VOL. 38, NO. 24
JUNE 12 - 18, 2017
“How could I be anywhere else?” “This “I liked city has Cleveland character” before it CLEVELAND BUSINESS “New “The challenge age of was cool” “Because opportunity” I is the fun part” believe
in “Cleveland is the Cleveland” “Cleveland embodiment of grit “30 hustles minutes and determination” to “Legacy city with a restless drive”
harder”
Akron!”
“Cleveland rocks hard, loves harder”
“This city never quits”
“There’s no place like home”
“There’s no other like it”
“Why not Cleveland? “Nothing Everything’s here!” is given. Everything “Because of its bright future” is earned” “Home is where “I feel welcomed and included”
the Lake is!”
“Born and raised by all things Cleveland” Meet Crain’s Twenty in their 20s, and see why they love this town. Pages 12-22
Composite photo
Entire contents © 2017 by Crain Communications Inc.
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CEOGC turmoil is a nonprofit case study By JAY MILLER jmiller@crain.com @millerjh
Joining the board of a nonprofit organization is supposed to be a rewarding way for someone to give back to their community. It doesn’t always work out that way. In February, a news release from Cecelia Williams, then chair of the board for the Council for Economic Opportunities in Greater Cleveland (CEOGC), announced that Jacklyn Chisholm had been fired from her job as president and CEO of the nonprofit. Since then, the operations of the organization that runs Head Start programs and provides other services to low-income families in Cuyahoga County has seen its board of directors split into two factions, spawning a war of words and two lawsuits. Because of the lawsuits, the two sides of the dispute have been speaking only through outside spokesmen, making it difficult to get a clear picture of the motivation behind the firing and to understand why the board has splintered. What’s clear, though, is that the turmoil has made the 53-year-old organization a cautionary tale for anyone who agrees to join the board of a nonprofit group. “These kinds of intra-board disputes happen, unfortunately,” said Alexander Campbell, an attorney
Chisholm
with the Cleveland office of Buckingham, Doolittle & Burroughs LLC who specializes in nonprofit law. “This case shows the value of good documentation, having well-organized minutes, regularly updating your code of regulations and following your code of regulations,” Campbell said. Rookie board members also may lack the confidence to speak up. “What happens so often is board members might go with the flow or take their business hat off when the go in the door,” said Elizabeth Voudouris, executive vice president of BVU: The Center for Nonprofit Excellence, an organization with offices in Cleveland and Akron that consults with nonprofits. “They’ve got the skills and expertise but think, ‘Everybody else is voting for it, so I’ll vote
for it.’ ” The problems for board members, however, is there may not be anyone to offer that kind of guidance, since there may be little training in how to be a board member and what the responsibilities are. “This isn’t taught anywhere,” said Voudouris, whose organization offers training for new board members. “People join boards and they don’t get any training.” CEOGC board members certainly weren’t trained for the battle they have been fighting since October, when some members of the board, including the chair, met and voted 6-5 to dismiss Chisholm. That sparked a wrongful termination suit filed by Chisholm, the former vice president of the Rock and Roll Hall of Fame. In it, her lawyer makes a dozen claims against six board members, including the two disqualified by the O’Donnell injunction, charging everything from terminating her in violation of public policy, to breach of contract and defamation. The suit contended that Chisholm was fired in retaliation for investigating financial irregularities and failure of the board leaders to comply with the organization's code of regulations, also called bylaws, including allowing directors to continue to serve after their terms had expired, which, apparently, is a key issue in dispute. The vote to fire Chisholm would not have succeeded without the votes of those two members, Rev. Charles Lucas, who was then chair,
“It’s crazy. The judge asked me who would want to stay on a board that’s a non-paying board. I told the judge, ‘I don’t know why.’ ” — Charles Patton, who was elected chair of the Council for Economic Opportunities in Greater Cleveland’s board on May 31
and Amos Mahsua. Chisholm has continued to serve as the organization’s leader through the turbulence. Then, on March 1, Chisholm-supporting board members filed a suit seeking a declaratory judgment to void the dismissal and other actions taken by the anti-Chisholm faction. They argued that the October meeting where the vote was taken to dismiss Chisholm had been announced as a meeting of the personnel and governance committees, not the full board, voiding the termination action. On April 28, Cuyahoga Common Pleas Court Judge John P. O’Donnell granted the pro-Chisholm group a preliminary injunction, saying their claims “demonstrated a substantial likelihood of success.” In his order, O’Donnell said his
reading of CEOGC’s code of regulations indicated that two board members — who both favored the Chisholm dismissal — were participating in board decisions long after their terms had expired. Without their votes, the dismissal of Chisholm would not have approved by the board. His judgment also voided actions taken that violated the code of regulations. No court date has been set for a trial. Since that preliminary injunction judgment, Municipal Court Judge Charles Patton was elected chair of CEOGC at a May 31 meeting called by pro-Chisholm board members who say the meeting met the requirements of bylaws. However, that vote is disputed by the other board faction. In a statement emailed June 5, Williams, who anti-Chisholm board members elected at a meeting in January before the O’Donnell decision, said the other group “filed a preliminary injunction suit to prevent the legitimate board from meeting and is now violating all governance rules in an attempt to convene their own meeting and further their own agendas. The costly legal battles and PR stunts created by this faction only create more turmoil and serve no one’s best interest.” “It’s crazy,” said Patton in a telephone interview. “The judge (O’Donnell) asked me who would want to stay on a board that’s a non-paying board. I told the judge, ‘I don’t know why.’ ”
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Former nightclub building bought for big Nautica play Jacobs group pays $1.25 million for structure at 2325 Elm St.
By STAN BULLARD sbullard@crain.com @CrainRltywriter
Real estate developer Jeffrey Jacobs has taken another million-dollar step toward expanding the Nautica Waterfront District beyond its entertainment center roots. Technically, it’s a $1.25 million step, as that’s the amount that Nautica Entertainment LLC, the name that Jacobs holds west bank properties in, paid on June 1 for the 2325 Elm St. building, according to Cuyahoga County property records. David Grunenwald, vice president of development at Nautica owner Jacobs Investments Inc., said in a June 7 phone interview that the acquisition is “just another step in what we’re doing to keep Nautica moving forward.� However, specific plans for the former nightclub and industrial building dating from 1900 are not set. Grunenwald said both the newly purchased structure and the one it bought in January nearby at 2320 Center St. will help expand the Nautica complex because any structures the company might build would occupy existing parking lots near the riverfront. And the Nautica parking will have to go somewhere when that happens. Grunenwald noted that Nautica has owned the empty block on the north side of the structures for five years. The sale shows there is one surefire way to make money in Flats real estate: sell it to another real estate developer. The seller, 2325 Elm Street LLC, bought the building for just $450,000 on July 24, 2014, with plans to convert the onetime Dream and Metropolis nightclubs to an events and live-music entertainment center. Joseph Tucceri, who heads 2325 Elm Street LLC and has interests in the Liquid bar in the Warehouse District and a Mentor machinery
The massing study for additional development at Nautica shows why the company is buying additional buildings — new ones will go up on its current parking lots close to the Cuyahoga River. (Contributed rendering)
“We’re spending a lot of time meeting with brands.� — David Grunenwald, vice president of development at Nautica owner Jacobs Investments Inc.
supply company, declined last Thursday, June 8, to discuss why his plans did not proceed. He also declined to comment on the big gain the building’s sale price suggests. Nautica in 2016 unveiled a master plan for what Jacobs said at the time would add more uses such as
mid-rise apartments, an office building and hotel to the entertainment district on the riverfront’s west side. Such uses would add fresh buildings to the mix of restaurants, entertainment venues and apartments developed nearly 30 years ago with the landmark Powerhouse building, now housing the Windows on the River events center and Great Lakes Aquarium, as a centerpiece. Grunenwald said Nautica’s current focus is to add a hotel to the west side of the river to capitalize on its busy wedding business. “We’re spending a lot of time meeting with brands,� he said, but declined to say more about the lodging venture.
Correction Incorrect revenue figures for Medical Mutual of Ohio appeared in the Largest Privately Held Companies list and a story about the list published on Page 26 of the June 5 edition of Crain’s. The corrected figures show that Medical Mutual posted an 11% revenue increase in 2016. The story has since been rewritten to note that the Top 30 companies on the list saw their combined revenue grow by 2.7% in 2016.
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Diversified approach brings major gains By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty
Education students offering advice to a manufacturer. A history major planning events for a nonprofit. Art, business and STEM majors working together on projects. These are just a few ways local schools, businesses and organizations are working together and helping non-business majors get tangible experience outside of their direct field of study. This type of partnership broadens students’ horizons, said Jason Ellis, department chair of teacher education at Ashland University, where, this past spring, students studying education worked with local manufacturer Rain Drop Products LLC. The Ashland students gave water park product maker Rain Drop suggestions on how to make the company’s products more inclusive and trained its sales team on the best language to use. Projects like this show students how to apply their knowledge to different areas, Ellis said. Rain Drop, which is located in Ashland, makes water equipment for splash pads and parks, mainly in municipalities. The playground industry has been moving toward inclusive play, which allows children of all abilities to play together, said Mark Williams, president and CEO. From his perspective, the water equipment industry has been behind on this trend, and Williams said he saw an opportunity to improve both society and sales. He realized the interactive components of the equipment, like lights or sounds, could be used to make more sensory experiences. But if he wanted Rain Drop to become a leader in inclusive play in its industry, he needed help. “I don’t claim to be an expert in inclusive play,” Williams said. Williams reached out to Ashland on the recommendation of one of his employees and soon connected with a small group of students. The students first studied all of the company’s products and gave suggestions for improvements that could make them more inclusive. One of the suggestions from the students was to line the edge of a pad for the water equipment with bumps, like those at intersections for the visually impaired, Williams said. The latter part of the project involved the students creating and giving a presentation to sales employees on how they can make their language more inclusive, said Ally Moore, one of the students. For instance, student Kayle Timura said they emphasized people-first language, which would mean saying a child with autism instead of an autistic child. Moore is studying early childhood education and early childhood intervention. Normally, she spends her summers babysitting or working at a daycare, but this year, she’s working as an inclusive play intern for Rain Drop. She still wants to work in education, but she said this experience broadened her horizons. It showed her that anything can be inclusive; it’s just a matter of figuring out how. Timura, who is studying to become a K-12 intervention specialist, plans to be a special education teacher, but said she’d be interested in continuing this kind of work for companies in the summers. Field director Carla Abreu-Ellis said
the students didn’t think this kind of experience was a possibility before, but that they were excited to train people and help them find the right language to use. The husband-andwife team of Ellis and Abreu-Ellis oversaw the project as associate professors in the College of Education; they will be full professors in the fall. While this collaboration was developed by company request, a number of universities in the region have programs specifically designed to help students earn this type of experience. For instance, Youngstown State University offers its Launch Lab program, which consists of multiple makerspaces, accessible to everyone and staffed by students in business, STEM and the arts, said Joseph Angelo, director of the Entrepreneurship Center. Students at the Launch Lab can develop their own businesses or work with local businesses on projects. Angelo said the collaborations make them work with people with different points of view. “So it opens their mind,” Angelo said. Or take Baldwin Wallace University’s Humanities at Work program. The university saw a need to help students in the humanities who may not have a clear career path, said Elizabeth Wilson, career adviser at the university’s Career Services. This program helps them explore careers and get work experience at the same time, to show students that employers are looking for skills they have to offer. Baldwin Wallace also offers the Growth Practice internship, which allows students of all majors to work directly with companies, answering questions like what new products or services could help existing customers, or which new markets may be a good fit for a business. The Humanities at Work program has been running for three semesters. So far, Wilson said, 13 students majoring in programs like creative writing, history and English have completed internships in fields ranging from finance to post-secondary education. The ALS Association Northern Ohio Chapter typically takes on an intern during walk season, as it has a development department of two, said Nicole Krejci, director of development. This past spring, the association took on a history major through the Humanities at Work program. Krejci said it was a good fit for the ALS Association because most nonprofit professionals don’t intentionally end up in nonprofits; they fall into it. But humanities programs give students a good set of skills, like being able to write clearly or analyze data. The intern’s strength in looking at numbers and patterns was a great fit for the association, Krejci said, and the chapter even hired her on fulltime to work in events for at least the summer, and possibly longer. And universities are continuing to develop programs with this goal of giving students a wider base of real-life experience. The University of Akron’s EXL Center launched the Akron Community Internship Program in May with the goal of being as interdisciplinary as possible, said Anoo Vyas, co-director of the center. Students will be matched with local businesses, organizations and institutions for paid, 100-hour projects. Some of the internships will apply directly to a student’s major — Vyas said one marketing student will be helping the city’s economic development department with that field — while others will not.
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A sign at the empty former Sears store in Westlake hints at DDR Corp.’s plan to remake West Bay Plaza in search of higher returns. (Stan Bullard)
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‘De-boxing’ DDR knows there is ‘value in the dirt’ By STAN BULLARD sbullard@crain.com @CrainRltywriter
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Despite facing headwinds from online retailing roiling its tenants and a continued stock market drubbing, shopping center owner DDR Corp. is turning to its realty roots to carry it through. A sign on the empty former Sears and onetime Kmart store in West Bay Plaza in Westlake that says “There’s more in store” shows the tack the Beachwood-based real estate investment trust’s new management team is taking. DDR is poised to launch a multimillion-dollar, phased renovation of the 1970s-vintage shopping center this summer when believers in online shopping suzerainty would shudder at the thought of such an investment. However, making the most of a legacy asset geared to local shopping needs of an affluent area could produce good returns for the real estate investment trust’s shareholders. DDR indicated it will use such fundamental approaches in appropriate places in its portfolio, particularly where it has lost anchor tenants, according to a recently filed Securities and Exchange Commission document. There's a drawback to that approach, though. “It implies you don’t know how many years and dollars it will take to see what the return may be,” said Haendel St. Juste, a REIT analyst at Mizuho Securities USA who follows the company and met with management at the recent International Conference of Shopping Centers annual convention in Las Vegas. “They know there is value in the dirt.” DDR even used the phrase “de-boxing” in the most recent presentation, indicating how it plans to install smaller tenants in large spaces that large-format but suffering retailers are vacating. While DDR has done such things for years, St. Juste said
those were for smaller tenants such as office supply stores and bookstores, while now it pertains to bigger spaces, such as shuttered Walmarts and Targets. In the same presentation, DDR management, which did not respond to a Crain's request for comment, said it believes it has shed its weaker centers and will only sell properties if they are more valuable for reducing debt than continuing to operate — a big change from the last five years. However, it still has some big deals to do, such as participating with Blackstone in the sale of a $1 billion portfolio and handling the $1 billion portfolio it owns in Puerto Rico that is now seen as an outlier because of the island territory's deep economic woes. While prior management said it would sell the Puerto Rico shopping centers “methodically,” current management led by CEO David Lukes said in the most recent presentation that it would talk about Puerto Rico when it has done what it plans to do. St. Juste said that’s similar to telling analysts to quit asking about the assets because it will tell them when it happens. Wes Golladay, REIT analyst at RBC Capital Markets, said not discussing what it will do with the Puerto Rico assets is better than having to meet a stated deadline and lose negotiating position. Meanwhile, DDR’s stock price has continued falling as shopping centers and malls get hit with an epic wave of retailer closings. It closed at $8.84 a share last Thursday, June 8, down 55.6% from a 52-week high of $19.92 a share. “They’re probably leading the charge in the downdraft,” Golladay observed. “It’s a tough industry now. Quality names are under pressure.” That’s especially true for a company with moving parts (or challenges such as Puerto Rico) and the third management team in five years. “They’re making strides,” Golladay said. “They’re doing as well as they can at this point.” Although its stock is falling, the
company on May 23 sold $450 million in unsecured notes at 4.7% and on May 30 sold $175 million of preferred shares at 6.38%. Proceeds are going to be used to retire expiring debts and for general corporate purchases. The company took advantage of the bond market’s willingness to provide corporate debt despite declining share prices and a May 11 Moody’s report downgrading its outlook on DDR to “negative” from “stable.” Moody’s said that was partially due to shopping center woes, but it won’t instigate further reviews if the company continues to improve its debt leverage. Such a move gives the company additional run rate to work on problems, such as repositioning the old Westlake center, and improves its liquidity. That also protects the company if the bond market takes a dislike to new issues, Golladay said. Having debt come due and no source for funds to replace it would not be a favorable situation if bricks and mortar retailing continues to suffer. “I don’t know how long they’ll have to work to produce results, but it shows, I imagine, they’re working hard and doing the right things,” Golladay said. The moves reflect Lukes’ experience on the real estate side of the shopping center business. His predecessors were either office REIT vets or financially rather than property focused. DDR on April 17 secured approval from Westlake Planning Commission to remake West Bay Plaza. The approved plan calls for first razing the empty Sears store and replacing it. In a surprise, the west wing of the shopping center also will be razed, but it will be phased to accommodate and retain existing tenants. Michelle Boczek, Westlake economic development manager, said a DDR executive told her the company expects to take out building permits for the project soon. “We’re excited,” Boczek said. “It will improve the look of the center.”
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Cleveland Clinic continues its march south By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre
Having seen some of its neighboring hospitals file for bankruptcy or join larger systems, Union Hospital in Tuscarawas County took a hard look at its future as an independent entity. After posting losses several years in a row and eroding its savings, the 150-bed Dover hospital began looking for a partner and ultimately settled on Cleveland Clinic, the two announced in late May. “While you still have money in the bank, you can choose your own dance partner. You don’t have to wait to be the last one picked,� Union CEO Bruce James said. “So that was realistically what we did while we were still economically viable, while we would be attractive to other players.� The Clinic’s play in Tuscarawas County is a first for the health system, which has steadily inched southward, most notably with its full takeover of Akron General in 2015. South of Akron, though, the health care landscape has shifted significantly over the last few years, and with the entrance of a behemoth like the Clinic, even more intrigue — and competition — is coming to the area. The Aultman Foundation of Canton took over a struggling hospital in Orrville in Wayne County in 2012. Also in Tuscarawas County, Trinity Hospital Twin City acquired the assets of Twin City Hospital in 2011 through the terms of its bankruptcy. In Coshocton County, Coshocton Regional Medical Center filed for bankruptcy protection last year, allowing California-based Prime Healthcare Foundation to acquire the hospital and the majority of its assets through
bankruptcy court approval. And at which operates the largest hospital in the start of this year, West-Virgin- Stark County. Roth points to several major ia-based Wheeling Hospital completed its acquisition of Harrison challenges facing all health care Community Hospital in Cadiz, Ohio, systems today: Insufficient reimwhich is a little more than 30 miles bursement; excess capacity as insoutheast of New Philadelphia in patient volumes decline in a shift from a volume to value-based payHarrison County. A combination of challenges fac- ment model; the threat of expected ing hospitals — federal health re- provider shortages; major IT inform, state budgets, patient demand, vestments for electronic health recommunity need, rising costs — can cords and third parties that tap into be particularly acute for indepen- the health market, taking services dent hospitals. Solo hospitals have a out of the hospital, such as orthohard time taking on risk or jumping pedics or eye surgeons. aboard alternative payment “While you still have money in models. They don’t typically the bank, you can choose your have the clout or market power to own dance partner. You don’t negotiate prices, have to wait to be the last one or the economies of scale picked.� from which a juggernaut like — Bruce James, Union Hospital CEO the Clinic can benefit. For the last 21 years, the network of In fiscal year 2015, about 30% of the hospitals in Ohio were inde- independent hospitals has collaboratpendent, down from nearly 46% ed to preserve independence while just 10 years prior, according to also enjoying the fruits of being part of data from the American Hospital a larger enterprise. The network includes Aultman, Union, Pomerene Association. Ohio hospitals have taken diverse Hospital in Millersburg, Alliance approaches to the shifting landscape, Community Hospital and Dunlap including affiliations, reductions, Community Hospital, which became closures, partnerships and total ac- Aultman Orrville Hospital after Aultquisitions, said John Palmer, director man acquired it in 2012. It still operof public affairs for the Ohio Hospital ates as a separate entity within the network. The network has worked toAssociation. Similar pressure to the health care gether on various initiatives, includindustry in the mid-1990s prompted ing creating a supply sourcing group, several hospitals, including Union, to a post-acute care network and a procreate a network of organizations gram for personal and professional that would collaborate “to do their development, as well as specific serbest to remain independent for as vice collaborations. After the Orville acquisition, long as possible,� said Ed Roth, CEO of Aultman Health Foundation, Union is the second system in the
network to come up with a new partner, but Roth stresses that what that means for the network will depend on Union’s final arrangement with the Clinic, set to be determined by the end of this year. For Union, joining the Clinic made the most sense for its ability to provide capital, help recruit physicians and bring more services to the area, James said. Staying independent allows a hospital to continue to do what it wants and how it wants, he said, but that was becoming increasingly difficult. Union Hospital was in a situation where it was beginning to see some “mounting financial losses,� losing around $5 million last year on $130 million in net revenue, James said. This came after the hospital eliminated 20 jobs in a $3 million cost-cutting effort that, if it continued, would eventually lead to cuts in services and more jobs. Union decided to not wait until it was in dire financial straits to look for a partner that could provide capital and allow the hospital to build on what it already had without diminishing its work.
The Clinic’s march Ann Huston, Cleveland Clinic’s chief strategy officer, said Union Hospital was clearly very careful and thoughtful about its path forward. “They’re a strong organization today, but when they look into the future of health care, they know that it’s going to be very difficult for an organization of their size and scope to remain independent,� Huston said. The two parties will work through a definitive agreement and the regulatory review process, with a goal of Jan. 1, 2018, for Union’s transition into the Clinic.
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Take it from someone who earned his MBA there: Four out of five CSU graduates stay in the region, providing the human capital that powers Northeast Ohio.
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Bringing on Union Hospital is a “logical extension� of the Clinic’s reach south, Huston said. In 2015, the Clinic formally acquired Akron General, a play that facilitated getting the right collection of services to the southern region, she said, noting that the Union addition still would have been possible without the Akron anchor. Union Hospital’s goal of quality care close to home fit well with the Clinic’s regional strategy, said Dr. J. Stephen Jones, president of the Clinic’s regional hospitals and family health centers. He doesn’t see the need for major changes at Union, but will look to build on their work, which will allow the Clinic’s southern strategy “to extend well beyond where we naturally are.� James said he expects Ohio will see more independent hospitals joining larger systems. The entities of the independent hospital network will each have to make their own decision about their independence or potential future partners, but Aultman plans to remain independent, Roth said, citing the importance of local decision-making. “If we weren’t able to continue to provide the level of care and service to our community, and our independence was in the way of our ability to be successful, then we, like others, would look at other options,� Roth said. Though the Clinic always has a growth agenda, Huston said, these expansions arew not unilateral decisions. “We have a variety of forms by which we partner with other like-minded organizations, and I expect that will just continue,� she said.
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The Department of Labor’s fiduciary rule, designed to force more transparency into the lucrative industry of financial advising, is creating no shortage of challenges for advisers who service retirement accounts. Yet, where many advisers are lamenting what amounts to the most sweeping and costly change their industry has undergone in recent memory — possibly ever — some firms stand to capitalize on the shake-up the rule is bound to have. “If we think about this selfishly, it does create more potential for enterprises like ours,� said Jeff Concepcion, founder and CEO of Beachwood-based Stratos Wealth Partners, a registered investment adviser that offers securities products through LPL Financial, the country’s largest independent broker-dealer network. “There’s opportunity to grow, and that’s a silver lining for those who have capacity, resources and skills to adapt,� he said. Smaller adviser firms and solo practitioners that rely largely on a commission-heavy brokerage business may struggle to adapt to the new changes in comparison to their larger counterparts with expansive networks, more resources and large compliance teams lending them support. Struggling advisers are the ones most likely to consider selling to a firm like Stratos, which has 87 offices (in 28 states) and $10.7 billion in total assets under management. The firm is what’s called a “super OSJ�: an extra large office of supervisory jurisdiction, or in other words, an independent broker-dealer that provides consulting business services to other advisers for a fee and back-office support in areas like compliance. Concepcion said he recently spoke with a small team in Gulfport, Miss., led by an older adviser who, in reaction to the DOL rule, thinks now is a proper time to exit the business. Concepcion said one of his teams likely will acquire that firm’s brokerage practice. There’s a lot of old money in Cleveland. Experts say much of that is tied to older financial advisers — a trait that generally can be said for the industry at-large — with paltry numbers of young people getting into the business. Those elements combined have been driving consolidation on their own as advisers with no succession plans retire and sell off their portfolios to advisers looking to grow. This rule is likely to speed up that trend. “I do think this is going to drive a lot of acquisitions of advisers heavy in the brokerage side who have conducted business in this manner for 25, 35, 45 years and don’t know they’re equipped for change,� Concepcion said. “This is another catalyst that’s accelerating an already significant trend of older advisers looking to get out of the business.�
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In February, President Donald Trump ordered implementation of the rule, passed under President Barack Obama, to be delayed, while simultaneously directing the DOL to
review the legal and cost implications of it. In late May, though, new labor secretary Alexander Acosta announced in a Wall Street Journal op-ed that the rule wouldn’t be delayed past June 9, which set off of a transitional period for advisers to be compliant for a hard deadline on Jan. 1. That caught a lot of advisers offguard. “This came out of left field a little bit,� said Scott Matasar, a Cleveland attorney specializing in the retail securities industry. “I don’t think anyone was expecting the DOL to go live quite yet.� The “heart� of the rule is in place now, Matasar said. Provisions that kicked in June 9 require advisers to provide “best interest� advice, charge no more than “reasonable compensation� and avoid misleading statements to clients, he explained. It’s the documentation needed for compliance that will need to be in order come the new year. “A lot of managers didn’t produce any policy procedures and contracts because they didn’t want to prematurely produce them, then a delay happens and they have all those policies and procedures out there,� said Dave Alison, a founding partner of Westlake’s C2P Enterprises, a holding company that comprises registered investment adviser (RIA) Prosperity Capital Advisors, insurance wholesaler C2P Advisory Group and financial adviser training business Clarity 2 Prosperity. Alison said his company’s RIA, partly because of its business model and the fact the firm is used as a model in their training division, was prepared for the June 9 rollout for all accounts they service whether at $10,000 or $10 million. There are no plans there to abandon clients with smaller accounts. But advisers in the C2P network are scrambling, Alison said. “Everyone is now in sort of a mad dash to figure out what they’re doing,� he said. “There’s a lot of people who aren’t very prepared.� Large wirehouses had been adjusting their products and compensation structures well before that initial soft deadline was announced, though. UBS Wealth Management has told its U.S. advisers their compensation will change. Wells Fargo has announced limits on mutual fund share classes. And Ameriprise Financial Services Inc. recently told advisers it’s eliminating some 1,500 funds that don’t meet new due diligence standards. Bank of America Merrill Lynch has created the discount brokerage service Merrill Edge to service clients with smaller accounts, saving costs by effectively setting up a hotline for investors to call for advice instead of a dedicated a financial adviser. The ongoing review of the rule could result in some possible changes. But it’s unlikely the whole rule will go away at this point. “At most, that analysis could have the effect of modifying or watering down that ultimate regulatory and paperwork burden on firms,� Matasar said. And firms really have no incentive to go back to old methods after conforming to the rule anyway because of the time and cost being sunk into those efforts already. “If you’re going to clean the house for a party,� Matasar said, “you might as well throw it.�
Finding opportunity For those already acting as fiduciaries, the changes are less impactful — even for smaller offices, as long as they’re affiliated with larger companies, like Leizman Wealth Management in Beachwood, an affiliate of Raymond James. Managing director Nancy Leizman said Raymond James is allowing individual advisers to still offer transactional accounts through what’s called a best interest contract exemption (BICE). That’s similar to what C2P is allowing its advisers to do. “So we’re not feeling any additional pressures,� Leizman said. “We are operating in this mode regardless of any kind of legislative mandates. It’s the people who have been operating in a very old-fashioned manner, old-fashioned brokers, who I think will have the most burden. It’s going to force out some of the marginal players for sure.� Alison wouldn’t put a specific dollar figure on it, but he indicated complying with the rule is a major expense. He said the firm has expanded its office to accommodate more staff in supervisory and processing roles they didn’t need before. And that’s all besides “hundreds of hours� spent on planning and preparing documents. “It’s costing the big firms tens or hundreds of millions of dollars, and it’s costing the midrange firms millions of dollars,� he said. “It’s just a side effect of more regulation.� Not every firm will be able to handle that. And like Stratos, C2P sees itself in a good position to acquire smaller advisers and grow their share of the market as other advisers vacate an increasingly complicated industry. “What you’re going to find is a lot of independent advisers are not going to want to deal with small accounts because it’s too burdensome and too much liability,� Alison said, noting it’s up to individual offices how they’ll deal with smaller accounts, which could mean raising account minimums. “This is going to help us grow quicker,� he added. “We feel we are extremely well-poised to capitalize on a lot of growth because of the rule.� Others see opportunity still in the chance to revamp their overall business models. Shane Bigelow, a Midwest managing director heading the Cleveland office for large New York-based asset manager AB Bernstein (one of the largest in Cleveland with close to $5 billion in local assets under management, according to Crain’s research), said his firm has been “pivoting� to performance-based fees in recent months, a move partly driven by the shake-up the fiduciary rule is creating. With that, advisers get a cut when they outperform a given index, which incentivizes exceptional performance while meeting fiduciary requirements. Of course, AB Bernstein only works with high-net-worth clients, so investors on the smaller end of the spectrum aren’t on their radar anyway. Yet, it’s another example in which a firm is finding opportunity to ultimately benefit the firm, using the onset of the fiduciary rule to revamp its business model with a compelling market proposition.
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Avery Dennison adds ‘creative sandbox’ By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty
Avery Dennison Corp. recently expanded its plant at 670 Hardy Road in Painesville Township, adding capacity with a vinyl film casting line and creating a renovated space for customers. Glendale, Calif.-based Avery Dennison makes graphics, labeling and packaging materials, and the Hardy Road plant is part of its largest business segment: label and graphic materials. The label and packaging material’s headquarters is in Mentor, and the company has a number of other plants in the region, including the one on Hardy Road. The Hardy Road plant is in the graphics portion of the business and supplies vinyl for industries like automotive, where the vinyl may be used to apply graphics to a vehicle, or wide-format signage, said Bill Podojil, senior business director for graphic solutions North America. And the introduction of large-format digital printers has created a growing market, as customers can easily print on the vinyl Avery Dennison makes. Podojil said there’s high demand for graphic materials, as customers transition from older types of material to the digitally printed products. That shift in technology means it’s easier for signmakers to enter the market with smaller teams. Before the expansion, the Hardy Road plant had focused on adhesive
coating, finishing and packaging, Podojil said. The vinyl the Hardy Road plant had previously been working with was cast in Avery Dennison’s Lowell, Ind., plant. But with this recent expansion, both are running casting lines to meet industry demand. Podojil said the original idea was to put the new vinyl casting line in the Lowell plant. But he said Avery Dennison has invested quite a bit in “people and plant in Northeast Ohio.” The company decided that as it was investing in the graphics business, it made sense to invest in the experience for customers, too, instead of just adding a new line. Podojil said the Lowell plant is relatively remote, while the company already has sizable infrastructure in Northeast Ohio. It made sense to expand facilities for customers where the company already had a large footprint and where customers would have access to different plants, Podojil said. The expansion in Painesville included the addition of new offices with training areas and conference rooms where customers could work on-site. The new offices are bright, modern and open. Podojil said the company wanted to make a “creative sandbox” that could inspire people. In total, the company added about 70,000 square feet to the plant and renovated another 14,000 square feet. That’s a significant expansion to a plant that was previously about 100,000 square feet. The project went quickly, Podojil said. The groundbreaking was in
Avery Dennison added 70,000 square feet to its Painesville Township plant. (Contributed photo)
April 2016; by January, construction and assembly of the new line were complete. Podojil said production on the new line began in April, after trials were completed. Northeast Ohio’s existing workforce also played a big role as the company decided where to located the new line, as there are a lot of people from the polymer and paint in-
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dustries Avery Dennison can hire. “We have a lot of really, really good talent in this area, and that certainly helped us,” Podojil said. The expansion created 19 jobs at the Hardy Road plant. Currently, there are a total of 143 employees on site, including eight of the 19 new positions, Maria Kula, communications manager for label and graphic mate-
rials, said in an email. The company declined to share the total cost of the expansion. Josh Pennock, trustee for Painesville Township, said Avery Dennison has been an “outstanding” member of the community, and he’s glad to see it expanding. It means the company sees the long-term potential of this line, as well as of the township.
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CRAIN’S CLEVELAND BUSINESS
Opinion From the Editor
Accolades are welcome, too
Editorial
Act locally President Donald Trump's decision to withdraw the United States from the Paris climate accord makes at least one thing clear: The burden to reduce carbon emissions and mitigate the effects of climate change rests largely with local governments, innovative companies and motivated citizens, rather than the feds. We share the view of many executives in the corporate community that the withdrawal from the Paris accord, which calls for nations to voluntarily reduce carbon dioxide emissions in hopes of limiting global warming to 2 degrees Celsius (3.6 degrees Fahrenheit) above temperatures at the outset of the Industrial Revolution, is shortsighted. But we don't accept that this is the end of U.S. leadership on climate issues. It can be the start of a new era, with energy coming from different sources. Cleveland Mayor Frank Jackson is among about 250 city leaders nationwide, under the mantle of the Mayors National Climate Action Agenda, who have pledged to “adopt, honor and uphold” commitments to the goals of the Paris agreement by working together to strengthen local efforts for reducing greenhouse gas emissions. Back in March, for instance, the group noted that 30 cities had issued a formal Request for Information for the potential acquisition of nearly 115,000 electric vehicles for their municipal fleets. Jackson, in his own statement following Trump’s announcement, pledged that the change in philosophy in Washington would not affect the city’s goal of reducing greenhouse gas emissions by 80% by 2050, through measures including energy efficiency and green building, the encouragement of advanced and renewable energy, and more. “We have a responsibility to leave for future generations a more green, vibrant and healthy Cleveland,” Jackson said. That is certainly true, and it doesn’t have to change because President Trump believes climate change is a “hoax” and that pursuing policies to combat it make us less competitive economically. The private sector has a big role to play, post-Paris. The national mayors group noted, for instance, that Goldman Sachs “is committing $150 billion to clean energy capital,” and that giant
companies like Microsoft, Wal-Mart and Google “are some of the largest purchasers of solar and renewable energy.” They clearly see a business upside to taking a more aggressive approach to climate change than the current administration envisions. Reaching the Paris accord goals “requires a holistic transformation of the energy grid away from carbon,” according to an analysis last week from CityLab. “That means continued investment in renewable energy purchases and technology, particularly with regards to renewables’ storage capacity.” One good example of that is happening in Cleveland, with LEEDCo’s Project Icebreaker, a freshwater wind project in Lake Erie that will put six wind turbines totaling nearly 21 megawatts of generating capacity about 8 miles off the Cleveland coastline. This kind of innovation can and must go forward. Foundations and investors that support such initiatives must not be deterred. If you’re a citizen concerned about the direction of climate issues post-Paris, don’t forget to sweat some of the small things that, collectively, help make a difference: Watch the thermostat and turn off lights; share car rides or use public transportation; recycle, and be thoughtful about your consumption in the first place; bike or walk to work, if that’s feasible. Good ideas don’t have to come from Washington. But city leaders must recognize they are now in the lead.
Keep it going
A record number of women are CEOs of Fortune 500 companies. There are 32 female CEOs on Fortune’s 2017 list — the largest number since the magazine began compiling the ranking in 1955. Two of the female CEOs lead local companies: Tricia Griffith of Progressive Corp. and Beth Mooney of KeyCorp. But do the math. Female CEOs still account for just 6.4% of the list. In short: Progress is being made, but there’s a long way to go in making sure companies are taking the best advantage of all the talent available to them.
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The staff here at Crain’s Cleveland Business works hard to cover the business community in Northeast Ohio and to earn your trust as a source of news and information. We don’t need recognition, but, to be honest, it feels pretty good when our work is recognized. So, if you’ll indulge me, I’d like to shine the spotlight on our staff and mention some awards we received. Crain’s Cleveland Business was recently named the best business publication in Ohio in the 2017 All Ohio Excellence in Journalism Awards sponsored by the Press Club of Cleveland. Crain’s won 17 awards in all, including three “Best in Ohio” first-place awards and eight first-places in other categories in the statewide contest, which saw a record number of entries, with more than 900. Elizabeth In naming Crain’s the top business pubMcIntyre lication in the state, the judges cited the staff for “great writing all around … not a weak story anywhere.” I take pride in this recognition because I see firsthand the dedication of the journalists here to cover all aspects of Northeast Ohio’s business community. Awards are not the lasting mark of the quality of our work. Ultimately, you, our readers, determine that. It’s rewarding, though, when we are recognized by our peers. Judging this year was done by journalists from New Orleans, Pennsylvania, Los Angeles, Idaho, Milwaukee, San Francisco, San Diego, Syracuse and Arizona. In the competition among business publications, Crain’s staff swept the general news category. Dan Shingler won first place for his coverage of FirstEnergy, with the judges saying, “Extra points for taking on a difficult, potentially bone-dry topic and turning it into an understandable, readable topic.” The staff of Crain’s shared second place for its “Rebuilding Cleveland and Akron” special report and third place for a series on the evolving nature of the city’s waterfronts and what it will take to truly make Cleveland a water town. Shingler also was awarded second place for “features/personality profile” for a profile of Mark Smucker, the fifth generation to lead the J.M. Smucker Co. In addition, Crain’s reporters took three first-place awards in other business publications categories. In “features/trends,” Jeremy Nobile won for his “cutting edge, fascinating” story on the growing marijuana business; Kevin Kleps took first place in “features/general” for an “unexpected and well-written” piece on the lasting impact of the Cleveland Force soccer franchise on fan experience; and the staff of Crain’s, under the steady direction of sections editor Timothy Magaw, received top honors in “features/package” for its “Embracing the lake and river” report. Kleps also won first place for his daily Sports Business blog in the digital media competition, with the judges remarking, “This is what a sports blog should be.” Editorial cartoonist Rich Williams was named Best in Ohio for cartooning and earned second place in the best single cartoon category for a cartoon of Donald Trump upending the GOP. In other visuals categories, creative director David Kordalski and former art director Rebecca R. Markovitz were named Best in Ohio for illustrations for all publications. Kordalski also was awarded first place in the pictorial category for a dramatic portrait of the Hilton Cleveland Downtown. Markovitz won first place for single page design among tabloids and second place for multiple illustration for one story among all publications. Managing editor Scott Suttell earned second place Best in Ohio for his editorial writing. And this column got some recognition, too, being named best business column. If you’ve made it to this point in this week’s offering, I’d like to thank you for not only reading this column and listening to me crow about our staff, but for reading our work and engaging with us. These awards are about you and about all the work that the professionals at Crain’s produce. I’m thankful for them, and for you.
Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Cleveland Business, 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113, or by emailing letters@crain.com. Please include your complete name and city from which you are writing, and a telephone number for fact-checking purposes. Sound off: Send a Personal View for the opinion page to emcintyre@crain.com. Please include a telephone number for verification purposes.
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Personal View
Griffin was being repulsive, not ‘edgy,’ in Trump video By GINGER CASEY
somehow made her a free speech champion. She says she plans to make even more jokes about the presiOn a wall in my study, I have a framed cover of the dent. (“I’m not laying down for this guy.”) Another of French satirical magazine, Charlie Hebdo. It is the is- her attorneys even jumped in at the news conference sue that was released after gunmen broke into their and said it was “un-presidential” for Trump to react to Paris office in 2015 and slaughtered 12 people because Griffin’s “joke” by saying how painful it was for his young son. their cartoons offended their Muslim faith. I am struggling with this because as a journalist, I Charlie Hebdo pushes the boundaries, no doubt — think Mad Magazine except much filthier — but de- support freedom of speech. I know that those who ofspite its often vulgar caricatures and political rants, the fend often serve to highlight the strength of our Conworld rallied behind the magazine and the headline, stitution’s First Amendment. Journalists are dying “Je Suis Charlie” (We are Charlie), which graced the around the world to protect this right. In Mexico alone, cover, following the attack on their staff. so many journalists have been murdered covering the Here in the United States, Larry Flynt, founder of the drug war that newspapers are closing rather than risk graphic and sexually explicit Hustler empire, has been further loss of life. at the center of the several obscenity court cases, the Watching Griffin at her news conference as she most famous being the one joked about what she did, I that went all the way to the had to wonder how the famSupreme Court, in the case ilies of journalists Daniel Hustler Magazine v. Falwell. Pearl, James Foley, Steven Yes, that Falwell — Rev. Jerry Sotloff and others were feelFalwell, religious leader — ing, knowing their loved who sued the magazine for a ones had their severed heads parody of him talking about held up in a similar way by having sex for the first time masked terrorists mocking with his mother in an outthe United States, the way Griffin said she was “mockhouse. In a unanimous ruling, ing” the president. I would the high court declared that imagine they are shattered, public figures cannot recovreliving the searing images and life-altering pain of their er damages for “infliction of loved one’s murders. emotional distress” based on Does Griffin have the legal parodies. This historic First right to do something this Amendment decision ruled abhorrent and repulsive? that protecting free speech Trying to profit by making a surpassed the interest in “joke” out of one of the most protecting public figures’ heinous ongoing terrorist emotions and reputations. acts of our times? Unless it The case drew widespread can be argued she was attention and was the focus threatening the president of a movie, “The People vs. with her actions, under our Larry Flynt.” Flynt’s legal During a June 2 press conference, Kathy Constitution the answer is team successfully made the Griffin addressed a controversial video in most likely, “yes.” argument that free speech which she held a bloodied mask depicting Lots of people do disgustdoesn’t protect speech you President Donald Trump. The comedian has like, but speech you don’t claimed Trump and his family are now trying ing things, like wiping themlike. selves with an American to “ruin” her. (Frederick M. Brown via Getty I am thinking about all of Images) flag, just to prove they can. this while watching the caAnd, as the case of Hustler reer suicide of D-list celebrity Kathy Griffin, who Magazine v. Falwell proved, “parody” is protected somehow thought she was being funny when she speech, regardless of how indecent it maybe. That’s posted a video of herself slowly raising a mask of the how freedom works. But do we also have the freedom to react to the horbloodied, severed head of President Donald Trump. The video looks shockingly real. Some would call it a ror of Griffin’s stunt by canceling her engagements, “parody” of ISIS terrorists who have held up bloody firing her from her TV job and terminating her enheads as trophies. Those who follow these things are dorsements? The answer is also yes. familiar with the disgusting and racist Photoshopped Still, Griffin doesn’t seem to understand why she is images of President Barack Obama hanging from a getting dropped left and right and why the Secret Sertree or worse, but those photos were distributed by vice wants to interview her. Her apology, which should fringe political groups, or unnamed individuals, not have been immediate and honest and a call for some quasi-mainstream celebrities. serious self-reflection, seems too self-serving at this Predictably, the reaction has been swift. CNN fired point to be genuine. She is trying to save her career, Griffin, her bookings were canceled, her endorse- which by all accounts, appears to be over. Pushing the boundaries of acceptable anything just ments were terminated. While Griffin at first apologized, admitting she crossed a line by trying to be to prove we can, like Hustler magazine and Charlie “edgy,” she later (after hiring Flynt’s attorney, Alan Hebdo often do, might make a point about free speech, Isaacman) backtracked and doubled down on her but somehow I don’t think the families of those who stunt, defiantly claiming she was a victim, blaming her were beheaded in their pursuit of press freedom are sudden career free-fall on Trump and his family, say- ever going to see anything but anguish in a stunt Grifing they were trying to “ruin” her for “criticizing” the fin is saying is, more or less, the same thing. That Griffin didn’t seem to consider any of that or president. At a rambling news conference, she also claimed them in her attempt to be funny or “edgy” is sad, but there was a group of “white guys who were out to get sadder still is her insistence that she just doesn’t get her” and vowed to continue to stand up for her First it. Amendment rights as if holding up a realistic-looking mask of a severed head of the leader of our nation Casey is an Emmy-award winning journalist and writer.
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PA G E 12
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CRAIN’S CLEVELAND BUSINESS
Christy Corfias | 28
Manager of strategy and business analytics, Cleveland Indians
in their T
20s
WHY CLEVELAND? That’s the question we asked Crain’s 2017 class of Twenty in their 20s — an inspirational group of young professionals that are helping propel Northeast Ohio’s renaissance through their business, civic and philanthropic endeavors. This year’s class was selected from a pool of several hundred nominations by a panel of Crain’s editors.
Five things
By KEVIN KLEPS
A woman’s best friend: Corfias says her poodle, Pam, is her “main interest.”
kkleps@crain.com @KevinKleps
he background on Christy Corfias’ computer screen is from a diary entry she wrote on Oct. 18, 1995 — a day after the Cleveland Indians had clinched their first World Series appearance in 41 years. Corfias, who was 6 at the time, simply said, “Go Tribe.” Two years ago, Corfias returned to her native Northeast Ohio as an executive development fellow in the Indians’ strategy and analytics department. In February 2016, she was promoted to manager of the club’s strategy and business analytics team. Her role with the Tribe is a wide-ranging one — from managing the club’s dynamic pricing platform, to attendance and revenue forecasts, schedule analysis, and helping to improve the team’s business and fan experience. The fact that she’s doing all of that for the sports team she so loved as a kid makes it sort of surreal for the Perry High School graduate. “I have a longtime fandom that I’m also feeding by being here,” Corfias said. Prior to joining the Tribe, Corfias worked for a Washington, D.C., consulting firm. There, she said she “learned a lot about pricing,” but grew tired of working 60 to 80 hours per week — much of which was spent on antitrust cases. She makes it clear that she didn’t return to Northeast Ohio “to settle down.” Instead, Corfias said the combination of being closer to her family and working for the Tribe couldn’t have been more perfect. Nicole Schmidt, the Indians’ vice presi-
Consistency in numbers: She does The New York Times crossword every day. Athletic past, present: Corfias has played softball “her whole life,” including at the University of Chicago. Favorite Tribe player growing up: CC Sabathia Interesting internship: In the summer of 2009, she was a legislative intern for late Congressman Steve LaTourette.
dent of brand, strategy and analytics, said Corfias is a huge asset to the organization. “She challenges status-quo assumptions, and helps us harness data in new ways to make better decisions — and to get to those decisions more efficiently,” Schmidt said. Corfias said the best part of her job stems from the obstacles the smaller markets face in Major League Baseball. “We have to be better at everything we’re doing as a front office than the next baseball team in order to be competitive,” she said. “That makes the job really challenging, but it also gives you a lot of opportunities to try stuff to see if they work because we need to innovate, we need to be at the cutting edge.” And as for the Indians’ Game 7 loss in the 2016 World Series, Corfias said the hurt hasn’t gone away. “I can’t totally say I’m over it,” she said. “When I think about Game 7, it’s a viscerally painful experience for me. But that I got to be here in this moment, in this job, is everything for me.”
“The challenge is the fun part”
Photographs by Tim Harrison for Crain’s
Stephen Love | 28
Program officer, Cleveland Foundation By LYDIA COUTRÉ
Five things
lcoutre@crain.com @LydiaCoutre
Hobbies: Biking, kayaking, gardening and playing the trombone in his band, Son Gitano
he time Stephen Love spent working through the Cleveland Foundation’s summer internship program was truly “formative” in helping him realize his desire to stay in Cleveland and work in community development. Previously on track to go to law school, this one summer during his junior year shifted his path. Love instead pursued a master’s of public administration, joined AmeriCorps VISTA and worked in nonprofit and community development roles before eventually landing at the Cleveland Foundation, where he connects students to the same opportunity that helped to launch his career. “It’s really one of those opportunities that gives them the type of clarity or at least gives them the questions to think about, ‘What can I do about my career path that would really position me into the nonprofit and public sector?’” said Love, who also reviews proposals as part of the foundation’s community responsive grantmaking team. “I think for the foundation, this investment in emerging leadership and talent is just really at the core of the work.” Love’s internship guided not only his career path, but also his dedication to stay in Cleveland. He and his wife now own a home
Favorite book: “1984” by George Orwell
T
Travel bucket list: Having just checked off Hong Kong and Australia, Love wants to visit South America. Secret skill: Cooking Favorite spot in Northeast Ohio: Anywhere with a view of the lake
in North Collinwood, where seven years ago, Love helped coordinate monthly beach cleanups. The team he gathered for these efforts has sprouted various other initiatives centered on cleaning and lifting up a community he has loved since he was young, when his grandmother often took him to Euclid Beach Park. Now that the parks are in much better shape, Love and others have shifted the focus to cleaning up the streets, and educating neighbors about reducing their litter and negative impact on Lake Erie. Nelson Beckford, now senior program officer at Saint Luke’s Foundation, led the internship program at the Cleveland Foundation when Love applied. Love was young, eager and “very curious about com-
munity development,” Beckford said. The two have maintained a personal friendship and continue to learn from one another professionally. Whatever comes next for Love, he’d like to continue environmental and philanthropic work. And Beckford hopes to see him continue to be an asset for the region. “(Stephen’s) personal and professional lives are aligned in a really, really cool way,” Beckford said. “He’s a very sincere, likable guy, and he’s a do-er. People like to be around him. It’s a rare quality.”
“Home is where the Lake is!”
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Jessica Malone | 29
Assistant director of development, Philanthropy Institute, Cleveland Clinic Five things
By LYDIA COUTRÉ
Other involvement: St. Malachi Center, Association of Fundraising Professionals, CWRU’s Alumni Association and Big Brothers, Big Sisters
lcoutre@crain.com @LydiaCoutre
C
oming from a family of engineers, Jessica Malone had a bit of a hard time explaining her junior year shift from studying engineering to anthropology, but it was the perfect fit. “It’s the study of people and cultures — how is that not fascinating?” Malone said. “And how does that not help make you a better person to be sensitive to those things and to learn from the best and worst of different practices?” In her role, she supports the Clinic’s regional hospitals, family health centers and the Medicine Institute with a primary focus on raising funds from grateful patients. She meets with them to talk about the work the Clinic does in the community, and how they could support patient care, research, community outreach, education and more. Malone said her background in anthropology fits incredibly well in her work, which requires a lot of sensitivity to family dynamics, cultural differences and the context of health care. The motivations behind each donation are unique. A half a million dollar gift feels great, but so does working with a family who doesn’t have much to give, but wants to make a difference. Recently, one patient made a small donation to purchase a blanket warmer for cancer patients who were going through chemotherapy on the same floor where he received treatment. “Working in health care, some of these guys are going through really tough circumstances, and their interest in doing for others in such a difficult time, it’s inspiring,” Malone said. “You feel great every
Favorite volunteer work: Strategy work, especially on boards, where she can figure out ways to address challenges and grow an organization Favorite spot in Northeast Ohio: East Fourth Street, especially during winning sports seasons Secret skills: She can fix almost anything. She’s always wanted to travel to : Dubai
“Why not Cleveland? Everything’s here!”
Christina Suh | 29 Associate, Tucker Ellis
By DOUGLAS J. GUTH clbfreelancer@crain.com
C
hristina Suh is “all-in” on her commitment to Cleveland, a claim backed by three years of handling complex financing and real estate transactions for some of the city’s tall-ticket developmental projects. Suh was hired by Tucker Ellis in 2014. Among her other duties, Suh arranges bank loans for corporate clients seeking to build a new office. The young attorney may not be privy to the construction itself, but she enjoys being part of the process. “It’s an exciting time to be in Cleveland with new developments popping up everywhere,” Suh said. “It’s about drafting a loan, communicating with the bank, and
day working with those kind of families.” Lara Kalafatis has been chair of the Clinic’s Philanthropy Institute since January, when she joined from Case Western Reserve University, where she knew Malone as an alumna of the university. Kalafatis considers herself fortunate to have the opportunity to continue to work with Malone. “If you’ve met Jessica, you just see someone who exudes confidence and compassion,” Kalafatis said. “She has a beautiful smile and I mean that from the standpoint of that is how I think she approaches her work.” In a world with a lot of negativity and division, Malone said that philanthropy holds her interest for its ability to bring people together. “There’s nothing sad or bad or negative about the world of philanthropy to me,” she said. “It’s all good. It’s working together; it’s moving forward; it’s making a difference. It’s believing in the best version of ourselves as an individual or an organization or a community.”
Five things Favorite class in high school: English Best Cleveland hot spot: Cuyahoga Valley National Park
working out a deal that makes sense for everyone.” Before joining Tucker Ellis, Suh worked in New York for a large international law firm and interned for a federal district judge. She said her area of corporate law at Tucker Ellis represents a lifeboat of positivity in a sea of sometimes adversarial litigation. “You’re in great circumstances with parties trying to get something done,” Suh said. “Seeing these projects come to life is encouraging.” Working for sophisticated companies requires a constant sharpening of Suh’s legal and business abilities, which include writing, analysis, negotiating and consulting. Fortunately, she can walk down the hall and get pointed advice from experts in their respective fields. “The biggest thing to learn is the practice
“This city never quits”
Favorite book: “Alexander Hamilton” by Ron Chernow What she wanted to be when she grew up: A lawyer Favorite vacation spot: Europe
of law is driven by relationships,” Suh said. “You have to earn the trust of your clients. To succeed in today’s competitive climate, young attorneys have to not only be great lawyers, but also great business people.” Tucker Ellis managing partner Joe Morford said Suh’s practical approach to dealmaking is bolstered by a laser-fine focus on the outcomes most important to her corporate charges. These skills recently helped close a $100 million acquisition involving a major national bank. “Christina achieves results by consistently working harder and exceeding the expectations of clients,” Morford said. “She demonstrates outstanding negotiation and deal management skills without being abrasive, and takes pride in bringing deals to the finish line on time and on budget.” When not lawyering, Suh runs marathons and practices yoga. After moving into a newly built home in Broadview Heights, she’s happily taking root in her adoptive home. Regardless of where her career leads, Suh expects to be an active participant in Cleveland’s resurgence for years to come.
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Zada Lines | 28 Associate, CBRE
Five things
By STAN BULLARD
What do you drive? A BMW? “I love my Honda CRV.”
sbullard@crain.com @CrainRltyWriter
Favorite hike: The Towpath Trail
Z
ada Lines said she thrives on helping clients find the right real estate to pursue their dreams and working to help her home town grow in her job at CBRE Group Inc.’s Akron office. “I’ve been called a boomerang multiple times,” she said, because the Bath native came home after spending two years teaching eighth grade science in North Charleston, S.C. “I left and I came back and I don’t think I’ll go anywhere else,” she said. After the move she decided to pursue a career in real estate brokerage because it allowed her to help Akron’s redevelopment. She works alongside but does not report to her mom, CBRE senior associate Susan Lines, and also learned the ropes from Gary Rickel, a long-established Akron broker and CBRE vice president. She enjoys the variety brokerage affords her because no two days are alike. By contrast, teaching required covering the same material, albeit with different students. Given the size of Akron’s market, she said commercial real estate agents pursue what work they find rather than being pigeonholed as downtown or
Mentor: “The obvious answer is my mom. She’s taken a leap of faith by helping me. I think I have helped her with technology.” Favorite dessert: Banana ice cream Parents’ reaction to her BGSU scholarship: “They said they earned it with all the practices and games they took me to since I was 11.”
“30 minutes to Akron!”
suburban office or industrial brokers, as they are in bigger cities. As a result, she works in office and retail leasing, does investment real estate sales and is tackling her first assignment to find tenants for an industrial building. She particularly enjoyed being part of the team that recently leased office space at Industrial Realty
Photographs by Tim Harrison for Crain’s
Miles Welo | 29 Associate, Mansour Gavin; The Game Sports Management By DOUGLAS J. GUTH clbfreelancer@crain.com
A “Our representatives are quick to respond to our needs with people who show up. That is critical to us. The people supplied tend to stay better than other agencies’ placements.” — Katheryn Robinson Director of Human Resources, Impact Products
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t Mansour Gavin, Miles Welo is accustomed to protecting millions of dollars in assets for his clients. He has transferred his estate planning and tax law skills to professional football, where the stakes are equally as high. Welo is co-founder of The Game Sports Management and Media, a Beachwood-based sports agency that launched in late May. The agency represents a group of NFL draftees and undrafted free agents in contract negotiations, endorsements and estate planning. An outsider may be wowed by the job’s big-money glamour, but the work itself is rigorous. At the recent NFL Combine in Indianapolis, Welo spent a week of 16-hour days tracking players, schmoozing with scouts and pouring over statistics. Not all of Welo’s weeks are that packed, but launching the agency while still working for Mansour Gavin keeps him on the clock seven days a week. “It’s fine, because I love what I do,” Welo said. Welo describes the company he launched as more of a full-service general counsel than an agency. Getting athletes inked to a pro contract
ultimately represents a small piece of a much larger responsibility. “We’re trying to set these kids up for the rest of their lives,” Welo said. “These are 22-year-olds going from training to the draft to the NFL within weeks.” A former player and coach himself, Welo and his partner,
“Nothing is given. Everything is earned” Vincent Calo, meet athletes’ families with an understanding of the roller-coaster nature of the NFL, where the odds of getting drafted are long and making the final roster can be derailed by one bad practice or off-thefield slip-up. “These guys and their families have been making sacrifices for years, so
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Y IN THEIR 20S
Bishara Addison | 29 Group’s East End project to SummaCare, which will launch IRG’s redevelopment of the office portions of the old Goodyear headquarters. Her career change also wasn’t about higher earnings in brokerage than teaching. “It’s not about that for me,” Lines said. “If you help other people succeed, you succeed. Opportunity is everywhere in this profession.” David Browning, CBRE managing director of its Cleveland and Akron offices, said, “She brings an insight to business beyond her years. Her dedication to her clients and community is exemplary. She brings an energy and enthusiasm to situations that is contagious.” Energy, indeed. Lines recently began running for exercise and completed her first half-marathon. That was a change-up for her as she played volleyball and softball at Revere High School. She won a full softball scholarship to Bowling Green State University as a pitcher on its softball team. Lines is also active with several Akron organizations, including Torchbearers, a service and leadership training organization for young professionals, works on events with Young Professionals of Akron and is a board member on the Commercial Real Estate Women trade group.
Five things Favorite teams: Cleveland Cavaliers and Indians Favorite movie: “Major League” His inspiration: His brother, Carter Cleveland hot spots: Barrio, Winking Lizard, Alley Cat Oyster Bar Bucket-list item: Representing the first overall pick in the NFL draft
there’s a great responsibility when Vince and I come into these kids’ lives,” Welo said. “We’re there to help them, but it’s their show.” Calo harnessed Welo’s legal expertise and football acumen two years ago for a previous sports management company. Welo’s tireless work ethic and attention to detail has served as a catalyst for the new agency as it ramps up for the 2017 NFL season, he said. “Some people get into the business with dollar signs in their eyes and no football background,” Calo said. “Miles isn’t a rah-rah, go-to-the-club type of guy. He’s in the business for the right reasons.” Welo finds inspiration in a challenge, particularly one that involves facilitating the dreams of a would-be All-Pro. “It’s easy to stay motivated when people are busting their butts as much as you are,” he said.
Senior manager, policy and strategic initiatives, Towards Employment By JAY MILLER
Five things
jmiller@crain.com @millerjh
Favorite movie: “V For Vendetta”
B
ishara Addison is absorbed in — laser-focused on, really — public policy. Right now she is senior manager of policy and strategic initiatives for Towards Employment, a nonprofit that helps low-income adults and those who have trouble finding work, especially people coming out of prison, prepare for and find jobs that lead to careers. “Bishara Addison is a seasoned community advocate with over seven years of community engagement, policy, strategic planning, project and volunteer management and grant writing under her belt,” said Jill Rizika, executive director of Towards Employment, who nominated Addison. “Bishara’s dream is to be a thought leader who contributes to developing essential community resources with powerful outcomes who ‘makes visions happen.’ ” Listening to Addison, and hearing her plans for the next phase of her life, it’s hard to see her doing anything else. A 2010 graduate of George Washington University in Washington, D.C., with a major in political science, Addison has mapped out an academic program for herself that
Book she’s reading: “Just Mercy” by Bryan Stevenson Favorite website: Freshwater Cleveland Favorite restaurant in Cleveland: Felice Urban Café First hero: Dominique Dawes, the first African-American woman to win an individual Olympic medal in artistic gymnastics, and the first black person of any nationality or gender to win an Olympic gold medal in gymnastics
will only sharpen that focus. For one, she’s eying a master’s in public administration from Cleveland State University, with a focus in psychology and a certification in diversity management. “I want to better understand how individuals coming from different backgrounds, different histories, different orientations work toward a collective goal,” she said. Beyond that, she has her eye on a program at the University of Akron, a Ph.D. in organizational psychology. “Part of my thinking is that you can have the best public policy in the world but if you’re not imple-
menting it well on the ground and if the consumer of what you’re trying to change is not at the forefront of the thinking when you’re developing that policy it’s probably not going to work out as well as intended,” she said, adding, “It’s hard to see myself in the corporate world.” After college she worked at a variety of policy-related fellowships and internships, including one at Towards Employment, before moving on to a fellowship in Boston. But she yearned to return, both to Cleveland and to Towards Employment. “After interning here (at Towards Employment), not only did I feel committed to the intersection of
“How could I be anywhere else?” reentry and employment, but I fell in love with Cleveland,” she said. The Cleveland job she found, however, was doing public policy work at the Cleveland Metropolitan School District, so she spent three years there before a public policy job opened up at Towards Employment.
Kate Mathews | 27 Vice president and relationship manager, corporate and institutional banking, PNC Bank By JUDY STRINGER clbfreelancer@crain.com
T
his time last year, it would have been difficult to secure an after-work drink with Kate Mathews. Not that she wouldn’t want to. In fact, Mathews welcomes opportunities to enjoy craft beers at Cleveland area breweries. It would have been a question of time. In 2016, Mathews was in the final year of a twoyear stint as vice president of community en-
“Cleveland hustles harder”
Five things Professional motto: “Kill people with kindness.” Last getaway: New Orleans
gagement and volunteering for the PNC Recognizing Emerging Professionals (PREP) program. Under her leadership, PREP volunteers put in hundreds of hours for PNC’s Grow Up Great program throughout the city of Cleveland — working in preschool classrooms or cleaning up playgrounds, for example — and dozens of PNC employees networked with colleagues in other industries. Last year, Mathews also was kneedeep in the launch of Young Catholic Professionals (YCP) Cleveland, as co-founder of the 10th chapter of a rapidly growing national organization aimed at Catholic professionals in their 20s and 30s. Since its founding, more than 1,000 individuals have attended YCP happy hours, monthly executive speaker panels and/or retreats. And, of course, she was managing a demanding day job as a third-year corporate relationship manager for PNC Bank — or rather, killing it, according to colleague Robert Goble. “During 2016, her sales and business development performance landed her in the top 10% of all relationship managers in the company,” Goble said, “most of whom have decades of experience.” Even this ambitious 20-something admits it was a bit much. “There is a difference between be-
The heart of it all: She loves living in downtown Cleveland. Biggest fear: Spiders Ideal night out: Brewery hopping
ing involved and being ‘the person,’” said Mathews, who transitions into an advisory role at YCP this summer. “Not that I won’t be involved. I am still heavily involved in both organizations.” The fact that Mathews seeks out stakeholder roles in the community is not by chance. The daughter of a second-generation Westlake business owner, at a young age she recognized the importance of assisting businesses, so that “they can, in turn, employ people, support families and make the community stronger.” Mathews joined PNC in 2011 after graduating from Miami University, working first in underwriting. In 2014, she became one of the youngest relationship mangers in the commercial banking group, helping middle market companies secure the loans they need to grow their businesses. “Even though they are not the huge Fortune 500 companies,” Mathews said, “they definitely have a big impact on our city.”
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Elizabeth Bonham | 27 Staff attorney, ACLU of Ohio By JEREMY NOBILE
Five things
jnobile@crain.com @JeremyNobile
In her spare time: Urban farming. “It’s a mission and a lifestyle.”
lizabeth Bonham wasn’t the kid who dreamed of a career in law. In fact, with an undergrad degree in environmental studies and agriculture — which she immediately followed by working on an organic farm out West — her career could’ve sprouted in a vastly different direction. Yet, the West Side native says she already has found her dream job as an attorney and litigator with the American Civil Liberties Union, where her work is dedicated to preserving civil rights and free speech. “I don’t think I was ambitious enough to see a world where I had the privilege to be here,” Bonham said. “This is literally a dream for me to be here.” Out West, Bonham got involved with local demonstrators in the socio-political Occupy movement, even helping organize some rallies, but felt a sense of duty to bring those efforts back to her native Northeast Ohio. She pursued law, she said, because it seemed like the most "effective" route for promoting social justice. “After doing that work out there protesting and organizing,” Bonham said, “it made me feel like the place I really had a connection to was the place I was raised in, and that’s where I should be doing this work.” Among some high-profile cases on which Bonham has already worked is one where the ACLU secured a federal ruling alleviating restrictions on where protesters could assemble during last year’s Republican National Convention. (Before the ACLU stepped in, the city only offered locations so far away from the event visitors could hardly hear or see them at all.) She’s
Gardening ambitions: To have yards on the block where kids can grab fresh food and eat it
E
“There’s no place like home”
Favorite biking routes: The Towpath Trail. However, her longest tour was from Louisville to Cleveland. Favorite video game franchise: The Legend of Zelda Words to live by: A farmer she worked with out West used to say, “Your goal in anything you do is to build an economy of generosity.”
also interested in prison reform. Bonham's passion is not at all surprising to her friends and colleagues, like Joseph Mead, an assistant professor at Cleveland-Marshall College of Law and an ACLU volunteer who has worked on cases with her, including the one tied to RNC protester rights. Mead calls her the “face of civil liberties” in Ohio. “I think of her as the ACLU’s secret weapon in Ohio,” Mead said. “It’s unbelievable to me that she’s only a couple years out of law school, given how talented she truly is.” Whether working farmland — she still runs a community farmshare program in Cleveland — or preserving peoples’ rights, her passions are all united by a hunger for economic and social justice. “I want to always be looking for ways I can make progressive change in this city and state and fight for the liberties of all people,” she said.
Photographs by Tim Harrison for Crain’s
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Y IN THEIR 20S
Peter Brown | 27 Owner, Six Shooter Coffee By TIMOTHY MAGAW
Five things
tmagaw@crain.com @timmagaw
Favorite local brewer: Masthead Brewing Co.
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ne could say Peter Brown’s career is highly caffeinated. Coffee has always been a constant in the Central Ohio native’s life, as Brown worked at several coffee shops over the years. His first was when he was 16 at Espresso Yourself Music Cafe in Powell, Ohio. After earning a degree in education from Ohio University, Brown moved to Cleveland and found himself roasting coffee beans out of his basement — something that turned into a relatively successful side gig while he did some substitute teaching. “I only had a one-pound roaster going in my basement, and some people started buying the coffee, so I formed an LLC for the heck of it more than anything else, then it turned into this.� Brown said. Today, Brown’s Six Shooter Coffee boasts a thriving wholesale business out of the Tenk West Bank building in the Flats, which recently added a full espresso bar, as well as a small retail shop on Waterloo Road in Cleveland’s Collinwood neighborhood. The cozy Collinwood shop is designed to be more of a showroom for the wholesale business as well as the Cleveland small business community as a whole. The coffee, mugs, baked goods, artwork and furniture in his shop all have local roots. “We are all working together,� Brown said. “I really think the local business owners are part of the Cleveland comeback. Knowing the people that are part of that comeback is hands down the best part of this all.� And Brown’s not peddling standard brew.
Hard to get away: He lives above the Collinwood shop. Diverse musical tastes: Bluegrass and metal Little known fact: He loves cats — in particular, his own, Monkey.
“Cleveland is the embodiment of grit and determination�
Giving back: He coaches rugby at Shaker Heights High School.
This is strong stuff. The name, for one, is inspired by coffee that former president Lyndon B. Johnson served at his Texas ranch that was known to be so strong is could float a revolver. With Starbucks popping up on every corner, the coffee business isn’t easy to penetrate — and Brown knows that. Brown said Six Shooter’s craft coffee business is doing well because of its accessibility. His philosophy? Source a good bean, and get out of its way. “We want to accentuate the flavors, not manipulate them,� he said. He added, “We have an extremely good product. Our pricing is very good for what we offer.� Adam Fleischer, the owner of the Wine Spot, characterized Brown’s success this way: “Just look at his progression. He grew this organically,� said Fleischer, with whom Brown worked for a time. “He focused on the wholesale piece and didn’t try to do too much too quickly. A lot of people take on too much risk too soon. Peter was very smart.�
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Michael Gong | 24
Science teacher and soccer coach, Lincoln-West School of Global Studies By MICHELLE PARK LAZETTE clbfreelancer@crain.com
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hen he’s asked his reaction to being named 2016 Liberty Ford Coach of the Year, Michael Gong doesn’t speak a word about how he benefited. He rattles off instead what the prize money bought for others. “That was really incredible because it was an awesome opportunity for our kids,” Gong said, explaining that the award bought nets for soccer goals, new jerseys and shin guards, and more. “Before, it was me buying them stuff. I think they deserve to be outfitted like the suburban schools
that have big athletic departments and a lot of money.” It was playing basketball with and getting to know the young people at a detention center when he was a John Carroll University student that inspired Gong to forgo pre-med studies for teaching. The youth he met through The Carroll Ballers, a program he started with a friend, unearthed a passion. “They were really great kids (with) dreams and visions for what they wanted to do,” said Gong, a biology major before he joined Teach For America. “They’d say they hate being there, and three or four months down the road, you’d see the same kid at the detention center. I saw the school
setting as a place where I would be able to continue working with some of the same kids.” Gong is teaching physical science and also is head varsity soccer coach, assistant varsity baseball coach and head freshman basketball coach. “When you’re able to do that kind of activity and share that kind of experience with the kids, something you both love ... I think that’s when you develop the most authentic relationships and develop those connections,” Gong said. Lincoln-West, historically one of the better soccer schools in the Cleveland Metropolitan School District, is
“Because of its bright future”
Photographs by Tim Harrison for Crain’s
Selina M. Pagán | 21
Program/chamber coordinator, Hispanic Business Center and Northeast Ohio Hispanic Chamber of Commerce By JUDY STRINGER clbfreelancer@crain.comw
S
elina Pagán wears many hats. The Slavic Village resident is a full-time staffer at the Hispanic Business Center and the Northeast Ohio Hispanic Chamber of Commerce — two sister organizations that share a mission to promote and support Latino businesses. For the Hispanic Business Center (HBC), Pagan assists with programs to revive Cleveland’s Clark-Fulton neighborhood, home to a large Hispanic population. For the chamber, she helps plan and execute events for business members locally and coor-
dinates with other Ohio-based Hispanic chambers at the state level. She’s also a full-time student at Cleveland State University and daughter, niece and cousin to a handful of Clark-Fulton business owners who are not shy about sharing their own opinions and concerns about the neighborhood and redevelopment efforts. “They give me a reality check when I need one, for sure,” Pagán said, “but it is nice to hear what they have to say. Sometimes, we get caught up on the technical side (of community development). However, we really value the input and support of the community because these programs are for all of us.” One of those programs is La Placi-
ta, a project close to Pagán’s heart and one she has helped organize and oversee since joining HBC in 2014 straight out of high school. Launched in 2015, the open air market features ethnic foods — mostly from Puerto Rico due to the high concentration of Puerto Rican natives in Cleveland — and Latino vendors selling a variety of arts and crafts and goods popular in their home countries. La Placita will be held on Saturdays from June 10 to Aug. 19 this summer. “It’s really an immersion experience for people outside of the neighborhood to come and celebrate Latino culture,” Pagán said. “It is also held right in the heart of Latino community, because we want our fellow resi-
“Born and raised by all things Cleveland”
Anthony Ries | 28
Vice president and managing partner, Bernie Moreno Cos. By MICHELLE PARK LAZETTE clbfreelancer@crain.com
A
t first, selling cars was just a means to law school for Anthony Ries. Having graduated from the University of Akron with a 3.89 (that C+ in Spanish 4 haunts him still, he chuckles), he was preparing for a few more years of study. But another $150,000 in student loans didn’t sound appetizing, he said, and Bernie Moreno Cos. offered him a salary he would have expected to earn as a young lawyer. Following more than one promotion after he joined the company as a sales manager in 2014, Ries supervises roughly 160 employees as vice president and managing partner. He oversees four
dealerships: one he runs himself and three managed by general managers who report to him. Bernie Moreno said Ries is universally respected throughout the company. “He’s the youngest by far,” of the company’s leaders, said Moreno, president of the company, which sells 20 luxury brands from 11 “rooftops,” or buildings. “He is very, very sharp. He’s able to learn things at a dramatically faster rate than most.” The way Ries sees it, respect for any leader, young or not, is rooted in performance. “We have some younger team members who will ask, ‘What did you do?’” he said. “It’s performance-based, and I’ve always performed well. I don’t ask anyone to do
anything that I wouldn’t do. You don’t lead from a podium pontificating down to people.” He admits to some obsessive organization, too. If he has 12 tasks, he finishes each one before he tackles the next so that “12 things get done perfectly.” That way, he doesn’t need to go back and do them again. “When you see someone who knows what they’re doing, you check your ego and you watch and you learn to execute it yourself,” he said. Perfecting the customer experience is the goal, especially because Bernie Moreno dealerships sell luxury vehicles, Ries said. “Buying a car is not just an ordinary purchase,” Ries said. “It’s the second biggest investment you’re going to make in your entire life. You
“New age of opportunity”
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two for two in Senate conference championships. Gong and his fellow coaches are sticklers, though: School comes first. “I want them to go to college if that’s what they want to do,” he said of his students. “They can’t slack off now. Every quarter matters.” It is clear to Irene Javier, principal of Lincoln-West, that Gong genuinely cares. “His work with the kids does not stop inside the four walls of the classroom,” Javier said. “He picks them up. He buys them clothes. He’ll take them to restaurants. Whatever it takes for our kids to have a good experience. “He sees himself not only as a mirror for his kids, but as a window for his kids,” she added.
Five things Puppy love: He has an 8-month-old labradoodle named Zuri. Favorite lesson to teach: Chemical reactions. “Their jaws drop to whatever is happening.” When he was in school, he was: Class clown. “I got good grades, but knew how much I could push certain teachers.” (Wonder no more why he has a patience for ninth-graders.) Summer plans: Training for a half triathlon Principal by 30: Gong aspires to lead a school by 30 and later start an all-boys school for at-risk youth.
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Five things Favorite holiday: Christmas
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Coffee or tea? “Coffee, definitely!” Go-to dish to cook: Rice and beans Last movie: “The House I Live In” Secret superpower: Her smile
dents and business owners to come enjoy it. The project helps develop the social cohesion of the neighborhood.” Young Latino Network President Maria Agosto, for one, is not surprised that Pagán would highlight the importance of social cohesion. She met Pagan during a cleanup day on Clark Avenue and believes the Cleveland State senior is nothing short of a “community warrior.” “Cleaning a street may not be how many people envisioned spending their Saturday morning, but I could tell she loved being there,” Agosto said.
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Five things Lessons form mom and dad: Family comes first, and work hard. Favorite car: “I have to say one I manage. Q60 for Infiniti. That’s a sweet car.” Lease or buy? Lease. “Cars are a depreciating asset. Leasing limits your costs of ownership.” Life lesson: “It’s always easier to tell the truth the first time. Do it right, and you never have to do it again.” No BS: BS is part of any business, but especially the car business, Bernie Moreno said. Not to worry: Ries has a “very good BS detector.”
should have someone who doesn’t just want to sell you a car but wants to act as your adviser throughout the process and be there when you need something. “If you set the expectations for yourself high enough, this is one business where you can go out and you can accomplish goals quickly,” he added. Ries, a resident of Twinsburg, lives with his wife, Sarah, and Cooper, their 18-month-old son.
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Caitlin Kilbane | 27 Principal, Marion C. Seltzer School By RACHEL ABBEY McCAFFERTY
Five things
rmccafferty@crain.com @ramccafferty
Favorite spots: Lakewood Park, Edgewater Beach, West Side Market and Angelo’s
aitlin Kilbane always wanted to be a teacher, but becoming a principal wasn’t always on her radar, especially so early in her career. Kilbane, a Northeast Ohio native, joined the Cleveland Metropolitan School District in June 2014 after a few years working in the special education department of Richardson High School near Dallas. As a special education “flexpert” for Cleveland, she supported principals and teachers, but she missed directly working with students and their families. Enter Cleveland’s Aspiring Principals Program — a program that helps prepare potential principals through a rigorous summer experience and a year-long, school-based residency before being placed in buildings of their own. Kilbane served as the aspiring principal at Pre-K-8 Nathan Hale school on Cleveland’s southeast side during the 2015-2016 school year. Joelle McIntosh, the school’s principal, described Kilbane as a strong communicator with good technical skills and “a joy to have around.” Kilbane started as principal at Marion C. Seltzer, pre-K through 8th grade school on Cleveland’s West Side, for the 2016-2017 school year. The first year was a bit of a “blur,” she said. The Aspiring Principals Program taught her the importance of maintaining confidence and calm on the outside — no matter how she was feeling on the inside. Still, there were plenty of things she had to learn on the fly — namely, improvisation. When the food order didn’t go
Summer plans: She’ll try to go to as many Cleveland events, like Edgewater Live, as possible, but during the days, people can find her at Marion C. Seltzer.
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Favorite musical artists: Rihanna, Drake and Ellie Goulding Favorite subject when she was a student: English Motto: “Just go with it.”
through on the school’s first family night, for instance, she had to reconfigure the event’s schedule. “I’m just constantly at full speed,” Kilbane said. It’s still too early to say whether test scores have improved since she started, but Kilbane said the school has already seen improvement in its “social-emotional status,” according to a recent survey. In particular, students reported feeling safer in and out of school, Kilbane said. Kilbane finds that the people she gets to encounter because of her work — parents, teachers and especially the students — make it rewarding. If she’s having a bad day, Kilbane will sit in a classroom and listen to what students have to say. It helps her stay grounded. “At the end of the day, I’m not doing this work for myself,” Kilbane said. “I’m not necessarily doing it for the teachers. I’m doing it for the kids and their families.”
“Cleveland rocks hard, loves harder”
Photographs by Tim Harrison for Crain’s
Christopher J. Litzler | 25 Vice president of originations, Pinnacle Financial Group By JUDY STRINGER
Five things
clbfreelancer@crain.com
This is home: He was raised in Chagrin Falls
C
hristopher Litzler could be a poster child for millennials. He lives in a hip urban area, Hingetown. Likes to hang out in neighborhood cafes and bars — prefers to walk or bike there, in fact. Frequents social media sites Instagram and Snapchat. But, if your idea of millennials in any way suggests this generation is made up of entitled slackers, this is where the stereotype stops. Litzler, according to Pinnacle Financial Group co-founder and principal James Leonard, puts in 80-hour weeks and is one of the hardest-working people Leonard knows. “One thing I would say from my chair as one of his bosses is that nobody will outwork him. Period,” he said. Litzler joined Pinnacle, an independently owned mortgage banking company in Independence, shortly after graduating from Ohio Wesleyan University in 2014. After his first day in a support role, he was bumped up to fulltime analyst. About a year into his Pinnacle tenure, Litzler brought on several of his own clients. In 2016, he was promoted to vice president of originations. Leonard said the speedy ascent at Pinnacle is all Litzler’s doing. “Chris has learned in three years what other people probably take seven to 10 to learn, because he’s very intelligent, extremely hard working and is really personable,” he said. Litzler, for his part, is quick to acknowledge
Got-to lunch spot: TownHall Bucket-list item: Skydiving Guilty pleasure: Mitchell’s Ice Cream Job as a teen: Soccer coach
the support of Leonard and other Pinnacle leaders. “They gave me autonomy to build relationships with their clients and our lenders,” he said, “and were really generous of their time to kind of help me grow in this business and motivating me and challenging me.” He also notes the importance of key real estate mentors in his life — not the least of which is his uncle, Tom Litzler, a recently retired Chicago retail real estate executive, and fellow Ohio Wesleyan grads David St. Pierre and Tim Junglas of Legacy Capital Partners, a real estate private equity firm where Litzler spent several weeks before starting college. Wherever the credit falls, Litzler’s success at Pinnacle is indisputable. Since joining the firm, he has been involved in nearly $1 billion in financing across the country. Still, the proudest moments for him are not closing big loans for mega retail centers or office complexes, but when “we can help younger developers do things they didn’t think they would be able to do.”
“I liked Cleveland before it was cool”
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Laura V. Altieri | 27
Proposal developer, Great Lakes Energy Institute By CHUCK SODER
Five things
ccoder@crain.com @ChuckSoder
Favorite high school extracurricular activity: Swim team
en years ago, if you had asked Laura Altieri if she was interested in women’s issues, she says she would’ve said “no.” After all, she grew up surrounded by strong, independent women in her family and at her allgirls high school in Tarrytown, N.Y. — a place that taught her to look at being a female as an asset. “It was just too obvious. ‘Yes, I’m going to grow up and have a career.’ What else would I do?” she said. Yes, Altieri did find a fulfilling career in the nonprofit sector, first with the Akron-Canton Regional Food Bank and now with Case Western Reserve University. She’s a grant proposal developer for the school’s Great Lakes Energy Institute. But nowadays she spends more time thinking about other women who don’t have it so good. Her mindset began to shift when she moved to Ohio to attend Kent State University and started meeting people who didn’t grow up in such an ideal environment. That shift continued when she took an internship at the World YWCA in Geneva, Switzerland, where she helped draft statements to the United Nations promoting the organization’s position on issues that affect women, such as child marriage and female genital mutilation. Then, after graduation, she joined the board at the YWCA branch in Warren, which among other things provides assistance to homeless women and those in need of affordable child care. Though she’s now well aware of the challenges that women face, she’s also amazed by the amount of support she’s received from other women over the years.
Family hobby: She and her husband Matt enjoy walking their two beagles, Lucy and Desi, through Cuyahoga Valley National Park, which is right next to their home in downtown Peninsula.
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Reads everything except: Crime and romance novels. Advice for other grant writers: Unsure of something? Call the program manager. “What’s in the RFP is really the tip of the iceberg,” she said. And have other people read your work. Advice for everyone else: “Pop your personal bubble and see how other people live. A good way to do so is through volunteer work.”
“I can think of, like, a dozen strong women — independent, hard-working — who invested time and energy in guiding me,” she said. At Case Western, Altieri helps researchers find funding to develop cleaner, more efficient energy technologies. She has helped the Great Lakes Energy Institute apply for 46 funding proposals during her first 10 months on the job — far more proposals, and better proposals, than the institute otherwise would’ve been able to submit, said associate director Grant Goodrich. Altieri has a great attention to detail, but she’s also able to think strategically and see the big picture, Goodrich said. He didn’t hire Altieri (they started on the same day in July 2016) but he would have if given the choice. “I couldn’t have done a better job myself,” he said.
“There’s no other like it”
Wenzhu Sun | 27
Connection program associate, Global Cleveland By JUDY STRINGER clbfreelancer@crain.com
T
o learn a little about the kind of person Wenzhu Sun aspires to be, just ask about her grandfather. Born in a rural Chinese village at a time when most kids grew up to be farmers, he walked for hours in mountainous terrain to and from college classes to become an engineer. As a businessman, he traveled the world — even working in Cleveland for a period — and taught himself English. “He’s was also very kind when he sees people in need,” Sun said of her late grandfather, “without asking for anything in return.” That same adventurous spirit and compassion are what drive Sun today. She left China during her junior year of high school for a semester-long exchange program in Victoria, British Columbia, which allowed her to explore other areas of Canada. After finishing her undergraduate work at East China Normal University in Shanghai, Sun returned to Canada for a master’s program at University of Windsor. In 2016, she followed her husband to the United States after he landed a job in Cleveland. While sightseeing on a city bus, Sun struck up a conversation with a man sitting next who suggested she connect with Global Cleveland, a nonprofit group that serves immigrants and refugees. Obviously channeling her grandfather’s initiative, she walked into the offices that day and asked how she could be a part of the organization. Jessica Whale, director of global talent and economic development, said Sun is one of the
Five things Where she’s from: Born in Shenyang, Liaoning Province, China Ideal meal: Korean barbecue Study time with Chandler Bing: The TV show “Friends” helped her learn English. Perfect getaway: Sarnia, Ontario, on the shore of Lake Huron Favorite Cleveland hangout: Home
first people ever to walk into the office and offer to help. “She offered to do translating and had a lot of really great ideas and energy and passion. We thought, ‘Wow,’” Whale said, adding that Sun’s experience with a similar organization in Windsor was another plus. Sun started as a part-time intern but soon was brought on full time in a role where she gets to call upon her own experiences as a newcomer to help international students — Sun said there are about 6,000 of them in the greater Cleveland area — find the resources and programs they need to succeed and perhaps even lay down roots. Sun herself has done the latter, buying a home in Maple Heights earlier this year. “People here are really friendly, and this city has some good vibes,” she said. “It’s very alive with many cultures. I like that part a lot.”
“I feel welcomed and included”
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Kerry McCormack | 29
Five things Role model: His mother. “We lost her in July of last year, and she remains an influence on me every single day”
Councilman, Ward 3, city of Cleveland By JAY MILLER jmiller@crain.com @millerjh
K
erry McCormack says running for public office wasn’t always on his to-do list. But it’s not exactly a surprise the appointed Cleveland city councilman is already going door-to-door for the fall election. After all, he spent much of his life around a father who was frequently on a ballot. Tim McCormack was elected a Euclid councilman in 1970, and then was a member of both the Ohio House and Senate and elected Cuyahoga County auditor and then commissioner. He now serves as an Ohio Appeals Court judge. And after graduating from Miami
University in 2010 with a degree in international relations, Kerry McCormack helped run his father’s unsuccessful campaign for Cuyahoga County executive that fall. He also worked as an organizer helping U.S. Sen. Sherrod Brown in his successful re-election campaign in 2012. But he’s more than a campaigner. “Kerry is the real deal,” said Joe Cimperman, president of Global Cleveland, who nominated McCormack to succeed him as Ward 3 councilman in April 2016. “While his understanding of budgets and policy and metrics is super, he feels most at home mentoring kids at Lakeview CMHA estate and listening — truly listening — to constituents.” Though McCormack doesn’t overlook the special interests his ward in-
cludes — downtown Ward 3 includes the Rock and Roll Hall of Fame, the Cleveland-Cuyahoga County Port Authority, the home of the Catholic Diocese of Cleveland and a clutch of county, state and federal agencies — Cimperman’s observation that he focuses on residents rings true. “I’ve always been interested in the well-being of neighborhoods, growing up in Collinwood (on Cleveland’s far East Side),” McCormack said. “I’ve seen the struggles on East 185th Street and East 156th and East 152nd.” Now, he works to balance the needs of the business and civic engines in his ward that drive the broader city with the needs of the 20,000-plus residents of his ward.
Favorite dessert: Mitchell’s caramel sea salt ice cream Book he’s reading: “Street Art San Francisco: Mission Muralismo”
“Legacy city with a restless drive”
In high school, he thought he’d be: An emergency room doctor. Favorite spots in Cleveland: Edgewater Beach and Wade Oval.
“It’s so easy to stick to your phone calls and your emails but you’ve got residents who may have a language barrier and don’t know how to reach the councilman,” he said. “Because there are folks who don’t know how to get in touch with you, you have to learn to get out in the community.”
Photographs by Tim Harrison for Crain’s
David Leb | 29
Five things Last book read: “Shoe Dog” by Nike founder and chairman Phil Knight
Associate, Cushman & Wakefield Cresco By STAN BULLARD sbullard@crain.com @CrainRltyWriter
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avid Leb said he believes he followed a “meandering path” to get where he believes he ought to be. He became a commercial real estate agent, first with Newmark Grubb Knight Frank and now with Cushman & Wakefield Cresco, after getting a graduate degree in education at Northwestern University and finding himself a statistic: burned out as an educator after two years. But what a way to go. Fresh out of Northwestern, he was one of 15 teachers who launched a charter school dedicated to helping minority and disadvantaged students get the back-
ground to help them pursue a career in law backed by a group of lawyers called “Legal Prep Charter School.” “The rigor, the time it takes and the lack of income put an end to that part of my life,” Leb said. “It taught me about overcoming adversity.” During a stint in development for the America Israel Public Affairs Committee (AIPAC) where he co-managed annual fundraising and political goals for the Ohio market, the Solon native realized he wanted to return to Cleveland. He also was impressed by members of the Jewish community who had the time and means to pursue social, civic and Jewish concerns. Meeting Jeff Cristal, the manager of Newmark Grubb Knight Frank’s office unit, solidified his desire because Cristal told him that if he wanted to return to Cleve-
land and pursue brokerage, he’d be good at it. Cristal became his mentor at NGKF. However, after two years, he changed directions after Rico Pietro, a principal at Cushman & Wakefield Cresco in Independence, invited him to join his team this spring. Leb’s was the name on the top of Pietro’s list when he decided to add younger people to Cresco’s team of veterans. “We need some energized, smart, personable and personally driven people with aspirations for growth,” Pietro said. “You can be proficient but it’s important to be likable. He’s hungry and willing to roll up his sleeves to get things done.” Leb said that with his decision to pursue real estate as a profession he decided to devote his free time out-
Favorite music: As a teenager, seeing the Dave Matthews Band at Blossom was the highlight of his summer. In the car, he listens to: National Public Radio
“Because I believe in Cleveland”
Dr. Emily M. George | 28
dshingler@crain.com @DanShingler
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alem native Emily George knew at an early age she would be a doctor. The real question was: animals or people? Fortunately for many humans in the region, she chose the latter — and has become one of the area’s upand-coming internal medicine physicians at Summa Health in Akron. “With her patients, Emily is a keen listener, able to include the suffering and life experience of her patients in partnering with them for treatment. She uses the latest medical evidence
in her treatments and respects the patient’s wishes by giving them a menu of choices from which to choose to address their care. As a medical educator, Emily travels in a small cloud of young doctors, each of them learning how to develop a version of her skills for their own doctoring,” said Dr. Ron Jones, also a Summa physician and associate director of internal medicine at the health system. George said she knew by the time she was in high school that she would study medicine. She just wasn’t sure whether she wanted to follow in the footsteps of her father, which she knew would take her down a difficult path. “He is an animal doctor, which in my book is much harder — animals
can’t talk,” George said of her veterinarian father. “I had it down between becoming a veterinarian or a physician — but I didn’t want to do the same thing that my dad did.” So, some animals might have missed out, but we got a great doctor when George became a physician in 2013. That includes some folks who might not have gotten to see a doctor at all. When she’s not taking care of patients at Summa, or caring for her 5-year-old son Michael, George spends a lot of her time at Open M, a faithbased free clinic in Akron. Jones said he has watched her volunteer there since George was in school. “I was surprised to find her busily volunteering every time I saw patients at Open M,” he said. “I
Leisure activity: Going to new restaurants with his wife, Shaina
side of family life to improving the lives of others. He serves on the board of the Young Leadership Division of the Jewish Federation of Cleveland and has joined the Anti-Defamation League to learn how to support communities facing discrimination. “In Chicago, it’s hard to feel your efforts can make a difference,” Leb said. “In Cleveland, you can.”
Five things
Associate director, Internal Medicine Center, Summa Health By DAN SHINGLER
Favorite vacation spot: The beaches of southern California
“This city has character”
Favorite animals: “I love cows! The cow is, by far, my favorite animal.” Favorite restaurant: El Fogon Mexican Grill Favorite book: She never reads books, but she reread this one: “Mountains Beyond Mountains” by Tracy Kidder Favorite movies: “I love the ‘Despicable Me’ movies. I have all of them, including the Minion movie.” Vacation spot: A cabin in the Smokey Mountains
knew that a student would need to drive 20 miles after class from the medical school in Rootstown to come to the free clinic in Akron, yet there she was. Emily would always be there. I remember asking myself, ‘Who is this person?’”
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Familiar face leads new development council By DAN SHINGLER dshingler@crain.com @DanShingler
Akron is taking a new approach to economic development, but with a familiar face that some would say already has spurred a great deal of Cleveland’s rebirth. Tom Chema, chairman of the Cleveland-based Gateway Group and the man who spearheaded the development of downtown Cleveland’s baseball park and basketball arena, is heading the Akron Growth Council just established by mayor Dan Horrigan. “I’ve asked Tom to lead it and to guide the entire project,” Horrigan said in a May 31 interview. “He brings a wealth of experience from across the region and the country in leading projects not only to completion, but to success.” In Akron, Chema likely won’t be building sports facilities, but he said he will work to build something else he’s known for in Cleveland and elsewhere — consensus. Horrigan and Chema both describe the city’s new growth council as a bit like the former Cleveland Tomorrow group, which included about 50 CEOs and other local business leaders who Chema said helped focus Cleveland on important initiatives, such as the Gateway Economic Development Corp. of Greater Cleveland that built Quicken Loans Arena and Progressive Field, and on other economic development efforts. Cleveland Tomorrow, along with the Greater Cleveland Roundtable, eventually merged to form the Greater Cleveland Partnership, still a major economic development group in the region. Now Akron wants to be greater, too. It will be Chema’s job to help it achieve that end. He has some high-powered help. In addition to Chema, Horrigan unveiled a slate of 18 other members of the new council, including GOJO CEO Joe Kanfer, RubberDucks owner Ken Babby, Akron Children’s Hospital CEO William Considine, Goodyear CEO Richard Kramer, University of Akron president Matthew Wilson
and Stark State College president Para Jones. At least some members appreciate that the mayor is reaching out to the business community and taking a Chema broad approach to economic development. “I’m enthused that the mayor is committed to building both economic growth and quality of life in Akron, and understands that doing so requires collaboration between government, business, education and the non-profit community,” Kanfer said in an email correspondence. Horrigan said he already knows some of what the city’s economic development mission will be, but he’ll turn to the new council to help identify other aspects, including the workforce needs of area companies. Toward that end, Horrigan said one of his major goals will be not only to retain existing businesses, but to help them grow. Not that the city won’t pursue other companies that might want to move into Akron, but it has probably spent too much time in the past “chasing smokestacks” and should focus more on the businesses that are here — which Horrigan refers to as his “existing customers.” Deputy mayor for economic development Sam DeShazior, who also is a member of the new council, said existing businesses are the key to good economic development policy in most places, including Akron. He said national data from the Washington D.C.-based International Economic Development Council, which surveyed all 50 states on the source of job growth, support that view. “About 83% of the growth came from companies that were already there. And about half of the other 17% came from companies in neighboring communities that were less than 50 miles away,” DeShazior said. Horrigan said another major prong of his economic development efforts will be to continue to rebuild the city’s population, with drawing more young people to live downtown and in city neighborhoods a critical
Enticing people to live downtown is one prong of Akron’s economic development plan. The historic Landmark building soon will undergo a transformation into apartments. (Shane Wynn for AkronStock)
component. That’s something he and his staff, particularly Akron director of planning and urban development Jason Segedy, have been working on since Horrigan took office in 2016, with plans to make the city more walkable and its roads safer for pedestrians and cyclists. “There’s a lot of research that says jobs will follow people,” Horrigan said. But, he added, the city has been losing population since about 1960. Akron needs to take a more “customer-service approach” to young people and residents, constantly communicating with them to ensure the city knows what they want and need, and provide them with reasons to remain in Akron, Horrigan said. Likewise, he said the city and its
new council will work with employers to ascertain what they need, especially in terms of workforce development, so that area workers can be prepared for jobs that are available but too often go unfilled. That’s where the University of Akron and Stark State likely will come in, as Horrigan said he hopes to see Akron become a bit like the San Francisco Bay area, which works closely with its tech companies, employers and schools to ensure that local businesses get the skilled workers they need. “When that flow of information stops, we’re dead in the water,” Horrigan said, noting that with an unemployment rate of about 5%, Ohio is near full employment, and several businesses can’t find qualified workers to fill jobs they have available.
That also means working with schools and area residents to convince students who might not want to pursue a four-year degree, or who might not be ready, to attend schools like Stark State, which Horrigan and Chema said can help prepare them for many area jobs, as well as for a four-year degree later. But, as much as anything else, Akron needs to better coordinate its efforts with those of other local governments, such as Summit County, area employers, nonprofits and others on the economic development front so that common goals are set and pursued by the entire community. That will be a big part of Chema’s job, and one he’s familiar with from his past work at Gateway and Hiram College, where he was president for 11 years before stepping down in 2014. “You don’t want to have duplication, because we (as a community) don’t have enough human resources to do everything twice,” Chema said. Chema and Horrigan think Akron has a lot going for it that can contribute to its future success. While there is much to do to continue to revitalize downtown, much already has been done, the mayor noted, including millions of dollars of work done over recent years to turn Akron’s canal from something once hidden beneath buildings and parking garages to its current state as a major draw and amenity for downtown residents. That, along with Canal Park, new restaurants, a recently renovated art museum and new urban housing units downtown all help the city to attract both residents and businesses, Horrigan and Chema said. Others agree and say the city has become attractive enough to new residents that it now is able to bring in and keep new entrepreneurs — including those who have founded high-tech companies — in the city. The believers include Bill Manby, managing director of Akron-based Acquire Investments, which is in the process of raising a $6 million venture capital fund to invest in Akron businesses. “There is plenty going on around here, and there are lots and lots of investment opportunities here,” Manby said.
Construction exec building up a new enterprise By DAN SHINGLER dshingler@crain.com @DanShingler
North Canton-based Knoch Corp. is about to begin a building spree that goes well beyond its normal arena of commercial construction. Chuck Fenske, vice president of the company and the heir apparent to his father, Knoch CEO Jim Fenske, said he’s starting something akin to a private equity fund to acquire subcontractors that will operate as either sister companies to Knoch or as part of a new group of companies he says he’ll build. But, unlike most private equity funds, Fenske said he plans to allow the companies he buys to remain autonomous, with the exception of some backroom functions, such as accounting, being combined. He also plans to purchase healthy businesses rather than those that need to be
turned around. “My goal is to keep all of the businesses separate … and we’re trying to buy companies that are successful. We don’t want to tinker with them Chuck Fenske too much,” Fenske said. So why would anyone want to sell if they have a company that is already successful? Simple, Fenske said: Too many small and midsize subcontracting firms do not have succession plans in place or, like Knoch, a new generation of family members that wants to run them. Fenske reasons that many of the owners of such companies will consider selling to him because they will effectively gain a succession plan and won’t have to exit the businesses that they may love. Fenske said he hopes
that many of the owners of companies he buys will stay on to run them for some time after the sale. “My thought process is that this is a good way to help others get the equity out of their businesses,” he said. He’s also offering something else that most other private equity firms do not: a long-term home for the businesses he buys. Most private equity investors buy businesses with the intention of holding them for three, five or even seven years, but their goal is to sell them. That’s how most private equity firms make the bulk of their investment returns. Fenske said he hopes to build a group of companies that he’ll hold indefinitely, making a return from the profits of the businesses, rather than their sale. As for investors, Fenske said he’s got a group of about 20 local business owners and other potential backers, and will draw funds from them on an as-needed basis as he brings in po-
tential transactions. His approach, however, will be structured. He’s targeting subcontracting firms in Northeast and Central Ohio — markets that Knoch, with annual sales of between $20 million and $30 million, already knows. Fenske will look for companies with operating earnings of between $3 million and $4 million a year, and expects to pay between $6 million and $12 million for each transaction. Will it work? Todd McCuaig thinks it will. He’s not only an entrepreneur himself — he bought Signum Inc., a display manufacturing company in Solon last year — he also spent 12 years doing transactions for the former National City Equity Partners in Cleveland as an investment banker in the 1990s and early 2000s. There, he helped invest over $700 million in more than 100 companies, he said. McCuaig said he thinks Fenske is correct that there are many subcontractor firms that do not have succes-
sion plans, and their owners will be attracted by the chance to cash out and stay involved in their business. “He has already been finding a good number of opportunities,” said McCuaig, who advises Fenske and said he will invest in his acquisitions. McCuaig said he thinks Fenske also has something else going for him that should give him a leg up on other potential acquirers: He’s from the construction industry himself. “Many sellers have built the business and they care about their business. They care about the people, and they care about their legacy. They’re interested in a successor/owner who can build on that legacy and preserve it,” McCuaig said. Fenske said he’s not ready to unveil it yet, but he’s confident he’ll complete at least one deal this year. If the strategy works here and in central Ohio, he may try to duplicate it elsewhere, he said. For now, he’s concentrating on the markets he knows.
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CRAIN’S CLEVELAND BUSINESS
THE LIST
Highest Paid Non-CEOs Ranked by 2016 Compensation
THIS YEAR EXECUTIVE
TOTAL COMPENSATION 2016 % 2015 CHANGE SALARY
BONUS
STOCK AWARDS
OPTION AWARDS
NONEQUITY PENSION INCENTIVE VALUE CHANGE PLAN
COMPANY COMPANY 2016 NET INCOME % CHANGE INCOME ALL OTHER COMPENSATION (MILLIONS) FROM 2015
1
Christopher M. Connor/Sherwin-Williams Co. former executive chairman, former CEO (1)
$7,287,196 $12,487,972
(41.6)
$1,221,987
$0
$1,815,516
$1,199,978
$2,555,000
$0
$494,715
$1,132.7
2
Lee C. Banks/Parker Hannifin Corp. president, COO
$7,049,754 $7,088,531
(0.5)
$850,000
NA
$1,532,957
$1,247,680
$1,222,471
$2,093,986
$102,660
$806.8
-20.28%
3
Ronald A. Rice/RPM International Inc. president, COO
$6,572,165 (2) $4,148,444
58.4 (2)
$720,000
$0
$3,735,376 (2)
$1,093,000
$790,000
$85,202
$148,587
$354.7
48.12%
4
Revathi Advaithi/Eaton COO, Electrical Sector
$5,979,142 (3) $3,875,138
54.3 (3)
$700,001
$0
$3,127,456 (3)
$581,461
$909,387
$648,546
$12,291
$1,922.0
-2.88%
5
Christopher M. Gorman/KeyCorp vice chairman; president of banking
$5,398,519 $4,986,353
8.3
$638,462
$0
$2,159,985
$239,999
$2,300,000
$23,448
$36,625
$754.0
-15.57%
6
Vincent C. Byrd/The J.M. Smucker Co. former vice chairman (4)
$5,140,498 $4,301,741
19.5
$711,346
$13,700
$1,370,000
$0
$1,301,500
$1,707,593
$36,359
$688.7
99.68%
7
Stephen R. McClellan/Goodyear Tire & Rubber Co. president, Americas
$5,117,054 $4,781,110
7.0
$610,000
$0
$424,386
$614,989
$1,917,080
$1,504,591
$46,008
$1,264.0
8
Joel Reiss/TransDigm Group Inc. executive vice president
$4,980,335 NA
NA
$360,000
$6,812
$0
$4,171,710
$253,188
NA
$188,625
$583.4
31.44%
9
Roger V. Jones/TransDigm Group Inc. executive vice president
$4,881,850 NA
NA
$360,000
$11,812
$0
$4,240,950
$253,188
NA
$15,900
$583.4
31.44%
10
Leila L. Vespoli/FirstEnergy Corp. executive vice president, corporate strategy, regulatory affairs; chief legal officer
$4,868,785 $3,525,122
38.1
$758,606
NA
$1,893,841
NA
$957,707
$1,249,581
$9,050
($6,177.0) (5)
11
Uday Yadav/Eaton COO, Industrial Sector
$4,785,041 NA
NA
$602,885
$0
$2,289,733
$523,479
$637,006
$710,822
$21,116
$1,922.0
-2.88%
12
David J. West/The J.M. Smucker Co. former president, Big Heart Pet Food and Snacks; former director (6)
$4,767,117 $4,898,870
(2.7)
$729,327
$15,000
$1,125,000
$0
$1,012,500
$1,749,542
$135,748
$688.7
99.68%
13
Mark M. McGuire/Eaton former executive vice president, general counsel, secretary (7)
$4,487,620 (3) $3,173,646
41.4 (3)
$583,976
$0
$2,213,171 (3)
$377,977
$620,219
$664,789
$27,488
$1,922.0
-2.88%
14
Andrew J. Paine III/KeyCorp president, KeyBanc Capital Markets; co-head of Key Corporate Bank
$4,279,625 $0
NA
$500,000
$0
$1,732,486
$192,499
$1,800,000
$18,015
$36,625
$754.0
-15.57%
15
John T. Lucas/Goodyear Tire & Rubber Co. senior VP of global human resources, chief human resources officer
$4,249,816 $4,919,692
(13.6)
$547,333
$470,000
$1,316,718
$458,992
$1,064,613
$363,068
$29,092
$1,264.0
311.73%
16
Steven T. Oakland/The J.M. Smucker Co. vice chair; president, U.S. Food & Beverage
$3,931,865 $4,187,091
(6.1)
$623,077
$12,000
$1,147,500
$0
$936,000
$1,195,309
$17,979
$688.7
17
David L. Bialosky/Goodyear Tire & Rubber Co. senior vice president, general counsel, secretary
$3,805,554 $4,390,309
(13.3)
$565,000
$0
$320,859
$464,999
$1,799,560
$629,586
$25,550
$1,264.0
18
Edward W. Moore/RPM International Inc. senior vice president, general counsel, chief compliance officer
$3,704,278 (2) $1,795,332
106.3 (2)
$360,000
$0
$2,443,655 (2)
$327,900
$425,000
$61,672
$86,051
$354.7
48.12%
19
Jorge L. Valladares III/TransDigm Group Inc. executive vice president
$3,631,150 (8) $988,200
267.5 (8)
$398,750
$25,163
$0
$2,596,500 (8)
$284,837
NA
$325,900
$583.4
31.44%
20
John C. Butler Jr./Nacco Industries Inc. senior vice president of finance, chief administrative officer, treasurer; president and CEO, The North American Coal Corp.
$3,470,650 (9) $1,550,845
123.8 (9)
$587,268
NA
$1,539,539 (9)
NA
$1,178,616 (9)
$16,727
$148,500
$29.6
34.68%
21
Steven E. Strah/FirstEnergy Corp. senior vice president; president, FirstEnergy Utilities
$3,342,359 NA
NA
$553,286
NA
$1,068,229
NA
$572,845
$1,130,263
$17,736
($6,177.0) (5)
22
George D. Blankenship/Lincoln Electric Holdings Inc. executive vice president; president, Americas Welding
$3,294,903 $2,164,266
52.2
$477,083
NA
$459,306
$221,696
$749,942
$1,359,141
$27,735
$198.4
23
Robert J. Davisson/Sherwin-Williams Co. president, Americas Group
$2,920,984 $2,659,467
9.8
$611,936
$0
$811,188
$544,120
$794,000
$0
$159,740
$1,132.7
24
James H. Lash/FirstEnergy Corp. executive vice president, president, FirstEnergy Generation
$2,876,218 $2,635,851
9.1
$583,187
NA
$1,049,657
NA
$569,678
$662,684
$11,012
($6,177.0) (5)
25
Edward J. Burke/KeyCorp co-president, Key Community Bank
$2,840,056 $3,863,283
(26.5)
$550,000
$0
$944,992
$104,999
$1,200,000
$17,540
$22,525
$754.0
-15.57%
26
Richard A. Zimmerman/Cedar Fair LP president, COO
$2,772,329 $3,642,278
(23.9)
$570,871
$0
$1,500,020
$0
$676,516
$0
$24,922
$177.7
58.33%
27
William M. Cody/Progressive Corp. chief investment officer
$2,603,778 $2,503,840
4.0
$463,269
NA
$1,046,275
NA
$1,081,734
NA
$12,500
$1,031.0
-18.67%
28
Christopher A. Coughlin/The Timken Co. executive vice president, group president
$2,501,037 $2,150,201
16.3
$515,041
NA
$871,350
$373,013
$185,415
$515,000
$41,218
$152.6
29
Gregory H. Trepp/Nacco Industries Inc. president, CEO, Hamilton Beach Brands; CEO, The Kitchen Collection
$2,483,810 $2,287,835
8.6
$624,852
NA
$0
NA
$1,453,696
$251,868
$153,394
$29.6
34.68%
30
Donald E. Washkewicz/Parker Hannifin Corp. former chairman, president and CEO (10)
$2,449,924 $14,690,161
(83.3)
$425,000
NA
$0
$935,760
$910,150
$0
$35,359
$806.8
-20.28%
31
Andrew M. Weeks/Parker Hannifin Corp. vice president; president, Hydraulics Group
$2,432,670 NA
NA
$400,956
NA
$907,854
$325,618
$333,449
$0
$464,793
$806.8
-20.28%
32
James A. Ratner/Forest City Realty Trust Inc. non-executive chairman
$2,279,449 $2,720,973
(16.2)
$500,000
$500,000
$559,253
$0
$656,375
$14,102
$49,719
($158.4) (11)
7.48%
311.73%
NM
99.68% 311.73%
NM 55.63% 7.48% NM
NM
NM
RESEARCHED BY CHUCK SODER: CSODER@CRAIN.COM
Want the full version of this list Ă‘ and every other Crain's list? Become a Data Member: CrainsCleveland.com/data Data provided by S&P Global Market Intelligence (Marketintelligence.spglobal.com). The list does not include CFOs. A list of Highest Paid CFOs is published separately. NM = not meaningful.
(1) Connor stepped down as CEO at the end of 2015 but continued as executive chairman until Dec. 31, 2016. (2) RPM granted performance-based stock awards to several top executives in 2016, but they won't receive the full award if they don't hit performance goals for the three-year period ending May 31, 2018. (3) For these Eaton executives, 2016 total compensation figures are inflated because they include cash payouts from a discontinued incentive plan and stock awards from a new plan. The number of shares they eventually receive will be adjusted based on Eaton's performance over a three-year period. (4) Byrd retired in mid 2016. (5) FirstEnergy attributed this loss to a $9.2 billion pre-tax impairment charge related to its decision to close plants and exit competitive power generation operations by mid-2018. (6) West transitioned out of both roles in 2016. (7) McGuire retired on March 1, 2017. (8) TranDigm awards stock options to most of its executives every two years, which causes their compensation to vary widely from year to year. (9) Butler was promoted to president and CEO of NA Coal, a NACCO subsidiary, on July 1, 2015. He received significantly higher compensation in 2016 mainly because the subsidiary exceeded its performance goals for the year. (10) Washkewicz retired from Parker Hannifin's board in 2016. He was replaced as president and CEO on Feb. 1, 2015. (11) Forest City lists several reasons for this decrease in its 2016 annual report. For one, the company noted that its income taxes were particularly high in 2016, partly because of
its conversion to a real estate investment trust.
CRAIN’S CLEVELAND BUSINESS
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TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher. Dates listed are the dates the documents were filed in the Recorder’s Office.
LIENS FILED Neon Beach Tanning Inc. 19585 Detroit Road, Rocky River Date filed: Excise Type: April 27, 2017 Amount: $87,738.70 Zion Corp. 3770 E. 93rd St., Suite 4, Cleveland Date filed: April 27, 2017 Type: Employer’s withholding, unemployment Amount: $81,260.06 Santorini Taverna LLC 1382 W. 9th St., Cleveland Date filed: April 26, 2017 Type: Employer’s withholding, unemployment Amount: $66,037.41
Moen Inc. 25300 Al Moen Drive, North Olmsted Date filed: April 27, 2017 Type: Employer’s withholding Amount: $33,992.62 Health Systems Design Inc. 27629 Chagrin Blvd., Suite 205, Beachwood Date filed: April 27, 2017 Type: Corporate income Amount: $33,864.37 Clark Mechanical Inc. 18850 Miles Road, Cleveland Date filed: April 26, 2017 Type: Employer’s withholding Amount: $30,595.45 Metro Equipment Sales & Service Ltd. 17900 Miles Road, Warrensville Heights Date filed: April 26, 2017 Type: Annual tax return, partnership Amount: $29,850.58 Lakeside Building Services Inc. 2122 St. Clair Ave. NE, Cleveland Date filed: April 26, 2017 Type: Employer’s withholding Amount: $22,504.42
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Little Miracles Child Care & Learning Center Inc. 22683 Euclid Ave., Euclid Date filed: April 27, 2017 Type: Employer’s withholding Amount: $16,655 Focus Creative Workshop LLC 5399 Lancaster Drive, Suite 6, Brooklyn Heights Date filed: April 27, 2017 Type: Employer’s withholding Amount: $15,616.64 CP Riebel Inc. 1743 Dover Center Road, Westlake Date filed: April 26, 2017 Type: Corporate income Amount: $13,529.55 Equinox Hair & Nails LLC 28919 Lorain Road, North Olmsted Date filed: April 26, 2017 Type: Employer’s withholding, unemployment Amount: $11,820.05 State Machine Co. 30400 Solon Industrial Parkway, Solon Date filed: April 26, 2017 Type: Employer’s withholding Amount: $9,865.01
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MCM Euclid Square Mall LLC 13829 Euclid Ave., East Cleveland Date filed: April 26, 2017 Type: Employer’s withholding Amount: $6,964.28 Hare Electric Inc. 4180 Wooster Road, Rocky River Date filed: April 26, 2017 Type: Employer’s withholding Amount: $5,933.84 Harold Pollock Co. LPA 5900 Harper Road, Suite 107, Solon Date filed: April 26, 2017 Type: Employer’s withholding Amount: $5,372.17
LIENS RELEASED Heartland Payroll Co. LLC 2001 Aerospace Parkway, Brook Park Date filed: Jan. 6, 2016 Date released: April 26, 2017 Type: Employer’s withholding, unemployment, CIVP Amount: $131,146.47 Moen Inc. 25300 Al Moen Drive, North Olmsted Date filed: April 27, 2017
Date released: May 17, 2017 Type: Employer’s withholding Amount: $33,992.62 Cellular Technology Ltd. 20521 Chagrin Blvd., Shaker Heights Date filed: Feb. 17, 2017 Date released: April 27, 2017 Type: Corporate income Amount: $32,717.07 One Kut Above Inc. 7460 Chippewa Road, Brecksville Date filed: June 5, 2013 Date released: April 27, 2017 Type: Employer’s withholding Amount: $20,067.17 Blue Star Partners LLC 28020 Miles Road, Solon Date filed: March 28, 2017 Date released: April 26, 2017 Type: Employer’s withholding Amount: $18,726.69 Curious Minds Learning Place Inc. 420 E. 275th St., Euclid Date filed: Employer’s withholding Date released: April 26, 2017 Type: Jan. 7, 2016 Amount: $5,702.75
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WHAT ARE THE FACTORS DRIVING CORPORATE RELOCATION DECISIONS? Corporate relocations are not taken lightly. They have long-range impact and the decision process is laden with immense challenges. Decisions to relocate corporations must take into account a variety of parameters centered primarily on strategic issues, overall investment and cost, as well as qualitative considerations. JUNE 22 • NOON - 1 PM
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ENGINEERING & CONSULTING
LAW
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Kaitlyn D. Arthurs
Jeremy Hinte
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McCarthy, Lebit, Crystal & Liffman Co., LPA
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OHM Advisors
Jack Moran was promoted to Principal at McCarthy Lebit. He is a business litigator with a focus in employment law. Jack’s practice emphasizes representation regarding claims of unlawful retaliation and discrimination, wage and hour disputes, non-competition and non-solicitation agreements, breach of contract matters and other related issues. His business litigation and trial experience also expand beyond employment law, with significant successes in real estate litigation.
William Von Alt Chief Business Development Officer Koinonia Homes William Von Alt has joined Koinonia Homes’ as chief business development officer. Von Alt will oversee the organization’s finance, accounting, corporate development and donor relations. Von Alt has valuable experience leading change and new growth in public, private and nonprofit organizations. His entrepreneurial and strategic approach that will add significant value to Koinonia’s leadership team. Von Alt will report to Koinonia President and CEO Diane Beastrom.
Crain’s People on the Move promotional feature showcases Northeast Ohio job changes, promotions and board appointments. Guaranteed placement inprint, online and in a weekly e-newsletter can be purchased at www.crainscleveland.com/peopleonthemove.
Katie Arthurs was promoted to Principal at McCarthy Lebit. She is a member of the firm’s family law group and focuses her practice on divorce, dissolution of marriage, prenuptial agreements, child custody, child and spousal support and guardianships. In addition to her litigation proficiency, she is trained in collaborative law, mediation and parenting coordination. Katie applies her experience in both litigation and ADR to help families reach successful outcomes through creative solutions.
ACCOUNTING
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Director, Risk Advisory Services RSM US LLP Stephanie has joined RSM’s management team with responsibility for the development of the firm’s risk advisory services practice for the NE Ohio market. She brings over 20 years of experience in the areas of accounting, auditing, risk management and compliance. Stephanie has global business knowledge in information systems, operational and regulatory auditing, business process evaluation and design, project management, fraud investigations, internal audit and Sarbanes Oxley compliance.the City of University Heights.
OHM Advisors welcomes Jeremy Hinte, RLA, to its multidisciplinary design and engineering practice. A senior landscape architect with more than a decade of design and construction project experience, Jeremy joins the firm’s Cleveland office from BEHNKE Landscape Architecture, where he was a principal. Jeremy graduated from Virginia Polytechnic Institute and State University with a B.A. in Landscape Architecture in 2006.
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CRAIN’S CLEVELAND BUSINESS
Source Lunch
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J U N E 12 - 18 , 2 017
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PA G E 2 7
Don Fischback
Senior counsel, Calfee
Most people probably think of Don Fischbach as an Oklahoman, but he’s actually a Buckeye and grew up in Wapakoneta. Now a senior counsel at Calfee, where he heads the firm’s energy and natural resource practice, Fischbach spent most of his career in the Sooner State. That includes a stint from 2000 to 2011 as general counsel of Continental Resources — a firm as legendary for its wildcat drilling success as it is for its bold and brash founding CEO, Harold Hamm. It’s a job Fischbach still refers to as “what a ride,” as he was there when Continental hit some of its big strikes in places like the Bakken oil fields. But since 2012, Fischbach has been a Clevelander through and through. He first immersed himself in the culture by living downtown, but eventually married local businesswoman and fellow golfer, Lisa Rothacker, and the couple now lives in Pepper Pike. Fischbach still specializes in oil and gas work, but he also works as a general corporate lawyer, just as he said he did at Continental. He says he loves Cleveland, in part because it has a lot of two things he loves in life: great restaurants and golf courses. — Dan Shingler
Five things Favorite thing to do outside Golf
Favorite place to do it Sand Ridge Golf Club in Chardon
Favorite restaurant Moxie — and Peppermint Thai
Favorite place to grab a drink Corona, a cigar bar in Orlando, Fla.
Favorite vacation spot Scottsdale in the winter, Breckenridge in the summer
Lunch spot Parallax Restaurant and Lounge 2179 West 11th St., Cleveland 216-583-9999 parallaxtremont.com
The meal One had tuna sushi and a sashimi salad (rice wine, vinaigrette & wasabi aioli). The other had a seared spicy tuna burger with soy mustard, wasabi aioli & pickled cucumbers.
The vibe Parallax is well-known among area foodies for owner and chef Zach Bruell’s Asian-fusion fare and sushi in Tremont. The place has a simple, unassuming ambiance, and on an early lunch visit, there were already a few diners at 11:30 a.m. By noon, the tables were pretty much filled.
The bill $38.46, plus tip
You worked at a company that is a very big deal in the U.S. energy industry. How did a kid from Wapakoneta end up becoming a big-league oil and gas lawyer in Oklahoma? I left the summer I graduated college from Miami (Ohio), I went out for a summer job and found a full-time gig that kept me out there for 30-some odd years. In 1980, there were not a lot of jobs here for someone right out of school. So I went to Oklahoma to take an oilfield job. I ended up with an office job behind a desk pretty quickly. Coincidentally, it started the day law school was supposed to start here, so I blew off law school and put it off for two years. … I had fully planned to return that September and go back to school here, but that summer job turned into a full-time job that was too well-compensated for a young college graduate to turn down. You ended up working for Harold Hamm, a very famous entrepreneur and CEO. What was that like? Exciting. He was a world-class entrepreneur. (He pauses.) He was kind of a dichotomy. He’d be extremely deliberate and contemplative while he was deciding something, but once the decision was made, he’d be “boom.” … And he had a memory like few people you’ll ever meet. Did you see him when he spoke at the Republican National Convention here? No, but I saw him two weeks later in Pittsburgh, and that was fun. He was very confident and optimistic that even with the public issues the campaign was dealing with, that they were still realistically in the contest. Cleveland’s a different world from Wapakoneta, or Oklahoma City, right? Yes. ... And I’ll tell you what, Cleveland has been far more than I expected. I find the food to be absolutely fabulous. What do you
want? You can get it authentic here. If you’re willing to be a little adventurous, you can find all sorts of cuisine here from around the world. And luckily my wife and I both really enjoy that. How is the business scene here different from Oklahoma City or other places you’ve been? It’s not as industry-specific here, is the biggest difference. It’s a much more diversified economy here. The financial sector is much more robust and manufacturing is much bigger. There’s no Lake Erie in Oklahoma. When you first moved here, you lived downtown? Yes. I didn’t know where I wanted to live before I got here, but I enjoyed living downtown immensely Was that a surprise to you? No. The only surprise was the fact that I liked the fact that I had no yard work. I thought I enjoyed yardwork, and I did, but it’s not something I look to do now voluntarily. I find I can occupy my time just fine. I just wish I could say my golf game has improved as a result. So you lived downtown, now you live in Pepper Pike. What’s the difference? A lot! I don’t have to drive near as far to the golf courses that I play. But now you have to go farther to restaurants? Not really. They’ve got some great restaurants within half a mile from me. Everything on Chagrin (Boulevard) is less than 20 minutes from my back door, and that’s on foot! So, which do you prefer, downtown or the ’burbs? It depends on my mood — they both offer advantages. … The downtown has a feel. It’s hard to duplicate the feel and the spontaneity that a large crowd downtown offers. We came down for the baseball playoffs last year, and that was a blast.
CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113 Phone: 216-522-1383; www.crainscleveland.com Reprints: Krista Bora; 212-210-0750; kbora@crain.com Customer service and subscriptions: 877-824-9373
Volume 38, Number 24 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 441131230. Copyright © 2017 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373.
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