commercial counterparts. Mutuals are typically smaller, community-oriented banks, often with less than $500 million in total assets. With no shareholders, they tend to reinvest profits back into the bank and the neighborhoods they serve instead of dividend payments.

But by virtue of how these banks work and the business they can conduct, balance sheet growth can be more difficult to achieve compared with commercial banks, Fraser which have more options for raising capital and growing income. Those challenges are some of the driving factors behind mutuals in years past converting their charters so they could be eaten by profit-hungry stock banks. Supporting — or perhaps saving — the mutual banking industry in Ohio and elsewhere is why Fraser formed the no-stock FMHC, the parent organization for First Federal Lakewood, in 2015. The structure provides for affiliations with other mutual banks. It’s akin to an M&A combination for commercial banks, in which an institution joins another through the holding company. The difference is there’s no money or stock exchanged in a mutual affiliation, and the affiliated entity typically retains its own name, charter, people and independence while benefiting from the scale and support provided through the parent company. Acquired commercial banks tend to be condensed some after a deal in terms of people and branches, while mutual affiliations are designed to preserve more than eliminate. On Friday, Sept. 27, FMHC announced its second affiliation in as many months — and its fourth in four years — with Warsaw Federal Savings and Loan Association of Cincinnati, an institution with about $56 million in assets. The deal follows one with

Blue Grass Federal Savings & Loan Association of Paris, Ky. ($34 million in assets), announced in August. Both combinations build on FMHC’s $2.1 billion in assets and expand the mutual banking company’s footprint to new markets. With Warsaw’s presence in the Queen City, First Federal’s historically Northeast Ohio-focused parent company, through its affiliates, now has a presence in the state’s three largest metros. FMHC’s other affiliations were Belpre Savings Bank in Ohio in 2016 and Doolin Security Savings Bank of Parkersburg, W.Va., in 2017. Both of those banks, which were struggling to grow, were combined under First Mutual Bank in 2018. Doolin gave FMHC its first presence in the Mountain State. The Blue Grass deal introduced FMHC to Kentucky. Fraser expects more affiliations to pan out from here for a couple of reasons. For one, banks might be interested in joining with others simply because of the economic environment. Even though margin-squeezing regulations have scaled back in recent years to the banking sector’s benefit, a flattening yield curve and falling interest rate environment could add to those margin pressures. That trend could lead to more commercial banks looking for growth through acquisitions in Ohio, where M&A activity has been generally slow in recent years — particularly compared to neighboring markets — but has picked up a little lately with some recently announced deals. The question is which firms will be open to selling. Another factor in bank combination is succession planning. Community banks in particular report challenges with drawing in new talent, which can leave a dearth of younger executives to

step up and lead a company as aging CEOs work their way toward retirement. Succession planning was a factor in both FMHC’s affiliation with Warsaw and the recently announced acquisition of Youngstown’s United Community Financial Corp. by First Defiance Financial Corp. In that deal, UCFC CEO Gary Small will eventually step up as CEO of the combined company. All those trends affect mutuals. As those banks look for viability, more may warm up to an affiliation with FMHC, as Warsaw did. Near Warsaw’s Cincinnati base are larger commercial banks, including Fifth Third Bank, Union Savings Bank and First Financial Bank, which has been buying up banks across the Midwest. The FMHC combination will not only enable Warsaw to retain its independence, but support improvements in areas like technology while providing more competitive products thanks to a larger parent company behind it. FMHC has also proven that it can make those affiliations work, while its legacy bank, First Federal Lakewood, continues to perform well. Improved balance sheets are evidence of that. First Federal Lakewood itself boasted a five-year compound annual growth rate (CAGR) from March 2014 to March 2019 of 5.9% in assets, 5.8% in loans and 6.1% in deposits. Third Federal Savings and Loan Association of Cleveland would be the bank’s closest mutual banking competitor in this market, though it’s a slightly different animal with a hybrid stock model and assets of more than $14 billion. Regardless, Third Fed logged a five-year CAGR of 4.3%, 4.4% and 0.7% in assets, loans and deposits, respectively, in the same time frame. The same five-year CAGR for the 39 other mutual banks in Ohio — all

of which have less than $500 million in assets — cumulatively amounts to growth of 0.8% in assets, 3.1% in loans and 0.9% in deposits, according to a report by ProBank Austin. Numbers like that could make affiliations for mutuals who could join FMHC all the more appealing. “We are starting to see momentum build (with interested potential affiliates),” Fraser said. “As far as the pipeline, there is a fair amount going on. There are others we’re having conversations with. We wanted to do one (affiliation) at a time first to prove out the concept and build confidence of affiliate banks and regulators that we are able to achieve this.” Fraser said he thinks FMHC can handle two or three deals at a time. And while another affiliation is unlikely before the end of the year, one will likely materialize in early 2020. FMHC is indeed unique in the Midwest and positioned to draw in more affiliates, said James Thurston, a spokesperson for the Ohio Bankers League trade group. He said the industry is “very protective” of its mutual banks, adding that the group lauds Fraser’s efforts to preserve mutual charters. Even though the state has just 41 mutual banks today, it’s the second-largest market for those institutions outside of Massachusetts, which still counts more than 90. At this point, those smaller banks gaining more scale through FMHC probably isn’t going to cause too much worry among competitors yet, although it very well could in the future. “If all of a sudden you are a bank backed by a multibillion-dollar holding company, that is going to raise some eyebrows,” Thurston noted. “And people will become more aware of the industry by virtue of that.”

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CRAIN’S CLEVELAND BUSINESS

Meet Cleveland-based housing guru Ivy Zelman By Stan Bullard sbullard@crain.com @CrainRltyWriter

Ivy Zelman is the owner of a small business based in Beachwood and has made four appearances in the last few weeks on cable business news channels. The CEO of Zelman & Associates was sharing insights on real estate and housing that have made her CALL YOUR LOCAL CREDIT UNION loved and hated among company executives in that space on Wall Street. She is an often-quoted analyst • Commercial Real Estate among the panoply of professionals Contact Loans up to $10 Million with an appetite for data-driven inJonathan A. Mokri sights into home and apartment 440.526.8700 • No Prepayment Penalties building, lending patterns and resijmokri@cbscuso.com • As Little as 10% Down dential-related real estate sales. In the media, she is typically introduced as the research analyst who Your Business Lending Partner • www.cbscuso.com “made her name” by being the first Wall Street securities analyst to call the 2005 housing peak and its pending collapse. Her bear reputation is so well-known that she was part of a Golden Gate Plaza recent Wall Street Journal story about Mayfield Heights, OH 44124 the lessons from the “rare breed of Wall Street bears.” However, it’s also fair to note she called the bottom of the housing collapse in 2012. She recalls some of the things she was called in the early 2000s as if they were badges of honor: “Poison Ivy” and “Prophet of Doom.” These days, she’s typically termed a “housing guru.” Zelman founded her company in PROPERTY OVERVIEW October 2007 and today has 30 em• Large regional shopping center serving densely-populated ployees, eight of them in Northeast eastern suburbs of Cleveland Ohio. Most of the others are, of course, in New York City. • Anchored by: Fresh Thyme Market, Marshall’s, PetSmart, The company provides in-depth JoAnn Fabrics, K&G Fashion Superstore & Cost Plus reports on housing issues for a subWorld Market scription: a weekly e-newsletter • Freestanding 10,000 SF restaurant available with highway called “The Z Report” and investfrontage - For lease or Build to Suit ment banking, typically mergers and acquisitions for private home build• Freestanding Conrad’s automotive service building coming ers. She said the firm did about a dozavailable – 7,284 SF en M&A deals in the last year. • Strategically positioned with highway exposure to I-271 & Zelman & Associates is also about Mayfield Road (125,554 vpd & 37,489 vpd) to undergo a dramatic change that Zelman discussed with the detail • Contact agents for additional info and pricing typical any business owner. Next Could we put in like a burst/star or something that says, “40ofUNDER 40 ANSean Tom NOUNCED!” (InGrasso case folks missed this Wall week’s ad?) spring, she plans to “unbundle” the firm’s research reports. That will al216.861.5498 216.861.5429 www.hannacre.com seanwall@hannacre.com tomgrasso@hannacre.com low customers to buy the data or reports they want rather than having to pay for it all. Putting in the software to allow clients to buy specific products is requiring about a $500,000 investment, she estimated. Such a move will allow Zelman & Associates to tap the much wider real estate audience for 6 – 9:30 PM data and insights than those followCleveland ing real estate companies that are traded on Wall Street. Museum of Art Zelman was already well established as a securities analyst, first at Salomon Brothers, then at Credit Suisse, when she moved to Cleveland because her husband, David Zelman, is from Cleveland and wanted to raise LEARN MORE ABOUT THE CELEBRATION his family here. They met while both AND VIEW THE 2019 CLASSES TODAY! worked on Wall Street and have portacrainscleveland.com/crains-events ble careers. They’ve been back for 19 years now and have three children; their oldest is a college freshman. PRESENTING SPONSOR: Zelman was traveling back and forth to New York from Cleveland long before setting up shop here. Rich Moore, a veteran real estate analyst who operates Lee Carvel ConSUPPORTING SPONSOR: sulting in Solon, first met Zelman as she took a seat next to him in first class on a flight to New York City. Detroit’s Hometown Bank “I listened to this woman I did not know tell an associate (in coach) what Event/registration questions: clevents@crain.com Sponsorship opportunities: Megan Lemke • mlemke@crain.com she wanted done,” Moore recalled. “I felt that if she wanted to provide more

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A housing expert with a national reputation, Ivy Zelman is the CEO of Zelman & Associates, a housing research consultancy and investment banking firm based in Beachwood. (Contributed photo)

instructions she’d make the pilot stop the takeoff so she could speak some more with her associate.” He introduced himself and asked if she was Ivy Zelman. When she learned he was a REIT analyst, she handed him a pile of her housing reports and told him to read them. Moore was astounded. “At that time, I knew who she was,” Moore said, “but I did not know she lived in Cleveland. For Credit Suisse

“At that time, I knew who she was, but I did not know she lived in Cleveland. For Credit Suisse to allow her to live outside New York City was very impressive.” — Rich Moore, real estate analyst, on Ivy Zelman

to allow her to live outside New York City was very impressive.” Moore recalled that she was a top-rated analyst by Institutional Investor and managed to retain that ranking after she left Credit Suisse, which was striking because such rankings sometimes incorporate which bank equity analysts work for. He got to know her better later when he, as an RBC Capital Markets REIT analyst, and she both had offices at One Chagrin Highlands in Beachwood. (Zelman & Associates is now at the multitenant portion of the Site Centers headquarters in Beachwood.) He continued to follow her career. “She is very in-depth, very opinionated and strong,” Moore said. “I think today’s private investors appreciate that: You’ve got to have an opinion.” Securities analysts also typically hold conferences, he said, and Zelman’s were notable for bringing in stellar speakers and being heavily attended. Her most recent conference, in Boston in August, drew 600. Moore said that is typical of tech company analysts and hard to do in the real estate segment. Two minor things played big roles in Zelman’s rise to acclaim. She went to college at night while working for an accounting firm and, after she

graduated, went to Wall Street rather than graduate school in business. The only job she could find was as a real estate analyst. The other thing was that a business associate early in her career suggested that she get to know people working for private home builders, real estate brokerage companies and mortgage lenders. During the housing downturn in 1992, Zelman recalled, one of her private builder contacts told her that public company executives who denied a slowing pace were “full of it.” Her private real estate contacts now are voluminous. In her “Poison Ivy” days at the bottom of the housing collapse, she said, public company players termed her network of private contacts “Zelman’s spies.” Although Zelman has garnered multiple awards, it’s clear she most likes recalling people who have told her she saved their building company through her advice to sell land before the downturn worsened as well as calls on stock trades before the market moves. She recently held an impromptu financial literacy course at the conference center at her office building for women she meets who don’t know about Wall Street. She plans to hold more, saying, “I feel it’s my purpose.” CNBC stock guru Jim Cramer recently praised Zelman for how she approaches real estate information: While most analysts look at the past, Zelman uses data to define the future. In a personal look back, she said, “It’s been quite the journey. But the most important thing is my three Zs: (her children) Zoey, Zachary and Zia.” The family’s collie is the fourth Z: Zili. All her children being in their teens raises the question of whether the Zelmans will stay here. Ivy Zelman said the couple may add a place in a warm location, but will always have a place here, especially as her husband loves their East Side suburban home.

Correction  A Sept. 23, Page 2 article about the cost of the Hilton Cleveland Downtown project misspelled the name of Jeffrey Appelbaum, managing director for Project Management Consultants, and misstated the final cost of the hotel. The cost, including all amenities, was $280,127,492.

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CRAIN’S CLEVELAND BUSINESS

A decade later, Northeast Ohio’s efforts to recover from recession remain mixed By Kim Palmer

Changes in NEO employment

kpalmer@crain.com @kimfouroffive

Top 10 industry sectors, 2017-2019

Ten years after the Great Recession, Northeast Ohio’s recovery shows a mix of gains in productivity offset by job losses and employment shifts between industries, according to a Team NEO quarterly report released Monday, Sept. 30. Team NEO, a business development organization that represents 18 counties in Northeast Ohio, focused on the lingering impact of the four most recent economic downturns and how the region's employment, wages and productivity were affected. The Great Recession, which according to federal data began in December 2007 and ended in June 2009, saw a loss of 168,000 jobs, or 8% of the workforce, in Northeast Ohio. A decade later, some sectors are still below pre-recession employment levels. In 2001, employment in the region was at its peak, with 2.13 million workers. That number was down 4%, to 2.05 million workers, heading into 2007, then hit a low of 1.83 million in 2010. Employment only now is nearing pre-recession levels, with about 1.94 million workers employed this year, according to Team NEO. Since 2010, the region has steadily added jobs. Industries in some sectors have met or surpassed pre-2007

Finance and insurance Construction Wholesale trade Professional, scientific and technical services Administrative, support, waste management and remediation services Accomodation and food services Retail trade Government Manufacturing Health care Jobs per sector

50k

100k

150k

200k

250k

300k

350k

2007 2019 Source: Jobs Ohio and Team NEO quarterly economic review, September 2019

levels, including health care, which has seen a 13% increase in employment, said Jacob Duritsky, Team NEO’s vice president of strategy and research and author of the report. “Health care has seen robust growth since the 2007 recession. We are at about 270,000 jobs in 2007 and now we are at about 320,000,” Duritsky said. The rub is that for every new health care job the region has gained, a job in manufacturing was lost, and the

“Health care has seen robust growth since the 2007 recession.” — Jacob Duritsky, Team NEO’s vice president of strategy and research

overall regional employment numbers did not see a drastic change. Even with the substantial growth of the health care industry, manufacturing remains the largest economic

sector here, representing $42 billion to $43 billion of the gross regional product (GRP) and accounting for 45% of the Northeast Ohio economy, including indirect production from related industries. “If you look at the largest sector of the economy from an output perspective, it is still far and away manufacturing,” Duritsky said. “One of the things that the Great Recession has hidden is that in 2001, when a relatively mild recession hit the rest of the country it had a dramatic impact here,” he added. The 2001 recession struck the manufacturing sector, the region’s largest employer at the time, particularly hard. That meant Northeast Ohio went into the Great Recession not having fully recovered from the previous recession. Manufacturing has also been hemorrhaging jobs since before the Great Recession as the implementation of automation has accelerated. Today's employment numbers look different, but output is nearly as high as it has ever been and is projected to reach an all-time high in the next two or three years, Duritsky noted. And productivity, output per worker, has grown since 2007. Northeast Ohio has experienced 9% growth in productivity, outpacing the national rate of 7%. “That is one of the best long-term signs of economic health over an extended period of time is growth and productivity,” Duritsky said.

With the data pointing to the nation nearing full employment levels, productivity is helping to drive the current economic expansion, said Jeff Korzenik, Fifth Third Bank chief investment strategist. Unemployment is low and the labor forces tight, he said, adding, “People who want to work are finding jobs, and there are even some industries who have jobs to fill but can’t find the people to fill them.” Even though some indicators show that Northeast Ohio has not completely recovered from the Great Recession, the data do point to an economy that is experiencing greater diversification. In the last 18 months, Northeast Ohio’s growth has been in diverse economic sectors, including professional services, information technology and aerospace. Big companies, including Amazon and HomeGoods, have created about 2,500 jobs here. Vacancy rates are at historical lows for both office space, at 7%, and industrial warehouse space, at 3.5%. The region is netting 1,000 to 2,000 jobs a year. Health care and manufacturing continue to expand, generating jobs and attracting large capital investments. The Team NEO Regional Economic Review uses data from a number of sources, including Moody’s Economy for Northeast Ohio, and federal and state sources such as the U.S. Bureau of Labor Statistics and Ohio’s Labor Market Information.

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The Centennial’s office component might shrink By Stan Bullard sbullard@crain.com @CrainRltyWriter

Real estate owner and developer Frank Sinito’s Millennia Cos. of Cleveland looks to be starting to play more to its origin as an apartment operator as it shapes the makeup of The Centennial, the adaptive reuse of the landmark building at 925 Euclid Ave. Plans for as much as a dozen floors of offices in the 22-story leviathan have been scuttled as Millennia works to create a financially feasible project, according to three sources familiar with the situation. That amounts to slashing as much as 400,000 square feet of potential office space from the market, more than in the 12-story Skylight Office Tower, 1660 W. Second St., or the 10-story Medical Mutual Building, 2060 E. Ninth St. In place of so much office space, Millennia is looking at expanding the workforce housing component of the project, essentially making it an apartment building with substantial first-floor retail space. The sources asked not to be identified because they are not authorized to speak publicly on behalf of the project. Myrna Previte, a Kowit & Co. senior vice president who focuses on the downtown office market, said she can see why Millennia might look at dropping the office component. “Sinito has done a great job with his downtown apartments and at Key Tower, but adding 400,000 square feet of office space to a market that cannot sustain it is not in everyone’s best interest,” she said. “I’m not sure where the tenants will come from. This year has been a little slow on the downtown office leasing side, and election years (as will be the case in 2020) are not strong leasing years.” Brian Hurtuk, managing director of Colliers International ClevelandAkron, said the challenge for a building of Centennial’s size is that it requires landing large office tenants of 40,000 to 50,000 square feet in size. “Tenants that size are hard to find,” Hurtuk noted. “You can make a few floors work with some tenants of 10,000 to 20,000 square feet, but you really need larger tenants.” Hurtuk said he’d be surprised if the office component goes away completely. At the same time, the renovations of the surrounding office buildings as Euclid Grand, The Ivy, Kimpton Schofield and The 9 are changing the building’s context. “After being dark for years, the area is once again becoming Main & Main in downtown Cleveland,” he said. “It still might be possible to make a substantial office component work, given what’s around it.” CBRE’s Cleveland office has the listing for the office and retail space at Centennial, and its recent emails marketing the building continue to show the massive office component. David Browning, managing director of CBRE’s Cleveland office, said Millennia has not changed its listing with CBRE, so its agents are continuing to market it the same way they have for the past year. However, Browning added, “Millennia’s likely doing what any developer would at this stage: running the numbers to see what works best. That’s what I would expect them to do.” Browning said he would be sur-

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prised if Centennial wound up with no office space at all. The landmark building at 925 Euclid Ave. was for years known as The Huntington Building, but its namesake tenant moved to 200 Public Square. Over the past 30 years, its major tenants, from EY and what are now Jones Day and Squire Patton Boggs and other white-shoe law firms, have moved to new buildings as they came online. Millennia bought the 1 millionsquare-foot building in May 2018. The project has won an Ohio State Historic Preservation Tax Credit for a $270 million undertaking if the up-

dating is done in accord with federal historic preservation standards. Millennia has since bought two other buildings on the same block, including The Statler, where it has completed a massive renovation of apartments previously installed in the one-time Hilton Hotel at 1127 Euclid Ave. In addition to the Key Center complex downtown, Millennia has an apartment portfolio of about 30,000 suites in multiple states. Millennia owner and CEO Sinito did not return three phone calls by 6 p.m. last Thursday, Sept. 26, to discuss his current plans for The Centennial.

Plans by Millennia Cos. for the multimillion-dollar adaptive reuse project of The Centennial, located at 925 Euclid Ave., might erase a massive, 400,000-square-foot office component. (Stan Bullard)

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Once-thriving Home Team Marketing closes The company, which recently employed more than 40 in NEO, struggled after being acquired by N.Y. group By Kevin Kleps kkleps@crain.com @KevinKleps

Home Team Marketing — once a Cleveland success story with more than 40 local employees and millions in annual revenue — has closed, multiple sources told Crain’s. The company, which launched in 2001, had an office at the Caxton Building on 812 Huron Road. As recently as 2017, Home Team Marketing had 50 employees, 42 of whom were based in Northeast Ohio, Steve O’Neill, the company’s chairman and CEO, told Crain’s at the time. Home Team Marketing’s employees, according to several sources, were told that the company was closing at the end of business on Wednesday, Sept. 25. By that time, the Cleveland office was “a ghost town,” a former HTM staffer said. Home Team Marketing’s website is no longer operational, and a Google search for the company said it has “permanently closed.” Katherine Bolton, who, along with her husband, Bill, owns and manages the Caxton Building, told Crain’s she hadn’t heard anything from Home

Team Marketing about the company closing. HTM’s lease is set to expire at the end of the year, Bolton said. The Caxton Building’s website states that the 5,835-square-foot suite that HTM’s staffers had occupied is available, which Bolton said is a courtesy that some companies grant the landlord when their lease is nearing its end. The company was founded in 2001 by three Fitzpatrick brothers — Jake, Peter and Regan — and friend Patrick Spear. Late in 2013, HTM was sold to a group of investors that was led by O’Neill. The deal, according to Securities and Exchange Commission filings, was valued at $11.3 million. The change in ownership meant a switch in business models, from one that focused on high school sports marketing partnerships to what O’Neill said in 2015 was a “community-oriented social media platform.” Peter Fitzpatrick was fired 11 months after the sale to New Yorkbased Home Team Holdings LLC. Regan and Jake Fitzpatrick, along with Spear, the other co-founder, were all gone by 2016. But Peter Fitzpatrick, who was HTM’s CEO until late 2014, remained on the company’s board of advisers and told Crain’s in 2015 that

Home Team Marketing’s key product was TicketRoar, which is powered by Eventbrite and gives fans the opportunity to purchase tickets to high school events on their portable devices. (Contributed photo)

HTM was “doing great.” At the time, the Fitzpatrick family, along with a few primary investors, still owned about one-third of the company. Peter Fitzpatrick, however, stepped away from his advisory role a couple years ago, and his group’s share of the company has been diluted over the years, he told Crain’s on Sept. 26. “It’s heartbreaking, frankly,” he said of HTM’s demise. “When we were running it, we had a lot of pride

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A disheartening end The company, a former employee said, lost its “soul” after the Fitzpatrick-led group sold its primary stake in HTM. Still, Home Team Marketing appeared to be doing well in 2017, when it received a $5 million investment from an affiliate of Lyrical Partners, a New York investment firm with more than $10 billion in assets under management. The investment, O’Neill told Crain’s, was sparked by a partnership that Home Team Marketing had struck with Eventbrite in 2016. The partnership matched HTM’s growing digital ticketing business with Eventbrite’s technology platform, and the Lyrical investment resulted in a new, seven-year deal with Eventbrite. The optimism centered around TicketRoar, an HTM service in which fans could purchase tickets to a vari-

ety of high school events online and with their portable devices. Then, HTM’s 50 employees were 21 more than the company had before Home Team Holdings became the primary owner, O’Neill said. “It gives us the growth capacity to take this business to the next level,” the HTM CEO said of the Lyrical Partners investment. That’s not how things turned out, multiple former employees said. Home Team Marketing’s Glassdoor page has quite a few negative reviews, several of which mention schools not getting paid what they’re owed from sales. A Northeast Ohio high school athletic director told Crain’s that was also his recent experience with Home Team Marketing. “They never paid the high schools, which in turn destroyed our relationship with our clients,” a former Home Team Marketing employee wrote on Glassdoor last year. A former HTM staffer told Crain’s on Friday, Sept. 27, that the employees who were let go — a group that the source estimated numbered about 13 or 14 between the Cleveland and New York offices — only were paid through the last day of business on Sept. 25. Staffers who were owed commission didn’t receive it, the former employee said. O’Neill didn’t respond to several requests for comment. When the Lyrical investment was announced, Home Team Marketing said TicketRoar had partnerships with more than 5,000 schools and HTM had generated more than $50 million in revenues for high schools since 2001. “We are shocked and disheartened as to how it has been operated,” Peter Fitzpatrick said.

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Opinion From the Akron Editor

Smart business leaders see value of arts partners

Editorial

Opening night Rocket Mortgage FieldHouse is ready for its closeup. The $185 million makeover of the building formerly known as Quicken Loans Arena is complete, and it officially comes to life on Monday night, Sept. 30, with a concert by the Akron-born Black Keys. A week later, the building’s signature tenant, the Cleveland Cavaliers, play their first exhibition game in the remade home. On an aesthetic level, the makeover is spectacular. Concourses have been opened up, new gathering spaces have been added, dazzling technology has been installed. Go to any of the 200 ticketed events or 1,400 private events that Rocket Mortgage FieldHouse hosts annually and you’ll be struck by how much more modern, intimate and lively this building feels as it enters its 26th year. As a renovation project, it’s a home run, if we’re allowed to borrow a metaphor from the team that plays next door. The first year of this new building marks the Cavs’ 50th season in Cleveland. Rocket Mortgage FieldHouse will host several marquee sports events soon: the 2022 NBA All-Star Game, firstand second-round games in the 2020 NCAA Division I men’s basketball tournament and the 2024 NCAA Women’s Final Four. Visitors will experience those events in one of the country’s best facilities. We recognize that the path taken to get here has left hard feelings in some parts of the community. The renovation project was announced in December 2016, but opposition to the deal was strong, and the Cavs at one point said they would pull out of the project. Quick political compromises got things back on track, and the Cavs now are committed to the building through 2034. The team funded $115 million of the $185 million renovation — a 62% to 38% private/public split — plus any cost overruns. Cleveland.com last week examined how the Rocket Mortgage FieldHouse deal stacked up against other recent arena projects and found that “the percentages of recent private investment in NBA markets of comparable size to Cleveland —

such as Indianapolis and Milwaukee — tend to be lower than the percentage of investment the Cavs have made here.” It’s only in much bigger markets, like Los Angeles and San Francisco, where arena projects are funded entirely by private investors. In the context of maintaining a modern building in a competitive sports and entertainment landscape, Cleveland’s arena renovation deal is a good one. It’s also fair to point out that, in a community where poverty rates for both Cleveland and Cuyahoga County suburbs remain worse than they were before the Great Recession, public officials should be able to work on solutions to those economic and social ills with the same pace and purpose they applied to the arena deal. The Cavaliers did their part in committing to the community with respect to the project workforce. Of the 1,600 people who worked on the renovation, 22% were minorities (the goal was 16%), 5% were women (matching the goal), 48% were from Cuyahoga County (the goal was 25%) and 21% were from the city of Cleveland (goal: 20%). About 52% of contracts on the project went to minority-owned, women-owned and small businesses. That’s important in the context of an Ohio Supreme Court ruling last week that upheld a state law prohibiting cities from guaranteeing their residents a share of jobs on local public works projects. The court, by a 4-3 margin, rejected Cleveland’s home-rule claim that the Ohio Legislature did not have standing to block a city requirement that 20% of total construction hours be performed by residents on publicly funded projects costing more than $100,000. Cleveland Mayor Frank Jackson said the city will fight the decision, the latest in a series of state challenges to the Fannie Lewis Law, passed in 2003. (Ohio pretends to be a home-rule state, but it’s hostile to big cities actually exercising that power.) In the meantime, contractors should follow the Cavs’ lead and meet the goals on their own, because it’s the right thing to do.

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When Jessica Stern of Americans for the Arts presented a recent workshop in Akron for leaders of arts and culture nonprofits about how to better collaborate with businesses, she advised groups to choose a company with which they’d like to work. After sitting through the information Stern presented, it became apparent that if businesses are smart, they just might want to do the same: Choose an arts organization with which to collaborate. If not a specific organization, then a specific angle of creativity, Stern said in an interview following the workshop. Stern is the private-sector initiatives program manager for Americans for the Arts, a nonprofit that supports the value of the arts and advances the network of organizations that cultivate the arts. Sue ArtsNow — a nonprofit organization Walton that’s making big strides in putting a focus on the value of the arts, both culturally and economically, in Summit County — brought in Stern the first week of September to meet with funders and civic, economic development and workforce leaders. Stern presented the workshop through Americans for the Arts’ pARTnership Movement program. While Americans for the Arts has worked with Arts in Stark and Arts Cleveland, the workshop to train arts leaders to collaborate with businesses was unique to Northeast Ohio in recent years, Stern said. “This particular work is designed to help arts organizations to move beyond just asking for a check,” she said. The partnerships Stern talked about did go beyond sponsorships and checks, instead looking at businesses giving artists platforms for their work, arts groups bringing in programs for employees and more. Along with having participants go through exercises and moderating a panel discussion, Stern outlined the best reasons businesses should partner with the arts, highlighting how such collaborations can drive innovation at companies, amplify workers’ skills, cultivate diversity, enliven the workplace and set businesses apart by engaging untapped customer bases. That’s not to mention how these collaborations can enrich community life. For the artists, collaborations are a chance to expand their audiences and tap into new customers for their work. And make no mistake that artists and creative industries are an important part of the economy. Summit County alone is home to 1,185 arts-related businesses (about 4.2% of total businesses) that employ 6,882 people, according to statistics from Americans for the Arts. As is often the case, specific examples can help paint a clearer picture, and Stern cited several, including a chain of Jiffy Lube shops in Indiana that partnered with a local arts group in what began as a way to cover up graffiti at one of the locations by painting a mural on the building. After murals were painted by the artists on three buildings, the Jiffy Lube chain partnered with the Arts Council of Indianapolis to paint six more in 2018 and another six in 2019. Jiffy Lube said the murals have been a boon because they give people an organic reason to pay attention to the chain's stores, and sales increased 5% over every other franchise in the country. In an example closer to home, Inlet Dance Theatre founder and executive/artistic director Bill Wade, a workshop attendee, shared how his group recently worked with Goodyear Tire & Rubber Co. in Akron. The collaboration began when Dominic Moore-Dunson, a company member and assistant to Wade, was working on his show called “The ‘Black Card’ Project,” which he described in an interview as a gospel tale about his life and black identity. SEE ARTS, PAGE 11

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.

9/26/2019 4:13:24 PM

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Deadline looms to stop cuts to Ohio’s safety-net hospitals By Graham Bowman

hospitals that treat low-income patients open and functional. Hospitals that are part of the DSH proThe Affordable Care Act will probably be rememgram are typically safety-net hosbered as the most transformative pieces of legislation pitals that provide critical, quality passed in the last half-century. Its table of contents services to the communities they alone is over 10 pages long. Its architects frequently referred to its basic structure as a “three-legged stool” serve, whether in rural or urban because if you remove one leg, the rest of the structure areas. Often, these hospitals are could come tumbling down. Components of the legisthe only or primary provider of services to the surrounding area. lation were carefully built to support specific reforms, Bowman These cuts would force them to cut and each “leg” had to do its part for the structure of the services, raise rates, or both, resulting in higher premilaw to remain standing. When the U.S. Supreme Court determined that ums, job losses and, in some cases, hospital closures. states could opt out of Medicaid expansion, the first Lower-income Ohioans who depend on their local leg was removed. In order for the ACA to be imple- hospitals will be forced to find care elsewhere or pay mented as it was written, everyone needed to have more for the care they need. In Ohio, DSH cuts would have an enormous impact health coverage, either through employers, the ACA marketplace or Medicaid. When everyone is covered on hospitals serving lower-income community memby one of these options, health care costs go down for bers. Ohio’s current annual DSH allotment is $759.3 everyone. million, which 161 hospitals and Making the Medicaid expansion Making the Medicaid health centers rely on to keep their optional inadvertently risked bankopen and provide quality care expansion optional doors to low-income patients. If Congress rupting hospitals and community fails to delay cuts soon, these hospihealth centers that treat mostly un- inadvertently insured patients. The drafters of the tals stand to lose $328.9 million in ACA went to great lengths to ensure risked bankrupting funding the first year — a whopping the law paid for itself. To do so, the hospitals and 43% reduction in funding — and ACA included a reduction in extra double that amount the following funding for Medicaid Dispropor- community health year. While the national health care tionate Share Hospitals (DSH). DSH centers that treat debate often stalls along partisan funding is given to hospitals that are lines, the DSH program is unique in financially burdened by providing mostly uninsured that it enjoys support across both free care to uninsured patients. So, it patients. sides of the aisle. President Ronald made sense to reduce this funding if those hospitals would start seeing revenues for their Reagan created the DSH program in 1985, and Conpreviously uninsured patients. However, keeping the gress first delayed implementation of the cuts in 2013 policy to cut DSH funding while also not expanding in an overwhelmingly bipartisan vote. They have deMedicaid is a disaster no one intended to happen be- layed them each year since, most recently in the budcause hospitals struggling to provide large amounts of get agreement Congress passed in 2018. However, uncompensated care would lose the only thing keep- time is running out this year; if Congress does not act ing them afloat. soon, $7 billion in cuts to the DSH program will go into Though Ohio did expand Medicaid in 2014, other effect this week, on Oct 1. As partisan politics dominate Washington, delaying changes in federal policies, specifically the removal of the individual mandate, and continued uncertainty in DSH cuts is one issue leaders from both parties can the market, are leading to increases in uninsured rates. and should agree on. But if Congress doesn’t act soon, New census data show that for the first time since the funding for the program that helps keep these hospiACA passed in 2010, the number of people who lack tals open will lapse, affecting dozens of hospitals health insurance is going up. This is also putting more across Ohio. This would definitely bring the tower strain on the health care system, especially those with crashing down on thousands of Ohioans. a disproportionate share of uninsured patients. As we see continued attempts to cut off the ACA’s Bowman is an attorney with the Ohio Poverty Law “legs,” the DSH program remains essential to keeping Center.

ARTS

CONTINUED FROM PAGE 10

Through family connections, Moore-Dunson hooked up with the Goodyear Black Network, an employee resource group at the Akron tiremaker, to get feedback on the piece and its efforts to explore the idea of diversity, equity and inclusion. As the Inlet folks met with the Goodyear people — about six times in a three-month span, Wade said — and discussed the choreography, the group participated in several different exercises. “(The exercises are) part of our curriculum. It’s part of how we build new work,” Wade said in an interview. Through those exercises, the Goodyear employees saw things they had never noticed and explored different ways to tackle the creative process. “It provides them a completely new vantage point on their work environment,” Wade said, adding that the Goodyear workers “seemed like little kids” in their enthusiasm to look at things in a new way.

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With that, Wade saw a value proposition, an asset, that he and his troupe can offer to companies, too many of which struggle with innovative thinking and tapping into the creative process. “There’s a population that we can legit serve with the value we have to give to solve some problems,” he said, adding that he was examining further opportunities to collaborate with other organizations. While there are always challenges — communication hurdles, for example, as those using corporate-speak and those in the arts world try to share their ideas — smart business leaders will see the opportunity in these collaborations. Such partnerships aren’t about just writing a check so your company can be good community stewards (though that’s a worthy goal, too); they’re about the tangible, value-filled benefits companies can reap. Smart businesses leaders — those willing to think a little differently — will reach out for these opportunities with both hands. Sue Walton is Akron editor of Crain’s Cleveland Business.

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SMALL BUSINESS

COVENTRY, CEDAR LEE DISTRICTS WEATHER CHANGING TIMES

The sizable home of former Coventry anchor Big Fun, which closed in June 2018, still awaits a new tenant. (Photographs by Douglas J. Guth for Crain’s)

Businesses in both East Side destinations are cautiously optimistic about the future By Douglas J. Guth clbfreelancer@crain.com

oventry Village and the Cedar Lee entertainment district are essential arteries giving life to Cleveland Heights’ beating heart. Although Cedar Lee has enjoyed an influx of investment compared to Coventry’s recent struggles, officials and merchants from both destinations are cautiously optimistic regarding their respective neighborhoods’ health. “Coventry is in that exciting place where Cedar Lee was five years ago,” said Cleveland Heights business development manager Brian Anderson. “There’s an opportunity to target some unique, interesting retailers to round out the rest of the small shops and restaurants on the street. It’s a different market (from Cedar Lee), but they’re following similar paths.” Coventry is currently a more walkable district than the nightlife-friendly Lee Road, with longtime fixtures such as Heights Hardware, Tommy’s Restaurant and Passport to Peru still drawing daytime shoppers, Anderson said. Even as music mainstay the Grog Shop continues to welcome new bands, the closure of anchors Winking Lizard, La Cave du Vin, American Apparel and Big Fun — along with In the 216 and Blush Boutique — has left a half-dozen vacancies on a street with only 47 storefronts.

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Cleveland Candle Co. store manager Kristina Canda demonstrates the shop’s DIY candlemaking process.

Cleveland Heights and the Coventry Village Special Improvement District (SID) are pursuing leads to fill some of those gaps, with announcements on at least two new businesses expected before the end of the year, Anderson noted.

‘It can’t get worse’ Cleveland Candle Co. is one of the newer arrivals on Coventry, landing in May 2016, before the departure of Big Fun and American Apparel. Recent closings contributed to the

shop’s 40% decrease in foot traffic, said president and co-founder David Gin, who said he’s nonetheless hopeful that Coventry is merely enduring the quirks of a routine business cycle. “For the most part, it’s bottomed out,” said Gin. “Districts lose mo-

mentum, and right now we’re in a down cycle. It can’t get worse.” Coventry is Cleveland Candle Co.’s third location, alongside Mentor and Ohio City. Gin’s shop is a miniature makerspace where customers create their own candles, choosing from among 200 different scents. The workshop experience extends to lip balm, bath bombs and painting classes. Though Cleveland Candle Co.’s maker model has made it a destination for returning customers, Gin still needed to trim staff at his Coventry location. He also said he believes Cleveland Heights is putting more emphasis on Cedar Lee while Coventry continues to slump. “I understand that, but I feel like when everything went down here, efforts shifted to where there’s momentum,” said Gin. “With more empty storefronts, we need to get some of that effort here.” Suzanne DeGaetano of Mac’s Backs-Books said the internet has chewed into specialty brick-andmortar shops like Big Fun. A Coventry staple since 1982, Mac's Backs enjoys a loyal clientele as well as a steady stream of visitors from the adjacent Tommy’s eatery. Even with the modern prevalence of online shopping, DeGaetano is confident the district will entice a new generation of small businesses. “We haven’t seen this amount of vacancies in awhile,” she said. “It’s a natural progression of businesses

9/26/2019 1:42:49 PM

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SMALL BUSINESS

During a recent Heights Music Hop event, the Cedar Lee district’s Mitchell’s store stayed open until almost midnight to serve the late-night crowds. (Mitchell’s)

moving and a pause before new ones come in. Coventry is still a great place to do business. We’re easily walkable and compact with a neighborhood that has always supported us.” Coventry is in a better position now compared to previous years of retail upheaval, DeGaetano added. In the early ’80s, the street was mostly bereft of parking and had no SID supporting local entrepreneurs. City planners should be targeting new businesses offering an interactive experience that shoppers can’t find anywhere else. “There are so many makers, crafters and DIY people producing great stuff,” she said. “Anyone that has a concept like that with unique products will do well down here.”

A district synergy Cedar Lee has a maker’s identity centered, in part, around brewing beer. Boss Dog Brewing Co. opened in late 2017 in the former Lemongrass Thai restaurant location, to be followed by the launch of Voodoo Brewery in October. Visitors craving a late-night tipple can also pop into CLE Urban Winery, Bottlehouse or Kensington Pub, among other neighborhood spots.

“Businesses here flow off each other and pull each other up. If people are coming in the door, I’ll stay open until they stop.” — Jason Hallaman, current owner of 80-year-old Mitchell’s Chocolates

“The Wine Spot is craft-focused, too,” Anderson said, citing another Lee Road haunt. “There’s also bakeries, Mitchell’s Fine Chocolates and (artisanal cheese pop-up) Marchant Manor Cheese coming in a few months.” Jason Hallaman, who bought 80year-old Mitchell’s Chocolates in 2016, said his sweet shop enjoys a synergy with surrounding businesses. Using beer from Boss Dog Brewing, Mitchell’s concocted a “Black and Tan Marshmallow” that patrons can order from the establishment’s dessert menu. The Tavern Co. — nearby in the former home of Brennan’s Colony — sells a brownie made from Mitchell’s ingredients.

Screening films that don’t hit the chain multiplexes helps the Cedar Lee Theatre hold its own in the era of streaming. (Cleveland Cinemas)

The uptick in nighttime activity on Lee Road is a boon even for businesses that see most of their customers during daylight. Hallaman sometimes keeps his doors open after hours for people coming from Cedar Lee Theatre or Dobama Theatre. During a recent Heights Music Hop event, Mitchell’s sold sweets until nearly midnight. “Businesses here flow off each other and pull each other up,” said Hallaman. “If people are coming in the door, I’ll stay open until they stop.” Throughout its tenure as a district backbone, Cedar Lee Theatre has partnered with restaurants and other businesses on various cross-promotions. Jonathan Forman, president of Cedar Lee parent company Cleveland Cinemas, said the moviehouse has always been a powerful magnet

for incoming entrepreneurs. “Businesses, especially restaurants, choose to locate there because they know the theater is going to draw people to the neighborhood,” Forman said. “We’re proud of that.” The theater thrives after sunset, but Forman would still like to see more daytime activity in the area — perhaps a FedEx store or other service business to go along with the CVS across the street from his marquee. Business at Cedar Lee has been stable as cinemas everywhere combat a deluge of streaming services and original content. This fall, Forman welcomes a selection of movies from the Toronto International Film Festival, hopefully attracting patrons to a “real city” away from lifestylecenter multiplexes.

“We have people coming in from Pepper Pike, Moreland Hills and Beachwood,” noted Forman. “Lee Road has been a vibrant district for a long time.” Cleveland Heights must continue to be aggressive in drawing outside dollars to the region, added the longtime theater operator. Coventry has Star Wars Day and free movies at P.E.A.C.E. Park, while the Cedar Lee district offers the Music Hop and Halloween Candy Crawl. An event like Candy Crawl may not have a direct impact on daily business, but anything that brings attention to the district is a positive, Forman said. “I love the fact that people are walking around,” he added. “More of that would be great. When you see the result, it’s worth it.”

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9/26/2019 1:53:15 PM

PA G E 14

S E P T E M B E R 3 0 - O C T O B E R 6 , 2 019 |

CRAIN’S CLEVELAND BUSINESS

SMALL BUSINESS

Tax Tips: Jonathan Ciccotelli

Tax dispute clarifies ownership transfer via ESOPs The U.S. Court of Appeals for the Tenth Circuit recently upheld a decision of the U.S. Tax Court that removed some ambiguity over how to interpret a “matching rule” in tax law. The rule affects how income is taxed when a company is only partially owned by an employee stock ownership plan, or ESOP. One of the great benefits of ESOPs is their treatment for federal income tax purposes. When properly established, ESOPs are exempt from federal income tax. They are championed as a way of giving employees an opportunity to gain business ownership. For that reason and others, some business owners approaching retirement may choose to transfer ownership to executive leadership using an ESOP. Sometimes, the transition may occur in a single event, but more often it takes place over time, perhaps even over a handful of years. During such a transition, the ownership over the business usually is shared in some fashion across shareholders and the ESOP. The recent court case addressed the deductibility of expenses in just such a situation.

Ciccotelli is vice president in the Tax Services Group at Meaden & Moore.

One of the great benefits of ESOPs is their treatment for federal income tax purposes. When properly established, ESOPs are exempt from federal income tax. They are championed as a way of giving employees an opportunity to gain business ownership.

In 2009, Steven and Pauline Petersen were majority owners in Petersen Inc., an S corporation, holding 80% of the stock while an ESOP owned the other 20%. In 2010, the ESOP became the 100% owner of the business. There’s an important difference from a tax standpoint between the Petersens as shareholders in the corporation and the employee-owners who were ESOP participants. The corporation is an accrual-basis taxpayer while the participants in the ESOP were cash-basis taxpayers. An accrual-based taxpayer may incur expenses in one year that are not paid until a subsequent year but still qualify as expenses for tax purposes in the year incurred. The taxpayer books the expense, or accrues for it, even though the cash payment may not be made until the following year. For a cash-basis taxpayer, expenses must be reported in the tax year they are paid. For example, an accrual-basis taxpayer may accrue payroll or vacation benefits for employees up to Dec. 31, but actually pay out those benefits in

the following year. As such, the payroll and vacation benefits will still qualify as tax deductions in the year they are accrued. If a cash-basis taxpayer reported those same expenses, they would be reported for tax purposes in the year they were actually paid. When the Petersens filed their tax return for the 2009 tax year, they claimed their usual deductions for vacation and payroll expenses accrued at the end of 2009 but paid in 2010. When the IRS examined the return, it disallowed payroll and vacation-related expenses for the ESOP participants that were accrued at the end of 2009 but not paid until 2010. The IRS relied on the “matching rule” in the U.S. Tax Code, which says if a taxpayer and someone to whom the taxpayer is making a payment are related, then the payment can’t be deducted until it is paid or included

in income. The IRS interpreted this area of tax law to conclude an S corporation partially owned by an ESOP could not deduct the ESOP employees’ accrued wages and vacation time until those amounts are included by the employee in their income. In this case, the IRS regarded the Petersens and their ESOP-participating employees to be related for purposes of the matching rule. The matching rule has been subject to some uncertainty among tax experts in the past when dealing with ESOP participants, so the case provides some important clarity. Most significantly, it suggests companies that are transitioning ownership using ESOPs need to pay careful attention to the timing of expenses to ensure otherwise-permitted deductions are not disallowed.

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9/26/2019 11:31:46 AM

CRAIN’S CLEVELAND BUSINESS

S E P T E M B E R 3 0 - O C T O B E R 6 , 2 019

PA G E 15

SMALL BUSINESS

Adviser: Rina Russo

Now’s the time to revisit parental leave policies Across the country, state and local governments are passing legislation requiring that employers provide their new-parent employees with some amount or form of paid parental leave. New York and California have, in the past few years, made paid parental leave a requirement for employers in those states. While Ohio employers are generally not required under federal or state law to provide paid maternity or paternity leave benefits to new parents working here, in a tight labor market, some Ohio employers have decided to offer paid parental leave benefits to attract and retain talented employees. When Ohio employers do provide paid parental leave benefits to employees, however, they must be careful to do so in a way that is nondiscriminatory. At one time, it was common for employers to offer maternity leave to newmother employees, but not offer any leave to new fathers. However, in 2015, the Equal Employment Opportunity Commission (EEOC) issued its most recent enforcement guidance for employers on parental leave policies: [E]mployers should carefully distinguish between leave related to any physical limitations imposed by pregnancy or childbirth (described in this document as pregnancy-related medical leave) and leave for purposes of bonding with a child and/or providing care for a child (described in this document as parental leave). Leave related to pregnancy, childbirth or related medical conditions can be limited to women affected by those conditions. However, parental leave must be provided to similarly situated men and women on the same terms. If, for example, an employer extends leave to new mothers beyond the period of recuperation from childbirth (e.g., to provide the mothers time to bond with and/or care for the baby), it cannot lawfully fail to provide an equivalent amount of leave to new fathers for the same purpose. Despite this guidance being in place for several years, employers have been slow to implement changes to parental leave policies. In 2017, the EEOC filed suit on behalf of a class of 210 male employees of one of the world’s leading makeup and skin-care companies for providing new fathers less paid leave to bond with a newborn, or with a newly adopted or fostered child, than it provided new mothers. Additionally, the company provided new mothers a period of a temporary modified work schedule upon returning from leave, while not making the same allowance for fathers. The EEOC procured a $1.1 million settlement for the class, as well as a court-imposed requirement that the company revise its parental leave policy to provide all eligible employees (mothers and fathers) with the same amount of paid leave for child bonding and the same period of modified work schedules. More recently, additional high-profile cases have resulted in similar million-dollar-plus settlements. With these types of cases on the rise, and the EEOC making clear that bringing these cases is on its enforcement agenda, employers should review their parental leave policies now. In revising such policies, employers should be aware of certain distinctions that can be made between mothers and fathers. Employers should keep in mind that they are free to offer additional

P015_CL_20190930.indd 15

Russo is a partner focused on labor and employment law with Walter | Haverfield.

leave benefits to mothers, as opposed to leave provided to fathers, when the leave is related to physical limitations imposed by pregnancy, childbirth or related medical conditions. That being said, leave time that relates to bonding

or caring for the new child must be equal for both mothers and fathers. However, employers must do more than just write and implement policies that are compliant on their face — they must also ensure their policies are applied consistently and in a nondiscriminatory fashion. Recently, lawsuits have begun challenging facially neutral parental leave policies that are allegedly administered in a discriminatory manner. One lawsuit challenged a parental leave policy that allowed both new mothers and fathers paid parental leave but provided new mothers additional dis-

ability leave time in order to recover from childbirth. While the policy appeared to be lawful on its face, the plaintiffs in that case argued that the additional leave time allocated to disability leave for new mothers was discriminatory because the employer did not actually require that the new mother prove through medical evidence that she needed disability leave. The plaintiffs also argued that the fact the employer provided the same amount of leave time to adoptive parents as to new mothers supported the argument that the entire leave time was for bonding. Therefore, the plaintiffs claimed,

the policy was discriminatory because it provided new fathers with less bonding leave than new mothers. Clearly, it remains important that policies be nondiscriminatory in writing and in action. The decision to provide Ohio employees with paid parental leave benefits is not one to take lightly. While employees may reward employers for providing generous leave policies by staying with their employer for a long time and doing good work, employers could expose themselves to liability if they do not create and administer those leave polices correctly.

9/26/2019 11:33:23 AM

PA G E 16

S E P T E M B E R 3 0 - O C T O B E R 6 , 2 019 |

CRAIN’S CLEVELAND BUSINESS

SMALL BUSINESS

Is success baked in for Whoa! Dough startup? Entrepreneurial food for thought

By Mary Vanac clbfreelancer@crain.com

Todd Goldstein, founder of Whoa! Dough in Highland Heights and inventor of its healthy-yet-indulgent cookie-dough bars, shared a few tips for food entrepreneurs:

Todd Goldstein has spent more than a decade helping entrepreneurs turn their ideas into businesses by connecting them to resources and seed money. Now, the co-founder and chief executive of LaunchHouse, the co-working space and entrepreneur community in Highland Heights and Lakewood, has started his own business: Whoa! Dough, a line of healthy-yet-indulgent cookie-dough bars. It’s the first time Goldstein has been the entrepreneur and not the entrepreneur’s helper. “I’ve always been on the side of giving advice,” he said. Whoa! Dough has its roots in Goldstein’s childhood, when he helped the baker at his uncle’s restaurant. He ate a lot of bread. “I remember always being ill,” he said. “I never knew what was wrong.” It took years for Goldstein to realize that his gut was reacting to gluten, the protein found in wheat, rye and barley, and the foods made from them. Today, we call that gluten-intolerance. About 1% of the U.S. population has celiac disease — a serious autoimmune disease that damages the small

Do your homework. Research markets for your product. Goldstein’s staff identified a gap in the snack-bar lineup: cookie dough. Talk to potential customers. Go beyond family and friends. What aspect of your product is most exciting to potential customers?

Todd Goldstein, center, and his Whoa! Dough team. (Contributed photos)

intestine and interferes with nutrient absorption when gluten is consumed — but six times that many, about 18 million Americans, are estimated to have “nonceliac gluten sensitivity,” according to Beyond Celiac, a nonprofit research organization. Some others simply think that eating a gluten-free diet is healthier. As a result, the market for gluten-

free foods has grown significantly over the last decade. The global, gluten-free food market is projected to grow 9.5% each year, reaching a market value of $6.43 billion by 2025, according to Adroit Market Research, a business analytics consultancy. After Goldstein realized his two young sons also are gluten-intolerant, he talked to his wife, Chelsea, and his

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P016_CL_20190930.indd 16

Find a commercial kitchen or contract manufacturer unless you want to learn about federal and state regulations for food production, permitting and safety. Consider hiring an expert to

LaunchHouse community and decid- develop your brand. What is your ed to start a company making glu- product focus and personality? How ten-free snacks. Goldstein asked his do you want your brand to look intern, Leah Berdysz, to do some re- (colors, fonts, packaging)? How do search on the snack-bar market. What you want to talk about your product (social media, advertising)? she found was a gap: cookie dough. “We decided to see if we could create an onTwist Creative is working with Whoa! Dough to the-go cookie-dough develop a brand strategy that represents the indulgence that rewards company’s values to retailers and customers. healthy eaters and is gluten-free, dairy-free, egg-free, soy-free and Non-GMO Project and OU Kosher certified,” Goldstein said. He reached out to a food manufacturer and test kitchen to develop the recipes for his cookie-dough bars. Now, more than a year and 19 product itera- Learn your retailers’ process. Once tions later, Goldstein and his team are you finally get a meeting with your beginning to market their Whoa! store’s buyer, how are you going to Dough bars, which come in five fla- convince them to take somebody vors: chocolate chip, peanut butter, else’s product off the shelf to make peanut butter chocolate chip, sugar room for yours? cookie and sprinkle sugar cookie. Each bar contains 7 grams of pro- Demonstrate your product. “If they tein, 9 grams of sugar and is made from don’t try it, they’re not going to buy simple ingredients, such as almonds, it,” Goldstein said. peanut butter, maple syrup, honey, sea Be prepared to step into the salt and vanilla. The bars can be pur- distribution breach. If a connection chased at Heinen’s grocery stores and is missed, do whatever’s necessary to online at Amazon.com, where they are get your product to the retailer who sold in boxes of 10 bars for $24.99. needs it. — Mary Vanac “We identified our audience as ‘Lessertarians’ (we think we invented sought out Whoa! Dough during the the word),” Mike Ozan, president and recent Natural Products Expo East in chief creative officer for Twist Cre- Philadelphia. Downey acts as a manuative, said in an email. “The beauty of facturer’s representative for compathis category is that it touches the nies looking to break into retail or demiddle of health-conscious eaters. velop their brands. While high-protein snack bars and Most of us do not want to be ‘free’ (sugar-free, fat-free, dairy-free, glu- cookie dough have been separate ten-free, grain-free … you get the food trends for years, Whoa! Dough point), but we want to consume much brings them together. “Whoa! Dough is geared toward beless of the things that we see as detriing a healthy, indulgent dessert. You mental to our health.” Twist Creative develops brand don’t see a lot of that right now,” strategy and designs identity, packag- Downey noted. Rather, the market is ing and marketing for “small-batch hyperfocused on “better for you” prodbrands,” Ozan said. “In the past year, ucts that “pack as many nutrients in as we have moved many regional start- few calories as possible,” she said. Sometimes, that focus means addups to a national retail presence.” The agency is helping Whoa! Dough ing sugar or engineered ingredients to determine what its brand should be make the “healthy” products taste and how to represent its values to re- better. “Whoa! Dough isn’t trying to be tailers and customers. “Twist au- something it’s not,” said Downey, who thored the brand positioning, the is gluten-intolerant. “It tastes amazing product messaging, designed the logo and the ingredients are crystal-clear.” She also likes Whoa! Dough’s packand the packaging” for the Whoa! Dough bars, Ozan explained. “We also aging and branding. “It is very bold, built promotional campaigns and fun, playful,” Downey said. manage the brand’s social media and Goldstein and his team of one fullpublic relations.” time and four part-time employees Molly Downey, sales manager for are busy educating consumers about Creative Partners Group, a retail de- the beauty of their bars, giving in-store velopment firm in Minneapolis, product demonstrations.

9/26/2019 11:34:06 AM

CRAINâ€™S CLEVELAND BUSINESS

S E P T E M B E R 3 0 - O C T O B E R 6 , 2 019

THE LIST

Ranked by full-time equivalent staff in county

Cuyahoga County Employers RANK COMPANY

STAFF IN COUNTY

TYPE OF ORGANIZATION

TOP LOCAL EXECUTIVE

PA G E 17

Summit County Employers RANK COMPANY

STAFF IN COUNTY

TYPE OF ORGANIZATION

TOP LOCAL EXECUTIVE

Cleveland Clinic 9500 Euclid Ave., Cleveland 216-444-2200/clevelandclinic.org

35,934

Health care provider

Tomislav "Tom" Mihaljevic, president, CEO

Summa Health 1077 Gorge Blvd., Akron 330-375-3000/summahealth.org

5,790

Health care provider

Cliff Deveny, president, CEO

University Hospitals 11100 Euclid Ave., Cleveland 216-844-1000/uhhospitals.org

17,125

Health care provider

Thomas F. Zenty III, CEO

Cleveland Clinic 9500 Euclid Ave., Cleveland 216-444-2200/clevelandclinic.org

5,018

Health care provider

Tomislav "Tom" Mihaljevic, president, CEO

U.S. Office of Personnel Management 1900 E St., N.W., Washington, D.C. 202-606-1800/opm.gov

13,038

Federal government

Dale Cabannis, director

Minute Men Cos. 3740 Carnegie Ave., Cleveland 216-426-9675/minutemenhr.com

4,226 (1)

Staffing and employment services firm

Jay Lucarelli, CEO

Minute Men Cos. 3740 Carnegie Ave., Cleveland 216-426-9675/minutemenhr.com

12,679 (1)

Staffing and employment services firm

Jay Lucarelli, CEO

Akron Children's Hospital One Perkins Square, Akron 330-543-1000/akronchildrens.org

4,129

Pediatric health care provider

Grace Wakulchik, president, CEO

Group Management Services Inc. 3750 Timberlake Drive, Richfield 330-659-0100/groupmgmt.com

10,311 (1)

Staffing and employment services firm

Michael Kahoe, president

Group Management Services Inc. 3750 Timberlake Drive, Richfield 330-659-0100/groupmgmt.com

3,708 (1)

Staffing and employment services firm

Michael Kahoe, president

Progressive Corp. 6300 Wilson Mills Road, Mayfield Village 440-461-5000/progressive.com

9,878

Insurance company

S. Tricia Griffith, president, CEO

Akron Public Schools 10 N. Main St., Akron 330-761-1661/akronschools.com

3,392

Public school district

David W. James, superintendent

Cuyahoga County 2079 E. 9th St., Cleveland 216-443-7220/cuyahogacounty.us

7,368

County government

Armond Budish, county executive

Summit County 175 S. Main St., 8th floor, Akron 330-643-2893/co.summit.oh.us

3,087

County government

Ilene Shapiro, county executive

The MetroHealth System 2500 MetroHealth Drive, Cleveland 216-778-7800/metrohealth.org

6,978

Health care provider

Akram Boutros, president, CEO

Goodyear Tire & Rubber Co. 200 Innovation Way, Akron 330-796-2121/goodyear.com

2,649

Tire manufacturer

Richard J. Kramer, chairman, president, CEO

City of Cleveland 601 Lakeside Ave., Cleveland 216-664-2406/city.cleveland.oh.us

6,947

Municipal government

Frank G. Jackson, mayor

FirstEnergy Corp. 76 S. Main St., Akron 800-736-3402/firstenergycorp.com

2,233

Electric utility holding company

Charles E. Jones Jr., president, CEO

Cleveland Metropolitan School District 1111 Superior Ave., Cleveland 216-838-0000/clevelandmetroschools.org

6,259

Public school district

Eric S. Gordon, CEO

Signet Jewelers 375 Ghent Road, Akron 330-668-5000/signetjewelers.com

1,968

Jewelry retailer

Virginia C. Drosos, CEO

KeyCorp 127 Public Square, Cleveland 216-689-6300/key.com

4,740

Banking and financial services company

Beth E. Mooney, chairman, CEO

University of Akron 302 Buchtel Common, Akron 330-972-7111/uakron.edu

1,899

Public university

Case Western Reserve University 10900 Euclid Ave., Cleveland 216-368-2000/case.edu

4,470

Private university

Barbara R. Snyder, president

Gary L. Miller, incoming president John C. Green, interim president (2)

1,793

Municipal government

Daniel Horrigan, mayor

Sherwin-Williams Co. 101 W. Prospect Ave., Cleveland 216-566-2000/sherwin.com

4,427

City of Akron 166 S. High St., Room 502, Akron 330-375-2316/akronohio.gov

1,333

State government

Mike DeWine, governor

Swagelok Co. 29500 Solon Road, Solon 440-248-4600/swagelok.com

3,939

State of Ohio 30 E. Broad St., Columbus 614-466-2000/ohio.gov

Huntington National Bank 200 Public Square, Cleveland 800-480-2265/huntington.com

1,318

Banking and financial services company

Sean P. Richardson, Cleveland regional president

Giant Eagle Inc. 5300 Richmond Road, Bedford Heights 412-967-4551/gianteagle.com

Diebold Nixdorf 5995 Mayfair Road, North Canton 330-490-4000/dieboldnixdorf.com

1,300

Self-service technology and security systems provider

Gerrard B. Schmid, president, CEO

Manufacturer of paint, coatings and related products

John G. Morikis, chairman, CEO

Manufacturer of industrial fluid system components

Arthur F. Anton, chairman, CEO

3,235

Multi-format food, fuel and pharmacy retailer

Bill Artman, senior VP, retail operations

Lincoln Electric 22801 St. Clair Ave., Euclid 216-481-8100/lincolnelectric.com

3,096

Manufacturer of arc welding products

Christopher L. Mapes, chairman, president, CEO

1,250

2,770

Food and beverage company

Steve Presley, chairman and CEO, Nestle USA

Multi-format food, fuel and pharmacy retailer

Bill Artman, senior VP, retail operations

Nestle USA 30003 Bainbridge Road, Solon 440-349-5757/nestleusa.com

Giant Eagle Inc. 5300 Richmond Road, Bedford Heights 412-967-4551/gianteagle.com

1,200

Craft and fabric retailer

Wade Miquelon, president, CEO

State of Ohio 30 E. Broad St., Columbus 614-466-2000/ohio.gov

2,124

State government

Mike DeWine, governor

Jo-Ann Stores LLC 5555 Darrow Road, Hudson 330-656-2600/joann.com

Content services software developer

Bill Priemer, president, CEO

Gaming, dining and entertainment destination

Chris Kelley, president, COO

1,938

980

Hyland 28500 Clemens Road, Westlake 440-788-4988/hyland.com

MGM Northfield Park (formerly Hard Rock Rocksino) 10777 Northfield Road, Northfield 330-908-7625/mgmnorthfieldpark.com

Less than truckload freight transportation

Scott McCormick, distribution center manager, YRC Freight

1,929

YRC Worldwide Inc. 10990 Roe Ave., Overland Park 913-696-6100/yrcw.com

840

Greater Cleveland Regional Transit Authority 1240 W. 6th St., Cleveland 216-621-9500/riderta.com

19 19

840

1,919

Manufacturer of exterior building products

Brian C. Strauss, president, CEO

Medical Mutual of Ohio 2060 E. 9th St., Cleveland 216-687-7000/medmutual.com

Associated Materials Inc. 3773 State Road, Cuyahoga Falls 330-929-1811/associatedmaterials.com BWX Technologies Inc. 24703 Euclid Ave., Euclid 216-912-3000/bwxt.com

820

ArcelorMittal 3060 Eggers Ave., Cleveland 216-429-6000/usa.arcelormittal.com

Pressure vessels, steam generators and electro-mechanical parts provider

Jim Bittner, GM, BWXT Nuclear Operations Group Barberton

Bridgestone Americas Inc. 10 E. Firestone Blvd., Akron 330-379-7000/bridgestoneamericas.com

797

Tire manufacturer

Nizar Trigui, chief technology officer

Western Reserve Hospital 1900 23rd St., Cuyahoga Falls 330-971-7000/westernreservehospital.org

779

Health care provider

Robert A. Kent Jr., president, CEO

U.S. Office of Personnel Management 1900 E St., N.W., Washington, D.C. 202-606-1800/opm.gov

759

Federal government

Dale Cabannis, director

Babcock & Wilcox Enterprises Inc. 20 S. Van Buren Ave., Barberton 330-753-4511/babcock.com

700

Engineering, manufacturing and construction services company

Kenneth M. Young, CEO

FedEx Custom Critical Inc. 1475 Boettler Road, Uniontown 800-762-3787/customcritical.fedex.com

672

Expedited, temperature-control and brokerage shipping solutions

Virginia Addicott, SVP, president of Custom Critical and global operations

Dominion Energy Ohio 1201 E. 55th St., Cleveland 800-362-7557/dominionenergy.com

627

Natural gas distributor

Jim E. Eck, VP, GM, Ohio & West Virginia Distribution

Oriana House Inc. P.O. Box 1501, Akron 330-535-8116/orianahouse.org

480

Addiction treatment and re-entry services provider

James J. Lawrence, president, CEO

National Interstate Insurance Co. 3250 Interstate Drive, Richfield 330-659-8900/natl.com

458

Specialty property and casualty insurance company

Anthony J. Mercurio, president, CEO

Public transit agency

India Birdsong, general manager, CEO

Health insurance company

Rick A. Chiricosta, chairman, president, CEO

1,880

Steel manufacturer

Mike Madar, vice president, general manager

Southwest General 18697 Bagley Road, Middleburg Heights 440-816-8000/swgeneral.com

1,827

Health care provider

William A. Young Jr., president, CEO

Ford Motor Co. 1 American Road, Dearborn 800-392-3673/ford.com

1,750 (2)

JACK Entertainment 100 Public Square, Cleveland 216-297-4777/JACKEntertainment.com

1,749

Cleveland State University 2121 Euclid Ave., Cleveland 216-687-2000/csuohio.edu

1,496

Public university

Harlan M. Sands, president

Ernst & Young LLP 950 Main Ave., Cleveland 216-861-5000/ey.com

1,490

Assurance, advisory, tax and transaction services firm

Monte Repasky, Cleveland office managing partner

Cuyahoga Community College 700 Carnegie Ave., Cleveland 216-987-6000/tri-c.edu

1,437

Community college

Alex Johnson, president

Eaton 1000 Eaton Blvd., Beachwood 440-523-5000/eaton.com

1,414

Manufacturer of electrical, hydraulic, aerospace and vehicle products

Craig Arnold, chairman, CEO

Automobile manufacturer

Kevin Heck, plant manager, Cleveland Engine Plant

Gaming and hospitality company

Angela Matthews, senior vice president

RESEARCHED BY CHUCK SODER: CSODER@CRAIN.COM Information is supplied by the employers. Employment figures are full-time equivalent as of June 30, 2019. Send feedback to Chuck Soder: csoder@crain.com (1) This is a staffing firm; the vast majority of these employees work on behalf of other companies. (2) Ford's 2019 employment figure is from Ford.com and represents total employees, not full-time equivalent employees; thus, the number is higher than it otherwise would have been.

P017_CL_20190930.indd 17

RESEARCHED BY CHUCK SODER: CSODER@CRAIN.COM Information is supplied by the employers. Employment figures are full-time equivalent as of June 30, 2019. Send feedback to Chuck Soder: csoder@crain.com (1) This is a staffing firm; the vast majority of these employees work on behalf of other companies. (2) Miller is scheduled to join the university on Oct. 1.

9/27/2019 11:49:42 AM

PA G E 18

S E P T E M B E R 3 0 - O C T O B E R , 6 , 2 019 |

CRAIN’S CLEVELAND BUSINESS

AKRON

Chamber makes diversity efforts a priority With a new, more accessible location, group takes on role as convener while taking a collaborative approach By Judy Stringer clbfreelancer@crain.com

There is no shortage of sobering statistics when it comes to Akron’s socioeconomic imperative. While Summit County — like many of its Rust Belt peers — struggles to find enough workers to fill open positions, the region has done a less-than-stellar job of finding ways to bring its underutilized African American population into the fold. Of the 100 largest U.S. metro areas from 2005 to 2015, Akron ranked among the 10 worst in terms of black employment growth and the five worst in terms of black income growth, according to a study released late last year. The study, conducted as part of the Elevate Greater Akron partnership between the city of Akron, Summit County, Greater Akron Chamber and GAR Foundation, found the region has more than 13,000 skilled, prime-aged people who don’t have a job. And within that population, African Americans — who make up 31% of the city’s residents and 12% of the region’s — are over-represented by a factor of two. Akron-based nonprofit Women’s Network, meanwhile, publicized research in February that suggests the region is not doing so hot by its female contingent either. Women comprise 52% of the Summit County population, but hold only 18% of senior leadership versus 30% nationally. Those leadership figures fall to 1% and 5%, respectively, for women of color. And even though women occupy 45% of executive director positions in the region’s female-dominated nonprofit sector, just four women (20%) and no women of color are represented among the top 20 highest-

paid nonprofit executive directors. Compared to men, female executive directors in Summit County make 82 cents on the dollar. “In both cases, what we are talking about here is equity, right?” said Greater Akron Chamber president and CEO Steve Millard. “Gender equity, race equity, equity in opportunities, equity in prosperity.” Historically, he admitted, these are not issues chambers like his or business audiences in general spend a lot of time thinking or talking about. Fifteen months into his tenure, Millard said the Greater Akron Chamber is poised to change all that by “helping our companies understand the economic case for inclusion” and, perhaps more importantly, engaging businesses and business leaders as an important part of the solutions. Millard said the chamber has been “socializing” the Elevate Greater Akron findings informally for nearly a year now, but its most public attempt to make the diversity case happened at the Sept. 14 Inclusion Summit. Organized by the chamber and its Elevate Greater Akron partners (the city, county and GAR Foundation), the summit drew more than 400 local business and community leaders to Quaker Station for a frank conversation focused on expanding opportunities for minority residents.

‘Collaborator General’

From left are Jan Conrad, director of the Women’s Network, which recently came into the fold of the Greater Akron Chamber; Robert DeJournett, the chamber’s vice president of opportunity and inclusion; and chamber president and CEO Steve Millard. The trio stand in front of a recently redesigned and rebranded chamber logo, just one of the many recent changes at the organization. (Judy Stringer)

The Greater Akron Chamber’s lead in driving an inclusiveness dialogue is part of a broader strategy toward a more collaborative approach for the 45-year-old organization. Even before Millard came on board in April 2018, the wheels were turning on efforts to align the chamber’s economic development work with that of the

city and county. Elevate Greater Akron is the shared economic blueprint coming out of that endeavor. “One of the biggest findings from our perspective was the need for business retention and expansion efforts to be better coordinated,” Millard said. “Today on weekly basis, about 15 to 17 economic development profes-

sionals meet to talk about every opportunity we have in the community for a retention or expansion opportunity, or an attraction opportunity, and really figure out who’s on point and what we should know.” Early on, Millard also was tasked with moving the chamber from its lofty 17-floor headquarters in a South

Main Street high-rise to someplace “more accessible” and repositioning the organization as “Collaborator General” for the region’s economic growth initiatives, including response to the inequalities. “The idea was that if we wanted to take on this role as convener and bring people together to create the kind of collisions that are necessary to make progress on our issues, we had to have physical space to do that,” he said. To that end, the chamber moved into a former physical therapy office on the south side of the AES Building campus earlier this year after spending about $175,000 to renovate the 11,000-square-foot space. The open layout provides ample coworking spaces, according to Millard, but the jewel of the new headquarters is a 3,000-square-foot conference suite. He said more than half of the renovation budget went into filling an indoor therapy pool and transforming the light-filled room, which overlooks the Bounce Innovation Hub, into the Greater Akron Chamber’s conference center. “For the last two months or so, it’s been jamming in here. We’ve had something set up every day or night,” Millard said. “Just last night, we had 50 to 60 minority business owners here, along with people from the city and the county, to talk about issues that they were facing.”

Moving the needle In June, the chamber hired Robert DeJournett as the newly minted vice president of opportunity and inclusion and, most recently, merged the Women’s Network into its operations. SEE CHAMBER, PAGE 19

Eleventy buys Beachwood marketing company By Dan Shingler dshingler@crain.com @DanShingler

Akron’s growing Eleventy marketing firm has planted its flag in Beachwood. The company hasn’t moved but has acquired Think Digital, a digital marketing firm formed in early 2017 that specializes in search engine optimization and search engine marketing, known as SEO and SEM, respectively. “We’re an Akron firm that actually bought a Cleveland firm, so there’s a little bit of reverse there from what people probably expect,” Eleventy owner and CEO Ken Dawson said. The two marketing companies joined forces in mid-September, with two of Think Digital’s four founding partners, Steve Donatelli and Matt Beck, joining Eleventy and splitting their time between Akron and Beachwood. It’s not a huge deal in terms of personnel, as both firms were fairly small. The transaction brings Eleventy’s staff from 13 to 20. It is a big deal in terms of the firms’ new combined capabilities, Dawson said. That’s because the addition

P018_CL_20190930.indd 18

“We’re an Akron firm that actually bought a Cleveland firm, so there’s a little bit of reverse there from what people probably expect.” — Ken Dawson, Eleventy owner and CEO

amps up Eleventy’s skill sets in a key area dealing with internet marketing. “While we’re a full-service agency, there are just some things they do better than us, frankly,” Dawson said. Eleventy has done some high-profile work, including working on the 2016 presidential campaign of Ben Carson, and has helped build brands of companies such as Akron-based Fully Loaded Chew, which makes tobacco-free snuff. The chief specialties of Think Digital that attracted Dawson was SEO and SEM. SEO refers to the ability to get a client’s site or content at or near

the top of search engine results, while SEM entails things like getting the right advertisements on the right web pages and in front of readers most likely to have an interest in the ad’s content. And though Think Digital was the smaller firm, it was well-known, even perhaps better known than Eleventy in some key markets, not the least of which is Greater Cleveland. “We’re still an unknown entity in Northeast Ohio in many regards, and this will help get us out of the gate,” Dawson said. Prior to the deal, Eleventy had a cli-

ent mix of about half nonprofits, while most of the rest of its work was devoted to consumer brands, for which it did marketing, branding and sometimes even product fulfillment, Dawson said. Think Digital lists 20 clients on its website, and they include both Eleventy — for which it did work prior to the acquisition — along with corporations ranging from Westfield Insurance to Parker Hannifin. The two firms’ complementary skill sets, client bases and geographic penetration make them a good strategic fit, Dawson said. Think Digital’s Donatelli agrees. “I’ve known Ken for about seven years now, and we’ve known each other as two companies doing work together and as friends,” Donatelli said. “It’s a combination of familiarity and trust.” Eleventy will maintain offices in both Beachwood and Akron, Donatelli said. He added Eleventy wasn’t the first firm to approach Think Digital about a possible combination, but that he was most comfortable working with Dawson. It’s usually been his firm’s expertise in SEO and SEM that has attracted the attention, he said. That’s not surprising, as the specialty of figuring out how to use Goo-

gle and other search engines to serve clients is among the fastest-growing services in the marketing and public relations arena. “Everything is moving toward SEO and SEM now,” said Joe Mosbrook, founder and CEO of Acclaim Communications in Cleveland. Companies constantly are bidding on words or phrases people may use to search, he said, and bidding to be at the top of the results list when they do. It’s no accident that if you search “paint,” for example, that SherwinWilliams is the first result. That little “ad” logo next to their entry shows a company paid for placement, Mosbrook said. Many corporations are turning to outside help to address this challenge, which has made the field important to marketing firms. As a result, many are either building their expertise or seeking acquisitions that will bring them that expertise, according to Mosbrook. “What you’re seeing in the industry are traditional marketing firms that want to get deeper into the digital space, and SEO and SEM are a perfect way for them to do that,” said Mosbrook, who added that he started his firm in 2012, in part, to take advantage of that trend.

9/27/2019 2:37:32 PM

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AKRON

Metisentry makes another defense-related acquisition By Dan Shingler

If he’s right, including in his estimate of the field’s potential, the initiative could grow Metisentry’s sales by four or five times, Engle said. He declined to specify the company’s revenues, but said they’ve not yet reached $10 million a year. If that sounds like pie in the sky being served up by an overly optimistic entrepreneur, consider that WillCo announced in August that it had been awarded a five-year, $10 million contract to provide the U.S. Army with a new training and certification tracking system. Engle thinks that’s just the start and that it’s the perfect foray to begin building an even larger ecosystem in which not only can the military track such things, but veterans and employers can also track and document that information themselves. Metisentry will do that, in part, by combining and leveraging the capabilities of WillCo and MilitaryHire, which Engle said are complementary: One tracks and manages credentials,

while the other presents them to employers. The two companies remain separate subsidiaries, however. For the time being, Metisentry will be busy fulfilling its obligations to the Army, integrating the capabilities of its two new acquisitions and growing both companies in terms of the number of personnel they work with and contacts with employers. MilitaryHire already has helped more than 50,000 veterans connect with new jobs, according to its website. The two companies are lightly staffed, Engle said, with only about 10 employees between them, so they’ll likely need more people to expand their products and services. Metisentry already has made eight new hires in the past three months and at the start of this year expanded its office in downtown Akron. But Engle said it will soon need even more people and space. Metisentry also will likely require more capital. Engle said he and his co-owner, CEO Mike Fischer, are working on that. Engle predicted they’ll make more acquisitions aligned with the military work. “We’re in active conversations there now. We may build new products for this space as well,” Engle said. Ultimately, Metisentry hopes to take what it learns and develops for the military and use it as a platform for similar products aimed at the private sector. Corporate America has to track the skills of its employees, too, especially in fields like technology, health care and cybersecurity, Engle noted. For now, though, the company is firmly focused on completing its military missions, which include helping the DOD develop standards by which to measure the skills of its personnel. Doing that also will give Metisentry an intimate working knowledge of DOD standards and certifications that it can use on future DOD projects and to help grow WillCo and future acquisitions. Metisentry hopes to build a group of subsidiaries and products whose sum is worth far more than their individual parts. “One plus one is four — that’s what we’re looking for,” Engle said.

tween those members and potential minority businesses partners. “Over the years we’ve hyped our community on a number of different things, but this time the hype is all about what legs we are going to put to it,” DeJournett said. “We are not just gathering this data and sharing it so we can feel good about raising awareness. We are asking ourselves and our business members, ‘What are the things we can do to deliberately and intentionally move that needle?’ ” Women’s Network executive director Jan Conrad sees a unique opportunity to engage African American women through the new affiliation with the chamber and initiatives like the minority roundtable and matchmaker events. “It’s just more visibility for us to be able to reach that population,” she

said. “There certainly are a lot of African American women businesses in this community, but from what I’m aware of, they haven’t plugged into any organization that’s really there as a support for them.” By the same token, having Conrad onsite provides the chamber with pathways to bolster female entrepreneurs and business owners — something it has needed to do better for some time — according to Millard. And the Women’s Network’s long-standing professional development and leadership training programs will be a “valuable addition” to the chamber’s membership offerings, he said. “It’s not terribly hard, but it is difficult,” Millard said. “We’ve got the data. We know what we have to do. Connecting all the dots is the hardest part.”

dshingler@crain.com @DanShingler

Akron’s Metisentry might be best known locally for being a contract software developer, especially in the area of software-as-a-service, and it has no plans to stop doing that. Thanks to two recent acquisitions, however, the company says it’s also starting to become known nationally as a resource the U.S. military uses to track technical qualifications and one that former soldiers and potential employers use to connect. Metisentry just acquired Clayton, N.C.-based MilitaryHire.com, which works to connect employers with veterans who have the skills they need via an online matching service, founding president Marling Engle said Sept. 17. That comes on top of Metisentry’s 2017 acquisition of WillCo Tech, a Kansas City, Mo.-based firm that specializes in tracking and managing the credentials of military personnel, such as specialized training or technical certifications. “It’s still the (Department of Defense) and veterans arena and still very much aligned with the talent management and credentials management, where we’ve been building a space,” Engle said of the MilitaryHire deal. Engle, who these days divides his time between helping his Metisentry staff of just over 30 develop software and working on acquisitions and an angel investment network, said he’s identified a growing field that helps the military and its personnel and holds tremendous revenue potential for his company. The military trains its people in all sorts of skills, from medical practices, computer technology and logistics to how to manage and lead people or analyze and deal with stressful situations. But there are challenges in terms of tracking who knows what and how current each soldier’s training is in a specific field. It’s also a challenge for ex-service personnel who need a way to show prospective employers the exact skills they have and training they’ve received. “We think there’s an opportunity to build a DOD-wide solution,” Engle said.

CHAMBER CONTINUED FROM PAGE 18

Both moves, Millard said, speak to the chamber’s commitment to invest in individuals who will “lead and catalyze” its diversity efforts. DeJournett said one of those efforts already underway is the compilation of a supplier diversity guide, which will list minority-owned and women-owned businesses and provide companies easier access to vendors who fall into those categories. The chamber also plans to facilitate minority business owner roundtables and discussions among individuals who oversee diversity programs within local organizations, as well as leverage its membership to identify supplier opportunities and organize matchmaker events be-

P019_CL_20190930.indd 19 P019_CL_20190930indd.indd 19

“It’s still the (Department of Defense) and veterans arena and still very much aligned with the talent management and credentials management, where we’ve been building a space.” — Metisentry founding president Marling Engle, on the acquisition of MilitaryHire.com

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9/27/2019 2:38:09 PMPM 9/25/19 2:56

Growth by Design

CONTENT SPONSORED BY

Missed a month? Catch up on this series at CrainsCleveland.com/TeamNEO

Next month: Accelerating the pace of technology adoption to advance profitability

Identifying and marketing competitive sites By ANNIE ZALESKI

NORTHEAST OHIO FACES CHALLENGES TO PROMOTE & IDENTIFY COMPETITIVE SITES

CRAIN’S CONTENT STUDIO-CLEVELAND

In 2015, ProVia — a company that manufactures aluminum storm doors and windows, vinyl windows and patio doors, and insulated glass units — launched a new window program that became a rousing success. As a result, the Sugarcreek-based manufacturer’s production in the last five years has increased from 40,000 windows to an estimated 200,000 windows annually. With that growth, the company realized it needed a bigger space. “We were just busting at the seams,” said Mike Burch, ProVia’s director of business improvement. “We decided that we needed to find a place to build a new facility to handle the current production load and also the future production that we’re anticipating over the next several years.” ProVia’s requirements for this new site included being located near their preferred highway distribution routes, closer proximity to labor and about 80 acres of flat, level land. Finding the ideal location for a new facility isn’t always easy, which is why Team NEO is focused on identifying and promoting competitive sites. Not surprisingly, these properties look different for each company. “The easiest way to think about what we do is time, risk and money,” said Christine Nelson, Team NEO’s vice president of project management, site selection and talent. “Companies want to locate in a place that is the least amount of time to get up and running. The more that we can eliminate risks for the company, the more competitive the site is.” By risks, this includes “any unknowns,” she adds. “What are the utilities for the site? What due diligence has been done for the site? Does it have environmental clearance? Are there wetlands? What does the community think about an end use for this particular site?” Promoting the region’s competitive sites is a proactive process, for which the organization keeps site selectors apprised of new development, either in person or remotely. Team NEO also gathers and maintains research on sites, and shares this data directly with companies. “We will work with companies that are looking for a specific type of real estate, and help them to know what is here,” Nelson said. “As we continue to do more work with brokers, we are seeing how regional economic development can play a big role in helping to connect all the different resources that site may need — utilities, incentives, roadwork development.” The move into online property searches also has shifted Team NEO’s approach to promoting competitive sites. “A company (used to) come to us and say, ‘This is what I want,’ and then we could conduct the search through brokers and communities to start looking,” Nelson said. “Now they’re doing that online. And so we need to have all the information that we can, as much data as possible, ready to go and out there in the public realm.” To that end, the state of Ohio maintains a searchable database of 5,000 pre-vetted sites available for site selectors. On its own website, Team NEO provides a dedicated database called NEO RightSites (teamneo.org/sites-buildings) highlighting the most competitive available sites.

A SUPPLY-AND-DEMAND MISMATCH? Complicating this work is the fact that there is a supply-and-demand mismatch as it relates to competitive sites. Part of this stems from Northeast Ohio’s existing building inventory, much of which tends to be built before 1964. These older buildings typically have ceilings too low for today’s manufacturing

OLDER CONSTRUCTION: Only 8% of available inventory was constructed after 2000 and contains the most desirable site amenities

Size Categories

INCORRECT/UNKNOWN DATA: We’re still learning about our inventory: Of 100 sites submitted for SitesOhio, 57% had incomplete data and 7% had incorrect data SUPPLY-AND-DEMAND MISMATCH: What companies are looking for—and what the region has available—are misaligned logistics, as well as narrower column widths. The region also is largely already developed, meaning there aren’t vacant spaces of 100 to 500 acres available for new construction. In general, Tonya Crist, co-owner of InSite, a consultancy that offers real estate development and investment services, adds that she’s seen economic development stakeholders promoting the wrong kind of specifications to clients. “You could put data out there, but if the client can’t make decisions based off of that data, that data is not effective,” she said. Crist adds that economic development organizations also often don’t know specifications of their region’s sites — something Nelson said Team NEO has discovered when digging into Ohio’s own inventory. “We’re finding that we have 5,000 some sites in our database, but we know very little about most of them,” she said. Several years ago, Team NEO realized that the state of Ohio needed to have better data on the properties listed in that database — and dug in to make that happen, according to David Browning, managing director for CBRE in Northeast Ohio. “They really started working as a collaborative partner with local municipalities, property owners, brokers and other people that are involved in the process, saying, ‘Are you aware that we don’t have many qualified properties that are in the database for proper submission to the site selectors?’” To bolster this database, Team NEO was an instrumental partner in a JobsOhio initiative known as SitesOhio, a multi-year statewide competitive site assessment program. Figuring out how many existing sites were available and where they were — and vetting new sites for potential inclusion — was an involved process, said Crist, whose company was chosen to execute SitesOhio program. As part of this project, Team NEO reached out to communities and encouraged them to submit sites for evaluation, since having a robust real estate pipeline available to compa-

THE VIBRANT ECONOMY Many residents in critical urban and rural neighborhoods already achieve lower levels of educational attainment. Over time, as the region’s investment footprint has expanded, their workforce participation is also decreasing, because they are geographically disconnected from opportunities that would help them enter the labor market. That’s why firms looking to make an investment and fill key positions consider a competitive site to be one near transportation options available to all residents. Developing creative transit solutions that provide better access to all will be an essential component of moving the economy forward.

2019 Demand*

Current Inventory*

SUPER (100+ acres, 250k+ sq. ft.)

22%

LARGE (31-99 acres, 100k-249k sq. ft.)

36%

19%

MEDIUM (5-30 acres, 20k-99k sq. ft.)

42%

39%

SMALL (<5 acres, <20k sq. ft.)

33%

*Numbers current as of 9/20/2019

nies is key. “They’ve been critical in helping us educate their communities by setting up meetings and letting us coach them in addition to the more tactical side of helping get the sites ready,” Crist said. Having this pre-vetted database is crucial in the commercial real estate world, Browning adds. Not only do prospective buyers or leasers need more conﬁrmed information than residential ones — such as zoning access, soil quality, and utilities such as power, sewer and water — but it helps improve property visibility. “An owner thinks that just because they list the property with a broker, to sell it or lease it, you’re casting the widest net,” he said. “(But) unless it goes through this vetting and this approval process and then ultimately ends up being in the larger database, it may not be visible to the regional and national site selectors.”

WHY A REGIONAL PERSPECTIVE MATTERS In all of this work, having a regional perspective is crucial. Part of that is the nature of competitive site searches: When companies are looking at potential sites, geographically, they’re not looking first at a city level. “Companies that are looking for a new location will typically go to a state or a region first, and start narrowing down from there,” Nelson said. “Regional economic development plays a big role in the site selection process across the country.” Having a regional perspective also generates more data, which helps Team NEO focus and prioritize its work, as well as “develop a perspective on what is competitive,” Nelson said. “We’re able to use those insights that we gained from working with the companies, understanding what it is they’re looking for, to then work with local economic developers to spend their time on those sites that are most competitive.” Working together as a region also provides a more accurate depiction of the available labor pool, supply chains and distribution networks, she adds. For ProVia, having a regional perspective helped it find a new site suitable for not just increased production, but also to open a distribution hub. The company found a site that seemed promising; during due diligence, an environmental survey came back positive. Unfortunately, proximity to utilities was an issue. Luckily, the company was able to work with multiple entities — including Team NEO, JobsOhio, ODOT Jobs and Commerce, and, especially, Harry Eadon, president/executive director of the Tuscarawas County Economic Development Corporation — to secure incentives to cover the cost of utility extensions and road improvements. “Once we started getting those numbers in,” ProVia’s Burch said, “Harry was able to work with these agencies to work on grants and loans that really benefited us to be able to build at that location.”

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9/26/2019 9/26/19 11:40:22 11:19AM AM

CRAIN’S CLEVELAND BUSINESS

S E P T E M B E R 3 0 - O C T O B E R 6 , 2 019

Enrollment, 2019 compared to 2018 University/college name

Fall 2019 enrollment (headcount)

Fall 2018 enrollment (headcount)

State universities Cleveland State University

15,648

16,327

Kent State University

37,411

38,323

Northeast Ohio Medical University

959

942

University of Akron

19,217

20,554

Youngstown State University

12,155

12,696

7,274

6,626

Private schools Ashland University Baldwin Wallace University

3,534

3,751

11,874

11,891

Cleveland Institute of Art

645

670

Cleveland Institute of Music

374

402

Hiram College

1,284

1,255

John Carroll University

3,506

3,555

Malone University

1,555

1,702

Notre Dame College

1,642

1,700

Oberlin College

2,846

2,785

University of Mount Union

2,243

2,359

Ursuline College

1,050

1,073

Walsh University

2,671

2,782

23,655

23,340

6,524

6,753

Lorain County Community College

10,278

10,519

Stark State College

11,833

11,657

Case Western Reserve University

Community colleges Cuyahoga Community College Lakeland Community College

Ashland University saw enrollment grow by almost 10% this year. (Ashland University)

PA G E 21

decline, said Susan Dileno, vice president for enrollment management. The college is in the midst of a market research project examining pricing and trend data. On the undergraduate side, the college has been making a variety of changes, from updating its brand to focusing more on digital marketing to changing how it manages recruitment. “There were a number of things that were changing this past year. It’s hard to pinpoint what was the thing, the silver bullet,” Dileno said. “And I don’t think there was one. But I think, collectively, it all seemed to help us remain steady-state.” Of course, enrollment is about more than just the students a college is bringing in. It’s about those it’s keeping enrolled. Dileno noted that retention at Ursuline increased as the college has added more intentional outreach and supports to undergraduate students.

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*Numbers are self-reported by the colleges and universities. *Numbers for Kent State and NEOMED are unduplicated, so students are only counted once but may be enrolled in multiple programs or on multiple campuses. *Headcount for all three years was not available for the College of Wooster or Lake Erie College.

ENROLLMENT CONTINUED FROM PAGE 1

Among the private schools, 10 saw declines in enrollment. (In addition to the schools included in the chart, the College of Wooster saw a decline of about 3%, according to full-time equivalent numbers the college submitted to Crain’s. The college did not provide figures for headcount.) Like the publics, most of the declines at the private schools were pretty small. One of the exceptions was the Cleveland Institute of Music, which has intentionally been trying to shrink its enrollment. CIM saw a decline of about 7%. Another exception was Malone University in Canton, which saw enrollment drop by about 8.6% this fall. The drop there is due to the loss of the intercollegiate football program, said chief of staff Tim Bryan. He said the university made the “difficult decision” to cut the program last February as part of its strategic planning process, saving about $1 million annually. The university knew it would see a decline as students either opted not to come to Malone or transferred out. Going forward, Bryan said the university is seeing growth in athletic programs like swimming and diving, cross country and track and field, as well as in some of its new majors. Malone has already seen applications grow, and he expects enrollment to rebound by next year. “We knew that we would grow our headcount again, but just in a different way,” Bryan said. Three private schools experienced enrollment growth this fall. Both Hiram College and Oberlin College had an increase of about 2% this year. Ashland University saw the most dramatic increase in the region, growing by nearly 10%. Catherine Williams, Ashland's in-

P021_CL_20190930.indd 21

terim vice president of enrollment management and marketing, attributes much of that growth to the university’s correctional education program. This fall, Ashland has a little more than 2,600 incarcerated students in the program, which allows them to work toward associate’s or bachelor’s degrees, Williams said. The university has offered the program since the ’60s, but it’s been growing in recent years, expanding to new states and facilities. Williams said the university has been working with the corrections departments in different states to expand its technology offerings. Hiram also attributed much of its growth to pools of nontraditional students. President Lori Varlotta said that as the college has started serving more populations of students, like those in its community college and high school partnerships, enrollment has grown. In particular, enrollment from the College Credit Plus program, which allows high school students to enroll at higher education institutions, has played a “significant” part in that growth, Varlotta said. College Credit Plus also has helped to increase the pipeline of students attending Hiram after graduation, she added. “Each year, we see an increasing number of students who take our courses as part of their high school dual enrollment fall in love with Hiram and matriculate to Hiram,” Varlotta said. “So it is helping grow our full-time, degree-seeking population, as well.” For many schools, enrollment is a complex balancing act. Take Ursuline College, which saw enrollment decline overall by about 2% year-over-year this fall. Undergraduate enrollment at the school has grown steadily in the past three years, while graduate enrollment has dropped. On the graduate side, Ursuline is working to learn what’s leading to the

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Allison Hall joins Ulmer as an associate in the firm’s Immigration Law Group, where she assists with all areas of immigration, visa, citizenship, consular practice, and removal defense. Previously, she served as a Judicial Law Clerk to Judge Judith E. Levy of the U.S. District Court for the Eastern District of Michigan. Allison received her undergraduate degree in political science and French, master’s degree in social work, and law degree all from the University of Pittsburgh.

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PA G E 2 2

S E P T E M B E R 3 0 - O C T O B E R 6 , 2 019 |

CRAIN’S CLEVELAND BUSINESS

SOURCE LUNCH

Christopher Hartley Director of cybersecurity, Sikich Christopher Hartley has worked in cyber and IT security since the late 1990s, a time when the job amounted to little more than firewall administration. Through the years, he’s honed his expertise in information security through posts at companies like ForeScout, Optiv, Trustwave and IBM. In August, Hartley joined the Akron office of Chicago-based accounting and professional services firm Sikich as director of its cybersecurity practice, where he’s charged with further developing its cyberbusiness. In light of his experience, Crain’s sat down with Hartley to discuss the state of the cybersecurity business today, his plans for the practice at Sikich and the trends of state-level data privacy laws across the U.S. — Jeremy Nobile

The Hartley file How do you unwind from work? “Video games. I’m an avid gamer.”

Preferred gaming systems PC and Xbox One

What he likes to play “Lots of MMOs (massive multiplayer online games). My go-tos are Star Wars: The Old Republic, Call of Duty or Red Dead Redemption.”

Cybersecurity tip for the average Joe “Hide your SSID on your Wi-Fi.”

Lunch spot City Barbeque 2870 West Market St., Fairlawn 330-800-2532

The meal Brisket and pulled pork for one, and pulled pork sandwich for the other, plus sides of vinegar slaw.

The vibe The large space was packed to the brim for lunch on a Friday afternoon. Big portions and fast-moving lines were nice, as was a condiment bar with loads of different barbecue sauces and toppings like onions, jalapeños and pickles.

The bill $31.85

SQUARE

CONTINUED FROM PAGE 1

“This little hiccup (the barriers) has not hindered our opportunity to enjoy and embrace everything that Public Square has to offer the city and the community,” said Sanaa Julien, CEO of the Group Plan Commission, which is responsible for the square’s maintenance and operations. To recap, after 15 months of construction and $53 million in federal, city and private funding, Cleveland’s Public Square was completely transformed from the gritty, traffic-heavy, public transit hub it had been into green space boasting hills, trees, undulating public seating and even a water feature. “The project was delivered and it was complete. We had a wonderful opening on June 30, 2016, and it was truly a celebration of what Public Square is,” Julien said.

P022_CL_20190930.indd 22

What brought you to Sikich and what are you currently working on? Sikich was already doing PCI work, forensics. But what they didn’t have was more of the risk- and compliance-management piece. They want to grow that out and that’s been my background for several years, so that’s why I’m here. Right now, I’m building out the service line practice, getting that off the ground and wearing multiple hats: visionary leader, marketing side, delivery side and even some of the sales side. As we grow, it’ll be more about visionary and sales support and growing the practice out. Any goals in place for the cyberbusiness? My goal is to take the service line and make it a $10 million-a-year service line. So I’d like to have 10-15 people eventually over the next two years. We don’t want hyper-growth; we want to do it organically. But I still want to try and achieve 10%-20% growth over next year, and the next year on top of that. Are state-level data privacy laws like those in Maine or Nevada, or those in store for California, among the biggest trends unfolding in cybersecurity today? Yes, those are going to be big. If you look back in time, even the early 2000s, California had sort of the first cybersecurity law, SB 1386, which basically said if you suffered a breach, and it would affect anyone living in California, you had to report it to the state, and they had the right to come back and sue you for being stupid. Massachusetts and Texas have similar things. Maine and Nevada have them, though California’s makes Nevada’s look soft. They basically took the European privacy act, GDPR (General Data Protection Regulation), and applied it at the state level. Now,

The renovation was completed in time for the 2016 Republican National Convention here. In the new design, cars were diverted around the 10-acre center while only public transit, with 30 bus route stops, would be allowed to travel through the short span of road that cleaves the park in half — or, as it turned out, maybe not. A spate of incidents in which vehicles were used as weapons caused the Department of Homeland Security and the city to rethink the open nature of the design. “Weaponized vehicles became a thing and a real thing,” said Nora Romanoff, associate director of the LAND studio public art/sustainable building organization and a member of the Public Square design team. “Then, Homeland Security and others thought it was time to address it as related to the square.” Public Square was closed to all traffic. Accusations of classism and

others are looking at what California is doing and looking to do it themselves. There are 14 or 15 states with legislation pending today for privacy laws. I would say in the next two to three years, you’ll probably see all states have some level of state privacy laws. And that’s if the government doesn’t enact its own type of federalized privacy rule. And the point of these rules is to give the states some teeth to go in and fine someone if they have a big breach to force them into being secure? Well, there’s a couple things. If you don’t want your data shared, it gives you the ability to opt out from having your personal info shared. That affects companies like Google and Facebook in California because they like to sell that information for advertisements and everything else. Now, you have the ability to say I don’t want my information shared, and you can’t store it. So these state laws are giving people and businesses a chance to rein in some of that. Absolutely. So if there’s an issue, if that data gets lost or exposed, the state can go back and sue. In California, if it’s a willful breach because someone didn’t have their stuff together, it’s $7,500 per incident per resident of California. That could be a fine of several billion dollars. Even if the event was incidental, it’s still $2,500 per resident affected. That’s big money when you’re dealing with big companies. A lot of people haven’t thought about this yet. But when GDPR came out, most people said, “Well, we don’t do business with the EU, so we don’t care.” Now, it’s a little bit different. Let’s use Progressive (Corp.) as an example. They might

“Weaponized vehicles became a thing and a real thing. Then, Homeland Security and others thought it was time to address it as related to the square.” — Nora Romanoff, associate director of the LAND studio public art/sustainable building organization and a member of the Public Square design team

racism followed. Eventually, the city relented and the street was reopened — but the Jersey barriers went up. It has been more than two years since supporters of Cleveland public transit, coupled with a $12 million repayment threat from the U.S. Department of Transportation, forced Pub-

not be selling insurance to the EU or EU expats, but I sure know I’m selling some products to people in California. So if I have a data breach, that’s going to hit me there, where it wouldn’t be a GDPR issue. Ohio has a data privacy act of its own in place now, right? Right. Ohio’s law has what they call litigation safe harbor. From how I interpret it, it means if an Ohio company suffered a breach, and they had a built security program, Ohio most likely won’t come after you, because you were trying. If you lost California or Nevada data in the breach, though, those states can still come after you. That safe harbor is just in Ohio, and that law was put in the books in November 2018. They could’ve probably gone even further with it, but I think they just wanted a place to get started. Do you think that Ohio law could be beefed up over time? Yes, you could definitely see amendments added to put more teeth into it. And there are no punitive damages tied to it. If you do get in trouble, there’s nothing saying what the penalty could be. Has anyone been sued or fined under that Ohio law yet? Not yet that I’m aware of. Where do you think the laws go from here? I would look at it from the federal side. If the government passes something like GDPR at the federal level and applies it down, I think you’ll see more teeth in stuff like this. But again, I think we’re at a two-year clip. That’s when you’re going to see a lot more of this coming up, especially if you’re doing work in other states. You’ll have to know what those laws are and how they apply.

lic Square to reopen to buses. Yet the Jersey barriers are still there. In the new redesign, bollards as “porous barriers” would replace the concrete barriers. The new barriers, coupled with changes in materials where selected, would signal the transition from public space to bus pass-through. The subtle but key changes are designed for a square meant to function as separate spaces or as a whole. The general theme of the original design is still in place, Julien said. “The concept is a very effective one to change the texture, change color and change the pattern so that people recognize that something different is happening,” Rugare said. “This is something used a lot in crosswalks or where, in this case, it is a multi-use environment.” Cost estimates for the redesign hover around $2 million. Construction would shut down parts of the square for 90 to 120 days, but no

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 Rachel McCafferty, Manufacturing/ energy/education Jeremy Nobile, Finance Kim Palmer, Government Dan Shingler, Energy/steel/auto/Akron Lydia Coutré, Health care/nonprofits Senior data editor Chuck Soder Cartoonist Rich Williams Local sales manager Megan Lemke Events manager Erin Bechler Integrated marketing manager Michelle Sustar Managing editor custom/special projects Amy Ann Stoessel Associate publisher/Director of advertising sales Lisa Rudy Senior account executives John Petty, Scott Carlson Account executives Laura Kulber Mintz, Loren Breen People on the Move manager Debora Stein Pre-press and digital production Craig L. Mackey Office coordinator Karen Friedman 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 39 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.

dates are on the immediate horizon. The city seems in no hurry to make redesign funds available. Mayor Frank Jackson’s office stated the redesign is “not a City of Cleveland project.” Julien hopes that, like the original, this update can go forward with a mix of public and private funds. “We are proud of the work that we have done in the planning phase, but really, until the financing is in place, we cannot make a move forward,” she said. Julien added she is hesitant to push anything too hard for fear of reigniting the controversy of 2016-17. However, removing the Jersey barriers is anything but controversial. “It seems like a very logical proposal to me that I hope meets the concerns of the city and makes the space perform as designed,” Rugare said. He added, “I never thought it would be controversial in the first place.”

9/27/2019 1:41:07 PM

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