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VOL. 39, NO. 29

JULY 16 - 22, 2018

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Employee benefit services firms Page 16

CLEVELAND BUSINESS REAL ESTATE

RUBBER CITY RISING ‘Unprecedented’ development is helping to reshape downtown Akron

By DAN SHINGLER dshingler@crain.com @DanShingler

In Akron these days, it seems you can’t wave a loan application or a for-sale sign without a developer tackling you, pen and grand plans in hand. The Rubber City is being vulcanized — Akron’s downtown core is on fire with a slew of recent developments, bigger ones in the works and seemingly no end to new projects for which developers are already buying property. The Bowery Project, the Law Building, the City Center Hotel and a yetto-be unveiled project near Lock 3 that could be the biggest project yet have area developers busy. How active is it? “On a scale of one to 10? It depends on how you quantify the scale, but from Akron’s standpoint, it’s a 10 if you look at the development timeline and compare the activity now with what has happened over time. Just in the housing sector alone, it’s unprecedented, the amount of activity going

Illustration by Daniel Zakroczemski for Crain’s

on now,” developer Joel Testa, president of Testa Cos., said. He’s no noob, either. His family’s company has been developing in and around downtown for 40 years, and Testa helped lead downtown’s current residential revival when he built the Northside Lofts in 2006 and gave the city some of its first upscale downtown

INSIDE Forward focus: Tools to keep the development pump primed Page 10 Who’s who: Some instrumental public and private leaders Page 12

Inside Iconic Agora gets a $3 million facelift Page 5

housing since the advent of radial tires. Testa Cos. spent about $30 million on the lofts’ 92 units, which remain some of the city’s premier housing. The building now is housing new retail development, too. And in 2016, Testa opened the Courtyard Akron Downtown — a $25 million, 146-room hotel that was the

first to open downtown since the city’s heyday. Today’s star of the stage, though, is the Bowery Project — six old, vacant, multistory buildings along South Main Street that, for more than a decade, have been a thorn bleeding momentum from downtown planners, mayors, civic boosters and previous developers who have failed to pull off a renovation. Now it’s again the jewel of the city’s downtown economic revitalization efforts. If it goes well, developers say, it will trigger a wave of additional projects, make it easier to finance other developments by inspiring investors, and give downtown the critical mass and population it needs to succeed as the urban community many hope to see. No pressure, right? The man taking much of that pressure, and still grinning, is Canton developer Dan DeHoff. He and his right arm, vice president of commercial development Beth Borda, say they’re confident they’ll announce the project’s final financing soon, after many hurdles. SEE AKRON, PAGE 14

Force Sports’ g-o-o-a-a-l-l! is to bring professional soccer to Cleveland. Page 4 The Clinic’s global stategy gets a sizable push from Chinese venture. Page 6

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New state plan places onus on teachers By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Ohio wants to make sure students graduate from high school not only knowing how to read and write, but also knowing how to make informed decisions and solve problems. And in June, the state board of education officially approved a broad strategic plan aimed at formalizing those goals. The plan addresses the changing workplace, which requires more flexibility from its workers, and the state’s changing population, which is becoming more diverse. And it addresses the fact that Ohio doesn’t always adequately serve its different student populations, such as those who have disabilities or those with economic challenges. The idea is for the plan to support the “whole child.” That means the plan expects schools to consider physical, social and emotional well-being, in addition to traditional academics. Key to the success of the plan will be teachers. And while that could mean changes for the region’s teacher education programs, they seem up to the challenge. Colleges and universities reported that they’re already doing a lot in the spaces in which the state is interested. But that doesn’t mean they’re waiting around for the state to pass down official changes. Take Notre Dame College in South Euclid, for example, which is actively re-examining its dual licensure program. “Because when you’re talking about meeting the needs of all students, you’re talking about every teacher really basically having to become a special education teacher,” said Sue Corbin, chair of the division of professional education. Notre Dame College already has a program that lets students get licensed to teach a particular grade level and special education, but it’s looking into options that would streamline that process for students, allowing them to take one program instead of two. And it’s considering having all students earn a dual license. A change like that would take at least three years to fully implement, Corbin said, but she thinks it would be “well worth the time.” Paolo DeMaria, state superintendent of public instruction, isn’t expecting teacher education programs to change drastically right away, but he does hope to see changes incorporating elements of the plan in the years to come. The plan officially covers 2019 through 2024, but DeMaria said much of the work will begin in the 2018-19 school year. PreK-12 schools will be expected to teach foundational skills, like literacy; leadership skills, such as problem-solving or design thinking; and social-emotional skills, such as responsible decision-making. The fourth area focuses on offering students a well-rounded education through subjects like sciences, health or art. Essentially, it will focus on making the skills many schools already taught more “deliberate,” DeMaria said. “It doesn’t mean you’re going to have a class in collaboration, but when you’re a social studies teacher and you’re teaching American history, how are you structuring that classroom setting and that classroom environment to be a little bit more deliberate about developing these

different skills vis-a-vis the classroom experience that those kids are having?” DeMaria said. That means teachers are going to have to plan these kinds of lessons as part of their curricula, instead of just dropping in special events or programs, said James Connell, who directs the educational administration program at Ursuline College in Pepper Pike. He’s also the dean of graduate and professional studies. Connell said education has been so focused on academics, but that doesn’t match up with the “reality of today.” Technology easily puts a wide variety of information at people’s fingertips. But if students aren’t getting an education that includes those social-emotional and leadership skills, they aren’t as well-rounded as they could be.

Those skills are critical if students are going to learn or be successful after graduation, DeMaria said. And that’s where the goal of the plan aims: The state wants to see more high school graduates enrolled in some form of further education, serving in the military or working in a well-paying job or a vocational opportunity like Americorps one year after graduation. To achieve this goal, the plan lays out a series of strategies, including developing standards and assessments for all four areas of learning and expanding graduation pathways. And there’s a strong focus on preparing and supporting teachers and principals. DeMaria said professional development isn’t in the plan as a specific strategy, but there will be a need for that kind of continuing edu-

cation for in-service teachers. Nationally, there’s been a drop in enrollment in teacher preparation programs in recent years, said Sajit Zachariah. Zachariah, dean of the College of Education and Human Services at Cleveland State University, was one of the few higher education partners directly involved in the planning process, specifically the portion focused on educators and instructional practices. To change the trend, Zachariah said the profession will need to work to change the perception of the profession. A lot of recent reform efforts have tried to “pin blame” on teachers, he said, and starting pay is often “horrendous” across the country, though he thinks it’s OK in Cleveland. Cleveland State already is doing a

lot that aligns well with the plan, including working with teacher academies at local K-12 schools to increase the pipeline of potential teachers, Zachariah said. While colleges and universities are already talking about topics the plan addresses like teacher recruitment and social-emotional learning, that doesn’t mean there aren’t concerns. Jennifer Walton-Fisette, director of educator preparation at Kent State University, said there’s a “disconnect” between higher education and K-12 schools. Superintendents will be expecting incoming teachers to understand the new standards, Walton-Fisette said, but those standards aren’t yet officially aligned with what higher education institutions are teaching potential educators.

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Thousands of kids play in soccer leagues that are run by Force Sports. The Bedford Heights company has six facilities in Northeast Ohio. (Contributed photo)

Force Sports’ lofty goal is return of Cleveland Force By KEVIN KLEPS

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In the last 13 months, Force Sports has acquired two of the largest soccer clubs in Northeast Ohio. Greg and Shaw Abrams — brothers who operate six facilities that offer sports programming and training in the region — believe the next step is bringing men’s professional soccer back to Cleveland. Should their plan come to fruition, the club will have a name that links back to their business — and rekindles memories of when a soccer team at Richfield Coliseum regularly outdrew the Cleveland Cavaliers. The Abrams brothers took a necessary step when they acquired naming rights to the Force — which played in the Major Indoor Soccer League for 10 seasons, beginning in 1978 — from Scott Wolstein. And it was the Wolsteins from whom Greg, 47, and Shaw, 43, purchased their Warrensville Heights facility (the first of the six Force Sports locations). The next step is a complicated one, because it involves building or acquiring a facility that will house a United Soccer League team. The USL is a 33-team Division II league that has added 19 clubs since the start of the 2015 season and operates one slot below MLS in the U.S. Soccer hierarchy. The USL will add a Division III league in 2019, and that circuit could eventually increase to 30 to 40 franchises, Josh Keller, the USL’s vice president of business development for D-III, told Crain’s in 2017. The Cleveland Force would compete in the USL’s top division, but the franchise first must identify a venue. “We are in that stage and working with different people and developers to narrow that down,” Greg Abrams said. Abrams said his group has been consulting with the USL throughout the search process, but didn’t want to put a timeline on when a site would be purchased. Considering the USL kicks off its season in March, the earliest the Cleveland Force could debut would be 2020. The Force Sports owner said locations throughout the region, includ-

Greg Abrams

Shaw Abrams

ing downtown Cleveland, are being considered. And while Abrams didn’t want to reveal too many specifics, various reports give some clues as to what will need to happen for the Force to return — albeit as an outdoor club. A minimum of 5,000 seats is required for a USL Division II club, and the expansion fee for that level is $5 million. The league’s website also says it hopes all of its clubs will be located “in soccer-specific stadiums across North America by the end of the decade.” The USL declined comment on Cleveland’s expansion possibilities, but multiple sources told Crain’s the league is hoping Cleveland is added to its rapidly growing group. Through Week 17 this season, the USL’s average attendance is up 16%, from a 2017 norm of 4,301 to a 2018 average of 4,997, according to Soccer Stadium Digest. Seven clubs are averaging more than 7,000 fans per match.

The start of it all About nine years ago, the Abrams brothers were playing in an adult soccer game at the Wolstein-owned Force-Northfield site. “After one of the games, we said there has gotta be a better way to do this,” Greg Abrams said. The Abrams, who had spent several years in the real estate business, wound up buying the Warrensville Heights facility. “That’s basically when Force Sports was created,” Greg said. The six locations (in addition to the flagship facility, there are buildings in Bedford Heights, Eastlake, Fairlawn, Rocky River and Westlake) now have 50 full-time employees and about 300 to 400 part-time coaches, Abrams said. Force Sports has club teams in baseball, softball, volleyball,

boys and girls lacrosse, and boys and girls soccer. The company also offers strength and speed training, hosts summer camps and other events, offers field and court rentals, and has three private schools that have hired Force Sports to run their athletic departments. Soccer, not surprisingly, is the company’s largest sport. In 2017, Force Sports acquired Cleveland United, a prominent Northeast Ohio soccer club that was founded by former Cleveland Force player and Cleveland Crunch assistant coach Joe Raduka. A year later, Force Sports added Internationals Soccer Club, which has a plethora of boys and girls teams throughout the region. Thousands of kids play in leagues that are run by Force Sports. That, Abrams believes, is a crucial part of a potential “pyramid” that would extend to U.S. Soccer Federation Development Academy programs and, ideally, the return of the Force. “We want to offer players the ability to come all the way through our system,” Abrams said. The company has plenty of Cleveland professional soccer ties. In addition to Joe Raduka, Ali Kazemaini, a former Cleveland Force and Crunch player, is the club chairman and a staff coach for CSA Impact United, which is part of Force Sports’ extensive soccer umbrella. Also, former Force players George and Louis Nanchoff are the founder and director of coaching, respectively, of Internationals Soccer Club. Greg Abrams worked for the Wolsteins and George Nanchoff at the Force facility in Warrensville Heights when he was in high school. “It’s all come very full circle,” Abrams said. Next up, he hopes, is a comeback for the Cleveland Force, who had a following in the 1980s that was so strong that the club outdrew the Cavs for five consecutive seasons — including an average gate of 13,692 in 1983-84. “I feel like we’ve already brought back some of that excitement, and to potentially cap that off with a pro soccer team here in Cleveland — as a born and raised Clevelander, it would be great for the city to have that opportunity,” Abrams said.

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Facelift gives iconic Agora a modern feel By JEREMY NOBILE jnobile@crain.com @JeremyNobile

According to a popular adage adopted in the world of rock, the more things change, the more they stay the same. While the same could be said for Clevelandâ€™s historic Agora Theatre and Ballroom, thereâ€™s a lot more emphasis on the change this month. July marks one year since AEG Presents, the live-entertainment division of Los Angeles-based AEG, acquired 100% ownership of the concert venueâ€™s operating rights and half the property. Financial terms of that deal have not been disclosed. Since then, AEG has pumped more than $3 million into renovating the space. While some changes reveal parts of the structure not seen for decades, many of the changes are in stark contrast to its more recent former self. That includes new air conditioning and heating, improved sound and lighting systems and a restored grand lobby. Old bars have been replaced, bathrooms renovated and security and safety improved. Wood flooring was torn up to reveal original ceramic tile that dates back to when the building first opened in 1913 as the Metropolitan Theatre. And thereâ€™s internet inside. Thatâ€™s all besides fixes guests may never notice, like new plumbing, refreshed dressing rooms and a revamped electrical system. â€œWe addressed operational needs so the building was brought into the 21st century and became more functional,â€? said Shawn Trell, AEG Presents chief operating officer and executive vice president. â€œBut there was also a big improvement optically. Suffice to say, there was certainly room for improvement.â€? Guests of years past likely remem-

The Agora Theatre and Ballroom opened in 1913 as the Metropolitan Theatre. (AEG Presents)

The neon marquee (shown before and after an update) is one of many spots that have been dramatically improved. (AEG Presents)

ber the Agora for its dark, dank guts stained by decades of cigarettes and booze. The aging space was degrading and begging for repairs, yet fondly

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embraced by concertgoers for its place in Clevelandâ€™s music history. Banners covered holes in the ceiling. Old wood wall paneling was glued to

parts of the floor. Restrooms were in disrepair. Those rough edges felt natural in many ways, like a physical embodiment of the gritty rock scene it shares a symbiotic relationship with. But cash flow was tight in recent years. And the Agora needed a plan to drive revenue. Agora owner and talent buyer Chris Zitterbart (who shares 50% ownership of the property itself with AEG) began running the Agora in late 2013 after being approached by Henry â€œHankâ€? LoConti Sr., who founded the first iteration of the Agora in 1966. Zitterbart came from Peabodyâ€™s that year, a concert club slanted toward hard rock that was vacated in 2013 as its lease was terminated for an expanding Cleveland State University campus that plowed over it. â€œWhen I came in, I know the venue needed investment and some love,â€? Zitterbart said. â€œFrom plumbing to Wi-Fi, it needed a lot of things. I couldâ€™ve done all that on my own, but it wouldâ€™ve taken a decade or two.â€?

Revenues were effectively flat as Zitterbart came in as the venue hosted only a handful of events a year. Activity picked up with Zitterbart at the helm. He began to diversify acts and book shows in the ballroom. But in terms of cash flow, it was still â€œeffectively a break-even propositionâ€? each year, Trell said. â€œThey had whatever shows they had, cover expenses and pay staff,â€? Trell said. â€œAt the end of the day, there wasnâ€™t a lot left after that, if anything.â€? There would never be enough capital to spruce up the facility the way it deserved with how business was progressing. Zitterbart and AEG began talking and working together between 2014 and 2015, connecting over an effort to book heavy-metal band Volbeat at the space. Discussions grew of a partnership. But AEG and the Agora were effectively sizing each other up those first years. â€œThey were kicking the tires to see what we were doing,â€? Zitterbart said. â€œI think they wanted to see we could be a viable entity in the market before a deal happened.â€?

New life under AEG Besides an injection of capital, the partnership with AEG offered improved management of shows. The company books some 10,000 events annually worldwide. And its U.S. network includes about 80 venues that AEG either owns outright or has exclusive operating rights for. Tapping into that network allows the new AEG-operated Agora to land touring acts that may have never hit its radar in the past. â€œItâ€™s tough getting multiple big acts at once and getting cash flow to work,â€? Zitterbart said. â€œNow with AEG agents, itâ€™s a lot easier to do six or seven shows in a row.â€? SEE AGORA, PAGE 18

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Clinic deepens global push with recent foray in China By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

Cleveland Clinic’s recently announced foray into China is the latest in an ambitious global strategy that leaders say will benefit patients around the world, as well as those at home in Northeast Ohio. The Clinic — an organization with annual operating revenue exceeding $8 billion — last week announced the inaugural member of Cleveland Clinic Connected, an international program that aims to improve patient care delivery in the United States and around the world by enabling other health care providers to access the Clinic’s best practices. Luye Medical Group and the Clinic have entered into a strategic collaboration to bring value-based, patient-centered care to a Shanghai New Hong Oiao International Medical Center. Financial terms for the collaboration were not disclosed. “As China plays a more significant role in the global community, it is evident as an organization that we must also play a role collaborating with China and helping local partners provide world-class care,” said Bill Peacock, the Clinic’s chief operating officer. Today, the Clinic boasts an expansive network stateside and has established facilities in Canada and the United Arab Emirates. Cleveland Clinic London is expected to open outpatient services in 2020 and inpa-

tient services in 2021, according to a Moody’s report. Crain’s first reported on the Clinic’s potential work in China last August, at which point the health system was tight-lipped about what that work would look like. This announcement offered a closer look at what we can expect to see in a relationship that “was formed through mutual industry connections and a shared vision for international growth,” Peacock said. Alhough Cleveland Clinic physicians and surgeons will not directly treat patients at Luye Medical, hospitals in the Cleveland Clinic Connected program can access best practices and protocols used by Cleveland Clinic experts at its locations worldwide. In recent years, the Clinic has established affiliation models with systems across the U.S., exporting its brand and expertise in specific fields to other providers. This strategy, along with the expansion of its global reach, has helped to bolster the $8 billion health care system’s brand domestically and beyond. Cleveland Clinic Connected is a logical next step. The global efforts are a hallmark of former president and CEO Dr. Toby Cosgrove’s 13-year tenure at the helm of the Clinic. Dr. Tom Mihaljevic, who was previously CEO of Cleveland Clinic Abu Dhabi, took over for Cosgrove at the start of this year. Selecting Mihaljevic, with his significant international experience, signaled the system’s commitment to its global efforts.

In Abu Dhabi, the Clinic had a management agreement with Mubadala Healthcare that was initially an advisory assignment, but it eventually turned into managing and operating Cleveland Clinic Abu Dhabi, today considered part of the health system. Cleveland Clinic physicians, nurses and caregivers treat patients at the hospital. The relationship with Luye Medical is “very different” than the work in Abu Dhabi, Peacock said. It’s “too soon” to predict what path this relationship will take, he said, but collaborations “often evolve over time.” According to Peacock, hospitals that are part of Cleveland Clinic Connected benefit from the Clinic in the following areas: quality and patient safety; best practices and guidelines for patient care and patient engagement; distance health and second opinions; clinical and executive education; and continuous quality improvement and advisory services. Meanwhile, ratings agencies are looking favorably at the Clinic as it prepares to take on a chunk of debt to finance its efforts in London, where the Clinic is converting a six-story, 198,000-square-foot building from an office space to a roughly 200-bed hospital. To assist in the buildout of the facility, the Clinic plans to issue up to $878 million in debt, which also will help refinance an existing bridge loan of $375 million, according to S&P Global Ratings. SEE CHINA, PAGE 17

Scuffles emerge over water

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Because water is so essential — and so scarce in some parts of the United States and the world — it has provoked heated court battles, legislative fights, and even wars. There is no war over water in Ohio, which is bracketed between the plentiful Ohio River and Lake Erie watersheds. But there is both legislation to restrict rates and court scuffling being initiated by communities that believe they are being overcharged for water or sewer service. A bill moving through the Ohio House of Representatives would penalize cities with water or sewer systems for setting excessively high water and sewer service rates to nonresidents in townships or neighboring municipalities. The legislation is a reaction to what some communities see as price-gouging. These fights are being fought because there is no regulatory oversight of municipal utility systems and because of the rapidly rising cost of water and sewer service. The Public Utilities Commission of Ohio (PUCO) oversees the rates and service of the commercial electric and gas utilities. But the Ohio Constitution’s home rule provisions protect municipalities and their utility systems, like Cleveland Public Power and the many muny water systems, from PUCO regulation. That often leaves residents in townships and smaller communities that

couldn’t afford their own systems to negotiate for service with existing systems that, faced with risings costs, charge property owners outside the city’s boundaries water or sewer rates that are significantly higher than rates it charges its own residents and businesses. Some cities also threaten to withhold service to property owners, or their townships, unless they accept annexation to the city to get the water and sewer service. The city of Hudson tried to fight its water supplier, the city of Akron, in court. But the Ohio Supreme Court upheld a lower court decision that said Hudson residents “have no right to demand reasonable water rates from Akron” and that no right “currently exists under Ohio law” for a community to challenge the utility rates charged by a municipality. R. Todd Hunt, an attorney with the Cleveland firm of Walter Haverfield LLC, said passage of HB 602 would be a step in the right direction. “We all understand that it costs (Akron) more to provide service beyond (its) city limits because of the distance from Akron to Hudson,” he said. “But the charges should be reasonably related to the cost of providing the service. We wanted the courts to impose that standard.” HB 602 would hit cities with water or sewers systems with cuts in state funding unrelated to utility service. The penalties against the cities include a reduction or a complete withholding of state Local Government Fund (LGF) allocations. LGF money is a significant source of city revenue. It is funded by sales tax collections that

are distributed to counties and local governments based on a formula first set when the sales tax was created in 1935. The cities also could be ineligible for state grants or loans given to improve water and sewer systems. State Rep. Mike Duffey, one of HB 602’s sponsors, said in a phone interview that not every city can afford its own water or sewer treatment plants, and he does not believe cities should be able to charge unreasonable rates to water and sewer users outside a city’s limits. “I have a problem with that,” he said. “People can’t do without water and sewer. If (cities with systems) are going to accept state taxpayer dollars, we should be able to put some strings on in the state legislature.” Under the legislation, city water and sewer systems could still charge higher rates to residential and business users beyond their city limits if those rates are based on recovering the actual cost to extend the service. The cities would have until Jan. 1, 2022, to end any unreasonable surcharges. If that doesn’t happen, the state would reduce LGF distributions by 20%. If, in addition, a municipality pressed for annexation, it could lose all its LGF money. Duffey said the rising cost of water and sewer services beyond the rise in inflation and the cost of settlements for illegal sewage discharges has brought the issue to a head. “Now water is getting really expensive, and because water is getting really expensive, these kinds of utility water war games are becoming meaningful amounts of money,” he said. SEE WATER, PAGE 17

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CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

Still time for C-Suite Gala nominations

Editorial

Akron’s on a roll The revival of Cleveland’s downtown — and the challenges therein — is a well-told story in these pages and beyond. It’s also one that, perhaps unfairly, has overshadowed the impressive revival occurring roughly 40 miles down Interstate 77. It’s time to change that. We’re talking about Akron, of course, and this week’s special report — orchestrated by Crain’s deft Akron team, Sue Walton and Dan Shingler — takes an in-depth look at the rise of the Rubber City’s downtown core. Shingler went as far as describing Akron’s downtown as being “vulcanized” with a slate of recent developments and other blockbuster projects in the works. For too long, Akron’s story, at least portrayed in the Cleveland media, had been driven by a “What about us?” narrative. It was one pushed by a bullheaded mayor — Don Plusquellic, who stepped down in 2015 — and other civic leaders who felt they weren’t viewed as players in the squishy Northeast Ohio economic ecosystem civic leaders are still trying to define. Luis Proenza, the longtime University of Akron president, always bristled at the “Cleveland Plus” marketing campaign, believing Akron should play its own starring role. None of that seems to matter these days, though. Akron is writing its own story — and, as demonstrated in this week’s special report, it’s a good one. That story hinges on several factors, as Shingler reported — access to capital, programs to encourage investment, a sustained healthy economy and a continued appetite for downtown living. There’s entrepreneurial work being done on all those fronts. One example comes from Don Taylor, CEO of Fairlawn-based Welty Building Co., a Greater Akron construction powerhouse. Taylor told Crain’s he plans to unveil this summer a new investment firm that will operate a $20 million to $30 million mezzanine fund. The fund would provide a mix of debt and equity financing

that could facilitate bank lending and ultimately accelerate development in Akron. It’s a smart business move, of course, for Taylor, whose business likely will benefit from these developments, but it’s an example of the type of innovative thinking Northeast Ohio desperately lacks. There’s also Joel Testa, who told Crain’s he’s trying to build, through a company that bears his family’s name, the Akron that he wants to live in — one that appeals to urban residents. Testa is responsible for some of the city’s most important developments, which include the Canal Square Lofts apartments, the Northside Lofts condominiums and the Courtyard Akron Downtown, which was downtown’s first new hotel in decades — yes, decades. We’d be remiss to not mention the leadership shown by Akron Mayor Dan Horrigan, whose management style, and lack of ego, is an about-face from that of his predecessor. Horrigan demonstrated that government isn’t always an impediment to business, but instead can help foster investment in the community. Horrigan, for example, was recognized this spring by the United States Conference of Mayors for his dedication to small business. Horrigan’s ultimate goal is to grow Akron’s population. It’s no small task given what’s happening across the Rust Belt. Look no further than Cleveland, where, despite dazzling new amenities, the city has struggled to grow its population anywhere but downtown and a few millennial-laden neighborhoods. Can Horrigan help buck that trend? Only time will tell. The cast of characters propelling the rise of the Rubber City is long — and we aren’t pretending to have identified them all. What’s important, though, is that it’s a team effort and momentum is certainly building. After all, no single individual — company, athlete, political figure, developer — can lift Northeast Ohio from the troubled times in which we’ve found ourselves.

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Crain’s has long recognized Northeast Ohio business people through a variety of award programs. It’s our way of celebrating and recognizing the immense talent in Northeast Ohio, from young leaders to mid-career professionals to corporate leaders. Next week, on July 26, we will be honoring 16 exceptional leaders with our Women of Note awards (you saw their impressive stories in a recent edition of Crain’s), and we certainly hope you can join us at the Huntington Convention Center of Cleveland to celebrate them. I’m always struck by the quantity and quality of nominations we receive. Take for example, our Forty Under 40 awards. We recently closed nominations for this year’s class and are now beginning the process of going through the hundreds of applications that were submitted — not an easy task with Elizabeth so many top-notch candidates. As usual, we McIntyre were flooded with last-minute nominations and requests to extend the deadline, which we did. Knowing that to procrastinate is to, well, be human, we’ve decided to also push back the nominations deadline for our C-Suite Awards. You now have until July 31 to tell about your amazing corporate leaders. As we did at our inaugural event last year, we will celebrate the C-level professionals on Dec. 6 with a gala event honoring their contributions, community commitments and outstanding professional performances. This is your chance to nominate a leader who deserves recognition for the work they do. We are looking for individuals from both the for-profit and nonprofit realms, in the following roles: chief executive officer, chief financial officer, chief information officer, chief marketing officer, chief operating officer, general counsel and volunteer board leadership. Human resources professionals will continue to be honored separately through our Archer Awards program. Please go to CrainsCleveland.com/nominations to submit an outstanding leader for consideration. We are looking for a diverse group of honorees, by industry, size of organization, product or service, financial success and other factors. We want this group of leaders to be a true reflection of the diversity of businesses and business people in our region. We also will honor a Northeast Ohio business leader with the Champion Award, given in recognition of distinguished service and extraordinary effort in promoting and advancing Greater Cleveland outside of our region. The work done by the Champion Award recipient should have a direct economic impact, attracting outside investment and direct spending. Additionally, their efforts should help to positively advance the region’s image, both nationally and internationally. David Gilbert, president and CEO of both Destination Cleveland, the regional convention and visitors bureau, and the Greater Cleveland Sports Commission, was the recipient of last year’s Champion Award. While we are still accepting nominations for the C-Suite awards, we have chosen the 2018 Champion Award recipient who will be honored that night. Crain’s Cleveland is proud to honor Barbara Snyder, president of Case Western Reserve University. Snyder’s tenure has been transformational for both the university and community, ranging from CWRU’s capital campaign success and its growth in undergraduate applications to projects such as the Tinkham Veale University Center and the planned Health Education Campus. We have a wealth of excellent leaders in all kinds of Northeast Ohio businesses, in every sector. We want to recognize all of them, so please let us know who you think deserves recognition. As they say in Hollywood, it’s an honor just to be nominated.

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Cleveland Business, 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113, or by emailing ClevEdit@crain.com. Please include your complete name and city from which you are writing, and a telephone number for fact-checking purposes. Sound off: Send a Personal View for the opinion page to emcintyre@crain.com. Please include a telephone number for verification purposes.

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Colleges, employers must help young adults enter job market By TRICIA KUIVINEN

Like many American parents of successful college students, I was very proud to watch my daughter graduate from her chosen college and be awarded her Bachelor of Arts degree last year. After four years of helping to pay her tuition bills, returning her latenight stress texts and providing her with plenty of encouragement, I fully relished the moment when her name was called and she walked across the stage to receive her diploma. The many years of hard work and sacrifice had finally reached their conclusion; she was off and running toward the job market. And yet she really wasn’t. She started her job search a few months before graduation, only to encounter many of the dilemmas and challenges facing young job applicants today. These include non-responses within the jungle of online applications; resume screening software that scores applicant resumes using only certain keywords, thus rejecting all but the highest percentage matches; phone interviews, a common tactic that allows employers to get a quick impression of candidates without investing the time and effort required by in-person appointments, but hiding the valuable impressions revealed by body language and facial expressions; entry-level positions requiring “1-3 years of experience”; unpaid internships lasting a year (who can live for a year without income?); and a confusing maze of required technology competencies and certifications that are not part of most existing college degree plans. After finally securing one in-person interview for a position she was fully qualified for, the meeting lasted barely 10 minutes and contained no skill-based questions. Her follow-up emails to the hiring manager were never answered. The same was true of more than a half-dozen interviews she attended, often after spending hours to prepare, only to hear nothing. Adding to her frustration were dutiful salary calculations for entry-level positions offered in her field, often revealing an hourly rate between $10-12, the same wage currently paid to many American fast food and retail workers. “Why would jobs requiring a col-

lege degree pay so little?” she asked. “How does that validate the time and cost I spent in college?” Great questions. Or perhaps another, more pivotal question should be asked: “How can jobs that pay so little require a bachelor’s degree?” Today’s employers appear to want candidates they can put to work immediately at the lowest pay, with little to no training investment, yet many simultaneously express that they “can’t find enough” qualified employees. Meanwhile, thousands of capable and eager American college graduates are wandering in employment deserts while their student loan interest continues to compound. What’s the solution? To really help students prepare for the job market, colleges need to do much more than tout their overall national rankings and career centers. The coursework required for undergraduate degree plans should be adjusted to include for-credit internships that provide real-world, paid experience prior to graduation, along with the necessary software training and certifications demanded in the modern workplace. Companies, in turn, should return to internal training programs that will transmit specialized skills and bring promising new grads up to company performance expectations quickly. A return to a focus on employee training would also lessen constant recruitment and hiring burdens by allowing companies to better customize their new hires to available openings. My daughter finally found a job that was a good fit for her skills and interests, and it was with a Northeast Ohio employer who 1) interviewed her in person, 2) offered a comprehensive training program and 3) provided a competitive, albeit modest, salary package. Thanks to this opportunity, she is employed full-time and is on track to pay off her student loan ahead of schedule. If American colleges and companies would both provide more of this concrete training and technology preparation, many more recent college grads would also be in her shoes. Kuivinen is a nonprofit management professional and organizational consultant from Cleveland.

Web Talk Re: Cavs, and Cleveland’s economy, after LeBron James Who cares? If fans are dumb enough to buy $22 million worth of Goodyear tires just because some guys with defective growth hormones dance around in their underwear emblazoned with Goodyear’s logo, they deserve to get stiffed for advance season ticket sales for a lousy team. The only tragedy is the taxpayers getting stiffed to rebuild the playground. If the fans are so whiny, let THEM pay for the arena in higher ticket prices. — Bob Fritz Look at the bright side. While LeBron is still at the top of his game, eventually his skills will decline and we’ll be spared watching it. Father Time is undefeated. — Lyn Anderson

Re: Crowdfunding for school districts The July 11 Crain’s story headlined “Ohio auditor recommends school districts adopt crowdfunding policies” is telling. So, we are down to crowdfunding to pay what our taxes should be paying for. Does anyone care to explain? — JPM

Re: Port Authority’s wind industry dreams The Confined Disposal Facility just north of Burke Lakefront Airport would be a great location for a wind turbine staging facility. The towers and turbines can be brought in through the Saint Lawrence Seaway with the big ocean barges and transferred to the job sites with lake barges. The location is completely secure and ready for development. — Tom Schock

Re: Fed study on tax cuts The Federal Reserve’s conclusion that the growth benefits of the recent federal tax cuts may be overstated was rather obvious from the get-go. Why stimulate an economy that doesn’t need stimulating? Save it for when you really need it. — John Vranic

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Focus RUBBER CITY RISING

Tools needed to keep Akron’s development pu New investment fund will focus on city’s projects By DAN SHINGLER dshingler@crain.com @DanShingler

For Akron to continue its downtown revival, it will need some help — capital, programs to incentivize investment, a sustained healthy economy and a continued appetite for downtown living. But that’s a far cry from the nottoo-distant past, when many would have said that the city needed a miracle. What’s more, many of the Rubber City’s current needs are being met or about to be addressed, including with a new investment fund aimed squarely at Akron. That last bit of assistance is coming from Don Taylor, CEO of Fairlawn-based Welty Building Co. (probably the largest construction company in Greater Akron) and past chair of the Greater Akron Chamber. Taylor said he’s bringing a longtime goal to fruition this summer by unveiling a new investment firm that will operate a $20 million to $30 million mezzanine fund — which could provide a combination of debt and equity financing that would help facilitate bank lending — to invest in Akron developments. “I’ve spent a significant amount of time putting this together over the last several months, and we’re going to launch a company ... Catalytic Community Capital,” Taylor said. Its mission, he said, will be to provide developers the last bit of financing they need to finish the capital stack necessary to complete projects in Akron. “We would actually invest in kind of a mezzanine fund to help people who are just stuck,” Taylor said. In a sense, Taylor is investing in his own business as well because Welty is likely to be involved in future projects in and around downtown Akron. Welty already is working on projects such as the Stark State Akron campus along state Route 8 and is preparing to start work on the city’s crucial Bowery Project later this year. Taylor, through his work with the

Akron is awash in development but challenges remain to maintain the momentum. (Shane Wynn for AkronStock)

Timeline of Akron’s rebirth During the past two decades or so, Akron has seen a steady dose of downtown development, save for the years of the Great Recession. And while this list doesn’t include some of the projects (Stark State Akron, Summa Health, for example) just on the outskirts of what the city deems downtown, it looks at how the city center we know today has taken shape and what we can expect in the near term. 1997, Canal Park Stadium: Home to the Cleveland Indians-affiliated RubberDucks minor league baseball team, Canal Park transformed Main Street and marked the start of a new era of development in downtown Akron. It cost $32 million to build and can accommodate more than 7,500

people for ballgames and special events. It’s also been getting improvements, like a new scoreboard, since RubberDucks owner Ken Babby purchased the team in 2012. Street view of Canal Park, home of the Akron RubberDucks. (Shane Wynn for AkronStock)

2001-2003, Lock 3 redevelopment area: The city purchased the land and buildings — once home to thriving businesses and later mired in blight — around Lock 3 in 2001 and by 2003 developed the area that evolved into Lock 3 Park, an outdoor entertainment venue that gathers thousands of spectators for concerts and other events. 2000, GOJO Industries: The maker of Purrell hand sanitizer moved its headquarters into an $8 million, 280,000-square-foot building, a former tire plant that the city purchased as part of its efforts to recruit GOJO from

chamber and other efforts, intimately knows the plans of city officials and entities like the Downtown Akron Partnership. They have set out visions for downtown that the city and developers now seek to fulfill. And he’s seen many plans often take longer than necessary as projects stall or go by the wayside. He thinks his new venture will help. “We think helping the capital stack is going to be a huge benefit to the city in activating some of these plans they have for downtown Akron,” Taylor said. Taylor said he’s been working with wealthy area families, individuals and other potential investors. He thinks he has the group he needs to launch. “There’s more to come on that in the next month or six weeks,” he promised during a June 27 interview. If he pulls it off, city officials will be thrilled. “That would be amazing … the biggest thing that downtown Akron needs, always, is more capital,” said James Hardy, chief of staff to mayor Dan Horrigan and the administration’s point man on many downtown development issues. Chris Burnham, president of Development Finance Authority of Summit County and possibly the one person who works the most on financing local development, also was enthused. “He’s been talking about, conceptually, some things like that for a while, so that’s good to hear. That would be great,” Burnham said. They and others would especially welcome something like a mezzanine fund because Akron has a lot of pent-up demand for projects and developers anxious to start them, but financing has gotten more challenging recently. Lenders are requiring more money be put into a deal before they’ll lend the rest, according to Burnham, Taylor and others. “It used to be you could borrow money on an 80/20 basis. You put 20% down and could borrow 80%. Now it’s more like 70/30,” Taylor said. His fund would address that gap. Until now, finding a source of financing or investment to bridge the gap has been difficult and sometimes impossible, Burnham said. “There are no capital funds and REITs looking to invest in a place like Akron. It’s just a fact,” Burnham said. Cuyahoga Falls. The company brought with it 230 jobs and has continued to invest in the building, reportedly spending $25 million in improvements in its first 15 years there. 2002-today, Akron Civic Theatre: Built in 1929 with an interior that resembles a Moorish Castle, the Civic is a jewel of downtown Akron. The theater in 2002 completed more than $20 million worth of interior renovations and today its executive director, Howard Parr, is raising $1.6 million to complete the restoration of the lobby, likely to be followed by a new facade. CONTINUES ON PAGE 12

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Akron’s Landmark Building is the centerpiece of the burgeoning Bowery Project. (Dan Shingler)

More in the toolbox Such a fund also would come at a time when Akron has a lot of its other boxes checked off in terms of what the city needs to continue its recent spate of development. For example, the federal government has approved “opportunity zones” for sections of Akron, including downtown, that will enable investors to improve properties without having to pay capital gains on the increased value of their holdings, Burnham said. The city intends to use them to their fullest extent, Hardy said. It’s just waiting for more details from the U.S. Treasury Department, which oversees the program. Akron has been disappointed before, including this past spring when the Bowery Project was denied New Market Tax

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Credits, so Hardy is cautious. “In theory, (the opportunity zones) sound really exciting and catalytic, but until the rules are set up and people start making investments, it’s still a little bit of a question mark,” he said. But watchers say the city already has a lot of things in place that should help sustain the pace of development. Chief among them is a 15-year tax abatement that the city enacted in 2017, allowing homeowners and developers alike to invest in residential property without adding to their local property tax liabilities. Those behind the Bowery Project, the conversion of the Law Building to residences and the conversion of the City Center Hotel to market-rate apartments all say the abatement is an important part of their financing. The city also is providing the right type of infrastructure for local developments to succeed, downtown backers say, which is perhaps most evident in the current work to redevelop South Main Street to better facilitate pedestrians, cyclist and livability. More can be done, though, such as creating a community development corporation (CDC) downtown to help the city and folks like the Downtown Akron Partnership plan and execute developments. Hardy said that’s being discussed. “A downtown CDC is a best practice that we don’t currently have in Akron,” he said. “Cleveland has one, Toledo, Columbus, Cincinnati — even Dayton has some sort of downtown development arm that is shielded from political winds. “We’re talking to some folks about getting one going in downtown Akron.” But what the city needs most, watchers say, are two things: for existing developers to deliver on their current projects as promised and sustained demand for downtown housing.

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Submit your nomination today: CRAINSCLEVELAND.COM/NOMINATIONS Deadline to nominate is July 27. This advertising-supported section will be produced by Crain Content Studio-Cleveland, the marketing storytelling arm of Crain’s Cleveland Business. The Crain’s Cleveland Business newsroom is not involved in creating Crain Content Studio-Cleveland content. For questions, contact Amy Ann Stoessel, managing editor of custom and special projects, at astoessel@crain.com or at 216-771-5155.

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RUBBER CITY RISING

10 to watch in Akron development One thing's for sure: It takes at least a village to rebuild a city. But that village needs leaders, people with vision, people with capital and people who can help navigate the bureaucracy and intricacies of urban development. Akron seems fortunate to have a strong cadre of such individuals — more than we could list. But here are a few of the folks who are stoking the fires that have the Rubber City burning with downtown development these days. — Dan Shingler and Sue Walton Dan Horrigan

James Hardy

Joel Testa Chief of staff, deputy mayor for integrated development

Mayor City of Akron

Tony Troppe President and chief operating officer

Details: Horrigan has set himself an ambitious goal: He wants to grow the city’s population. To do it, Horrigan knows he has to make downtown a vibrant core of the city. He worked with city planners and the Downtown Akron Partnership to create the Downtown Vision and Redevelopment Plan, which aims to make the city center more livable. He’s also encouraging developments to help satisfy the increasing demand for downtown living. Under his watch, the city authorized the sale of the Landmark Building and others along Main Street to make possible the Bowery Project, which will bring retail space and nearly 100 apartments to downtown. And the city enacted a residential development abatement that is assisting many current projects.

Details: A lifelong Akron resident, Hardy came on as chief of staff when Horrigan took office and was tapped in February to lead the city’s newly created Office of Integrated Development, which was created to eliminate the “silo” approach when it comes to development, and Hardy plays a critical role in ushering through some of the city’s biggest development projects. “We currently have very little residency downtown, which we’re looking to boost,” Hardy said. “We want downtown to be a true residential neighborhood, that is activated in the evenings and every weekend too, not just during business hours. Increased residency will increase demand for dining, grocery and retail.”

Details: Testa keeps “trying to build the Akron I want to live in,” he told Crain’s in October 2017. It seems Testa wants to live in a city with a lot of appeal to urban residents. He’s responsible for some of the city’s marquee projects, including the the Northside Lofts and Courtyard Akron Downtown. He’s since built the Northside Marketplace, a sort of retail incubator, and has plans for a year-round fresh food market in the spot. Next on his list: redeveloping the former Akron City Center Hotel into 80 to 100 affordable, market-rate apartments. For Testa, whose family started the company in 1967, it’s more than just business. “What I do in Akron is my calling,” he told Crain’s last fall.

Don Taylor

Dan DeHoff

Suzie Graham

President and CEO Welty Building Co. Details: If you take a look at the construction projects in and around Akron, chances are you’ll see the Welty name. Taylor is the hand on the controls of the company that’s increasingly connected to high-profile projects. Now Taylor’s company is partnering with DeHoff Development on the Bowery Project, which is vital to the city’s vision of what it wants downtown to be. Taylor, who plans to unveil a new investment firm this summer, understands that vision. “We need to create a place for people to live in downtown Akron,” he said. “Cleveland is probably 10 years behind Chicago and maybe Pittsburgh in creating that downtown live-workplay environment. I feel Akron now needs that same sense of place.” CONTINUED FROM PAGE 10 2006, Northside Lofts: The project is listed by most people as the first major downtown residential development of Akron’s current building boom. Developer Joel Testa invested $30 million to build the 92 lofts as high-end residences, along with mixed-use space. Testa is planning a $5 million expansion and remodeling of the location, which is the site of the new Northside Marketplace for small retailers. 2008, Towpath Trail: For decades, few knew that the Ohio & Erie Canal Towpath Trail was part of downtown Akron. In 2008, the Towpath Trail Bridge over the Innerbelt was built, connecting it to downtown. Now, it’s seen as a key feature of downtown living and one the city plans to exploit further as it develops the Innerbelt’s former land.

City of Akron

President DeHoff Development Co. Details: DeHoff is a Canton native who, along with his father and company chairman Bob DeHoff, is well versed in suburban development and real estate. In addition to development, they also have more than 100 real estate agents, with both the development and realty operation focused on Stark County. The Bowery Project is the company’s first foray into the downtown Akron market. “Other cities — Pittsburgh, then Cleveland — have already built downtown housing,” he said. “What here do we have in Akron to test the market? We’ve got (Stuart Lichter’s) Goodyear East End project ... and he’s got a waiting list. If you had told me before that he would have a waiting list for apartments, I would not have believed you.” 2007, Akron Art Museum: The 63,000-square-foot, $35 million John S. and James L. Knight Building of the museum was designed by the Viennese architectural firm Coop Himmelb(l)au after an international competition. It was the first American building designed by the firm and has been part of an arts revival downtown. 2009, 22 Exchange: This student housing center at Main and Exchange streets was a key development in terms of bringing more young people to the urban core. It was quickly filled and followed by the development of other private apartments for students, including The Depot, 401 Lofts and University Edge. 2015, Akron Children’s Hospital Kay Pavilion: Ever-growing Akron Children’s sought to deepen its roots in downtown Akron with this $180

Testa Cos.

President and CEO Downtown Akron Partnership Details: When once asked about Akron being seen as the little brother to Cleveland, Graham said, “If Akron has a gender, she is definitely female: resilient, changeable, generous, dynamic.” That deep understanding of her hometown guides Graham in her work leading the nonprofit, whose goal is to improve the vitality of downtown. That means as an economic driver, but also in terms of livability. While maybe not tied directly to downtown’s marquee development projects, the Akron native is a facilitator, bringing stakeholders — government, corporate, human services and small business, among others — together, and helping them see the best use of downtown space. million, 370,000 square-foot building has 75 private rooms and offers emergency services, an outpatient surgery facility, a neonatal intensive care unit and facilities to help mothers with high-risk births. 2016, Courtyard Akron Downtown: After five years of planning, developer Joel Testa opened Akron’s first new downtown hotel in about 80 years. The $25 million hotel, built near Testa’s Northside Lofts, offers 146 high-end hotel rooms downtown. 2016, Canal Square Lofts: Though originally restored in 1985, Canal Square has continued to grow. In 2016, it added 22 new apartments. Now developer Joel Testa is planning $7.5 million in new renovations. Exterior view of Northside Lofts condominiums. (Shane Wynn for AkronStock)

Joe Moffa Developer

President

Everett Group

Riley Hotel Group

Details: Troppe just might be Akron’s most eclectic developer, in both personality and projects. He has worked at creating an arts district around his Blu Jazz+ club, developed office and retail space in the Everett and Kaiser buildings, created housing in the Cascade Lofts and now is working with the Riley Group to bring a boutique hotel to downtown. The common denominator: Troppe often works on historic preservations. “I’m an epicentrist and that means I like to go center stage,” he said. “I want to go right where the action will be. And it’s often, if not always, in the middle of a historic district that has yet to be rediscovered. … If you’ve got a stage that’s half built, you don’t need to build from scratch.”

Details: Moffa has spent his career in the hospitality industry, starting at age 12 in his family’s restaurant. He followed a career that took him from chef to general manager of Quaker Square. The Medina resident ultimately started his own hotel management company, and now Riley has more than 17 hotels — both independent and branded, from Ohio to Key West, Fla. — under its management. Riley is now working on the new Blu-tique Hotel project in Akron with co-developer Tony Troppe. Moffa in 2016 told Crain’s that his team already was involved in planning the financing and design for the new hotel. “It makes sense for us to do that since we will be responsible for managing guest comfort,” he said at the time.

Chris Burnham

Tom Rybak

President Development Finance Authority of Summit County Details: Burnham is the man behind the fund that is behind efforts to help to rejuvenate areas of Akron. Capitalized by philanthropies, corporations and individuals, the Akron Community Revitalization Fund was created to help finance projects, especially in distressed areas. Among its loans is one for $1.28 million to the developers behind a $10 million boutique hotel. Burnham has his own reasoning as to why there’s a boom in Akron. “The economy is better, so banks are lending. I guess sometimes it’s just a matter of timing,” he said. “But maybe there are a few more tools in place, too, and there’s new interest in downtown from developers who have previously had suburban interests.” 2016, Cascade Lofts: Developer Tony Troppe bought an old industrial building in 2011. Five years and $3.5

Princialin-charge, senior architect T.M. Rybak and Associates Details: Rybak is new to Akron, but the man behind efforts to convert the Law Building into luxury apartments is not a newcomer to development. His firm has done several projects in and around his home base of New Jersey, ranging from smaller projects to large medical facilities and the Meadowlands Racetrack. His Akron is a big one. “We’re pretty excited to be here, pretty excited to own this building, and hopefully, we’ll be successful in getting the vision that we seek for Akron,” Rybak said in June. “The people of Summit County, there are no words to speak of their support of this building and for us and for their vision of this area, and the city also helped out and gave us great support.” million later, he had opened the building as 24 urban, luxury apartments on the north edge of downtown on the Ohio & Erie Canal Towpath Trail. Now the building is full of tenants and is opening Lock 15 brewery on its ground floor, and Troppe says he may expand it soon. 2017, Northside Marketplace: Attached to the Northside Lofts, Northside Marketplace has 10,000 square feet of space for small and new retailers to display and sell their wares without having to rent larger and more expensive space. About 40 retailers now operate from the space, on the ground floor of Joel Testa’s development, which was done in conjunction with the Downtown Akron Partnership and plans to open a fresh-food food market later this year. CONTINUES ON PAGE 14

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AKRON

CONTINUED FROM PAGE 1

“The project was at risk,” said DeHoff, whose DeHoff Development Co. and Fairlawn-based Welty Building Co. make up the Bowery Development Group, which is financing the about $40 million project. DeHoff was referring to the project’s ability to use New Market and Historic Tax Credits, which he and Borda said were key to financing the project. Previous developers had some, but lost them — something DeHoff said his company discovered only after they bought into the project. But DeHoff, his partners and local officials were able to largely replace the credits and raise other financing with the help of city and state officials, which took more time, but eventually worked. “We were going to close (on financing) in March. We’re now shooting for August. A lot of that had to do with the New Market Tax Credits,” Borda said. Construction is slated to start in September, the executives said. “Construction will take a year to 14 months, and everything will be reconstructed,” Borda said. What will be left, according to the Bowery’s plans, will be a complex brought back to life, connected below ground and surrounded by new streetscaping and canal-front open spaces. It will include about 100 new apartments and 60,000 square feet of mixed-use space that is expected to include cafes, retailers, coffee shops and, according to DeHoff, a grocery store and probably a brewery with which he’s currently negotiating. But it’s what’s on the outside that might have the biggest impact on downtown Akron. The project’s walk-through amenities on the ground floor and its design are meant to tie that section of Main Street with a scenic and tumbling part of the Ohio & Erie Canal behind it, creating a river-walk environment with large patio area that will open access to Lock 4 and tie the canal into an increasingly walkable downtown. Opening up such public spaces is something many civic leaders say helped downtown tremendously at neighboring Lock 3, where the city purchased a group of old buildings, tore them down and exposed a parcel that has become a major downtown park, gathering place and entertainment venue. “It was an abomination before that,” said Suzie Graham, president CONTINUED FROM PAGE 12 June 2018, AES Building: The former ExxonMobil Advanced Elastomer Systems building just south of Canal Park on Main Street recently got new life when the Development Finance Authority of Summit County announced it would loan $580,000 to enable building owner and developer David Schipper to renovate the building for two new tenants, CommuniCare Health Services and OHM Advisors. July 2018, Akron Children’s Hospital Considine Building: Long a keystone of downtown, the hospital worked with the city in 2017 and 2018 to figure out a way to expand there — a process that involved land swaps, lots of planning and an $82 million investment. The hospital is now set to take possession of its new facility in July and will then move more than 200 of its physicians and

of the Downtown Akron Partnership. She puts the repurposing of that site at the top of her list of changes that have transformed the downtown area, and others agree. “Lock 3 is our Central Park. It’s your recreation space, our green space and our community-event space,” Testa said.

One busy street The Bowery, though, is far from the only thing going on in that little pocket of the city. Across the street, the Law Building’s new owner, New Jersey developer Tom Rybak, just announced he’s converting the 11-story office building into a mixed-use development that will include 112 luxury apartments. The $26 million development will offer tenants on-site services for laundry and food delivery, and will have a gym and maybe even its own doorman, Rybak said. Next door to the Bowery, the Akron Civic Theatre — which has been holding down the fort in this section of Main Street with the enduring dedication of executive director Howard Parr — is raising $1.6 million for a lobby restoration. That would largely complete the renovation of the theater’s interior, leaving only the replacement of facade before it would return to its past glory, according to Graham. “He’s so close — so close!” she said of Parr, whom she described as a local hero of many downtown boosters, herself included. Also a few blocks north of the Bowery Project is Mayflower Manor, a 16-story building that was once a premiere downtown hotel and ballroom that currently provides subsidized low-income housing in its more than 200 apartments. New York-based Capital Realty Group announced it was purchasing the building in March. The group says it plans to spend $10 million renovating the structure, using the city’s new residential tax abatement to help. A specialist in subsidized housing for seniors, Capital Realty reportedly has promised that residents will not have to move from the building during renovations and will be able to remain after the work is done with no increase to their rent. City officials, who have been touting downtown as a place for residents of all incomes and walks of life, say the project is proceeding on schedule, with planning to continue through this year followed by construction in 2019. And in the middle of all of this de-

The Main Street corridor is ground zero for much of downtown’s development. (Shane Wynn for AkronStock)

velopment, the city is redoing Main Street itself. In March, the city announced it had been awarded an $8 million Transportation Investment Generating Economic Recovery (TIGER) grant from the U.S. Department of Transportation to continue the southward march of its ongoing Main Street renovations — right past the Bowery, Civic and Law Building (so far). That’s in addition to the $5 million TIGER grant it received for the project in 2016. It will be two years of work and traffic rerouting, but the $26.7 million project is expected to be done at the same time as the Bowery Project. When it’s done, a large section of Main Street will not only have new pathing, but new bike and walkways, transit facilities, lighting and landscaping. City planners and downtown advocates hope all of this development on Akron’s welcome mat will spur more improvements right there on the front stoop. And that might already be happening. Testa said he’s agreed to purchase land from the city along Lock 3 on the other side of the canal, off Water

other staff into the building’s 230,000 square feet of space. July 2018, Main Street Promenade Project: Two years of work kicked off to redo a large section of Main Street in an effort to increase the city’s livability The $26.7 million project will add new bike and walkways, transit facilities, lighting and landscaping. The work is being funded in part by two Transportation Investment Generating Economic Recovery (TIGER) grants, $5 million awarded in 2016 and $8 million in March. Ongoing 2018, Bowery Project: Arguably the most important development downtown today, the Bowery Project has had more than its fair share of fits and starts. Now in the hands of Canton-based DeHoff Development and the Welty Building Co., the project includes six buildings along South Main Street that will get

Street, for a massive new building. “We’re in negotiations on a development agreement now with the city,” Testa said. He’s got big plans for the site — a new building, with 172,000 square feet of space, possibly complete with a new major downtown employer that would occupy a now-vacant lot. Testa said he has commitments from office tenants to occupy more than half of the building, with most of it going to a single out-of-state company that would be new to Akron. He’s not saying who that is yet but said he’s moving forward on the development. “It’s a planned entertainment complex, office building, hotel, parking garage, lofts and 10 retail/entertainment spaces all along Lock 3,” Testa said. He thinks that while there’s office space in Akron, there’s not really much modern office space — and not enough nice space. Others agree. Welty CEO and former chair of the Greater Akron Chamber Don Taylor brought it up while discussing the opportunities and challenges of downtown. “Akron’s office building space is reRendering of the Blu-tique Hotel, set to open this fall. (Contributed photo)

about $40 million worth of improvements that will result in 100 apartments, 50,000 square feet of mixed-use space, a downtown grocer and more access to the locks on the Ohio-Erie Canal. Ongoing 2018, Law Building: Located across the street from the Akron Civic Theater and the Bowery Project, the 210,000 square-foot,

11-story Law Building was purchased this year by New Jersey developer Tom Rybak, who plans to convert it to luxury apartments at a cost of about $26 million. Ongoing 2018, Mayflower Manor: Another big residential development on Main Street, north of the Bowery Project, the historic building was purchased by New York’s Capital Realty

ally antiquated,” Taylor said. “That has hurt the Akron market because the efficiencies, and the collaborative space you could create is really antiquated.” Testa hopes he’s right and that Taylor’s work on the Bowery Project produces a successful stretch along Main Street and around the Civic. “We would almost butt up against the Civic,” Testa said of the new project.

More than Main Street The Civic section of Main Street is not the only part of downtown Akron that has been experiencing a boom in development, nor is it the only section with more on the way. Testa, for example, is adding on to his Northside Lofts on the northern edge of the city’s center. That development got off to a fast start, lost some momentum during the financial crisis, but has recently been expanding with a ground-floor marketplace for new, local retailers and a planned farmers and food market on the floor below. Now Testa plans to invest $5 million more this year, adding new lofts. “Northside’s been a phased thing. Group, which says it will invest about $10 million to renovate it but will keep rents the same for its low-income and other residents, most of whom receive government rent subsidies. Ongoing 2018, City Center Hotel: This former 342-room Holiday Inn was purchased in 2016 by developer Joel Testa, who is now working to convert the 19-story building into 144 market-rate apartments, available sometime in 2019. Testa estimates the development will cost about $15 million. Ongoing 2018, Blu-tique Hotel: A development of Tony Troppe and the Riley Hotel Group, the Blu-tique is set to open this fall in the former United Building. The about $12 million development will offer 71 rooms on East Market Street, across from Troppe’s Blu Jazz+ club and in the heart of the downtown arts and music district he’s developing.

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RUBBER CITY RISING

We have another 12 units to start this fall,” he said. Along Main Street near Cascade Plaza, he’s also redeveloping the former 342-room City Center Hotel — one of the city’s taller buildings at 19 stories — into about 144 apartments

he hopes to bring to market next year. Over on East Market Street, between North Main and High streets, there’s another pocket of development, with artistic flavor that followed the opening of the new Akron Art Museum building in 2007. That area has been championed by developer Tony Troppe, whose projects are usually smaller than giant bites like the Bowery. But Troppe is basically trying to build a district around the arts by chewing up one piece at a time and spitting out developments known for their creative use of modern design in old spaces. Currently, the development of a new hotel is on his plate. Troppe is converting the former United Building into a 71-room (to start) boutique hotel that he’s dubbing the Blu-tique Hotel, adopting a moniker shared by his nearby Blu Jazz+ club. Phase one of the project will cost about $12 million, is ongoing and should be open by this Thanksgiving, Troppe said. After that, he’ll expand to as many as 150 rooms, depending on demand, he said. Troppe said he’s co-developing the project with Medina-based Riley Hotel Group — which will also manage the Blu-tique, along with 17 other hotels it operates around the U.S., including the Kent State University Hotel and Conference Center. Troppe’s work at improving the neighborhood already may be helping the city to attract other developments. A 3,000-square-foot microbrewery, Akronym Brewing, opened up nearby on Market Street this spring.

Getting it to stick It’s quite a list of developments, and a long one for a city the size of Akron, which has been losing population — an issue Mayor Dan Horrigan wants to address. And because Akron’s core is small, these developments all are in close proximity to one another as well. For one, Troppe’s developments and Testa’s Northside Lofts are about a five-minute walk to the Bowery site. The city has also had its fair share of false starts over the years, most recently with the financial crisis stalling some developments and the Bowery Project’s recent failures to launch. But this time really does feel different, civic leaders say. “That’s always the challenge,” GAR Foundation President Christine Amer Mayer said. “There’s always a lot to get excited about, but how much of it actually converts to real projects? But I’m feeling really optimistic about what we’re seeing now.” City officials, some of whom have been working on the current round of projects under more than one administration, also express real confidence in ongoing development. “We’re at that initial tipping point that a lot of other cities, including downtown Cleveland, have been at before,” said James Hardy, the mayor’s chief of staff. He added, “We are about to prove the market downtown — not just for residential living, but for business and mixed-use as well. Once we do that, I think the spigot will really open up.”

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‘We’re rooted here’ On that last point, so far so good. Developers like Dan DeHoff, whose company is leading the Bowery Project, say they’ve been closely watching other developments in town — chief among them, Stuart Lichter’s massive East End development about a mile east of downtown. “He’s full ... with a waiting list,” DeHoff noted, adding that Lichter’s success inspired his own confidence in the Bowery Project. As for residents, time will tell how many eventually come, but so far downtown at least seems to be sticky. In other words, at least some of those who live there like it enough to stay, or even upsize. That includes people like Alexandre Marr, a music teacher and employee at American Greetings in Cleveland who has lived in downtown Akron for three years. He spent a year at one of Tony Troppe’s developments off East Market Street before moving to Troppe’s Cascade Lofts two years ago. Now, he and his partner, Dominic Iudiciani, a local photographer, are looking to move again but not out of downtown Akron. That’s only gotten better since they moved in. “Oh, my gosh — exponentially better!” Marr said. He and Iudiciani have a challenge, though. They want to own, and possi-

J O I N

bly even build, their next home. That might be tough to do downtown, Marr said, but they’re working hard to make that happen. “We love it here. Our preference is to live downtown … We’re rooted here now,” Marr said. Developers seem to have that same feeling. Most of the major ones working downtown are on their second, third and even fourth projects in and around the city’s center. The newcomer is Canton-based DeHoff. He seems to have gotten the long-struggling Project going and said he expects to break ground in September. So, what could go wrong, right? Plenty. Development is generally a risky business on the precipice of turning from boom to bust. Right now, demand is high and the market is easy, but things will tighten. “We’ll overbuild,” says Joel Testa, president of Testa Cos. “It’s just what developers do.” But that doesn’t have to happen soon. The key, developers say, will be to monitor the market and continue to do the things that have increased demand for space downtown. As anyone in Akron, including Taylor, knows — continued success is never guaranteed. Yes, a lot is going the city’s way, but that doesn’t mean anyone should let their guard down, he said. “We haven’t had a burning platform we’ve had to change – the indicators aren’t going in the wrong direction — but if we’re not careful, we’ll miss the next wave of success,” he said.

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CRAINâ€™S CLEVELAND BUSINESS

THE LIST

Employee Benefit Services Firms Ranked by the number of area professionals

LOCAL BENEFITS PROFESSIONALS THIS YEAR

CLIENTS TOTAL NE IN NE COMPENSATION OHIO EMPLOYEES OHIO (%) STRUCTURE

SERVICES

TOP LOCAL EXECUTIVE

Fees, commissions

Employee benefits strategic consulting, group benefits brokerage, human capital strategies, health and wellness management, retirement plan consulting

Robert J. Klonk, CEO

Fees and commissions

Administration of life and health insurance programs for employers, financial institutions, affinity groups and insurance company partners

David L. Selman, president, CEO

Benefits strategy, design and pricing; pharmacy benefit management consulting; benefits administration and exchange; communication and change management

Gina Kashuk, senior director, office leader, Cleveland

265

Fixed fees, commissions

Group health benefits consulting and administration, retirement plan solutions, payroll, COBRA, flex, property and casualty, life insurance and HR consulting

Michael P. Kouzelos, president, benefits and insurance

114

Fees and commissions

Brokerage and consulting in health and welfare, retirement, wellness, human resources, compensation, health care analytics, benefits compliance

David D. Kempton, Ohio president

Fee-for-service based on hourly rates

Health and group benefits, retirement consulting, actuarial services, defined contribution plan recordkeeping, defined benefit plan administration

Nancy Pokorny, principal

Assured Partners of Ohio 3900 Kinross Lakes Parkway, Suite 300, Richfield 44286 (440) 333-9000/www.assuredpartners.com

Commissions, fixed fees, project

Industry-specific solutions designed to help business owners to attract and retain employees

Kyp L. Ross, regional president

Alpha Group Agency Inc. 4200 Rockside Road, Independence 44131 (216) 520-3300/www.thealphaga.com

Commissions and fixed fees

Benefits and human capital solutions, personal tech support for online benefits administration, HR compliance, alternative funding, pharmacy benefit management

John Wain, managing partner; Jim Schade, Adrienne Vichill, Kevin Mackay, Brian Spear, principals

The Fedeli Group 5005 Rockside Road, fifth floor, Independence 44131 (216) 328-8080/www.thefedeligroup.com

By service, commissions, fixed fees

Employee benefit plan design including consulting, compliance, wellness, self funding and data analytics, voluntary and executive benefits, group purchasing

Umberto P. Fedeli, CEO

Mercer 200 Public Square, Suite 3760, Cleveland 44114 (216) 830-8000/www.mercer.com

53 (2)

By project, commissions, fixed fees, hourly rates

Retirement and risk management, health and welfare benefits, investment consulting and management, talent strategies and management

Dean Aloise, Pittsburgh office leader Jessica Kachur, wealth office leader (3)

CPI-HR 6830 Cochran Road, Solon 44139 (440) 542-7800 /http://cpihr.com

Consulting fees, commissions, administration fees

Human capital management firm combining consulting, brokerage and administration

Jim Hopkins, president

Skoda Minotti 6685 Beta Drive, Mayfield Village 44143 (440) 449-6800/www.skodaminotti.com

215

By project, commissions, fixed fees, hourly, retainer

Benefits, compensation, 401(k), Affordable Care Act planning and compliance, benefit plan audits, retirement plan design and administration

Gregory J. Skoda, chairman

USI Insurance 1301 E. 9th St., Suite 3800, Cleveland 44114 (216) 591-0088/www.usi.com

Commissions or fixed fees

Employee benefits strategic consulting, group benefits brokerage, population health management, retirement plan consulting

Kate M. Bang, president, employee benefits

Huntington Insurance Inc. 200 Public Square, Cleveland 44114 (888) 576-7900/www.huntington.com

Commissions and fees

Consulting and strategic planning in population risk management, on-site clinics, data analytics and predictive modeling, results-based wellness and health care reform

Craig Mottice, executive vice president, managing director, Northeast Ohio

Chapman & Chapman Inc. 2307 E. Aurora Road, Suite B13, Twinsburg 44087 (440) 287-7600 /www.chapmanandchapman.com

Commissions, fees

Employee benefits strategic consulting, benefits brokerage including voluntary and worksite, retirement plan consulting, executive benefits

Walter K. Chapman, CEO

NFP 4700 Rockside Road, Suite 540, Independence 44131 (216) 264-2707/www.nfp.com

Fees, commissions

Corporate benefits, commercial insurance, private client resources, HR technology solutions and retirement

Jim Dustin Brian Hirsch, managing directors

Aon Hewitt 5005 Rockside Road, Suite 1000, Independence 44131 (216) 573-9700/www.aonhewitt.com

Health and benefits, retirement and investment, talent and rewards, HR operations services

Gregory M. Hubbell, senior v.p., health and benefits practice leader; Brian Slife, senior v.p.

Conduent 6000 Freedom Square, Suite 100, Independence 44131 (216) 642-4254/www.conduent.com

By project, commissions, fixed fees, hourly rates

Health and productivity, retirement, communications, compensation, benefit audits, benefit outsourcing

Audrey Cervas, director

Todd Associates Inc. 23825 Commerce Park, Suite A, Beachwood 44122 (440) 461-1101/www.toddassociates.com

Commissions, fixed fees, project based

Health insurance, disability insurance, dental insurance, vision insurance, life insurance, executive compensation/ benefits, section 125 plans, wellness programs

Edward J. Hyland Jr., president

BDO 32125 Solon Road, Solon 44139 (440) 248-8787/www.bdo.com

Fixed fees

Recordkeeping, TPA administration, retirement plan funding, medical plan design/consulting, discrimination testing, government filings, ERISA compliance

Robert M. Littman, Ohio managing partner

Althans Insurance Agency Inc. 543 E. Washington St., Chagrin Falls 44022 (440) 247-6422/www.althansinsurance.com

Commissions, fees

Risk consulting and management, plan design and compliance, group medical, disability, dental, life and vision insurance

James C. Althans, president, CEO

PK Financial Group Inc. 9261 Ravenna Road, Unit B4, Twinsburg 44087 (216) 393-8182/www.pkfinancialgroup.com

Fees (percent of assets managed); commissions

Provide retirement plan consulting services in the forprofit and not-for-profit space

Pete Kaplan, president Brian Petros, CEO

Noble-Davis Consulting Inc. 6190 Cochran Road, Suite D, Solon 44139 (440) 498-8408/www.nobledavis.com

Fixed fees plus hourly rates for special projects

Retirement plan consulting, plan design and administration, welfare plan documents and filing

Jan L. Davis, president

Vantage Benefit Advisors Inc. 6200 Rockside Road, Independence 44131 (216) 642-7878/www.vanfinbenefits.com

Commissions and fees

Insurance, compliance, human resources and technology, flex benefits, retirement plans, Medicare supplements

William McCormick, president, CEO

DS Benefits Group 3555 Reserve Commons Drive, Medina 44256 (330) 725-0501/dsbenefitsgroup.com

Fixed fees and commissions

Customized insurance brokerage services, including government regulations and compliance, strategic planning, benefit design and financial analysis

Dino Sciulli, president

Brewster & Brewster Inc. 370 Blackbrook Road, Painesville 44077 (440) 951-8889/www.brewsterandbrewster.com

Fixed fees

Plan design and adminstration for 401(k) and cash balance/defined benefit plans; retirement plan repair shop

Donna Brewster Jane Brewster, owners

COMPANY (1)

2018

2017

Oswald Cos. 1100 Superior Ave., Cleveland 44114 (216) 367-8787/www.oswaldcompanies.com

145

138

325

SelmanCo 6110 Parkland Blvd., Mayfield Heights 44124 (800) 735-6262/www.selmanco.com

134

126

138

Willis Towers Watson 1001 Lakeside Ave., Suite 1500, Cleveland 44114 (216) 937-4000/www.willistowerswatson.com

120

129

166

CBIZ Inc. 6050 Oak Tree Blvd. S., Suite 500, Independence 44131 (216) 447-9000/www.cbiz.com

110

101

Arthur J. Gallagher & Co. 1111 Superior Ave., Suite 1601, Cleveland 44114 (216) 623-2600/www.ajg.com

Findley 1660 W. 2nd St., Suite 900, Cleveland 44113 (216) 875-1900/www.findley.com

RESEARCHED BY CHUCK SODER (CSODER@CRAIN.COM)

Want the full Excel version of this list Ă‘ and every Crain's list? Become a Data Member: CrainsCleveland.com/data The full list contains 37 firms. Information is supplied by the companies. Send feedback to Chuck Soder: csoder@crain.com.

(1) When ties occur, firms are ranked by total local employees. (2) Employment numbers submitted by Mercer in 2017 were incorrect; this number is a new estimate. (3) These executives are based in Pittsburgh but oversee

Mercer's Cleveland office.

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Telemedicine could soften geneticist shortage By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

To help meet the growing demand for genetics services amid a national shortage of genetic providers, some health systems in Northeast Ohio have turned to telemedicine. Science has offered many more ways that patients can benefit from learning about their genes, and the cost of the technology has come down, helping to drive demand. “Today we have more tools, and we understand the genetics better,” said Dr. Anthony Wynshaw-Boris, chair of the department of genetics and genome sciences at the Case Western Reserve University School of Medicine and head of the clinical genetic activities throughout the University Hospitals health system. University Hospitals began offering telemedicine services last year, a move that was met with enthusiasm from patients. In May, Cleveland Clinic’s Center for Personalized Genetic Healthcare, the clinical arm of the system’s Genomic Medicine Institute, hired Dr. David Flannery to help drastically expand its telegenetics offerings, which first began in 2016. “There’s limited number of geneti-

WATER

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Cities with such systems are opposing the legislation. In written testimony to the Ohio House Finance Committee in June, Cleveland Mayor Frank Jackson argued that the Cleveland Division of Water’s four-tiered pricing system to the 80 cities it serves range from 30% to 75% above the Cleveland city rate and that those rates are reasonable, based primarily on the distance from the city’s water treatment plants. He said they are in line with best practices outlined by the American Water Works Association, though likely more than would be considered reasonable under HB 602. Since most of the costs of these systems are fixed capital costs, any cuts in rates beyond the municipal boundaries would have to be offset by increases in the home cities. If HB 602 were to become law, Jackson argued, it would, “undermine the financial position and home rule authority of municipalities that assume the financial and operational risk associated with owning and operating a utility system.” In another lawsuit, 850 residents in an Amherst Township development

Cleveland Clinic Express Care Online so they can virtually deliver results to patient, purchasing telehealth equipment for the main campus genetics clinic, adding virtual genetics consults for inpatients at other Cleveland Clinic hospitals and exploring the possibility of offering of outpatient telegenetics at Cleveland Clinic locations outside Ohio. The Clinic will also implement eConsults, in which a physician can contact a geneticist or genetic counselor to determine whether a patient should have a test done, rather than simply referring patients to the specialist. The system is also employing a “flipped telemedicine” model, in which geneticists in other parts of the country will see patients in Cleveland via telemedicine. So far, the Clinic has hired a geneticist in Miami and another in Detroit. “Every year, I kept saying this is the future, you know, telemedicine’s the future,” said Flannery, who’s been working in telegenetics since the 1990s. “And it’s finally reached the point where it has, and it’s because the technology’s not the complication anymore. It’s the human factor of getting telemedicine services organized that’s the real challenge. … It’s a matter of getting patients connected with providers and figuring out how to make that happen.”

cists in the country, and limited number of genetic counselors in the country,” said Flannery, director of telegenetics and digital genetics at Cleveland Clinic. “And the Flannery distribution of genetic providers is not very well-distributed because most of us are in academic medical centers, and patients are scattered all over.” There are only about 1,600 board-certified medical geneticists who are M.D. providers in the United States. According to the National Society of Genetic Counselors, there are roughly 4,000 board-certified genetic counselors, providers who go through two years of post-undergraduate training to get a master’s degree. “Expanding the workforce is something that’s been a priority for genetics specialists, but it’s probably going to be hard to keep up with demand,” Flannery said. Growing the number of genetic providers proves to be challenging for a number of reasons. Creating a graduate program for genetic counselors is “fairly easy,” Flannery said, but the challenge in M.D. training for geneticists comes with having to cre-

ate and fund a residency program. Beyond educational challenges, genetics isn’t the most lucrative field in medicine, so it struggles to draw interest, he said. University Hospitals has a residency program for geneticists, training between four and six geneticists per year. It also recently increased its genetic counseling training program from six to eight students per year. Wynshaw-Boris said he sees the need for geneticists and genetic counselors continuing to grow, because “the amount of new genetic knowledge is growing, and that will mean we’ll have more need for services.” The growth in demand for these services has been driven in part by a focus on precision medicine, as well as by offshoots of the Human Genome project, an international research effort to determine the sequence of the human genome and identify the genes that it contains. MetroHealth is also seeing a growing demand for its genetic services, but hasn’t ventured into telemedicine at this point. Dr. Rocio Moran, division director of genetics and genomics at MetroHealth, said she’s seen a “significant change” in the referral base in recent years. Traditionally, genetics primarily dealt with the study of rare disorders, especially those that exist in pediat-

rics. So most of MetroHealth’s genetics patients were babies with birth defects or developmental issues, or pregnancies with anomalies noted. “As genetics and genomics really began to take its footing in medicine, we’ve really seen that referral base increase over the years to include adults with adult-onset conditions like cancer, cardiovascular conditions, neurologic conditions in order to try to identify the molecular cause of their medical issues,” Moran said. “But we’ve also seen kind of an increasing wave of patients interested in wellness opportunities, so identifying genetic markers that could predispose to various things in a pre-symptomatic patient as opposed to a symptomatic patient.” The last area she’s seen growth in has been in the field of pharmacogenetics, or how patients metabolize various drugs based on their genetic makeup. The costs of genetics services ranges widely, Moran said, from $250 to thousands. Physician visits are often covered by insurance, but systems have found it challenging to get insurance companies to allow for billing genetic counselors’ services. At Cleveland Clinic, the expansion of its genetics offerings includes setting up genetic counselors with

are seeking at least $1 million from the city of Lorain for past sewer system overcharges. Residents of Hidden Valley are suing Lorain for violating agreements on sewer service rates dating to the 1970s, when Hidden Valley was developed. Those agreements set the rate at 130% of the rate charged to Lorain city residents. The suit contends that a rate increase imposed by Lorain City Council in 2012 boosted rates to 200% of the Lorain city rate in violation of the existing, earlier agreements, without any cost analysis. Matt Dooley, a partner in the Sheffield Village law firm of O’Toole McLaughlin Dooley & Pecora LPA, is the attorney for the Amherst Township residents. He said he believes his clients are owed at least $1 million in sewer service overcharges. Dooley believes the Akron ruling won’t stand in the way of the Hidden Valley lawsuit. He believes existing state law supports the contention of his clients. Nor does he believe his clients need the added protections that HB 602 would create. “I like the point of it, I think it sends a message that there is a problem,” Dooley said. “But we believe there is statutory protection in place as to sewer (rates).”

CHINA

aggressive moves in the Florida mar- long-term commitment in China,” ket and construction in London. according to a news release. The foMoreover, the system’s revenues are cus is on key specialty areas and highly concentrated in Northeast meeting growing needs for disease Ohio, which Moody’s said could “con- treatment and health care in the strain growth given weak demograph- Shanghai community. The hospital — owned and operated ic trends.” Of course, the Clinic’s moves beyond Northeast Ohio are de- by Luye Medical Group, the regional signed to diversity the health system’s health care services arm of Luye Life revenue stream without diluting its Science Group — also can connect patients with Cleveland Clinic specialists focus on its home base. As for its China move, the expan- through distance health technologies sion via this partnership is consistent to obtain second opinions without the with the Clinic’s strategy to both time and expense of travel. The Clinic’s strategy to reach globbring business and patients to Northeast Ohio, as well as developing stra- ally isn’t unique. Mayo Clinic, the tegic partnerships around the world, Minnesota-based health system often said Tom Campanella, director of the viewed as the Clinic’s fiercest compethealth care MBA program at Baldwin itor domestically, has referral offices in Colombia, Mexico and Ecuador. Wallace University. “I think it’s a consistent response, and Through various sorts of arrangethen when you think of growth area and ments, Pittsburgh-based UPMC has you think of an area that you want to a presence in places such as China, have a strategic partnership with, it’s the Italy, Ireland and others. “I think there are only, though, a few area of, you know, the far east and speorganizations in our country, and then cifically as it relates to China,” he said. Patients in Shanghai will be able to there’s a few in other countries, that access detailed health education ma- have the ability and the expertise and terials from Cleveland Clinic experts the talent and the reputation to be able on conditions and various treatment to do something like this,” Campanella options. The partnership marks a sig- said “And we’re fortunate in Cleveland nificant milestone for Luye Medical that one of those organizations hapto be theμ Cleveland Clinic. ” and Cleveland ClinicCRAIN'S to “fulfill their pens CLEVELAND BUSINESS JULY 16, 2018 μ PAGE 17

CONTINUED FROM PAGE 6

Moody’s, meanwhile, affirmed the Clinic’s Aa2 rating with a stable outlook, which “will allow the system to grow revenue outside of the constrained Northeast Ohio market.” S&P assigned its “AA” long-term rating to Cleveland Clinic UK Financing PLC — its London-based business entity — and affirmed its “AA” longterm rating on Cleveland Clinic’s series 2014 taxable bonds. The ratings reflect S&P’s view of the Clinic’s “credit quality as it implements a strategic plan that will expand the system outside of its stronghold in Northeast Ohio, help improve its knowledge base, and maintain operations at a very sound level,” according to S&P. S&P reports that the Clinic is projecting high capital spending through fiscal 2023, with average capital expenditures of about $1 billion a year during this period. However, there are risks, as noted by Moody’s, despite the ratings agency’s upbeat view of the Clinic’s operations. Moody’s stated that the Clinic will be more highly leveraged because of its expansion efforts — notably its

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AGORA

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The AEG component also has influenced some one-off acts to go there, like April’s Dennis Kucinich fundraiser featuring Dave Matthews. “When you have an act of Dave’s stature, you don’t want to be worrying about any holdups from a production angle, a venue angle or anything like that,” said Max Bonanno, a partner with MidCitizen Entertainment who scouted the Agora for that event. “Knowing that the AEG team was in charge of things, it was a huge relief in a sense.” That’s a big change in itself. When Zitterbart took over the Agora, he was often pressured to pay performers in advance because, prior to his arrival, some acts got stiffed, including the Black Keys. Notably, Black Keys co-

founder Dan Auerbach played his first show at the venue since that snafu in March, which was a big win for Zitterbart. “People knew me before I came to the Agora,” he said. “But I essentially had to pay my dues all over again because of what happened with the Black Keys.” Aesthetically, Jason Parent, a booking agent with APA Agency who grew up in Cleveland going to Agora shows, said it’s a “night and day” difference at the venue today and that the artist experience has improved. “My first club show there was in 2002. I had a real nostalgic feeling for it,” Parent said. “When it reopened under Chris, I was all about going there. But the sound kind of sucked. There was no AC. It was kind of dumpy. So I was careful about what shows I’d put there.”

Tile panels highlight the restored grand lobby of the Agora. (AEG Presents)

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He didn’t mention any acts by name that actively avoided the Agora. But he did point out an upcoming show in August featuring Alkaline Trio, who haven’t played there in many years. The Agora only closed for about two months at the start of the year to complete its biggest renovations. While traffic is beginning to increase, it’ll still be a few years before there’s a true return on investment. Beyond nabbing more big and diverse concerts under AEG’s lead, the new venue — which has grown staff from about 60 people to 100 — is planning to heavily promote itself as a general event space, creating a new line of revenue. Executives declined to share what recent revenues have looked like with the Agora. However, a new foundation is

there for financial growth. “I’m looking at 2019, 2020 and 2021 and anticipating double-digit growth numbers,” Zitterbart said. As far as the corporate presence at a historically rock-driven venue, are there any downsides for the Agora? Zitterbart may be biased, but he certainly doesn’t think so. “The reality is, I had been on my own since 2005 (with Peadbody’s). It’s not a culture shock, but it is a transition,” Zitterbart said. “And AEG embraces the entrepreneurial spirit from market to market. They will have their best practices and procedures, but also respect the individual market to do what they do best. It’s the best of both worlds, which is kind of cheesy. But I still have the entrepreneurial piece of what I enjoy, now just with their experience and backing. So I think it’s a win-win.”

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Jeff Young

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Senior Project Manager

Assistant Project Manager

President & CEO

R. L. Hill Management, Inc.

First Federal Lakewood

Vice President, Treasury Management Officer

Jeff joins R.L. Hill Management as a Senior Project Manager after working for Infinity Construction for 19+ years. His portfolio includes healthcare, public works, education and the private markets. He has led several projects for The Cleveland Clinic, University Hospitals, Metro Health, Ursuline College, Tri-C and CSU. He has also completed numerous renovations and ground up projects. Jeff is instrumental in company growth and has implemented new construction technologies for our employees.

Marcus joins R.L. Hill Management as an Assistant Project Manager. He is a graduate of Bowling Green State University and has 7+ years of experience with Turner Construction. His responsibilities include implementation and management of project schedules, submittals, safety and quality control reporting and daily construction reports. Marcus excels at managing client relationships which complements the R.L. Hill expectation to deliver the highest level of integrity to our business partners.

Tim Phillips joins First Federal Lakewood as president and CEO. Throughout his more than 25-year career in banking, Phillips has served in leadership roles for financial institutions across Ohio. In his new role he will be responsible for sales and operations, as well as enhancing the bank’s commitment to the customers and communities it serves. Phillips, a Northeast Ohio native, also serves as a board member for a number of civic and charitable organizations.

Robert R. Terbrack

Joey J. Arnold

Theresa L. Polachek

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Swagelok Company

Gallagher Sharp announces that Robert Terbrack has been named Partner. Additionally, Bob will take on the role of Practice Group Manager for the firm’s Mass Tort/Toxic Tort Practice. Bob represents businesses, insurance companies, and individuals in a wide variety of civil litigation, particularly matters involving mass tort/toxic tort, and has presented to other defense counsel regarding effective strategies in successfully defending asbestos claims. See www.gallaghersharp.com.

Fifth Third Bank has named Lynette Manzella as Vice President, Treasury Management Officer. She is responsible for providing appropriate working capital management strategies and solutions to commercial banking prospects and clients in Northeastern Ohio. Manzella has more than 20 years of middle market and large corporate banking experience supporting companies locally and nationally. Most recently, she was a senior treasury professional with KeyBank’s national healthcare team.

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Joey J. Arnold has been a Swagelok associate since 1995, holding leadership positions in many functions across Swagelok. In his new role as Vice President, Continuous Improvement and Quality, he will continue to evolve Swagelok’s manufacturing strategies and be responsible for quality assurance, internal audits, and continuous improvement programs that help respond to customer needs. Arnold is also leading the company’s development of a new global headquarters and innovation center.

Theresa L. Polachek joined Swagelok in 2007 and has held several leadership roles within communications, most recently as the director of global brand and communications strategy. As vice president of corporate communications, she will be responsible for Swagelok’s internal communications, global brand program, marketing communications, digital presence, and customer experience strategies.

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CRAIN’S CLEVELAND BUSINESS

Source Lunch David Dunstan

President and managing director, Western Reserve Partners The national market for M&A continues to thrive and is positioned to do so for a few years to come. From private equity funds to strategic corporate buyers, many firms are hungry for size, scale and new business lines as they see strong returns and a buildup of cash — which is the result, in part, of tax reform. David Dunstan, a founding partner of Cleveland investment bank Western Reserve Partners, is seeing that activity unfold from his home market in Northeast Ohio along with the rest of the Midwest and beyond as the firm’s acquisition by Citizens Bank last year has expanded its reach across the country. Crain’s sat down with Dunstan to get his take on what’s continuing to drive M&A trends, the deal flow in today’s climate, and why he thinks today’s seller’s market could persist for years to come. — Jeremy Nobile

Five things What’s something people don’t know about you? I compete in triathlons. I’ve done two Ironman 70.3 (half-Ironman) events.

Triathlons on his wish list Ironman events in St. George, Utah, or New Zealand

Currently reading “To America: Personal Reflections of an Historian,” by Stephen E. Ambrose

Drink of choice Any summery IPA

Words of wisdom “Luck is what happens when preparation meets opportunity.”

Lunch spot Urban Farmer 1325 East 6th St., Cleveland

The meal The Farmer Chop salad with chicken, salami, kale, romaine, blue cheese, sunflower seeds and roasted garlic dressing. And the Protein Bowl with salmon, quinoa, avocado, blueberries, beets, poached egg and lemongrass vinaigrette.

The vibe A truly modernized steakhouse in a large space in the heart of downtown that gets packed at lunch time. Despite a slew of business people, there’s a laid-back vibe that comes with its Midwest personality. A bit pricey, but worth it for its prime locally and organically sourced fare.

The bill $49.70, plus tip

Let’s revisit the Citizens deal first. Why did the firm ultimately agree to join with them? We had talked about outsourced M&A solutions with them for years before that. We started seeing other commercial banks buying investment banks the last couple years, and a few firms had approached us. We weren’t actively marketing ourselves at the time. But we ultimately selected Citizens because, besides our familiarity, they were one of the largest commercial banks in the country without a formal M&A capability. So with them, we got to retain our firm culture and be part of building something bigger there, as opposed to being rolled into another firm. How’s that affecting your pipeline for deals? Our pipeline is great. It’s one of the best M&A environments we’ve witnessed in our careers. It may be the best environment we’ll see for the next 20 years. When you look at the amount of dollars in private equity funds, dollars on corporate balance sheets and access to capital for banks and nonbank banks for leverages, there is a significant amount of dollars chasing a limited amount of deals. Deal values are growing, but volume is decreasing. Why is that? Our backlog is busy, and you might think it could be even better. There’s a huge opportunity for middle market companies right now. If you’re an aging business owner, there may not be a better time to sell as valuations for the best companies grow. But despite that, a lot of people are sitting on the sidelines, which is why even in this great M&A environment, you’re still not seeing as many deals as you think you would. Why might they turn down a sale? The stock market is highly valued, and businesses are performing well. So say you’re a 63-year-old business owner that’s doing well with good margins and low debt. Multiples are great. But if you took all the money in that business out, where do you invest it to get the same kind of return you’re getting on your business today? That is a question these business owners are asking themselves. Sounds like you’re suggesting these people could miss out if they opt to stay on the sidelines. What they aren’t fully contemplating is, eventually, we’re going to have a

recession. It’s hard to predict when. But when that hits, it’s going to be two to five years before you get back to your base level. And multiples may be down then. Say you’re 63. The recession hits when you’re 65. It may not be until you’re 70 that you could get the same deal you would’ve gotten today when you’re 63. You have to be looking forward to when you should be selling. What are the multiples companies are drawing today? On average, there’s at least one to two turns on the premium in this environment. If your business used to trade at 5x or 6x EBITDA, it may be 7x or 8x now. And it can be higher. What really matters is how your company is performing compared to its sector. Size is good. And when you’re doing better than the rest of your industry, you’ll get the higher multiples. Double-digit valuations are more common today. But if you don’t have those characteristics, you’re not going to be at 10x or 12x EBITDA. Is a disparity in supply and demand driving those prices? There’s definitely an imbalance with demand to acquire good companies and supply in the market, and that creates a pricing opportunity. If you’re a seller, valuations are at or near all-time highs. Private equity funds are at record levels in terms of dollars and raising funds at a record pace. Family offices are getting more involved, which is a whole other buyer universe that wasn’t substantial 10 years ago. You got record levels of cash on corporate balance sheets, tax reform and record earnings. That creates a larger overhang of dollars that want to do deals. Why do you see this environment continuing for a while? Let’s say you assume a 50% debt, 50% equity capital structure for a deal. There’s something like $5 trillion of buying power there and currently growing. On average, there’s about $1 trillion of activity annually. So you’ve got like five years of pent-up demand, and you can’t work through that kind of buying power overnight. The only real answer is a substantial increase in the number of deals. So you either need to burn through $5 trillion of value, or you need $5 trillion of activity while everything else remains static, which it’s not. It’s continuing to grow. So for the next several years, up until the next recession, it should be a good seller’s market and a tough time to be a buyer.

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