Crain's Cleveland Business

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VOL. 37, NO. 15

APRIL 11 - 17, 2016

Business of Life

FINANCE: Hurting the poor?

Critics take issue with Huntington’s deal

The Fixers

P. 6

Artists explore Cleveland’s issues ahead of the RNC

FOCUS: Middle Market Paid sick leave is a growing concern

P. 22

P. 17

SOURCE LUNCH Santina Protopapa on arts and education P. 23

CLEVELAND BUSINESS

Who helps to fix them?

Fed chief Mester says challenges remain

BY JEREMY NOBILE jnobile@crain.com @JeremyNobile

As the top Federal Reserve official in Cleveland explained last week, it was a long time coming, but Ohio’s labor markets have finally returned to their pre-recession peak.

Although that bodes well for the regional economy and generally indicates a positive outlook for companies that are seemingly well staffed, there are still longer-run challenges facing the business sector, said Loretta Mester, president and CEO of the Federal Reserve Bank of Cleveland.

Mester spoke with Crain’s about labor market conditions in Ohio and

BY LYDIA COUTRE lcoutre@crain.com @LydiaCoutre

When MetroHealth trauma surgeon Dr. Amy McDonald has to tell parents their child has died, she wants nothing more than to sit with them, mourn with them and support them.

But then the next trauma victim comes in, and she has to help.

“If I’m at work, and I have a patient die, I can’t sit there and grieve,” said McDonald, MetroHealth’s director of trauma in the intensive care unit. “I’ve got to move onto the next patient. What else can I do? You learn to start compartmentalizing.”

A culture of needing to be flawless, invulnerable and strong has left those emotionally draining cases largely undiscussed, tucked away in the corners of caregivers’ minds alongside the daily stresses of long hours, paperwork, self-criticism and mounting requirements. The list goes on.

The joy and passion that brought caregivers to the health profession can be cast in the shadow of these stresses.

For decades, there wasn’t a space to discuss or deal with these stresses, but in the last several years, the issue is getting what many say is much-needed attention. More surveys and studies are looking into the issue, with many showing doctor burnout topping 50%.

Dr. Adrienne Boissy, chief patient experience officer at the Cleveland Clinic, said burnout comes in three main forms: emotional exhaustion, depersonalization and

Entire contents © 2016 by Crain Communications Inc.

P. 27

Labor market is on the mend

Increasing stress being placed on caregivers is big cause for concern

SEE CAREGIVERS, PAGE 26

The List The largest commercial contractors

across the Fourth Federal Reserve District — which comprises all of Ohio, western Pennsylvania and eastern Kentucky — following a speech in Cleveland last Wednesday, April 6.

The good news is Ohio’s unemployment is now at 4.9%.

That’s a sharp decline from the 11% peak seen in December 2009 during the height of the Great Recession.

Overall, the unemployment rate is one good indicator that business here is thriving again.

“But that doesn’t mean everyone can get a job who wants a job,” Mester said.

Yet, with unemployment hovering around Mester’s long-run level of SEE MESTER, PAGE 25

SparkBase closing after long struggle Lack of cash stifles effort to fix loyalty card company

BY CHUCK SODER csoder@crain.com @ChuckSoder

ISTOCK

SparkBase was in bad shape when Stephen Haynes took over as CEO last May. At the time, he thought the company still had a fighting chance to turn itself around by moving beyond its stagnant core business — processing gift card and loyalty card purchases. But he changed his mind last month, after SparkBase lost two key clients.

On March 22, the company ceased almost all of its operations, laying off 14 of its 18 employees. Those who remain aim to find a buyer interested in acquiring the company’s software. They’re also supporting a few remaining clients.

In short, SparkBase “just ran out of money,” said Haynes, who also manages a local venture capital firm called Glengary, which owned a stake in the Midtown Cleveland-

based company.

SparkBase would’ve needed to raise more capital to restructure itself, but it had a hard time finding willing investors with cash on hand, Haynes said, noting that Glengary and many other venture capital firms in Ohio are out of cash. SparkBase’s complex ownership structure made that task more difficult, he added.

As for the company’s existing investors, they “didn’t want to write more checks,” he said.

Those financial issues caused the two clients to leave, he said. When they did, Haynes decided that it would take “too much time, too much effort and too much money” to turn the company around.

“This was a decision I was brought in to make. … I decided it wasn’t worth it,” he said.

Over the past decade, SparkBase had raised nearly $9 million from a long list of investors, including North Coast Angel Fund of Mayfield Heights and more than 40 individuals. It also received $1 million from the Innovation Ohio Loan Fund as well as two Cuyahoga County loans totaling $790,000.

If the company can find a buyer for its software, any money it receives would go toward paying back those government loans. The state is SEE SPARKBASE, PAGE 27

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Employees at the four CBS Radio stations in Cleveland received an email on March 15 telling them the parent company was pursuing “strategic alternatives for its radio division.�

The announcement was described as the “end of an era� by the Los Angeles Times, and speculation was all over the map regarding the future of the 117 stations CBS Radio owns in 26 markets. But, industry insiders stressed to Crain’s, this move is anything but surprising during uncertain times for traditional radio, as listeners spend more time on digital music, podcasts and subscription services such as Spotify and Pandora.

John Gorman, a former WMMSFM, 100.7 program director, launched oWOW, an internet rock station, in 2015. He compares terrestrial radio to fax machines because he says it’s like a dated appliance in the digital age. “Let’s face it, radio as a platform is worth less every day,� said Gorman, who was with WMMS from 1973-86. “The revenues aren’t there anymore.

With the switch over to digital, it’s not going to come back.�

Radio stations would argue that with live streaming and shows being offered as podcasts, they’re keeping up with the times. But even the most ardent radio supporter would admit the industry is facing more than its share of obstacles.

Representatives from the four Cleveland CBS stations — WKRKFM, 92.3; WNCX-FM, 98.5; WDOKFM, 102.1; and WQAL-FM, 104.1 — referred Crain’s to CBS’ corporate office in New York. Karen Mateo, CBS Radio’s senior vice president of communications, said it was “very early in the process,� and that the company wouldn’t be commenting beyond its initial announcement of a possible sale or spinoff of the radio division.

Should CBS decide to sell its radio properties — either bit by bit, or in one large chunk — the future of any station would get more tenuous.

Such a move or series of moves, however, might be the less likely scenario, for multiple reasons.

A big one is the list of potential buyers is limited. The two largest radio companies, iHeartMedia and Cumulus Media, are ridden with debt and struggling with lofty loan payments. “Based on available capital and based on the market of radio stations today, it’s not like there are lines of usual suspects out there waiting to buy up these stations,� said Michael Harrison, the editor and publisher of Talkers magazine, a leading industry trade publication. “That may not be the road available to them.�

In Cleveland, which Gorman said isn’t a “growth market� for radio, the options for a potential sale are even more scarce, the industry veteran said. “I really think CBS has to look at

each market individually,� Gorman said. “What is the best deal in each market, and who’s buying? It’s almost like I have a storage room full of fax machines, but who’s going to buy them?�

IPO ahead?

Another significant reason a sale of the radio stations might be less likely than it first appeared last month is by spinning off its radio properties, as CBS did with its Outdoor division in 2014, the company could reap the tax benefits created by an initial public offering. In a recent memo to staffers, CBS Radio president Andre Fernandez, while not ruling out a sale of some or all of the company’s stations, said an IPO is the preferred move.

“Corporations are not necessarily forthcoming with local branches.

That makes it difficult for people who work at a company like CBS when this kind of story gets out there. It’s an atmosphere of uncertainty.� — Michael Harrison editor and publisher, Talkers magazine Operating the radio division independently, Fernandez said in the memo, would make employee contributions “even more important.�

But converting its digital billboard business, CBS Outdoor Americas Inc., into a real estate investment trust hasn’t really paid off for shareholders of the spinoff, Outfront Media Inc. The company’s stock is down more than $9 per share, to $20.87 as of April 7, in the last year.

A high-level CBS Radio source in Northeast Ohio told Crain’s the fourstation Cleveland group is optimistic about the possibility of an IPO, which the source believes is the most likely scenario. The four CBS radio stations in Cleveland also touted results from the most recent Nielsen quarterly, which showed that WDOK ranked first among all women listeners in the 25-54 age group, and that 92.3 and 98.5 occupied two of the top three spots among men in the 25-54 demographic.

WKRK, WNCX, WDOK and WQAL reached nearly one million listeners per month in the quarter, the ratings showed. Numbers such as that are why Harrison, the Talkers editor and publisher, said radio isn’t sidling up to its death bed. “It still has life in it,� Harrison said of traditional radio. “It still has an audience of people who have grown up with it and like it. It still generates ratings and revenue.�

But, he added, debt is a huge problem for the owners of far too many stations. That has resulted in financial cuts that have affected the product, Harrison said. “What is wrong with the picture is too many stations operate with budgets that are so depreciated that they can’t afford to do radio well,� he said. “What adds to the problem is the fact that radio is not the most cutting-edge form of technology in life as it is, so therefore it can’t afford to be anything but its best. If it can’t afford to do even an average job because of bad planning, that makes it unworkable.�

An ‘uphill battle’ CBS Radio, while not debt-ridden like the industry leaders, isn’t without its problems. The company’s radio revenue dropped 6% in 2015, and CBS took a $484 million writedown on the value of its FCC radio licenses, The Wall Street Journal reported. The four Cleveland stations, all housed at the Halle Building, didn’t experience the staff cuts that took place at several CBS Radio properties across the country last year, sources said.

CBS hasn’t given a timeline on when it will decide on a sale or spinoff, and sources said it could take a year or more. Gorman, who admitted it took months for his internet radio station to get potential advertising partners to take it seriously, said the web has changed everything for traditional radio. “It’s been an uphill battle for us, but at least we don’t have the debt,� he said of oWOW, which has office space in Cleveland’s Gordon Square Arts District. “The great thing about online (radio) is outside of our own investors, we don’t have a lot of overhead. As long as we keep the lights on, we pay our employees and we have the equipment, we’re doing OK.�

CBS’ ultimate decision for its radio division, which has properties in every top-10 market, could wind up being a positive one for the likes of WKRK, WNCX, WDOK and WQAL. But corporate announcements such as the one made last month always bring a ton of questions. “Corporations are not necessarily forthcoming with local branches,�

Talkers’ Harrison said. “That makes it difficult for people who work at a company like CBS when this kind of story gets out there. It’s an atmosphere of uncertainty. It becomes difficult to deal with people above you, people below you and someone in the media who presents a threat because they don’t want to say anything they’re not supposed to.�

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CRAIN’S CLEVELAND BUSINESS z APRIL 11 - 17, 2016 z PAGE 5

Skyscraper intrigue swirls downtown

BY STAN BULLARD sbullard@crain.com @CrainRltywriter

Before steel and stone can start reshaping downtown Cleveland’s skyline with new office buildings, the more fundamental building blocks are tenants who will occupy, and pay for, the space.

Speculation about new skyscrapers is ramping up thanks to activities by two of downtown Cleveland’s largest corporate citizens: SherwinWilliams Co., which is working on an acquisition that would make it the world’s biggest coatings company, and Medical Mutual of Ohio.

Rico Pietro, a principal at Cushman & Wakefield Cresco brokerage in Independence, believes it makes for additional excitement in the downtown market.

“When you add Sherwin-Williams’ potential need with the Medical Mutual requirement, you could have two significant buildings come out of the ground in the next few years,” Pietro said, in addition to the proposed NuCLEus mixed-use project. “Wherever they go, you’ll see additional development in that area.”

Likewise, Kevin Piunno, a senior vice president at Cresco, said what happens if and when the companies set their course triggers many conversations among office brokers.

“Can you imagine Landmark as a mixed-use project with apartments and offices,” he asked, pointing to the follow-up opportunity — or liability — if the paint company should move.

At this point, what’s clear is both Sherwin-Williams and Medical Mutual may be too large to move into existing empty office space, even with a 16% vacancy rate among top-tier buildings. Both also may be able to redo their existing properties to stay put. However, each is also large enough to launch a real estate developer’s project downtown or in the suburbs.

Sherwin-Williams has 2,800 associates in 900,000 square feet of the company-owned Landmark Office Towers, 101 W. Prospect Ave. Medical Mutual has a requirement for 380,000 square feet, as much space as it has in The Rose Building, 2060 E. Ninth St., with about 1,300 workers downtown. It also has 700 workers in Beachwood, Copley and Strongsville offices that it may consolidate together in some to-be-determined fashion.

Conway wrote in an email, “S-W has experienced dynamic growth over these past few years (i.e. nationwide we open one new paint store every three-to-four days) which have resulted in more downtown jobs and our need to expand into space in the adjacent Skylight Office building.”

With the Valspar deal, SherwinWilliams has said it intends to keep its headquarters in Cleveland and maintain what it describes as a “significant presence” in Minneapolis.

At the same time, it has said it expects synergies from combining with Valspar, with growth opportunities in product lines and globally, as well as efficiencies that will benefit the companies and their customers.

costs — from the proposed combination, according to a Securities and Exchange Commission filing of the conference call transcript.

The big proposed acquisition, as well as a CEO transition to former chief operating officer John Morikis from long-term CEO Christopher Connor, surfaced since rumors started circulating in the real estate industry that the company had sized up sites for a new headquarters downtown. Insiders privately say the plans have varied, but have ranged from 600,000 to 900,000 square feet in size.

Sherwin-Williams’ Conway argues the company may be able to expand within its footprint if law firms and other tenants in the building decide

to move. Akron-based FirstMerit Corp. also has a branch and some offices in the complex that total 9,000 square feet, which may become available through the bank’s proposed merger with Columbus-based Huntington Bank.

Others note the company could do short-term leases in other spaces for some workers.

‘Intriguing’ opportunities Meantime, farther east on Prospect at the Rose Building, which is on the corner with East Ninth, Medical Mutual openly discusses the options it is mulling.

SEE SKY, PAGE 27

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Leaving options open Ask Sherwin-Williams about a potential headquarters project search and Mike Conway, director of corporate communications, answers, “Assessing space, land and building and new paint store location needs, is nothing new, something we’ve been doing for 149 years as part of our regular business planning cycle.”

Conway said the paint and coatings company’s focus is on concluding the proposed acquisition of Valspar Inc. of Minneapolis. The $11.3 billion deal is scheduled to be closed early in 2017 if shareholders and regulators approve it.

“It’s business as usual here at Landmark,” Conway said.

However, the company for the first time last year leased 50,000 square feet across the street in the Skylight Office Tower, 1660 W. Second St. Sherwin-Williams would not disclose how many people or which of several teams it moved next door.

Whether the combination nets more headquarters jobs in Cleveland — and if so, how many — are obvious questions that remain unanswered. When an analyst asked about how many corporate costs could be cut in the consolidation during a March 21 conference call, Sean Hennessy, Sherwin-Williams’ chief financial officer, said, “I don’t think we’re ready to talk about anything like that.”

He said the company would not elaborate beyond saying 42% of the $280 million in cost savings it expects will be in the area of selling, general and administrative expenses — which includes headquarters and a variety of other business overhead

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Huntington Bancshares is pushing back against some challengers questioning the bank’s pending merger with Akron’s FirstMerit Corp.

While Huntington may disagree with some of the issues raised by groups like The Ohio Fair Lending Coalition and New York-based watchdog group Inner City Press/Fair Finance Watch — who both argue the combination could result in more harm than good, particularly in some low-to-moderate income Ohio communities the banks currently operate in — the groups say Huntington is at least hearing them out.

Some of those neighborhoods, like those in and around Akron and Cleveland, are expected to see a reduction in branch locations as operations in the expanded Huntington footprint are consolidated to achieve the cost savings that made the deal attractive to shareholders and executives.

Lawyer and Inner City Press executive director Matthew Lee, who regularly challenges bank mergers, has called the deal “one of the most negative bank proposals in years.”

He said that closing 100 or more branches in the affected communities could be as harmful “in its way as the toxic drinking water in Flint, Mich.”

Collectively, the challengers to the deal take issue with the impact of branch closures, the bank’s lending procedures and Huntington’s financial commitments to affected communities.

Part of the Fed’s role in signing off on a bank merger is identifying the public benefit.

But reducing the branch network as proposed would make it harder for people in Akron and Cleveland communities to access banking services, Lee argues.

“The harm of the branch closures outweighs any benefit that can be shown,” Lee said. “It’s important that this gets full scrutiny. As proposed, this should be denied.”

If nothing else, Lee and the other groups involved, including the National Community Reinvestment Coalition in Washington D.C., are urging the Fed to extend its commentary period beyond the current April 15 deadline by another 30 days and hold public hearings.

Sources indicate the comment period seems like it could be extended. But as of last week, the Fed, which makes that call, has not approved an extension.

Fighting branch closures Huntington CEO Steve Steinour has said the bank aims to cut FirstMerit’s total expense base by 40% when the two expectedly merge around the third quarter, with most of that coming from back-office operations and a branch network con-

solidation.

So far, Huntington has proposed the closing or consolidation of 107 branches in its combined eight-state footprint in merger applications filed with the Federal Reserve Bank and the Office of Comptroller of the Currency.

At least 60 of those are in Ohio, with 49 in Northeast Ohio, specifically.

Meanwhile, additional branches will need sold to comply with regulators.

OCC filings show Huntington is looking to sell off branches representing $600 million in deposits in the Canton market, or 43% of their total deposit base there, and another $50 million in the Ashtabula market.

Huntington provided a 42-page response to Lee’s comments to the Fed on March 31 through its law firm, New York-based Wachtell, Lipton, Rosen & Katz, arguing customers will benefit from an overall extended network of branches and ATMs while FirstMerit customers will have access to more bank products and services.

“The legacy customers of FirstMerit Bank will also benefit from the extended branch hours of Huntington Bank branches on Saturdays, and such customers in Ohio and Michigan will enjoy the added convenience of Huntington Bank branches co-located in local major grocery stores, which are open seven days a week and for longer hours than traditional branches,” the law firm wrote.

The firm also said that the 43 branches proposed for closure so far in Cleveland, Akron and Canton, 74% are “short-distance” consolidations as defined by the OCC and within one mile or less from a receiving branch. Of the total 107 proposed closing, 58% are considered “short-distance.”

But Lee wasn’t impressed with the response, calling its tone “dismissive.”

In a reply, Lee points out that in selecting branches to close or consolidate against the branch that would receive those customers, Huntington is opting to shutter the lower income location, and there is “nothing moving the other way.”

“We will have more comments, but for now the comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved,” he wrote in a reply to the Fed. Regarding whether Huntington is reconsidering what branches to close, Huntington spokesman Brent Wilder pointed out that 13 are in designated low-to-moderate income communities and that “proposed branch actions are not finalized and are subject to regulatory input.”

Lending criticized Inner City Press, along with the Fair Lending Coalition, also call out the banks for what they deem as inadequate lending to minority appli-

cants and in poorer neighborhoods regardless of any apparent compliance with provisions of the Community Reinvestment Act and other regulations.

Charles Bromley, director of the Ohio Fair Lending Coalition, which is working closely with the NCRC and other groups to articulate credit needs to the Fed and Huntington, said the Fed commentary periods are a chance to shed light on those lending issues.

For example, in a lending analysis provided to the Fed, Inner City Press said Huntington made 197 home purchase loans to whites in the Akron MSA in 2014.

However, it made nine to African Americans and three to Latinos. In Cleveland that year, 582 home purchase loans were made to whites, 37 were made to African Americas and nine were made to Latinos.

According to the most recent census data, the Cleveland population is 52% African American, 33% white and 10% Hispanic.

The bank declined to comment for this story on its lending procedures, including those tied to the CRA and Home Mortgage Disclosure Act. But its law firm addressed them in a response to the Fed. “Any implication in the March 19 E-mail that Huntington Bank has engaged in prohibited discrimination in its home mortgage lending is unfounded,” the firm wrote before explaining its lending procedures and highlighting, among other things, past community development loans made in the Akron and Cleveland regions.

“This is our chance to hold them accountable,” Bromley said.

“The most important thing is to have a discussion with the bank about how they’re going to make credit available and how they’ll make their products available to the underserved community.”

And while Huntington, so far, has committed $20 million to the Akron and Canton communities and $5 million to Flint, Mich., Bromley said it’s not enough.

The dollars also don’t address overall lending practices he, and others, are scrutinizing and suggesting need improved.

Notably, KeyCorp, in a partnership with the NCRC, announced in March it is committing $16.5 billion over five years to communities it serves — with a focus on eastern New York — affected by its merger with First Niagara Financial Group, the parent company of First Niagara Bank.

Of course, that commitment came five months after Key announced its acquisition plans, and Huntington’s merger was announced just two months ago.

Asked if Huntington is planning to make additional financial commitments, Wilder was unspecific, but said the bank will “continue to make proactive announcements about commitments within specific communities and more broadly across the enterprise.”

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CRAIN’S CLEVELAND BUSINESS z APRIL 11 - 17, 2016 z PAGE 7

The Week

CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1 1230; Phone: (216) 522-1 1383; www.crainscleveland.com

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The Cleveland Convention Center, turned FirstMerit Convention Center of Cleveland, is now the Huntington Convention Center of Cleveland.

Huntington Bancshares Inc. on April 6 announced an agreement between FirstMerit Corp. and Cuyahoga County for the Columbus-based bank to officially take over naming rights for the building as a merger between both companies draws closer to completion. The company is taking on all terms of the original 20-year, $10.3 million deal approved between county council and the Akron-based bank that was announced last September.

That agreement, which runs to 2035, provides the county with $400,000 annually over the 20-year period, plus regular adjustments for inflation, which brings the deal to more than $10 million over its lifetime.

Kent State University president Beverly Warren announced she has been diagnosed with breast cancer and will undergo surgery. In an email to the university community, Warren said her medical team at the Cleveland Clinic has assured her that the cancer is “in a very early stage and that there is a high expectation for a full recovery.” Warren said she would remain active and involved in the business of the university throughout her recovery. She expects to have a reduced public schedule into May. Warren joined the university as its 12th president in July 2014 after having served as provost and senior vice president at Virginia Commonwealth University.

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CAN YOU GIG IT? Fairlawn City Council authorized a plan that involves installing a new high-speed fiber internet network and wireless access points throughout the city and the Akron-Fairlawn-Bath Township Joint Economic Development District. Fujitsu Network Communications of Texas will build the so-called FairlawnGig network.

Extra Mile Fiber LLC of Dayton will serve as FairlawnGig’s anchor service provider. The construction project is slated to cost about $10 million.

PLANS ON TRACK An advance guard of more than 500 internet columnists; print, television and radio reporters; media executives and technicians who are leading the way for 20,000 of their media associates on April 6 descended on Quicken Loans Arena to check out the logistics of the Republican Party’s presidential nominating committee in July.

Republican Party officials laid out the plan for convention week. Jeff Larson, CEO of the Republican Committee on Arrangements, said he was confident about the soundness of the security plan being put together. “I believe this will be one of the most secure conventions that we’ve had, but we’ll still allow people to get around and enjoy the things this city has,” he said.

PEACE OF M ND

NO TO NORTH CAROLINA Cuyahoga County Executive Armond Budish is taking a symbolic stand against anti-LGBTQ legislation passed in the state of North Carolina. In an April 5 executive order, Budish said no officer or employee of Cuyahoga County is authorized to approve any non-essential official travel to North Carolina. The order is a direct response to North Carolina’s “Public Facilities Privacy and Security Act,” passed on March 23 to counteract a civil rights ordinance passed in Charlotte earlier this year.

A CLOSER LOOK Directors of specialty transportation insurer National Interstate Corp. appointed a special committee to consider a $30-per-share offer from American Financial Group Inc. to acquire the shares of National Interstate not already owned by American Financial’s Great American Insurance Co. subsidiary. Richfield-based National Interstate said the special committee comprises five of its directors: Norman L. Rosenthal (serving as chair), I. John Cholnoky, Patrick J. Denzer, Donald W. Schwegman and Alan R. Spachman.

At $30 per share, the deal is valued at about $293 million.

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Round 1 ends, but battle looms FirstEnergy, following favorable decision from utilities commission, might be underdog in next bout

BY DAN SHINGLER dshingler@crain.com @DanShingler

FirstEnergy Corp. won its big fight. Now it has to defend its title.

The Public Utilities Commission of Ohio on March 31 provided Akron-based FirstEnergy with a unanimous decision approving the company’s proposed power purchase agreements.

Because those PPAs include special fees put to ratepayers to guarantee the profitable sale of power from FirstEnergy plants to its distribution arm, interests ranging from local governments to other power companies and environmentalists cried foul. The deal is anti-competitive and only ensures that dirty coal and outdated nuclear plants remain online longer than any invisible hand would allow, they contend.

But the PUCO sided with FirstEnergy. It agreed the plants are necessary to Ohio, in part because they represent on-demand backup power that could be needed again if, say, natural gas prices were to spike because fracking were banned. And that settled the matter. Or not.

Observers and industry experts say a bigger fight now looms — and the utility is probably the underdog.

FirstEnergy’s 18-month slugfest in front of the PUCO was brutal, and no doubt costly in terms of public relations, advertising and lobbying.

It also might have just been a warmup for the real brawl, or brawls, that are to come. The next venue is prob-

ably national, too, before the Federal Energy Regulatory Commission.

“I think there’s a high probability FirstEnergy will lose when it goes to FERC,” predicts Andrew Thomas, a longtime energy law attorney and an economic researcher on energy matters at Cleveland State University.

FERC has jurisdiction because FirstEnergy sells power from the plants affected by the PPAs into the wholesale market, which is the federal agency’s domain. Thomas said FERC does not like anti-competitive deals or transactions that are not arm’s length.

Former PUCO chairman Todd Snitchler, who now consults with power generators seeking to sell into the Ohio market, thinks FERC represents the biggest threat to FirstEnergy’s PPAs, especially because competitors are complaining that the PUCO ruling upsets the wholesale power market. FERC must waive some of its rules on affiliate transactions for the PPAs to stand, he said.

“That case is one I think people feel have very strong merits, and there’s a great likelihood of success in that case,” Snitchler said. “That’s the one most industry watchers think has legs.”

Connect the dots Even if FirstEnergy does survive an FERC fight, it probably will come back home for a slugfest with heavyweight lawyers before the Ohio Supreme Court, assuming the PUCO stands by its decision on any ap-

peals, as expected. If that happens, lawyers will be throwing jabs about how the PUCO is circumventing the Ohio Legislature’s intention, in violation of the state constitutions, with a few other hooks no doubt thrown in as well.

The PUCO’s March 31 rulings on FirstEnergy and Columbus-based AEP “continue an unwelcome trend of government intervention in competitive markets, at the urging of the state’s electric utilities,” wrote the Office of the Ohio Consumers’ Counsel. “As a result, several million Ohioans will pay a lot more for electricity than the market prices intended by the state Legislature.”

The Consumers’ Counsel continued, “It is difficult to connect the dots between electric deregulation and market prices in the 1999 Ohio law to making consumers pay for reregulation and subsidized power plants in the decisions today. The Ohio Consumers’ Counsel has asked federal officials who oversee the nation’s electric markets to protect Ohioans from paying subsidies for power plants.”

For its part, FirstEnergy said the PUCO ruling is legal and valid — and should stand.

“FirstEnergy’s Purchased Power Agreement complies with existing Federal Energy Regulatory Commission (FERC) rules that promote customers shopping for retail energy supply,” the company said in a statement.

“With the PPA, customers retain their ability to select a generation supplier, and the PPA has no impact

on the price customers pay for generation,” the utility added. “FirstEnergy believes energy costs will increase in the future. Under the PPA, the company’s Ohio utilities will help safeguard customers from future rate increases by crediting customers’ bills when energy prices rise.”

About those PPAs …

Meanwhile, environmentalists, other power generators, local governments, green-energy advocates and others are jumping onboard the opposition train, either complaining to FERC or threatening to take the matter to the Ohio Supreme Court or the PJM Interconnection, which sets the rules for the electric grid upon which FirstEnergy relies and seeks a level playing field for all generators who use the grid.

Any of them could make utility PPAs null and void. The energy and financial world is certainly watching to see what happens.

New York based Fitch Ratings issued a release on Monday, April 4, addressing the likelihood that FirstEnergy’s sweet deal will face potentially souring challenges. The PPAs, as they now stand, represent a “constructive credit development for them and their Ohio-based utility and power generation subsidies,” Fitch wrote.

Of course, in a release headlined “Fitch: Ohio Affiliate PPAs May Face Further Scrutiny,” the way things currently stand was not the issue the credit rating agency was pointing

out.

“However, pending complaints filed with the Federal Energy Regulatory Commission (FERC) earlier this year are a source of uncertainty regarding the viability of the affiliate PPAs,” Fitch continued. “In addition, Fitch expects parties opposing the PPAs will seek a rehearing and, ultimately, judicial review of the PUCO order.”

In other words: Those PPAs are nice, if you’re a FirstEnergy creditor, but get ready to watch them get assailed in a variety of venues and courts and they could get thrown out.

Even some who have supported FirstEnergy’s argument before the PUCO aren’t optimistic the company’s victory will last. But, as in any case before a court or regulatory body, no one is sure of the outcome.

“I think it will more likely than not be shot down,” said Matt Brakey, an energy consultant to businesses and president of Shaker Heights-based Brakey Energy. “But the odds aren’t much better than a coin flip.”

Snitchler basically agrees but is reluctant to predict an outcome.

What he is sure of, he said, is that Ohio’s electricity market will face more uncertainty for up to two years as the matter winds its way through courts and regulatory agencies.

That probably helps FirstEnergy, he said, because uncertainty will make it more difficult for competitors to make investment decisions about building new plants in Ohio or that would sell into its electricity markets.

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Nonprofits lean on efficient training “What we found is our disposals are going to be quite a bit less for the simple fact that we’re able to get things out in plenty of time for our consumers to have this product before an expiration code may come into play, or anything else.”

BY LYDIA COUTRE lcoutre@crain.com @LydiaCoutre

From the moment a food item was donated to the Akron-Canton Regional Foodbank last year to the time it was in the hands of those in need, it would sit in the foodbank’s volunteer center for 92 days, on average.

But now, with the help of Lean Six Sigma training from Akron Children’s Hospital, the nonprofit can receive, sort, inspect, pack and deliver food donations in about 39 days.

“We’ve only been doing this project since the end of December, so I think the more we get more people involved in this, I think that 39 days … could be in the 20s,” said Matt Petrick, senior manager of operations for the foodbank.

Lean and Six Sigma principles — the idea of eliminating waste and removing variation, respectively, in different processes — have been implemented in many for-profit sectors, from manufacturing to health care to construction. But it’s not as common in the nonprofit world,

— Matt Petrick, senior manager of operations, Akron-Canton Regional Foodbank. said Mike Antochow, deployment leader for Akron Children’s Center for Operations Excellence, who provided the training to the foodbank.

Many haven’t realized the benefits or shy away from the cost of training, which Petrick said would

be about $6,000 per person for the training Antochow provided.

The children’s hospital provided training and certification for free to two staff members and helped the foodbank streamline processes that officials there have known for a

while needed improvement. Without the hospital, the cost could have been prohibitive, said Barb Hornick, the foodbank’s technology and operations analyst, who went through the training with Petrick.

“We’re not there to try to tell peo-

ple what to do,” said Antochow, who also is training several other foodbank employees for smaller projects on a different Lean Six Sigma level of certification.

“We’re there to try to train and SEE NONPROFITS, PAGE 16

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Opinion From the Publisher / Editor

A shot of reality about stress in the workplace

Editorial

Capital ideas Phenom, a promising mobile app and social media company for athletes, made more noise on its way out of Cleveland than it ever did while it was here.

But that’s OK. The conversation articulated by Phenom founder Brian Verne in a piece in VentureBeat, and joined by others in the tech, entrepreneurial and economic development communities, is a healthy development for a city that has made strides in entering the new economy but still has much work to do.

Phenom recently left its home base in Cleveland to join the highly praised 500 Startups business accelerator in San Francisco, where it can make valuable connections in the startup-rich (and literally rich) Silicon Valley.

Verne told Crain’s tech reporter Chuck Soder in February that the benefits of being part of a big-time accelerator weren’t the only reason for the move, as he considered potential investors in Northeast Ohio too risk-averse to support a consumer technology company like Phenom.

Ray Leach, CEO of venture development organization JumpStart, argued in pieces in this publication and VentureBeat that Phenom’s departure is a healthy sign for Cleveland.

There’s “nothing upsetting” about Phenom joining 500 Startups, he wrote in VentureBeat.

“In fact, the founders’ willingness to go where they have the best chance of success is exactly the kind of entrepreneurial hustle our city, state and country need right now.”

True enough. But Verne, again in VentureBeat, had a different take, writing, “The truth is, it is a problem that we left Cleveland. We should have been able to find funding at the level and speed that would allow a promising startup to grow and compete. And while we did get some local backing, the funding ecosystem at large is so bureaucratic and slow-moving that it’s more likely to kill than nurture startups.”

This is not a new complaint.

Northeast Ohio entrepreneurs for years have lamented the lack of available capital here.

Complicating matters further of late is that LaunchHouse no longer is running its bootcamp-style startup accelerator program (it continues to provide office space and educational programming related to entrepreneurship) and Bizdom Cleveland late last year ended its accelerator program, too.

Does Cleveland have the right mindset to support its young companies? There are many tech startups and others that have grown and thrived here, but Verne, who remains an advocate for the region, thinks we could do better.

“It is imperative that more investors in Cleveland empower smart young entrepreneurs who have the intelligence and drive, but not the means, to build a great company,” he wrote in VentureBeat, undoubtedly echoing the feelings of the smart, young entrepreneurs this region needs to drive more growth.

A well-timed event hosted by Jones Day, “TechniCLE Speaking 2016: Fostering Innovation,” takes place this Thursday, April 14, and features a series of short talks and moderated panel discussions. It promises to focus on issues including “how to best support, position and leverage the local tech industry in the ongoing revitalization of Northeast Ohio’s economy.”

One of the featured speakers: Brian Verne. Another is Frank Sullivan, CEO of innovative manufacturing company RPM International and a longtime advocate of tech education in the region.

This is a chance for some of the region’s best minds to assess where we are and where we need to go. Figuring out how to improve support for smart entrepreneurs will go a long way to making Northeast Ohio’s economy work better for all its residents.

PUBLISHER AND EDITOR: Elizabeth McIntyre (emcintyre@crain.com)

CLEVELAND BUSINESS

MANAGING EDITOR: Scott Suttell (ssuttell@crain.com) SECTIONS EDITOR: Tim Magaw (tmagaw@crain.com)

Perspective can be a beautiful thing.

I got a dose of much-needed perspective early in my career from my older sister, a registered nurse. I was reminded of that last week when I read Crain’s reporter Lydia Coutre’s story on caregiver stress.

All jobs come with some level of stress. Mine became acute a month into my first job as a copy editor at the Lorain Journal, which at the time was an afternoon newspaper. That meant the editing shift started at 5 a.m. Not only that, but deadline awaited the minute you walked in the door because the presses started rolling before 9 a.m.

For a 22-year-old just out of college, I wasn’t completely unfamiliar with deadline pressure, having worked at the student newspaper. But I wasn’t used to deadline pressure at Elizabeth the ungodly hour of 5 a.m.

McIntyre I spent the pre-dawn hours, when I’d much rather be sleeping than spellchecking, writing headlines, fixing grammatical errors and sharpening syntax.

One Thursday morning, the editor stormed into the newsroom with a freshly printed paper in hand: “Who wrote this &#%!@ headline?” Now this particular editor was one of the most talented journalists I’ve worked with, but he also was one of the most profane, demanding and, at times, downright cruel people I’ve known. Humiliation was one of the sharpest tools in his management toolbox, and as I raised my downcast eyes to the headline in question, my heart stopped.

I was about to be eviscerated.

There in big, bold type, was my work: “Council tables police chef’s funding request.” Police chef, not police chief. I knew I was cooked.

The stress made my voice quiver: “I wrote it,” I squeaked. He turned, narrowed his eyes, and paused. Slowly, a sarcastic smile crept across his face. His eyes locked with mine. “Don’t worry, honey,” he oozed. “Only 30,000 people saw it.” He then threw the paper at me and walked away.

I don’t know how I got through the rest of that workday. That night, I fell apart. The tears started and didn’t stop for three days. I couldn’t believe I’d made such a boneheaded mistake — and in my first month on the job! I even contemplated a career change.

Finally, on day three, I called my big sister, the nurse, and unburdened myself. “How could I make such a mistake?” I sobbed.

“I’m so embarrassed. I want to die!” After patiently listening, she laid it on the line as only a sister can: “Yes, it was awful, but you need to learn from it and move on. It’s not the end of the world.

When I make a mistake at work, someone might die.”

And she was, of course, right. Health care workers, like my sister and millions of others, deal in life-and-death situations regularly. Those encounters take a toll, which is why it’s important that hospitals in Northeast Ohio and nationwide are offering solutions to help caregivers manage the stress inherit in their profession. It’s not just about the consequences of making a mistake. It’s about the pressures of providing care faster to more patients, of needing to put on a veneer of invulnerability, of working long hours. Health care workers dedicate their lives to the well-being of others. Their own well-being is vital, but it’s not as easy as “physician (or nurse, or respiratory therapist, or X-ray technician) heal thyself.”

Our health care institutions and their leaders recognize that.

Their employees, and in turn all of us, will be healthier for it.

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

SOUND OFF: Send a Personal View for the opinion page to emcintyre@crain.com. Please include a telephone number for verification purposes.

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START THE CONVERSATION

PROM AND GRADUATION SEASON IS UPON US Take our parent-teen drinking and driving pledge today. Encourage your teen to make smart choices when it comes to driving safely.

Letter to the Editor On behalf of Greater Cleveland Volunteers, I want to bring attention to National Volunteer Week, April 10-16, 2016, and thank all the wonderful volunteers we have in Cuyahoga County.

National Volunteer Week began in 1974 as a way to recognize and celebrate the efforts of volunteers.

Since then, the original emphasis on celebration has widened. The week has become a nationwide effort to urge people to get out and volunteer in their communities.

National Volunteer Week is about inspiring, recognizing and encouraging people to seek out imaginative ways to engage in their communities. It’s about demonstrating to the nation that by working together, we have the fortitude to meet our challenges and accomplish our goals.

Each year, Greater Cleveland Volunteers takes this

time to thank all of its volunteers that help at a wide variety of organizations in the community. From tutors and mentors that help children in the schools, to dedicated meals-on-wheels delivery volunteers, to caring individuals that comfort patients in hospitals, hospices or nursing homes, and those that help the unemployed find job, our volunteers make Cuyahoga County a better place to live.

National Volunteer Week is also a time to promote volunteerism and encourage more people to serve.

If you have an interest but aren’t sure what volunteer opportunities are available, look at our website: greaterclevelandvolunteers.org or call 216-391-9500.

— Joy Banish Executive Director Greater Cleveland Volunteers

Web Talk Re: Indians home opener and 2016 outlook While it is greatly appreciated that the Indians added an extra game for the ticket exchange, we all learned the “buyer beware” downside of dynamic pricing. In exchange for a $100 Opening Day ticket, we will now get two $20 tickets. While many will learn from this and not make that mistake again, the Indians will surely sell out — Donald Sinko the home opener again next year.

The Indians need to do three things to increase attendance: 1. Lower ticket prices. The Indians doth protest too much when they say how “low” their prices are. Not so in the real world. 2. Win more games. They seem to be working on this with some success. 3. They need a little luck. It always helps. I think their gradual phasing out of Chief Wahoo may help #3.

— Seth Hirschfeld

Re: RTA’s budget crunch I would recommend that RTA take a look at its organization chart and take a meat ax to it. There are way too many departments and senior staff members. RTA does not need its own police force. Cleveland has a perfectly good police force. I would also recommend that it shut down the ill-conceived Waterfront line. Most days and times, no one rides it at all. Finally, I would observe that every person in the county pays the tax that supports RTA, yet very few of them use its services. Robbing Peter to pay Paul is unsustainable in the long term, since Peter will just move to a “safer” location to avoid being robbed. Ultimately, the riders themselves need to pay for the services they use, not the general population.

— Henry Holtkamp This is such a baloney argument, with all due respect.

All those transit riders also pay for fancy highway expansions in suburbs they never visit. In the United States, we share the cost of infrastructure. The gas tax, which hasn’t been raised in almost 30 years, only pays for like 50% of the cost of interstate highways anymore.

Everyone’s taxes pay for stuff they don’t use. That doesn’t mean they aren’t good investments. The cities that are eating Cleveland’s lunch economically, like Seattle, are investing huge in transit. Petty arguments against transit that amount to “I got mine” aren’t serving this region well. Where is our empathy for low-income workers?

— Angie Schmitt According to data from the Tax Foundation, gas taxes and other user fees cover just 52% of the cost of maintaining Ohio’s road network. That means that 48% of the money spent on roads comes from the general funds of state and local governments, which is paid into by everyone, regardless of whether or not they own a car.

Nine percent of Ohio households lack access to a car, a number that climbs to 24% in Cleveland, yet Henry Holdkamp claims it is the drivers who subsidize transit and not these individuals — 63% of whom are low-income,

according to the Brookings Institution — who subsidize drivers. Ohio spends more money mowing the lawns alongside roads than it does to support transit, but we’re supposed to believe RTA is the real culprit.

— Tim Ohio’s state-level transportation funding remains mired in a long outdated, near-primordial pro-highway philosophy that should embarrass us all. As noted in Crain’s wonderfully enlightened April 4 editorial, “Not fare,” the typical state provides 20% of the transit needs in their state, whereas Ohio is at eight-tenths of 1%. Further, at least 16 other states spend substantial additional state tax revenue supporting intercity rail passenger transportation as part of their efforts to provide a balanced, multimodal transportation matrix for all residents. Decades ago, many of my fellow transportation-improvement advocates and I responded to requests from a small group of Akron-area state legislators with information about how states across the nation funded urban and intercity public transportation services. Failure of Ohio’s legislators to constructively use this information produced the decades of inaction largely responsible for Ohio’s current transportation funding fiasco. Throughout more recent decades, our annual urging of Ohio’s legislative and executive leadership to consult with their counterparts in other states about transportation funding has been similarly ignored. Is it too much to expect that this editorial will finally grab the attention of our state “leaders” about the urgency of adopting more enlightened transportation funding priorities? Experience suggests the answer will be that it is too much to expect. Facts on the ground demand that answer come in the form of legislative and executive action to meet the full range of Ohio’s urban and intercity transportation needs.

— J. Howard Harding

Re: Source Lunch with Dominic Ozanne Dominic Ozanne has raised the standards in the design/build and general construction industry, and not just for minorities. I have seen first-hand the professionalism he brings to the business. What is not apparent is his hands-on commitment to help small and minority businesses in the industry with mentoring and partnering. Being very involved in this facet, I see this as a very important component to making this region grow.

He recognizes how difficult the construction industry is make a difference in! We all need to support these efforts. Thank you, Dominic.

— Neil Dick

Re: Ruling favors utilities PUCO subsidizes FirstEnergy and AEP with job-killing electrical rate increases that will harm all of Ohio’s employers and, ultimately, every Ohio resident. This multibillion-dollar drain on Ohio’s businesses will have a more negative impact on Ohio’s economy than any — 203156 Ohio tax increase I can remember.

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There is an art to what this

BY DAN SHINGLER dshingler@crain.com @DanShingler

Whiskey Painters of America president Ron Beahn is also a collector of the unique art. (Dan Shingler)

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Who’s in the mood for a little art?

Because if your budget, or your space, is too small to stretch for a big and pricey canvass, the solution might be right under your nose. But it might smell like Jack Daniels or Johnny Walker; a group of distinguished artists known as Whiskey Painters can find a muse in any spirit.

And these masters of small pieces turn out some remarkable and collectible works, known as Whiskey Paintings. The works are created by a national group of artists that got its start in Akron. The Whiskey Painters of America (WPA) club remains active and based in Silver Lake, and it just began one of its two annual shows.

Plenty of people have never heard of Whiskey Painters, Whiskey Paintings or any association of whiskey and painting at all. Here’s what you missed: Way back in the days of men who were so mad that they would start companies and still drink two martinis at lunch, some of them were also crazy enough to want to paint a little during their liquid lunch. At least they were after Akron industrialist Joe Ferriot, the founder of injection molding company Ferriot Inc., figured out a way to do it. Ferriot popularized what became sort of the antithesis of “pop” art, called Whiskey Painting.

Ferriot fitted a working pallet into an aspirin tin, cut some brushes down to ultra-portable size, and sliced his pressed paper medium into pieces that would fit in a shirt

pocket — about four inches by five.

His kit had all he needed to practice his wet passion on the road, except of course, for water. But then, Ferriot figured, who ever said you had to use water? So he didn’t. He sat at bars in New York and elsewhere on his travels and dipped his brush in whiskey. Turns out, it not only worked great, but an artist didn’t have to buy much whiskey when producing little card-sized gems and giving them away to strangers at the bar, either.

State of the art The concept turned out to attract some extremely talented and wellknown artists, and by the 1960s, the club was formed. Its roster has included some great painters, and it still does.

The most famous probably is John Pike, known to most who have studied the art of watercolor for his teachings, books and materials, but also to admirers who frequent the galleries of the Smithsonian or collect his 20th century illustrations.

There’s also Paul Strisik, a famous artist who worked in Rockport, Mass., and Middletown artist Marc Moon, another internationally known artist who was a longtime member of the group before he passed away in 2006.

Chagrin Falls’ Lois Salmon Toole also is a noted artist who is an active Whiskey Painter. And, don’t forget Medina’s Fred Grath, says Ron Beahn, the current president of the Whiskey Painters of America.

“He’s won many awards and is a very, very accomplished painter,” Beahn said.

Grath, like Beahn, is also not just

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group does with a drink a creator of whiskey paintings, but a collector.

“It’s a noteworthy organization that’s sometimes kind of overlooked by people,” Grath said. “They don’t recognize the top-notch artists that participate. It’s not a novelty. Some people might think it is, but it’s not to me — I collect the art myself.”

Their collectibility might be one of the things that makes Whiskey Painters so popular. Being small, they don’t take up a lot of space, so collectors can put many of them on their walls — or even in books. And they also don’t cost as much as larger paintings, making Whiskey Painters accessible to more people.

For example, one of Grath’s fullsized paintings, on a canvas 32 inches wide and 23 inches tall, will cost a collector between $2,300 and $5,000, Grath says. But even his most expensive Whiskey Paintings have sold for less than $1,000, and most sell for $500 or less, he said.

The price is right Pricing is a bit of a hot topic at the moment, too. The WPA has two shows annually — one in Northeast Ohio, and the other in Augusta, Ga., Beahn said. This year’s show at the Cuyahoga Valley Art Center in Cuyahoga Falls began last Monday, April 4, and runs through May 12.

Beahn, who also runs Ron Beahn Custom Framing in Cuyahoga Falls, has been busy painting and gathering works for this year’s sale and show. About 30 WPA members are participating, and most will have eight paintings at the Cuyahoga Valley Art Center, he said. Some will be very affordable.

“We have a standing rule that you

can’t have anything for less than $75, so they usually start at around $90,” Beahn said. But, with a couple hundred paintings in the whole show, there will be a wide variety of prices, he added.

There’s always a chance, too, that a painting picked up at the show will rise in value. But Beahn advises buyers to simply buy what they like, without thinking of it as an investment. Most members of the WPA have been painting for decades, he said, so they are already well-known in art circles.

There is another way to invest in the group, though. Beahn said the WPA is currently open to taking on one or two new members. It doesn’t happen often, since membership has always been strictly limited to 150 artists (fewer than 300 have ever gotten in), but at the moment there are a couple openings.

Potential new members don’t have to be world famous, but they should be competent artists. They should also be someone you might actually want to have a drink with, Beahn joked.

He’ll likely meet some new people at the upcoming show, said Cuyahoga Valley Art Center executive director Dave Whited.

“We’re pretty excited about it. It’s one of our best attended shows of the year, and a lot of them are local artists,” Whited said. “We probably have about 30% of the artists walk their work in, and then we have others who ship in stuff from all over the country.”

He appreciates the small scale of the work.

“We’ve got a gallery full of paintings, so it’s a good thing they’re small,” Whited said.

Chagrin Falls artist Lois Salmon Toole created this whiskey painting of Cleveland. (Dan Shingler)

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TAX LIENS The Internal Revenue Service filed tax liens against the following businesses in the Cuyahoga County Recorder’s Office. The IRS files a tax lien to protect the interests of the federal government. The lien is a public notice to creditors that the government has a claim against a company’s property. Liens reported here are $5,000 and higher.

Dates listed are the dates the documents were filed in the Recorder’s Office.

LIENS FILED

unemployment Amount: $7,978

Type: Employer’s withholding Amount: $6,108

Special Transport & Rigging Inc. 4730 Warner Road, Garfield Heights Date filed: Jan. 6, 2016 Type: Failure to file complete return Amount: $8,536

Caliber Jet LLC 29550 Detroit Road, Suite 300, Westlake Date filed: Jan. 25, 2016 Type: Partnership income, quarterly federal excise tax return Amount: $7,383

Brystil Inc. 5250 Transportation Blvd., Suite 10, Cleveland Date filed: Jan. 6, 2016 Type: Unemployment Amount: $5,999

Best Mens Wear Inc. 4227 W. 222 St., Fairview Park Date filed: Jan. 6, 2016 Type: Employer’s withholding, unemployment Amount: $8,251 Michael & Sons Landscaping Inc. P.O. Box 40422, Bay Village Date filed: Jan. 25, 2016 Type: Employer’s withholding,

Elewski & Associates Inc. 6833 Hillside Road, Independence Date filed: Jan. 25, 2016 Type: Unemployment Amount: $6,970 Kenton Industries Ltd. 1455 E. 185 St., Cleveland Date filed: Jan. 6, 2016

First Fruits Child Development Center 1 21877 Euclid Ave., Euclid Date filed: Jan. 6, 2016 Type: Failure to file complete return Amount: $5,800 Curious Minds Learning Place Inc. 420 E. 275 St., Euclid

Date filed: Jan. 7, 2016 Type: Employer’s withholding Amount: $5,702 Gala Catering Co. Pazzos Grand Ballroom 7874 Broadview Road, Parma Date filed: Jan. 7, 2016 Type: Employer’s withholding Amount: $5,404

LIENS RELEASED Americore Employment LLC 5933 Mayfield Road, Mayfield Heights Date filed: Dec. 11, 2015 Date released: Jan. 25, 2016 Type: Employer’s withholding Amount: $9,222 Atlantis Co. 105 Ken Mar Industrial Parkway, Broadview Heights Date filed: May 9, 2013 Date released: Jan. 8, 2016 Type: Employer’s withholding Amount: $33,151 Atlantis Co. P.O. Box 5047, Largo, FL Date filed: Oct. 1, 2013 Date released: Jan. 8, 2016 Type: Employer’s withholding Amount: $32,435

2016 CLEVELAND HERITAGE MEDAL BESTOWED UPON INDIVIDUALS WHOSE SIGNIFICANT CONTRIBUTIONS THROUGH LEADERSHIP, COLLABORATION AND SERVICE HAVE LEFT AN INDELIBLE MARK ON ALL SPHERES OF THE CLEVELAND COMMUNITY.

MORTON L. MANDEL THE REV. DR. OTIS MOSS, JR. SANDRA PIANALTO RICHARD W. POGUE SEN. GEORGE V. VOINOVICH THE INAUGURAL CLEVELAND HERITAGE MEDAL WILL BE PRESENTED ON MAY 21, 2016 AT METROHEALTH GALA2016 To join us in the celebration, please call 216-778-7509.

Cleveland Heritage Medal Selection Committee: Deborah Z. Read , Esq., Thompson Hine LLP, Co-Chair Ronald B. Richard, The Cleveland Foundation, Co-Chair Mitchell Balk, The Mt. Sinai Health Care Foundation Julie Boland, EY Akram Boutros, MD, FACHE, The MetroHealth System Margot J. Copeland, KeyBank Foundation John R. Corlett, The Center for Community Solutions

Pamela B. Davis, MD, PhD, Case Western Reserve University School of Medicine Kristen Morris, Cleveland Clinic Grafton J. Nunes, Cleveland Institute of Art Rear Admiral Michael Parks, The American Red Cross of Northeast Ohio Jerry Sue Thornton, PhD, Cuyahoga Community College

Avon Drive In Laundry & Dry Cleaning Co. 1830 Superior Ave. E., Cleveland Date filed: Nov. 10, 2011 Date released: Jan. 6, 2016 Type: Employer’s withholding Amount: $34,872 B & I Automotive Repair Inc. 33200 Aurora Road, Solon Date filed: Oct. 17, 2014 Date released: Jan. 6, 2016 Type: Employer’s withholding, corporate income Amount: $13,227 C & D Truck & Equipment Service Inc. 4015 Jennings Road, Cleveland Date filed: Aug. 19, 2013 Date released: Jan. 6, 2016 Type: Employer’s withholding Amount: $29,582 California Ceramic Supply Co. No. 211 19451 Roseland Ave., Euclid Date filed: April 6, 2009 Date released: Jan. 22, 2016 Type: Employer’s withholding Amount: $7,834 California Ceramic Supply Co. No. 211 19451 Roseland Ave., Euclid Date filed: Feb. 23, 2009 Date released: Jan. 22, 2016 Type: Employer’s withholding Amount: $5,369 Craig I. Smith an LLC 2824 Coventry Road, Shaker Heights Date filed: Sept. 4, 2008 Date released: Jan. 6, 2016 Type: Individual income tax return Amount: $73,760 Dream on Foundation Inc. 968 Bryan Drive, South Euclid Date filed: Sept. 3, 2015 Date released: Jan. 6, 2016 Type: Employer’s withholding Amount: $11,037

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coach folks to see that, ‘Hey, there’s another way of doing things,’ and then having them really drive the improvements.”

At any given time, the foodbank’s volunteer center used to hold 180,000 pounds of donations.

Before items left the center after three months of holding, volunteers would have to re-inspect the donations to ensure the expiration date hadn’t come around since the last inspection. Now that they’ve cut that storage time in more than half, that step is eliminated, and only 60,000 pounds are waiting to be sorted and inspected.

“What we found is our disposals are going to be quite a bit less for the simple fact that we’re able to get things out in plenty of time for our consumers to have this product before an expiration code may come into play, or anything else,” Petrick said.

The new process has a bonus of improving volunteer experience.

Now volunteers can be more social, sit around a table and chat while they work.

“It’s just a better feeling of teamwork,” said Hornick.

Without training, Petrick and Hornick agreed they wouldn’t have gotten to where they are today without the training.

“I think we were able to look at things with a fresh perspective,” Hornick said. “It was a tremendously productive exercise to do that.”

Building internal capacity A few years ago, the Cleveland Public Library was struggling to fix its processes and find efficiencies, said Cindy Lombardo, the library’s deputy director/chief operations of-

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ficer. Every morning, she’d walk through a hallway of boxes upon boxes of material ordered through CleveNet (a consortium of libraries that share materials) but that hadn’t been shipped. Customers weren’t getting their items as quickly as the library would like, Lombardo said.

“If you’re a nonprofit, you need to find ways to reduce the waste and the variation of processes even more so because you may not have the resources that a for-profit organization has.”

— Barb Hornick, technology and operations analyst, Akron-Canton Foodbank So the library brought in an external consultant with Lean Six Sigma expertise.

The outcomes “exceeded our wildest dreams,” Lombardo said.

There hasn’t been an overnight carryover in at least two years.

Seeing the benefits of this project and another that recently started, the library has decided to train some of its own staff.

With the help of state of Ohio

scholarship dollars, Lombardo is sending several staff members to LeanOhio Boot Camp, a public-sector-tailored training through Cleveland State University’s Maxine Goodman Levin College of Urban Affairs.

Developing experts within the staff instead of relying on outside consultants is a smarter way to use taxpayer money and will help the library apply the tools more regularly, Lombardo said.

Time is money At the foodbank, the training for Petrick and Hornick was a “huge time commitment,” but it was very helpful, and Hornick said she would encourage other organizations to look into it.

“If you’re a nonprofit, you need to find ways to reduce the waste and the variation of processes even more so because you may not have the resources that a for-profit organization has,” Hornick said.

Antochow said Akron Children’s Hospital has reached out to other nonprofits and is looking at providing more training, which proved to be incredibly helpful for him as well.

Though he has been working with the principles for years, teaching others the basics helped him take a step back and learn new things he can take back to the hospital.

He’d encourage other experts who spend all their time improving processes at their own organization to seek out similar opportunities to train others.

“Knowing that folks in Akron and Canton now are going to benefit from that because there’s more food available here in the community, that’s definitely a very rewarding thing as well,” he said.

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ADVISER - P. 19

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TAX TIPS - P. 20

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Nothing to sneeze at Lack of paid leave to care for family, selves is a growing concern

BY LYDIA COUTRE lcoutre@crain.com @LydiaCoutre

A child with cold or flu symptoms on an early weekday morning leaves many parents with a choice: send their child to school sick or take off work to take them to the doctor.

If that mother or father is one of the 49 million employees in the United

States without paid sick leave, lost wages and concerns of being fired often loom over that decision, said Patricia Stoddard-Dare, associate professor at the Cleveland State University School of Social Work, who co-authored a study on paid sick leave.

“So now, the well-intentioned mother might say the best thing for my family unit is to send my child to school sick,” Dare said. “I don’t want parents to be put in that position.”

But many are. The study, released in the journal

Health Affairs in March, found that workers without paid sick leave are 1.6 times more likely to forgo medical care for their family and three times more likely to forgo that care for themselves when compared with working

adults with paid sick leave.

The cost of those decisions comes from two places, StoddardDare said.

“It’s coming from wage loss and then it’s also coming from your care, (which) becomes more expensive now because you delayed it,” she said. “You might need to

go to an emergency room. You might need to get after-hours care which is more expensive, or your condition got worse.”

Offering paid sick leave can keep sick employees home, and therefore colleagues healthy and productive, said Linda Quinn, associate lecturer in Cleveland State’s department of mathematics, who also co-authored the study. A paid sick leave benefit can add job stability, help with employee retention, boost the mental SEE SICK, PAGE 18

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and physical health of caregivers and cut down on worker errors, accidents or injuries.

Yet the United States lags behind other nations: Of the 22 countries ranked highly in economic and human development, it is the only one that doesn’t mandate that employers offer paid sick leave.

Seventy percent of full-time employees in the country have paid sick leave benefits, while only 19% of part-time workers have this benefit, according to the study, which has a third co-author, LeaAnne DeRigne, associate professor at the School of Social Work at Florida Atlantic University in Boca Raton.

Benefits that matter The study controlled for various demographic variables, including gender, education levels and income brackets — people in all different sectors and with all different education or experience levels can be without paid sick leave.

As many employers look to recruit younger workers, they find that paid sick leave is a key attraction as newer employees demand the benefit, said Scott Hamilton, the Illinoisbased North American managing director of human resources and compensation consulting for Arthur J. Gallagher & Co. Quinn said it’s important that paid sick leave benefits be offered in the right way. Packaged PTO time, in which days off could be used for paid sick leave or vacation, can leave employees weighing a vacation later in the year against taking care of themselves immediately, she said.

Many employers say PTO packages can offer flexibility, ease employer concerns about abuse of those sick days and offer a cost to budget that benefit.

Stoddard-Dare said studies have shown that abuse to be minimal, such as one in San Francisco, a city that has mandatory paid sick leave, which found that though workers were allotted five to nine paid sick days a year, most only used three and about a quarter used none.

“Internationally, it does not ap-

pear that countries that mandate paid sick leave are at a disadvantage,” Stoddard-Dare said.

Industries hit hardest People working in the service industry, such as food service, health care, home health, and child or elder care, are less likely to have paid sick leave — only 35.4%, according to the study.

Stoddard-Dare said if she eats at a restaurant, drops her child off at a childcare facility or is choosing a place for her elderly parent to reside, “then I would want to know if those employees have paid sick leave.”

In the service industry in particular, Hamilton said employers are balancing the cost of high turnover against the cost of not offering a total reward package, which includes a reasonable base salary and time off.

“If you’re not offering a basic competitive total reward package, you’re going to have very high turnover, which the cost of that may more than offset not offering a small amount of paid sick,” Hamilton said.

It becomes a “rational conversation” to see what the real costs of each are.

Swathi Ravichandran, associate professor and program coordinator for Kent State University’s hospitality management program, said hospitality workers tend to be part-time employees of small organizations that have fewer employees.

“These are not people that make a whole lot of money,” she said. “Even giving up that one shift is still a big deal. It affects whether they could maybe make rent or not. So it does matter.”

The cost question Cost is a big factor for businesses deciding to offer the benefit, and mandates are generally not supported by the hospitality industry because of that, Ravichandran said.

It’s the same argument that comes up during conversations about raising the minimum wage. As cities and states raise minimum wages, the real, measured impacts

on businesses may be able to indicate how they could be affected by a mandated paid sick leave.

In a statement, the Ohio Restaurant Association said it recognizes it doesn’t want management or staff coming to work sick, but a paid sick leave mandate would have a negative impact.

“When it comes to managing time off and other work place issues, employers working in cooperation with their employees is a much better approach than a one-size fits all government mandate,” the statement read. “One of the benefits of working in the restaurant industry is the ability to customize one’s work schedule/shifts from week-to-week.”

At the Cleveland Clinic, employees earn paid time off throughout the year, which they can take as sick days or vacation, said Guy Van Tiggelen, the Clinic’s executive director of Total Rewards, compensation and benefit packages for employees.

Because human capital is important, offering a competitive benefits package is key — and the right thing to do, Van Tiggelen said. Sick employees should have the time to take care of themselves, he said, and should be able to stay home to avoid getting coworkers sick.

“But probably the most important reason is because we are a health care organization, we’re really concerned about the patient,” Van Tiggelen said. “If a caregiver or employee comes in who is sick, there’s always that risk they could pass it along to either one of our patients, or a family member or visitor who is with the patient.”

The Visiting Nurse Association of Ohio offers all regular employees paid time off. It allows the home health employees, who spend much of their time visiting clients, to feel comfortable staying home to take care of their families or themselves, said Gene Karlen, VNA’s chief human resources officer.

“It’s sort of that practice what you preach,” Karlen said. “We’re sharing that with our clients, and wanting them to reach optimal health. So we like to have our employees focus on themselves as well.”

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ADVISER: Stacy Feiner

Exit planning: It’s all in your head This thought keeps gnawing at you. You own a business — and you don’t have an exit plan.

The legal and financial risks are sizable, but you keep saying you don’t have time.

But it’s more than that.

You know it, and I know it.

It’s your business. It’s either important to you or it’s not.

Leaving your business is emotional and you don’t want to face it. The way you see it, exit planning means you’re done, you won’t be important anymore, your life is over.

It stirs up fear and anxiety over what’s next, combined with the fact that you don’t know how to do it.

You pacify yourself for the moment by saying you’ll get to it later, but all the time and logic in the world won’t penetrate the power of these fears.

The truth is it’s all in your head.

You’re facing a mental block when it comes to exit planning. You can’t ignore it.

If leaving something this substantial — something you built with sweat and tears — to your children, to your employees or to a worthy buyer is important then you know you have to wake up and do it right.

Here’s what it takes: Start by getting your head in the game. Emotion and logic are excellent business partners. The psychology of business is about marrying your emotion with logic so you can look at whatever lies ahead with the same confidence you bring to everything else you do in business. Dig into your psychology.

Step No. 1: Get your head in the game Business psychology goes deeper than strategy. It digs into your gut, shoves a mirror in your face, and challenges your thinking. When emotion and logic come together, you make levelheaded, powerful decisions that put you in front as the leader.

Wind up: Don’t assume that exiting a business is about winding down. This couldn’t be further from the truth. Your most important job before transitioning the company to new leaders is to position it for success for another 30 years.

Set up: As the business owner, you’ll want to set your successors up for success or you will want a buyer to pay a premium for your company.

A strategic plan and a financial commitment to a formal transition process allows you to drive the quality of what you walk away with and what you are remembered for.

Step up: Exiting your business is not business as usual. Just like building a new plant, installing a new ERP system or launching a new product, exiting your company requires capital. Expect to make a capital investment and add new resources to ensure your desired outcome.

Wake up: Look at the situation square in the face. You are letting go, negotiating a deal, and redefining

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Step No. 2: Take the helm You own the process. Avoid the risk of selling your company at a discount or saddling your successor with an underperforming company by being at helm.

Build your bench: Design your talent management system to get top performance. Develop a working knowledge of your people across the enterprise so your talent decisions are always smart. Establish a philosophy, know-how, and processes to hire the right people, provide them clear direction, and prepare them for new roles as the company grows.

Enhance value: Form an expert team to build and drive the plan with you. Work specifically with a management consultant who will focus you on increasing profitable revenue by helping you define your strategy, improve operational efficiencies, ensure financial accountability and tap the sweet spot in the market.

Be transparent: Be transparent about your plans for company’s future after you leave. Transparency of the vision will gain employee confidence as well as mitigate the risk of employees “bailing out.” Often the future leader will have a bigger vision, more capital and an updated strategy to stimulate growth in ways that benefit employees.

Remember, get your head in the game. Take control of exit planning.

Coach Tom Landry says it best, “A coach is someone who makes you do what you don’t want to do, who has you see what you don’t want to see, so you can become who you have always known you can be.”

For this endeavor, perform like an elite athlete. The psychology of your decision rests squarely in your hands.

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MIDDLE MARKET TAX TIPS: Carl Grassi

Tax relief may be on the way for property owners Dramatic changes in the real estate market over the last decade have led to more frequent disputes between property owners and tax authorities regarding the appropriate value of real estate subject to real estate taxes.

A recent decision by the Ohio Supreme Court may make it easier for property owners to get some relief when the value of the property has declined since it was acquired.

Property owners are generally prevented from arguing for a lower valuation than that established by a recent purchase price for the property.

In its recent decision, the court considered whether an appraiser’s report could rebut the presumptive validity of a tax valuation based upon a recent sale price.

In this case, the property owner, which had purchased a Comfort Inn hotel in 2007, filed a complaint for tax year 2009 seeking a reduction of the value assigned to the property from $3.49 million down to a little more than $2 million.

At the Board of Revision hearing, the hotel owner’s expert appraiser explained that the 2007 sale price of $3.49 million was not representative of the property’s value.

Specifically, the appraiser relied upon evidence indicating that the Comfort Inn hotel and other comparable hotels were experiencing a precipitous decline in revenue streams from 2007 through 2009 based upon significantly reduced occupancy levels attributable to the economic crash in the fall of 2008.

The Board of Revision found the appraiser’s report and testimony to be well supported and reduced the property value from $3.49 million down to $2.6 million.

The Board of Education appealed this decision to the Board of Tax Appeals.

The Board of Tax Appeals acknowledged the presumptive merit subscribed to the 2007 sale price, but held that its “recency” was rebutted by information provided and relied upon by the owner’s appraiser, and further reduced the property value to about $2.53 million.

On appeal to the Ohio Supreme Court, the central issue was whether the assumed validity of a property valuation based upon a recent sale price can be rebutted by an appraisal report and testimony.

The court first observed the general rule that the presumptive validity of the sale price may be rebutted by evidence showing that the sale is not recent, not at arm’s length, or not voluntary.

The court then instructed that it is permissible to rely upon information contained in an appraisal report and testimony to conclude that the presumptive validity of the sale price is not reflective of the property’s actual value.

The court warned, however, that the mere fact that an expert has opined that the property value should be reduced is not sufficient to

Carl Grassi is president of McDonald Hopkins LLC. undermine the validity of the sale price.

Rather, specific information bearing on the question of recency, the arm’s length character of the sale, or the voluntariness of the sale proffered by an expert appraiser, through a report or testimony, may be sufficient to successfully rebut the presumption of sale price validity.

At issue on this appeal was evidence of recency, and, curiously, whether the transaction was at arm’s length.

With respect to recency, the court found compelling that a significant downward market shift for hotels had occurred between January 2007 and the Jan. 1, 2009, tax lien date.

Because the appraiser convincingly articulated that a “softening” of the market had developed between the approximate time of the sale and the tax lien date, the Supreme Court of Ohio held that the 2007 sale could not be deemed recent relative to the Jan. 1, 2009, tax lien date.

With respect to the arm’s length transaction component, the owner’s appraiser opined that the sale was not truly arm’s length because the owner did not act as a fully knowledgeable, typically motivated buyer.

The appraiser reached that conclusion based upon his finding that the owner paid too much given the hotel’s ongoing performance issues at the time of the sale.

Possibly because the school board did not oppose that argument, the court held that an arm’s length transaction had not occurred and therefore the 2007 sale price was not representative of the tax valuation.

The primary takeaway of this decision is that evidence proffered through an expert appraiser can overcome the presumption of sale price validity even when the sale at issue occurred only two years prior to the tax lien date.

Consequently, litigants challenging the valuation of property based upon a sales price that is unrepresentative of the actual value of the property would be wise to explore the reasons for that variance and articulate, through expert testimony, how such reasons diminish the property valuation.

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CRAIN’S CLEVELAND BUSINESS z APRIL 11 - 17, 2016 z PAGE 21

Budget Dumpster tackles trash problem with tech

BY JUDY STRINGER clbfreelancer@crain.com

Not so long ago, before the likes of Expedia and Hotels.com, shrewd consumers had to connect directly with airlines and hotels to find the right fit. The same could be said of Dumpsters.

Getting the right-sized Dumpster rented for the right amount of time — for a kitchen remodel or cleaning out grandma’s house — required calling three or four different refuse collectors. The bigger companies often had higher charges or shorter rental periods, while the smaller players weren’t staffed with customer service reps to man the phones.

“Most of these companies, their business is set up to deal with big contractors, big construction companies,” said Mark Campbell.

Neither large nor small haulers, he said, are structured to cater to “the person who might not know everything there is to know about renting a Dumpster.”

Campbell and brother-in-law John Fenn launched Budget Dumpster in 2005 to do just that.

The Westlake company has no Dumpsters of its own. It contracts with haulers all over the county to take the hassle out of Dumpster renting.

“We don’t compare ourselves to Waste Management or Republic (Services),” Fenn said.

“We are more like an Expedia, Orbitz or Priceline or Hotels.com where we work with a bunch of different vendors, hundreds of vendors nationally, and offer (consumers) different pricing and terms.”

Campbell and Fenn grew up together in West Park.

The duo initially started a boutique real estate firm, with Campbell selling and Fenn marketing, before transitioning into a junk removal with a company they founded called Cleanup Contractors.

“People kept calling and asking for Dumpster services and not the labor we provided,” Campbell said. “So, a light went off in John’s head.”

Today, at about 1,500 boxes per week, the idea appears to be a good one. In the last three years alone, Budget Dumpster has seen rapid increases in sales and employees.

Revenues grew from roughly $10 million in 2013 to nearly $30 million last year.

To date, Campbell said the company is up another 40% in 2016.

Employment, which now hovers at about 60 full-time staff, grows by about 10-15 people each year, he said.

The partners attribute much of their success to alleviating pain points on both sides of the Dump-

Q & A: Amit Patel & Naman Desai

Amit: I’m a Clevelander, born and raised. I love this place. This is definitely one of the best cities to start a company given ability to quickly test and validate your concept, stay lean and create awareness to a tight community.

Aren’t there similar services to Quo already? How do you separate yourselves?

Amit: Nobody offers an end-to-end apartment search concierge experience, and our carefully tailored, concierge interaction differentiates us from the search sites. Our concierges are dedicated to making sure renters land the best apartment for their needs. And they aren’t beholden to other motivations, which is frequently the case with others in this industry.

Let’s be candid. How has the first year gone for Quo? Where do you want to improve?

Amit: The first year was a great success. We validated our model and demonstrated a market fit. We

were fortunate to see solid traction, steady growth, and public relations that met or exceeded almost all of our growth targets.

Now we want to improve the member experience through a more robust technology platform that creates interactions that are easy, timely, and goal oriented.

Naman: We are also building out tools and assistance for our concierges so that they’re equipped with domain knowledge to make them even more proficient in serving members. Finding a new home is a big decision and having a knowledgeable assistant on your side is a tremendous help.

As you’ve made traction with the startup, what strategies have worked and which, perhaps, haven’t?

Naman: We’ve spent a lot of time testing different channels and measuring how they work. Our digital ad strategy has become more efficient, and we’ve also been able to devise a corporate partnership strategy that keeps us in front of potential renters without being obtrusive. Because renting in New York City, Cleveland and Chicago is

Amit Patel

Naman Desai

I’ve learned that continuous network and warm intros to investors are key in order to keep growing the business.

Naman: I went through Techstars NYC with ClassPass. It was a great experience and conditioned my mind in a number of ways. For example, always keeping an eye on how people are using your product.

You might think they’ll love X but if you see them using Y more, that’s worth digging into. It’s important to be passionate about your idea but also open to different ways of addressing the problem you’re trying to solve. We frequently take a step back to make sure we haven’t missed something.

proving the experience.

Naman: I can’t imagine being creating a technology-assisted solution for this process without having spent significant time as a concierge, and frequently perusing our concierge interactions. It’s important to be connected to both the process, and hiccups that slow it down, as well as the renter’s mindset. Finding an apartment is an emotional process and you can’t separate that from the experience.

Mark Campbell and John Fenn of Budget Dumpster. (Contributed photo) ster transaction. Smaller haulers don’t typically have big marketing departments or budgets.

Contracting with Internet-savvy Budget Dumpster gives them access to customers they might not reach otherwise.

“We are a sales arm of their organization,” Campbell said. And, big companies see the Westlake firm as “a consistent stream of business,” Fenn added.

For consumers and small busi-

co-founders, Quo

Tech innovators Amit Patel and Naman Desai had already helped friends and families find places to live for years, so it only felt natural to marry that experience with their collective backgrounds in startups to launch a new business.

Just like that, Quo was born. It’s an on-demand service that helps prospective renters identify apartments by pairing people with local concierges who in turn help those users with everything from scheduling viewing appointments, cleaners and movers to acquiring insurance.

Launched in Cleveland in March 2015 and soon after expanded to New York City and Chicago, the yearold business has drawn at least 50,000 apartment seekers. The founding duo has raised more than $350,000 for their business and working toward a $1 million goal.

Crain’s spoke with Amit and Namaan about their first year, what they’ve learned along the way and how innovation has played a role in their early success.

— Jeremy Nobile Why did you want to start the company here as opposed to anywhere else?

nesses, the benefit is a simpler and often less costly rental experience.

The large volume of requests generated by Budget Dumpster allows haulers to bring down their prices, said Sean Nally, who works in the company’s marketing department.

Budget Dumpster passes the saving on to its customers.

While there are similar “Dumpster brokers,” in the marketplace, most are local or regional, according to Finn.

Only a handful work nationally.

The broad reach coupled with value keeps customers like Kathy Houle coming back.

She’s a project coordinator for Centennial, Colo.-based Inre Media, which installs multimedia equipment at hotels, convention centers and resorts.

It relies on Dumpsters to haul away the packaging materials and any debris from retrofits.

Houle regularly calls Budget Dumpster with quote requests for projects across the country — many at the same time.

Nally said the company operates in 150 U.S. markets, including most of the bigger metropolitan areas.

Currently, its biggest markets are Atlanta and Chicago, but the company is seeing large gains in Southern California and all across the South, where DIY projects can go on “365 days a year.”

Now that is has a national footprint, Budget Dumpster’s focus is honing in on its existing relationships with haulers.

“A lot of these guys, at first they really don’t know who we are or what we do, but as soon as they see the type of business we can bring, obviously they value our relationship on a different level,” Campbell said.

“It gives us a unique opportunity to explore ways we can bring more business to them.”

cyclical — it ramps up over the summer — we tested out taking summertime reservations during the winter months. That was a huge success and something we’ll continue to emphasize. We tested out a few guerilla marketing techniques, such as posting witty ads on Craigslist, which is still the go-to destination for many apartment hunters, but that proved to not be an effective method of acquiring users.

Both of you have worked with past startups, some of which went well and some that didn’t pan out. What’s something you’ve learned from those past experiences you apply to Quo? Amit: I went through the LaunchHouse accelerator with another startup and I learned a great deal from the program. They pressed hard on the customer development approach from Steve Blank (who launched the lean startup movement), which is what we’ve applied to Quo. I was also able to meet and network with the local investor community. Unfortunately, Tagora didn’t pan out since I wasn’t able to secure the right talent and funding.

So both of you are still involved with that granular work, too, taking calls and talking to customers?

Amit: We really enjoy being concierges as we get to learn ways to improve the process for our team and enhancing the member experience. It’s a way for us to understand what can we innovate in the process and build underlying technology to make our business more efficient to scale while im-

Where does Quo go from here? What can we expect next from you two?

Amit: We are in the process of building out an app that will add to the speed and efficiency of our service, but in a very natural way.

Using technology to facilitate the rental process in real time will allow us to provide a higher level of service to even more renters. Speed and quality are two metrics we focus on, and the app is built around those pillars. We want to scale the business and continue our growth into other highly transient markets such as San Francisco; Los Angeles; Washington, D.C.; Austin and more.

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z APRIL 11 - 17, 2016 z CRAIN’S CLEVELAND BUSINESS

Business of Life Artist’s projects get to heart of issues

BY JAY MILLER What should visitors to Cleveland for July’s Republican National Convention see and hear about the city’s assets and challenges?

Artist Kate Sopko and a group of filmmakers are asking that question to a group of Clevelanders who are active in a range of civic ventures and asking for their answers in the form of tours they would give RNC delegates if they had the chance.

The films, combined into an installation Sopko calls “The Fixers,” will be available at SPACES Gallery in the Flats this summer. The films also will be available online through the gallery’s website, and Sopko is working on installations in places where convention delegates will stumble across them.

“We’re trying to make it as accessible as possible,” the Garfield Heights native said. “A convention is a moment where we galvanize around higher-level politics, and Cleveland has a landscape that has a lot we can say about policy being effective or ineffective, (trying) to serve people’s needs.”

As it’s a work in progress, Sopko was reluctant to get into details, but she’s planning for the films to cover seven or eight issues, such as school policy and infrastructure needs. Sopko also realizes that, given the time pressures visitors will face, her work may have a broader impact on Cleveland-area residents.

Each film will have anywhere from three to 20 interviews with people who are knowledgeable and insightful about the film’s issue. For each film, the interview subjects were chosen, and the interviews were guided, by a person who is well-networked around the particular subject matter.

The cost of the project, which Sopko pegs at a little under $25,000, is being underwritten by SPACES; Art Matters, a New York foundation that supports artists who are pushing aesthetic and social boundaries; and an online crowdsourcing site called Hatchfund.

This is not Sopko’s first foray into what she calls social practice, or public works of art.

“Public work has the possibility of just shifting the way we think about our world and the way we interact with our world, the way we relate to other people,” she said. “We’re setting the table so people can talk to each other about getting interested in the city.”

Sopko, a 2000 Kent State University graduate, said she has been working seriously as an artist for five years. Before that, she worked as an arts administrator, at SPACES and elsewhere, and done what she calls, “kitchenwork,” or work that she continues.

She sees her arts administration experience as critical to the kind of art projects she undertakes.

“You’d be surprised at how much art work is administration,” Sopko said. “It’s managing and scheduling people and you have to figure out how to ship work, insure work.”

Among her recent projects is a series of what she calls “forts” — places people have created for centuries — that answer questions about the things people value enough to defend. She also has an ongoing project called “City Repair Cleveland,” that brings people together to find ways to improve their neighborhoods.

“The Fixers” will be exhibited at SPACES, 2220 Superior Viaduct, from May 20 to July 29, and at Smack Mellon gallery in New York City from June 18 to July 31. The preview trailer can be seen at https://vimeo.com/156270302.

Still images pulled from the trailer for “The Fixers.”

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CRAIN’S CLEVELAND BUSINESS z APRIL 11 - 17. 2016 z PAGE 23

BUSINESS OF LIFE

Source Lunch Santina Protopapa has a passion for using the arts to educate.

As executive director of the Progressive Arts Alliance, a program that combines art and STEM (science, technology, engineering and math) education, Protopapa leads the small staff of employees and contractors who works with students in local schools.

The program has grown since it began in 2002 and now serves five schools in Cleveland, one in Garfield Heights and two in Warrensville Heights.

In March, the alliance took a project to share at SXSWedu, inspired by an installation done at Cleveland’s Mound STEM School. There, students worked with artists to create an LED light and sculpture installation on clouds. The students had already been learning about both clouds and circuits, and this project combined the two.

Santina Protopapa

— Rachel Abbey McCafferty

How has the program evolved over the years?

Over the years, PAA’s programming has evolved by effectively adopting and adapting emergent trends in education. When we launched in 2002, STEM and the Maker Movement were not a part of the education field. As we’ve grown over the years and deepened our commitment to partnering with schools, we’ve maintained a niche in teaching and learning that harnesses the current trends in the field. We’ve accomplished this by operating as an arts-integration lab in which our artists engage in R&D that allows them to develop innovative projects and the corresponding curriculum to engage students and their teachers in Cleveland classrooms.

Through our lab approach, we are able to iterate and refine these projects as part of our ongoing school partnerships. After we iterate our prototypes in local schools, the refined work becomes model projects or curricular units that we share with the national education field. As a result, we’ve discovered that our work not only has a transformative impact on students, but also impacts the professional development of classroom teachers and professional artists.

How is the alliance different from an extracurricular arts or STEM program at the schools?

Progressive Arts Alliance’s arts-integration programs are different than extracurricular arts or traditional STEM programs in that we custom design experiences that provide equal weight in an art form and in an aspect of the STEM curriculum. These programs are designed to use meaningful inquiry to deepen students’ understanding in core curriculum content. Our artist-educators accomplish this by applying the principles of projectbased learning to our work. This results in students demonstrating an increased capacity to articulate comprehension of grade-level content. Students also walk away with new technical and creative skills that can be applied to a variety of contexts.

How does the work of the alliance fit into the students’ day-to-day education?

PAA maintains ongoing partnerships with a number of Cleveland schools. These partnerships enable our in-school workshops to be custom-designed to align with the curriculum that students are working on at that moment.

After students work with their teachers to learn a new concept, they turn around and work with PAA’s artists-educators to apply that new knowledge to large-scale projects that challenge them to collaborate and problem-solve with their peers.

EDUCATION

What do you think is the role of arts in education?

FIVE THINGS:

The arts play an essential role in providing a robust curriculum for students to develop the critical skills needed to be successful in the 21st century. Each art form provides students an opportunity to develop critical thinking and listening skills, refined attention to detail, and design thinking skills that are essential to any career path. A well-designed learning environment for students includes a transdisciplinary curriculum in which the arts are not only offered as stand-alone subjects, but are also seamlessly integrated into other areas of the core curriculum.

MUSICAL TALENT

What role do the arts play in your life, outside of work?

I’ve been involved in music ever since I can remember. Learning to play an instrument taught me how to be a good student and developed my perseverance. I am so grateful that I was able to take music lessons starting in kindergarten. Music really helped me develop my leadership skills.

Once I began studying and learning to play jazz, I was able to develop creative problem-solving skills that play a role in every aspect of my life. Jazz also taught me how to collaborate with others. Outside of work, I try to immerse myself in experiencing and learning about music and its cultural context whenever I have the opportunity.

Outside of work, Protopapa plays the vibraphone and DJs — vinyl only, no laptop. She thinks collecting music and “finding those hidden gems” is the best way to learn about music.

LISTENING TO?

LUNCH SPOT

Afro-Cuban jazz, Latin jazz and classic ’70s salsa

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MOST MEMORABLE CONCERT Stevie Wonder’s Songs in the Key of Life tour at Madison Square Garden

BEST LOCAL SPOTS Johnny Mango World Café & Bar, Gust Gallucci Italian Foods and Siam Cafe in Cleveland, as well as Calhoun Record Shop in Akron

FAVORITE CITY LANDMARK Terminal Tower. Protopapa said she lives downtown and loves learning about the city’s history.

The meal A Greek salad (the 55) and a tomato-mozzarella sandwich with chips (the 40), both with water

The vibe The Superior Avenue location is decorated with local art. It has ample seating and natural lighting in its two dining areas.

The bill $21.97, plus tip

20160411-NEWS--24-NAT-CCI-CL_--

4/8/2016

11:56 AM

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MESTER CONTINUED FROM PAGE 1

5%, it seems the challenges facing companies today are deeper than monetary policy may be able to affect.

Some employers are still finding it difficult to find workers, particularly for more highly skilled jobs. In Ohio, that tends to be more weighted toward skilled manufacturing and construction jobs, Mester said, but even some service sectors are facing problems.

It’s a trend reversal from past years.

For example, bankers a few years ago struggled to find compliance officers. Today, they report more issues in filling teller positions. Even some retail companies are having trouble filling general staff positions.

The struggle to find workers is a sentiment punctuated in a recent survey by PNC Financial Services Group, whose April 2016 economic outlook report found that nearly 40% of Ohio businesses respondents say it’s harder to find qualified employees compared to a year ago. The

bulk of those positions tend to be in technology and skilled positions.

“But we’re hearing from a swath of contacts in service sector industries that even with the occupations that are considered lower-skilled positions, they’re having trouble finding workers,” Mester said.

The fact that even some service and retail companies report difficulties finding workers while unemployment is low points to a broader issue, too.

For one, Ohio and the rest of the Midwest face the challenge of low population growth, Mester said.

Ohio’s population has been growing at less than 0.4% a year through the past five years, which is about half the rate seen in the nation as a whole, she points out. It’s also considerably slower than the western and southern regions of the United States.

The slow population growth is a likely factor in some businesses filling what are considered lower-skill positions — there simply are fewer people.

Mobility issues further compound the problem. Despite a presence of renowned companies with highpaying jobs, like those provided by Cleveland’s strong health care industry, many skilled workers in the Midwest are being trained here, then moving away.

Those kinds of issues can’t really be addressed through monetary policy, Mester said.

“Once you have this high-skilled group of people, we have to try to do things to keep them in the city,” Mester said. “Even though your innate population isn’t growing, there are things you can do to keep people here. If you look downtown, you see a lot of development going on, and that’s reflective that we have a lot of potential here.”

A positive outlook Mester said more employers are offering increased incentives and retention packages to keep workers around. And while wage growth seems slow right now — which Mester said could be a result of companies thinking that even if they pay more, they won’t attract the people they want because of a skills gap —

it could accelerate as companies compete for talent.

According to the PNC survey, though, that may not happen immediately.

The survey notes that only 23% of Ohio respondents expect to increase employee wages this quarter, which is down from 36% in the fall and 26% from last spring.

“The expectation is that as we continue on and labor markets improve — and I expect more improvement over the year — we will see more upward pressure on wages,” Mester said.

The outlook for the economy is still rather positive, she said. Labor markets will continue improving, and wages should go up.

And businesses are generally still optimistic, said PNC economist Mekael Teshome. The PNC report shows that Ohio’s small and midsize businesses are cautious about the next six months, but they still expect stable sales and profits despite greater pessimisms about the economy, which seem tied to stock market lows and rhetoric of presidential candidates. It’s almost as if businesses expect to do well despite the greater economy, he said.

Manufacturing — which makes up about 15% of the Ohio economy compared with 10% across the nation — health care and professional services are expected to lead Ohio’s job growth, according to the report.

But the region’s remaining unemployment issues are more structural today, or deeply rooted in other problems, than cyclical, meaning based on the business cycle, Mester said. That’s a shift compared with the years immediately trailing the last recession.

And that’s significant, Mester said, because monetary policy can have little effect on structural problems.

An oil well worker laid off by the sink in prices simply isn’t going to transition to a skilled nursing job, for instance. It’s that mismatch between skill sets creating the structural issues in this region.

Hiking interest rates won’t help retrain workers, but the right kind of programs can.

“As a country, we need to figure out how to do that in an efficient way that’s not burdensome to businesses,” Mester said.

“I think we should be able to do that.”

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z APRIL 11 - 17. 2016 z CRAIN’S CLEVELAND BUSINESS

CAREGIVERS CONTINUED FROM PAGE 1

lack of personal accomplishment.

In his State of the Clinic speech earlier this year, Clinic CEO Dr. Toby Cosgrove highlighted concerns that roughly half of caregivers and physicians reporting unreasonable stress.

He said the system is planning town hall meetings to address caregiver stress, which is a “major concern,” not only for the Clinic but across all health care delivery.

Northeast Ohio hospitals have programs to help caregivers talk about and manage their stress and systems to identify stressed physicians. They continue to look for ways to reduce stress for caregivers and ensure they are accessing the supports they need.

“If we can give tools to people so they can reclaim their love, their passion, their enthusiasm of being a health care provider, then it’s phenomenal and everybody will benefit from it,” said Dr. Francoise Adan, medical director for University Hospitals Connor Integrative Medicine Network and its SMART (Stress Management and Resilience Training) program.

Compounding stressors The past several years of health care reform have exacerbated stress for doctors. Paperwork already was a frustrating, time-consuming task that took providers away from patients. Electronic health record requirements from the Centers for Medicare and Medicaid Services added to that.

Other CMS programs have brought more scrutiny and added pressure for physicians to keep costs down. And doctors are asked to see more patients in less time. Doctors who see more patients per week report higher levels of burnout, ac-

cording to a national study by TINYpulse, which helps track workplace issues like happiness and engagement. The study, released in March, also found that on a scale of one to 10, health care employees rate their work-life balance at 5.87, while all other industries average 7.02.

“Many of us work long hours, and we sacrifice time that we could be spending with our families in order to take care of others,” said Dr. Robert Richardson, elected president of the medical staff at St. Vincent Charity Medical Center, who acts as the physician representative on St. Vincent’s board of directors.

To top it all off are the driven personalities the health care field often attracts. As a group, physicians are predisposed to burnout, Adan said, noting that many are compulsive perfectionists and can be guilt-ridden.

“The culture of being a physician doesn’t emphasize at all taking care of yourself and emphasizes being superwoman or superman,” Adan said. “That all combined really puts them at risk of burnout.”

St. Vincent, like most hospitals, has a system in place to identify burnout. A health and wellness committee at the hospital investigates reports of physician impairment, including substance abuse, emotional problems or stress, Richardson said.

The idea is not to punish them, but get them help.

The committee, which gets referrals from colleagues, supervisors or providers themselves, provides advice, support or treatment referrals.

Bob Smith is the director of MetroHealth’s medical staff assistance program, which offers a free, confidential, on-site outlet where overwhelmed physicians can feel safe addressing their stress. Smith said when the program began three years ago there were significantly

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“I said, ‘Don’t be ashamed that you get emotional. This is very difficult. The day you should worry is when it doesn’t bother you.’ ” — Dr. Alfred Connors, chief quality officer, MetroHealth

more supervisors referring physicians than self-referrals. In the past 18 months, that has flipped.

Though the portion of MetroHealth’s medical staff accessing the program has remained steady, more and more are coming on their own, identifying they need support, which is an encouraging sign, Smith said.

Case Western Reserve University is looking for ways to get ahead of provider stress, said Dr. Steven Ricanati, assistant dean for student affairs at Case’s School of Medicine.

He said as a pass/fail curriculum, fewer lectures and small-group, team-based learning helps promote collaboration over competition, which decreases stress. From the beginning, he wants students to understand that medicine is a team sport. When physicians work together, they have more support, give better care and are less likely to experience burnout, Ricanati said.

The school also works to identify stressed or overworked students and get them treatment, like university health services. Ricanati oversees one of the school’s academic societies, which puts students into small communities to foster close relationships, which can offer support and help identify students who may be struggling.

And in an effort to prevent getting to that point, the school brings out therapy dogs before exams, offers yoga classes and encourages students to get together for social events. Some may sound silly, Ricanati said, but they are a small but important piece of preparing graduates to be flexible in a time of tremendous change for the health care industry.

Managing stress

216.831.7171 cp-advisors.com

At UH, the eight-week SMART program is a “safe, confidential, non-judgmental, supportive” environment, where providers learn very practical skills — nothing they haven’t heard of, Adan said — to build their resilience.

She teaches skills like mindfulness, positivity, gratitude and breathing exercises “to emphasize that it’s OK to take care of yourself and to take a few minutes to make yourself part of your priorities,” she said.

Patricia McMullen, nursing supervisor at UH Portage Medical Center, enrolled in the program recognizing that it could help her manage stress in and out of work. The small class afforded her the opportunity to talk about the stress she sees as the afternoon shift supervisor for the whole hospital’s nursing staff. She’s often stepping in for staffing shortages, helping families

cope or responding to code calls, such as cardiac arrests.

Nurses, supervisors, a staffing secretary, a physician and others gave her small group a mix of experiences. The younger participants turned McMullen onto smartphone apps that offer background music for meditation. In turn, she gave them her best stress relief tip: stepping outside for a walk.

The fellowship those group classes offered made her realize she was often isolated during lunch. Now, she eats with people. She breathes deeply a lot at work.

“There was nothing that was really earth-shattering,” she said. “But when you take the hour once a week with a group of people, it’s just better.”

MetroHealth offers Schwartz Rounds, a panel of providers and support staff that presents and opens up a discussion to encourage the room to discuss the emotions they deal with on various cases. The tool was developed by the Schwartz Center for Compassionate Healthcare in Boston.

The first at MetroHealth last fall drew 300 people. Since then, they’ve averaged more than 225 at the monthly program.

McDonald, the trauma surgeon, presented at one of the panels that discussed the day the victims of the 2012 shooting at Chardon High School came into MetroHealth.

Years later, it still struck deep and strong emotions among presenters and the hundreds gathered. McDonald spoke about a case few heard of that day. While her colleagues worked to save the high school victims, she dealt with many other traumas, including deaths — in particular a 12-year-old boy who was shot. Despite immediate efforts to save the child, he died.

Since then, she has struggled with the conversation around that day.

Everyone — the media, the public, hospital administration — wanted to talk about the Chardon victims and offer support for the emotional toll of that case, but no one asked her about the tragedy of the 12-yearold from Cleveland. “That was upsetting to me,” McDonald said.

“Every life should be valued.”

She doesn’t want attention for every case. It can become a distraction. And she understands, to an extent, why some make news and others don’t. But she grieves for all lives, she said, and had a hard time reconciling the attention and discussion around one over another. This panel gave her a chance to discuss and deal with it.

For about a decade, the Cleveland Clinic has offered emotional support through Code Lavender, a service that

sends interventions, such as counseling or spiritual care, to patients and caregivers. In a world where people see death and dying every day, it’s a busy service, Boissy said.

Because physicians don’t typically show vulnerability, creating a culture that promotes that is key after so many years of not acknowledging there was a problem, Boissy said.

Cosgrove focusing on the issue at his State of the Clinic and beginning the town halls are good steps toward changing that culture and facilitating a conversation.

Keeping in touch with your emotions but managing them in a way that lets you remain effective is a difficult, but critical balance to maintain, said Dr. Alfred Connors, chief quality officer at MetroHealth. He recalled a time a medical student got embarrassed when he saw her crying after a family made a difficult decision to not take aggressive actions to revive their father if he died.

“I said, ‘Don’t be ashamed that you get emotional. This is very difficult,’ ” he said. “ ‘The day you should worry is when it doesn’t bother you.’ ”

‘You are not weak’ Burnout can have clear implications for a provider suffering, including depression, anxiety and substance abuse. There have also been a number of studies talking about the impact of burnout on medical error rates, quality care, safety and patient satisfaction, Boissy said.

The implications could reach further unless the industry tackles burnout. If stress isn’t addressed and managed, many worry that doctors will walk away from a profession already facing a shortage.

By 2025, the nation will face a shortage of between 46,000 and 90,000 physicians, according to a 2015 study conducted for the Association of American Medical Colleges. The TINYpulse study found that health care employees who responded are more likely than those in other industries to leave their job for a 10% raise.

And when physicians leave, that means fewer people doing more work, increasing stress and exacerbating the problem.

When McDonald presented to her MetroHealth colleagues about the 12-year-old child who died, she learned of another provider who struggled with the same conflict.

She felt better after having the chance to talk about these shared experiences. Seeing another physician or surgeon dealing with the same emotions, McDonald said, “You realize again: You are not alone. You are not ‘weak.’ ”

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CRAIN’S CLEVELAND BUSINESS z APRIL 11 - 17. 2016 z PAGE 27

The List COMPANY THIS ADDRESS YEAR PHONE/WEBSITE

COMMERCIAL CONTRACTORS Ranked by 2015 Revenue LOCAL REVENUE 2015 (MILLIONS)

FTE EMPLOYEES NEW CORPORATE # OF CORPORATE AS OF 4/1/2016 # OF LOCAL NEW LOCAL LOCAL PROJECTS CONTRACTS PROJECTS CONTRACTS CORPORATE 2015 (MILLIONS) STARTED 2015 2015 (MILLIONS) STARTED 2015

YEAR FOUNDED TOP LOCAL EXECUTIVE

1

Turner Construction Co. 1422 Euclid Ave., Suite 1400, Cleveland 44115 (216) 522-1180/www.turnerconstruction.com/cleveland

$348.5

$339.6

40

$9,961.0

1,500

163 5,300

1902

Jason Jones vice president, general manager

2

Cleveland Construction Inc. 8620 Tyler Blvd., Mentor 44060 (440) 255-8000/www.clevelandconstruction.com

$300.7

$25.1

4

$225.4

33

145 895

1980

Jon D. Small president

3

Gilbane Building Co. 950 Main Ave., Suite 1410, Cleveland 44113 (216) 535-3000/www.gilbaneco.com

$283.7

$288.1

19

$4,882.5

193

62 2,645

1873

Scott Orr vice president

4

Donley's Inc. 5430 Warner Road, Cleveland 44125 (216) 524-6800/www.donleyinc.com

$268.0

$283.0

20

$392.0

39

262 506

1941

Malcolm M. Donley president, CEO

5

The Ruhlin Co. 6931 Ridge Road, Sharon Center 44274 (330) 239-2800/www.ruhlin.com

$175.5

$112.6

32

$177.1

49

315 225

1915

James L. Ruhlin president, CEO

6

The Austin Co. 6095 Parkland Blvd., Cleveland 44124 (440) 544-2600/www.theaustin.com

$163.4

$4.6

16

$203.9

80

80 200

1878

Michael G. Pierce president

7

Fortney & Weygandt Inc. 31269 Bradley Road, North Olmsted 44070 (440) 716-4000/www.fortneyweygandt.com

$89.1

$6.6

16

$85.4

79

106 106

1978

Greg Freeh president

8

Kokosing Inc. 13700 McCracken Road, Cleveland 44125 (216) 587-4900/www.kokosing.biz

$86.5

$170.1

23

$825.1

203

251 2,314

1951

Brett Burgett owner

9

Shook Construction Co. 10245 Brecksville Road, Brecksville 44141 (440) 838-5400/www.shookconstruction.com

$53.5

$13.1

8

$98.2

46

48 257

1926

Chris Halapy executive vice president

10

John G. Johnson Construction Co. 1284 Riverbed St., Cleveland 44113 (216) 938-5050/www.johngjohnson.com

$50.0

$18.0

20

$18.0

20

23 23

1943

Marty Weber, president, owner; Mike Weber, vice president, owner

11

Infinity Construction Co. 18440 Cranwood Pkwy., Warrensville Heights 44128 (216) 663-3777/www.infinityconstruction.com

$43.5

$39.5

46

$39.5

46

55 55

1997

Charles A. Izzo president

12

Drake Construction Co. 1545 E. 18th St., Cleveland 44114 (216) 664-6500/www.drakeconstructionco.com

$33.0

$12.0

55

$19.0

62

32 46

1954

Steve Joseph Ciuni president

13

Continental Building Systems 23240 Chagrin Blvd., Suite 400, Beachwood 44122 (216) 454-2500/www.continental-buildingsystems.com

$28.2

$28.8

12

$327.6

54

14 141

1984

Rick Adante project executive

RESEARCHED BY DEBORAH W. HILLYER Source: Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available to purchase at www.crainscleveland.com.

SPARKBASE CONTINUED FROM PAGE 1

still owed $936,000; a county representative didn’t respond to questions in time for this story’s deadline.

With the help of all that funding, SparkBase grew from eight employees in November 2010 to 40 in January 2013. But that number had fallen to 20 by May 2015, when the board hired Haynes to replace founder Doug Hardman.

So what happened? For one, over the years, revenue from the company’s core business — which involved working through third party companies to sell gift and loyalty card programs to small retailers — flattened out, Haynes said. Attempts to go after larger clients didn’t pan out either.

SparkBase also spent a few years developing and marketing a mobile app that consumers could use to redeem coupons and other rewards.

But in January 2014, Hardman said that the company had backed off on what had been an aggressive plan to market the Paycloud app. The company realized it was going to be hard to drive widespread adoption, Hardman said at the time.

Cash flow problems Just before Haynes was hired, SparkBase had struck a deal to sell its core line of business to another company so it could focus on marketing a new version of its software.

Haynes said he saw potential in the new software: It could be used by

both internet retailers and physical stores, but it also could be used by any organization that wanted to reward its employees or customers for any reason.

It also was easier to use than SparkBase’s old system, which forced the company to spend a lot time providing customer support.

SparkBase managed to attract some new customers, but its ability to invest in growth was limited: When SparkBase sold its core business, it received some cash up front, but additional milestone payments arrived more slowly than expected, Haynes said.

“We never really got enough operating cash to grow the company,” he said.

Even though SparkBase was in “a fragile position” before Haynes arrived, its employees remained “unbelievably committed” to turning the business around, he said. That’s one reason why he decided to serve as CEO. “I thought it was worth the effort because the team was so committed to it, despite the odds,” he said.

So what will happen to those employees? Many of SparkBase’s investors “are able to refer them to our other portfolio companies or other high-growth companies in the region,” Haynes said.

“They were all entrepreneurial so given the shortage of technology talent in the region, most are in high demand,” he said.

SKY

CONTINUED FROM PAGE 5

The health insurer’s leases on all of its area properties expire at about the same time in 2020, which Jared Chaney, Medical Mutual executive vice president, said puts it in a “once in a generation” position to plan its physical operations.

“We may decide combining all four operations into one building makes sense,” Chaney said. “It may make sense to have two. I’m positive we will not have four buildings. We’ve got all the options available to us.”

Asked if the chance to change the company’s culture is a factor, Chaney said, “It’s exciting. We’re in a 116-year-old building. It certainly wasn’t built for how we use it today.”

The changing nature of office use by companies also may come into play. Bob Redmond, the Ohio broker for Mohr Partners, said offices have been growing smaller since the early 2000s thanks to technology, the popularity of open offices and the ability to put more workers into less space as a way to cope with rising building costs.

“Companies look at how their offices allow them to compete for the best and the brightest,” Redmond said, noting that was a factor in the movement of the EY accounting firm into the namesake Ernst & Young Building. He said there is a striking contrast in how Sherwin-Williams presents itself with the contemporary design of its research center in the Flats and its art deco HQ.

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