Crain's Cleveland Business

20151214-NEWS--1-NAT-CCI-CL_--

12/11/2015

4:22 PM

Page 1

VOL. 36, NO. 50

DECEMBER 14 - 20, 2015

THE DISH: Female butchers

Source Lunch

35th Anniversary

Saucisson owners carve own path P. 5

The Tribe’s Tim Salcer Club’s head of ticketing dishes on evolving field

FOCUS: Middle Market Paternity leave is sought-after perk

P. 24

P. 13-16

REPORT: Shale

The List

CLEVELAND BUSINESS

Gulfport making patient Utica play P. 19-21

Largest office leases P. 27

Spire: Things are looking up Athletic complex in Geneva pays off contractor liens, touts growth of programs

BY KEVIN KLEPS kkleps@crain.com @KevinKleps

Students in the Spire Academy Sports Training program compete in basketball, volleyball (pictured), swimming and track and field. (Contributed photo)

Spire Institute is more than 6 years old, but the state-of-theart athletic complex in Geneva is getting a bit of a fresh start.

Spire said it recently made the last of its lien payments to a group of contractors who did work on the massive facility. In a statement given to Crain’s, Spire founder Ron Clutter thanked Hughes-Roller Building Co. of Ashtabula, the general contractor of the facilities that were built at the complex, and the project’s subcontractors for their “patience and understanding.”

Crain’s reported in March 2012 that six mechanic’s liens totaling $11 million had been filed against Spire in the Ashtabula County Recorder’s Office. The largest, $8.57 million, was filed

by Hughes-Roller.

In the statement, Hughes-Roller president Matt Conway said the company and its subcontractors “appreciate the efforts of Spire in completing the agreed-upon payments for the work performed at the site of the aquatics center.” He added that the complex “is a wonderful regional asset” that “means a lot” to Ashtabula County.

Spire chief operating officer Jeff Orloff told Crain’s in a phone SEE SPIRE, PAGE 11

Flashstarts CEO bullish on startup accelerators Closing of Bizdom, LaunchHouse programs raises questions about viability of model

BY CHUCK SODER csoder@crain.com @ChuckSoder

The Bizdom Cleveland business accelerator is gone. The LaunchHouse Accelerator is gone.

But Flashstarts remains.

And it’s not going anywhere, according to CEO Charles Stack.

He’s still bullish on the idea that both Bizdom and LaunchHouse abandoned — the idea of putting entrepreneurs through a full-time, bootcamp-style program designed

to help them launch businesses over the course of three or four months.

It’s too early to say whether the accelerators will make money on the investments they made into the 90plus startup companies that have graduated from the three programs since 2012.

Even so, Stack said he has plenty of reason — and cash — to continue running the Flashstarts accelerator.

Yes, there have been challenges along the way. For instance, Stack said he’s had a hard time convincing wealthy individuals who’ve never invested in tech startups to back Flash-

starts companies.

Even so, he believes that the annual program is producing high potential businesses. And some of them have had success raising additional capital. One of the best examples is Complion, which graduated from Flashstarts two years ago. The clinical trial documentation software company raised an additional $2 million from investors over the course of 2015.

“We’re going to have some hits out of our first year, our second year, our third year,” said Stack, who has started and sold a few tech companies.

Flashstarts also is taking steps to make the program more effective. It’s forming partnerships with local universities, corporations and other institutions. It’s raising capital to make sure its best graduates have cash to keep growing. And it aims to become a destination for startups in the health care software space, which is a particularly hot at the moment.

Plus, Stack is working to surround Flashstarts companies with a community of supportive entrepreneurs.

In May, the accelerator moved into a cavernous space on the second floor SEE ACCELERATORS, PAGE 26

Charles Stack

Entire contents © 2015 by Crain Communications Inc.

Business of Life — New-look apartments Older properties undergo expensive renovations, P. 22-23

20151214-NEWS--2-NAT-CCI-CL_--

12/11/2015

11:35 AM

Page 1

Small Business Matters i Want more information and resources on this week's topics, ideas and events? Go to www.cose.org/smallbizmatters.

PRESENTED BY

52 TIPS FOR YOUR BUSINESS

Tip #50 – Market to the Millennial Consumer and Employee

By Alicia Hoisington

Millennials are now the largest demographic group in the United States, having surpassed the baby boomers. As such, it is imperative that small businesses get a handle on how to market their products to this age group, and, even, market the company itself as a potential employment option.

From a marketing standpoint, Greg Dooley, co-founder of Estrella Consulting in Hudson, says it’s important to note the KP LYLUJL PU ILOH]PVY HUK L_WLJ[H[PVUZ MYVT prior generations. For instance, millennials JVTT\UPJH[L KP LYLU[S` TVZ[S` ]PH [L_[ HUK social media. They also prefer access over ownership, using services such as Spotify or sharing-economy services such as Uber. They also have less brand loyalty, Dooley said.

“Given that millennials now represent the largest demographic group in the U.S., small I\ZPULZZLZ ZOV\SK THRL H JVUZJPV\Z L VY[ to learn more about their values, behaviors, ULLKZ HUK L_WLJ[H[PVUZ ¹ OL ZHPK ¸>P[O this information in hand, businesses are much more equipped to develop marketing plans that will communicate and deliver the value of their products and services for this KLTVNYHWOPJ NYV\W ¹ The millennial group shouldn’t just be top of mind when it comes to marketing, however.

More than one in three American workers now are millennials, according to Pew Research Center analysis of U.S. Census Bureau data.

In 2015, millennials surpassed Generation X (those aged 35 to 50) to become the largest share of the American workforce, according

to the research. And by 2020, millennials will comprise about 50% of the global workforce, according to PricewaterhouseCoopers.

(JJVYKPUN [V 7^*»Z ¸4PSSLUUPHSZ H[ >VYR! 9LZOHWPUN [OL >VYRWSHJL¹ YLWVY[ TPSSLUUPHSZ» use of technology is what sets them apart, as the group has grown up with broadband, smartphones, laptops and social media as [OL UVYT ;OL` L_WLJ[ PUZ[HU[ HJJLZZ [V information. ¸;OPZ PZ [OL ÄYZ[ NLULYH[PVU [V LU[LY [OL workplace with a better grasp of a key I\ZPULZZ [VVS [OHU TVYL ZLUPVY ^VYRLYZ ¹ [OL report reads. Some things employers should keep in mind as they look to hire millennials, HJJVYKPUN [V [OL YLWVY[!

December 14

By The Numbers

ₔ ₔ

;OL NLULYH[PVU WSHJLZ TVYL LTWOHZPZ on their personal needs than those of the organization, as their behavior has been colored by the global economic crisis.

ₔ

4PSSLUUPHSZ [LUK [V IL \UJVTMVY[HISL with rigid corporate structures.

ₔ

;OL` L_WLJ[ YHWPK WYVNYLZZPVU H ]HYPLK career and constant feedback.

ₔ

ₔ

;OL` OH]L HTIP[PVU HUK KLZPYL [V TV]L quickly upward in an organization. ;OL` ^HU[ H ÅL_PISL HWWYVHJO [V work as well as regular feedback and encouragement.

4PSSLUUPHSZ ^HU[ [V MLLS HZ PM [OLPY ^VYR PZ ^VY[O^OPSL HUK [OLPY L VY[Z HYL recognized.

>OPSL P[ ZLLTZ JSLHY [OL KLTVNYHWOPJ of the workforce is changing, are the requirements for hiring changing? That is, do college degrees still matter today?

“For our business, we do require a IHJOLSVY»Z KLNYLL MVY UL^ OPYLZ ¹ +VVSL` says. “That being said, we’re not necessarily SVVRPUN MVY H ZWLJPÄJ KLNYLL ¸>OLU 0 TLL[ ^P[O QVI JHUKPKH[LZ 0»T interested in learning about what they’ve done with their degree as well as the ZRPSSZ [OL`»]L KL]LSVWLK [OL L_WLYPLUJLZ they’ve had, how they solve problems, and how they communicate and interact with V[OLYZ ¹ OL ZH`Z

LEADERSHIP/52 TIPS FOR YOUR BUSINESS

The number of millennial-aged workers in the U.S. workforce.

SOURCE: PEW RESEARCH CENTER

Connection Calendar “THE WORLD IN 2016: BOMBS, BRAVADO AND BLAHS” 2016 GLOBAL ECONOMIC FORECAST

Tip #51 – Motivate Your Team

The International Business Network invites `V\ [V H WYVNYHT ¸;OL >VYSK PU ! )VTIZ )YH]HKV HUK )SHOZ¹ .SVIHS ,JVUVTPJ -VYLJHZ[ featuring Dr. Ken Mayland, President of ClearView Economics, LLC. Dr. Ken has spent more than 39 years studying the business cycles and providing economic analyses to a variety of constituencies, is widely quoted by the media and has won numerous awards for forecasting accuracy.

By Terri Kevani It goes without saying a motivated workforce is a more creative and productive one, and that can go a long way to setting the tone for your JVTWHU`»Z J\S[\YL HUK LUNHNLTLU[ L VY[Z /\THU 9LZV\YJLZ L_WLY[Z PKLU[PÄLK Ä]L RL` things companies should do when it comes to team building.

Walk the walk.

Genuine leadership is key to creating a productive work environment. If you demonstrate the same drive, passion, and commitment to the goals and vision of the company [OH[ `V\ L_WLJ[ MYVT `V\Y LTWSV`LLZ VU H daily basis, you will inspire the same from your team.

LTWSV`LL»Z L VY[Z (JJVYKPUN [V [OL Employee Recognition Report by the Society Encourage dialogue. for Human Resource Management, values4HRL `V\YZLSM H]HPSHISL [V `V\Y Z[H HUK based employee recognition programs are keep lines of communication open. Employees helping employers create a stronger culture want to be able to speak their minds. By pre- and more human workplace. senting opportunities to share ideas and voice concerns, you help establish trust and respect.

6 LY ZLSM PTWYV]LTLU[ VWWVY[\UP[PLZ 6U [OL ÅPW ZPKL IL Z\YL [V JVTT\UPJH[L ^P[O ,_WHUKPUN HUK PTWYV]PUN HU LTWSV`LLZ» your team as openly and honestly as possible. skills and knowledge through professional KL]LSVWTLU[ JHU ILULÄ[ `V\Y JVTWHU` Recognize achievements. greatly while enhancing job satisfaction.

Consistent recognition of a job well done, Professional development can encompass whether as a casual mention or as part of various learning opportunities, including formal a formal employee recognition program, [YHPUPUN JLY[PÄJH[PVUZ HUK [VWPJHS ZLTPUHYZ is a great no-cost way to acknowledge an and conferences.

53.5 million

DECEMBER 16 8-10 AM Embassy Suites, Independence *VZ[! MVY TLTILYZ MVY UVU TLTILYZ Register at www.cose.org/events.

Incentivize your team. >OL[OLY [OYV\NO JHZO VY UVU JHZO rewards, incentivizing your team can boost employee morale and the overall corporate culture. If pay increases or bonuses aren’t PU [OL I\KNL[ JVUZPKLY V LYPUN WHPK [PTL V ÅL_PISL ^VYR OV\YZ YLTV[L ^VYR opportunities, employee celebrations, and goal-oriented contests with fun prizes.

A GLIMPSE INSIDE THE 10,000 SMALL BUSINESSES PROGRAM Interested in learning more about the Goldman Sachs 10,000 Small Businesses program or thinking about applying? This is an opportunity for you to get an inside peek at what the program is about. You will learn about the program, meet lead faculty member Larry Polena, participate in a mini session and engage with a panel of local small business owners who graduated from the program.

JANUARY 14, 2016 For more on this topic, be on the lookout for the refreshed version of the COSE Update magazine, which will debut early next year.

CONTENT PROVIDED AND PAID FOR BY THE COUNCIL OF SMALLER ENTERPRISES

! (4 ¶ 74 Tri-C Advanced Technology Training Center, Cleveland

Check out www.cose.org/events for all the latest happenings.

20151214-NEWS--3-NAT-CCI-CL_--

12/11/2015

11:35 AM

Page 1

How to decorate your front door.

How to decorate your driveway.

CLASSIC BMW

2015 328i XDRIVE PER MO LEASE

$339*

36 Month lease requiring $2,995 Cash or Trade due at signing 10,000 miles per year and 20¢ charge per mile over. Plus tax, title, license and doc. fee. *Additional charge for certain exterior colors

And by right around the corner I mean I-90 & SOM Center.

BMW 2016 X1 xDrive28i MONTHLY LEASE “All-New for 2016”

BMW 2015 528i xDrive

$439

MONTHLY LEASE

36 Month lease requiring $2,995 Cash or Trade due at signing. 10,000 miles per year and 20¢ charge per mile over.

Plus tax, title, license and doc. fee

BMW 2015 428i xDrive

$499

CONVERT. M0.LEASE

36 Month lease requiring $2,995 Cash or Trade due at signing. 10,000 miles per year and 20¢ charge per mile over.

Plus tax, title, license and doc. fee

INTRODUCING THE ALL-NEW BMW 7 SERIES.

7

all-new

UNDENIABLE INNOVATION. THE MOST INNOVATIVE VEHICLE IN ITS CLASS. EXPERIENCE IT AT CLASSIC.

Drive

BMW.com

CLASSIC BMW I-90 & SOM CENTER WILLOUGHBY HILLS 888 439 8833 With approved credit. Offer ends 12/31/15

$589

36 Month lease requiring $2,995 Cash or Trade due at signing. 10,000 miles per year and 20¢ charge per mile over.

Plus tax, title, license and doc. fee

20151214-NEWS--4-NAT-CCI-CL_--

PAGE 4

12/11/2015

3:21 PM

Page 1

z DECEMBER 14 - 20, 2015 z CRAIN’S CLEVELAND BUSINESS

Hartland’s ambitious goal is ‘right on target’

FOR LEASE 382 ROSEMONT ROAD NORTH JACKSON, OHIO

BY JEREMY NOBILE

BEST CRANE FACILITY IN THE AREA

jnobile@crain.com @JeremyNobile

• Well-maintained 307,315 SF rail-served building on 21 acres • 2500a/480v heavy power • 4 loading docks/bays, 3 drivethrough bays, 10 drive-in doors • Four 20-ton radio-controlled cranes • 24’ - 38’ clear ceiling heights • Great access to I-76 and the Ohio Turnpike (I-80)

Visit

TerryCoyne.com Or call Terry at

216.453.3001

1350 Euclid Ave., Suite 300 Cleveland, Ohio 44115

Complimentary In-flight Wi-Fi

AIR CHARTER SERVICE AIRCRAFT MANAGEMENT

Northern Ohio’s Premier Air Charter Service Serving the area with 10 Jets • 25-HOUR JET CARD NOW AVAILABLE • www.FlySkyQuest.com • 216-362-9904 Charter@FlySkyQuest.com

Hartland & Co. is halfway to an auspicious goal the investment advisory firm set just two years ago.

When David Fulton Jr. stepped into the CEO role in 2014, he set the target of doubling revenues by 2018.

Since establishing that target, the company has further nurtured a taste for acquisitions to help spur its targets for organic and geographic growth.

After growing the private-client side, Hartland now is doubling down on the institutional advisory business the firm was founded on in 1989.

This month, Hartland completed the acquisition of the Lancaster Pollard Investment Advisory Group, a Columbus-based institutional investment consulting firm under the Lancaster Pollard Holdings Company umbrella. Terms of the deal were not disclosed.

That combination adds a few employees and $1 billion in assets under advisement. Hartland now comprises 67 employees advising on $16.5 billion.

The deal also extends the Hartland brand’s physical presence in Columbus, “which is an extremely attractive market for us,” Fulton said.

“And we feel like with the backing of a significant firm like ours, their growth is going to accelerate in that middle part of the state,” he added said.

The timing was right, too. Lancaster Pollard was interested in divesting the institutional side of its business anyhow — but not because it wasn’t performing well.

sbullard@crain.com @CrainRltywriter

Debunk the misconceptions, steer clear of common mistakes and walk away with maximum wealth in this essential guide to selling your business.

“Walk Away Wealthy is loaded with practical ideas you can use to maximize the value of your business—to yourself and to the person you sell to.”

—Brian Tracy, Author of Now, Build A Great Business

“Launching a company without an exit plan is like building a car with no brakes.

Walk Away Wealthy is a must-read for anyone who is starting or has started a business.”

“We’ve been successful in growing our private equity firm and mortgage and investment banking firm and other things we do, so we are focusing on those areas of the business that continue to grow very rapidly,” said Lancaster Pollard chairman Thomas Green. “We sort of found that the institutional investing business was just not core to our main platform.”

Prior to that deal, Hartland’s last acquisition came in January, with the absorption of Portland, Mainebased independent wealth adviser Plimsoll Mark Capital. That marked the company’s first expansion outside Ohio.

Fulton declined to disclose annual revenues. However, he reports that the company has been growing at a rate of 25% annually since 2010.

And that’s without making large revamps to fee structures that Fulton expects to keep about the same.

Although the pace is expected to slow some, growth like that has positioned the company to expand its footprint. It already has claimed the entire floor of its space in downtown Cleveland, and new hires will begin

Hanna bulks up brokerage arm

BY STAN BULLARD

Walk Away Wealthy: The Entrepreneur’s Exit-Planning Playbook

David Fulton Jr.

to fill out the new Columbus location.

“From a small base, you can grow at that rate and sustain it for a while,” Fulton said. “We’re still going to grow quickly, but probably not at that pace.”

Regardless of aggressive growth trajectory, Hartland intends to retain its independent status, Fulton said, which he argues remains crucial for their model in the investment advisory sector today.

“The key is to remain independent and free on conflicts,” Fulton said. “That is really attractive to prospective clients.”

Hartland has also promoted internal talent to punctuate its renewed focus on institutional investments via Brian Hrabak, its new chief investment officer, and Michael Shebak, who has been appointed head of the institutional consulting group.

About $13.5 billion of Hartland’s assets under advisement are controlled in the institutional group.

As the company continues to grow, Fulton said Hartland will continue to invest in itself to improve research, the handling of regulatory compliance and cyber security — something clients increasingly ask about and expect advisers to be able to address.

Beyond gaining scale to offer better services to existing clients, Hartland is banking that its additional size and visibility will help attract additional institutional investors to its client base at a period where competition within the industry itself remains hot.

And as far as that goal to double revenues? Fulton expects to hit the mark.

“It’s still absolutely a goal to take it into that direction,” he said. “And we’re right on target.”

Hanna Commercial has acquired Kelly & Visconsi Associates, a small real estate brokerage known for big retail deals — such as representing Meijer’s and Costco in new locations — and owners of shopping centers throughout Northeast Ohio.

Howard “Hoby” Hanna IV, Mayfield Heights-based president of Howard Hanna’s Great Lakes region, said the merger is designed to bolster Hanna Commercial’s ability to serve the retail real estate market.

“This is like adding a crown jewel to our other acquisitions,” Hanna said, referring to its expansion into Northeast Ohio’s commercial real estate market over the last 18 months with purchases of the former Chartwell Group and Ostendorf-Morris Co. Kelly & Visconsi adds eight retailfocused agents and two administra-

tive people to Hanna Commercial’s staff. Terms were not disclosed. Mac Biggar, president of Hanna Commercial, said the firm previously had one agent focused on retail market and three others who served retail clients along with other brokerage duties.

Talks for the merger began more than a year ago and built on Howard Hanna’s purchase in late 2014 of Pittsburgh-based Langholz Wilson Ellis, which has a substantial retailoriented practice. Although talks with principals of Kelly & Visconsi were already underway, Hanna said at that time he asked Langholz Wilson principals who would be a good addition to its retail team here and received a validating answer: Kelly & Visconsi.

Joining Hanna Commercial are Kelly & Visconsi’s two name partners, Anthony T. Visconsi and Rich Kelly, as well as its third partner, Greg Slyman. Anthony Visconsi said he and his partners see joining Hanna Commercial as an opportunity to expand service to its clients and to grow with

Howard Hanna’s marketing platform. Slyman said he believes contacts from Howard Hanna’s legion of residential agents also can produce expansion opportunities for the firm.

Kelly said Kelly & Visconsi already operates beyond the ClevelandAkron area to Columbus and Youngstown, so combining with Langholz Wilson through Hanna Commercial will strengthen its ability to serve retailers in a larger region.

Kelly and Visconsi launched the boutique 20 years ago, but Kelly said the age of the name principals had “little” to do with the desire to merge.

Kelly & Visconsi has represented 80 different retailers on 5 million square feet of selling space. It currently has listings for more then 200 acres. Kelly & Visconsi will operate under its own name for about a year, Hanna said.

Kelly & Visconsi will retain its office in Woodmere Village but its agents may use Hanna Commercial’s downtown Cleveland office.

—Marshall Goldsmith, Author of The New York Times and What Got You Here Won’t Get You There

Download your FREE chapter from the book now by visiting: www.walkawaywealthy.com

Volume 36, Number 50 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230.

Copyright © 2015 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 212-210-0750 Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-9911, or email to customerservice@crainscleveland.com, or call 877-824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.

20151214-NEWS--5-NAT-CCI-CL_--

12/11/2015

11:38 AM

Page 1

CRAIN’S CLEVELAND BUSINESS z DECEMBER 14 - 20, 2015 z PAGE 5

THE DISH

Saucisson rejuvenates the art of local butchering Melissa Khoury and Penny Barend of Saucisson, a small-batch maker of sausage and cured meats and everyone’s favorite lady butchers, celebrated their two-year anniversary on Monday, Dec. 7, with a small bash at their new home in Slavic Village. The place is not finished yet, but the entrepreneurs plan to open a 2,800-square-foot storefront and production facility in the spring, around the time the Fleet Avenue streetscape will be done.

Let us help you get there. We help business owners plan for and implement a successful exit strategy.

Increase Value. Minimize Taxes. Protect Assets.

Lee Chilcote Chilcote is a freelance writer and editor who has written for Vanity Fair, Next City, Belt and other publications. He is managing editor of Fresh Water Cleveland.

In the meantime, Khoury and Barend, who have literally grown their business one farmers’ market sale at a time following their modest beginnings at the Cleveland Culinary Launch & Kitchen, are slammed with orders at their kitchen facility at the Katz Club Diner.

They say that’s not only a sign of their success, but also of the growing market for natural, locally prepared meats. They’re moving into a new home to accommodate that rising demand.

“We maxed out the space at the Culinary Launch & Kitchen, and now we’ve maxed out the space here,” said Khoury during an interview in which she and Barend deftly broke down whole sides of pork.

“We have a crazy following at the farmers markets, and people are always excited to see what’s new each week. The storefront will make us more accessible.”

Khoury and Barend — who go by the playful nicknames “Queen of Pork” and “Local Meat Maven,” respectively — plan to open a state-inspected butchering facility in their new Fleet Avenue storefront, allowing them to sell more products wholesale to restaurants.

Additionally, they plan to offer cooking classes and special events, including a possible summer sausage-making camp for kids (don’t worry — there’s no slaughtering at this facility).

The women met when they worked at the same restaurant in Orlando, Fla., 10 years ago. They remained friends even when living miles apart, and when Khoury decided to launch Saucisson, Barend came to visit from San Diego.

After working a booth together at North Union Farmers Market and realizing they were a good team, Khoury invited Barend to move to Cleveland and become her business partner.

Barend and Khoury, who have played up their gender in the maledominated butchering world by using the Twitter hashtag #ladybutchers and posing in dresses with meat cleavers for a photo shoot, are driven by their love of whole animal butcher-

DO THE GOOD YOU WANT TO DO

Call our Certified Exit Planning Advisor, Ray Lampner: 330.572.8014 Ray.Lampner@bcgcompany.com • www.BCGLegacyAdvisors.com

Melissa Khoury, left, and Penny Barend are aiming to open their Slavic Village storefront in the spring. (Contributed photo) ing, a practice that is making a comeback. They’re also passionate about providing high-quality, chef-driven meat products to their customers.

“Lots of chefs, especially newer grads, don’t get the opportunity to do whole animal butchering,” Khoury said. “I tried my darndest to keep whole animal butchering on the menu when I was a chef, but it’s hard when only you and the sous chef know how to do it. You’re just not going to trust a green line chef with a $70-$80 piece of meat.”

“Whole animal butchering is just less wasteful,” Barend added, explaining that most of the pork that’s sold in grocery stores is a single cut of meat, leaving valuable parts of the pig to be thrown away or used in other products.

The business partners also enjoy working directly with local farmers, especially New Creation Farm in Geauga County. The pigs and other animals at New Creation are raised outside and fed a natural diet, unlike large commercial farms that keep pigs confined on concrete under fluorescent lights, they said.

“We’re building relationships with local farmers and connecting them to customers,” Barend said.

Bringing home the bacon There are many innovative aspects to Saucisson’s growing business. Not only are they young female butchers, but they also bring a contemporary, foodie flavor to an age-old craft with meat treats like pork merguez (a red, spicy sausage originating in North Africa) and porchetta (a savory, fatty pork roast in the Italian culinary tradition). They don’t try to compete with the makers of Slovenian sausage and smokies that are ubiquitous here. Instead, they’ve found a niche by selling local products that are not easy to find elsewhere, except through a distributor.

“We’re chefs, we’re not going to do anything boring,” joked Barend.

As Cleveland’s culinary scene continues to develop and consumers become better educated

about natural, locally prepared meats, more butchers like Saucisson are popping up. Longtime chefs Parker Bosley and Karen Small were pioneers in whole animal butchering, and now younger entrepreneurs like Trevor Clatterbuck of Fresh Fork Market, Adam Lambert of Ohio City Provisions, and Alexia Rodriguez and Emma Beno of the Pork Chop Shop are getting in on the action.

“Cleveland doing what it’s doing is opening up chefs’ and diners’ minds,” Khoury said.

The women say their business is built on the city’s supportive restaurant scene.

“One thing about Cleveland, everyone’s got your back here,” Khoury said. “As soon as we launched, people asked, ‘When can we buy stuff?’ Then chefs called and said, ‘Call me when your market week is over, I’ll buy what’s left.’ ” Saucisson’s owners have been “relentless” with their marketing, hitting up five farmers markets a week during the summer, as well as regular appearances at Platform Beer Co. (Carnivore Christmas, an event that tends to sell out every year, is coming up on Monday, Dec. 14, at Platform.)

The entire business is run by just the two of them, plus an occasional intern who is paid in kind (“We straight up pay him in bacon,” Khoury said with a laugh). They deliver their product in two small Mazdas.

Despite the long hours and financial risk of being entrepreneurs, they say they’ve never regretted going out on their own. They get their Saturday nights off and are doing what they love.

“I’m happy because I don’t have to work for someone else,” Barend said. “There’s never a day I don’t want to go in to work.”

At the end of the day, Saucisson is about helping people eat better, healthier food that’s also more sustainable for the environment.

“Hopefully, we’re connecting people back to where their food comes from — that’s our main goal,” Barend said.

Weatherhead

“Having taken almost all the strategy and design components of the Executive [Education] program at Weatherhead, I am grateful to have had a range of offerings that suitably coalesced into the Competitive Strategy through Business Model Design and Innovation program.”

– Maurice Apprey, University of Virginia

WHAT YOU LEARN IN A SINGLE DAY CAN CHANGE EVERYTHING.

Visit weatherhead.case.edu/executive-education to view the 2016 schedule — more than 70 programs are available!

Fly On Your Schedule.

And Our Reputation.

Reliable, safe, Classic Jet Charter. ARGUS Gold rated.

440-942-7092. ClassicJetCharter.com. Willoughby, OH. AIRCRAFT MANAGEMENT | SALES AND ACQUISITIONS | CLEVELAND BASED

20151214-NEWS--6-NAT-CCI-CL_--

PAGE 6

12/11/2015

3:20 PM

Page 1

z DECEMBER 14 - 20, 2015 z CRAIN’S CLEVELAND BUSINESS

GETTY IMAGES

For Sale - 68,639 SF Industrial Bldg.

Easy Access to I-90 & Shoreway

892 Callendar Boulevard, Painesville, OH • • • • •

• 68,639 SF Freestanding Industrial Building • Located on 6.73 Acres • Plenty of Parking • 4 Docks with Levelers • 3 Drive-In Doors

22’ to 25’ Clear Height Four 5-Ton Cranes 480 Volt / 3-Phase Power Ample Outdoor Storage Space Easy Access to I-90 & Shoreway

Gregory B. West

216.861.5379 GregoryWest@HannaCRE.com

HannaCRE.com

FREE GIFT FOR NEW CUSTOMERS

Since 1999

“The Name You Can Trust!� “FLEXIBLE. ONE SOURCE. UNLIMITED RESOURCES.�

Q

Banners, Posters, Vehicle Wraps Wall Graphics and other Signage

Q

Direct Mail Marketing

Q

Website Creation or Enhancement

Q

Digital Publications

Q

Mobile Friendly Apps and Website Conversions

Q

Free Online Company Store for Ordering of Business Cards (25 employees or over)

Q

Promotional Products

Q

Print Services

“Call Joe Thomas Group

440-268-0881

A CertiďŹ ed Minority-Owned Business, independently owned & operated

That’s me!� www.ProformaJoeThomasGroup.com

|

www.JoeThomasGroup.com

Proforma Joe Thomas Group is a franchisee of Proforma and is not affiliated with any other Proforma franchisees

Cummins

Commercial Real Estate Services, Worldwide.

Jerry Fiume, SIOR, CCIM Tom Fox, SIOR tel 330 535 2661 www.naicummins.com

30,068 SF Tallmadge Industrial Building for Sale

228 S. Thomas Road, Tallmadge, OH 44278 $750,000 Industrial Buildings and land 13-14 foot ceilings and 3-Phase power 3 drive-in doors and 7 docks CCHSHNM@KĂ˜ Ă˜2%Ă˜GNTRDĂ˜NMĂ˜OQNODQSXĂ˜ENQĂ˜QDMS@KĂ˜NQĂ˜NEĂšBD

Call Jerry Fiume, SIOR, CCIM or Tom Fox, SIOR

Housing First’s model could get valuable jolt Ohio is evaluating whether Medicaid funds could be used to help homeless find and maintain permanent housing

BY LYDIA COUTRE lcoutre@crain.com @LydiaCoutre

For residents living in permanent supportive housing from the Housing First Initiative, a partnership between local organizations to end chronic homelessness, health care services come to them.

Since January, a mobile clinic that offers Housing First residents supportive health programs and assistance in accessing specialists has been going door-to-door to the initiative’s 10 buildings.

An informational bulletin from the Centers for Medicare and Medicaid Services issued this summer could pave the way for more models that combine housing and health care, but CMS requires states to add the options to their Medicaid plan — a step Ohio has not taken, though others have. “Housing is like a vaccine,� said Jenny Eppich, senior program director based in Cleveland at Enterprise Community Partners, a nationwide organization that works to create opportunity through affordable housing and the initiative’s coalition leader. “Housing is sort of the foundation from which a lot of folks can really begin to address a lot of their issues.�

Sam Rossi, spokesman for the Ohio Department of Medicaid, said the state is in the process of evaluating the information in the bulletin to understand its full implications.

The Housing First Initiative began in Cuyahoga County in 2001, when Sisters of Charity Foundation of Cleveland, in partnership with Enterprise Community Partners and the Cleveland/Cuyahoga County Office of Homeless Services, assembled 17 organizations to bring the permanent supportive housing model to Cleveland. Today, there are more than 40 partners working together.

While CMS didn’t approve Medicaid dollars to be used for housing, it did lay out the housing-related services that the funds could help support. “What they mean by that are the services that are typically non-medical, but they’re case management,

and so the services help people with stability,� said Barbara DiPietro, senior director of policy for the National Health Care for the Homeless Council. “And it’s that stability that helps them better engage in health care services that Medicaid traditionally provides.�

The bulletin lists examples of housing-related services and activities that states could be reimbursed for, such as assisting with housing applications, ensuring a safe living environment, educating clients about tenant/landlord rights and responsibilities or developing agreements and relationships with the state and local housing/community development agencies to facilitate access to housing resources.

Right now, Medicaid funding is available for community psychiatric supportive treatment (CPST), support services that address the individualized mental health needs of a client, said Eric Morse, chief operating officer from FrontLine Service of Cleveland, the lead service provider for Housing First.

For certain eligible people, Housing First can bill Medicaid for services like accessing resources, monitoring symptoms, medication education and education about illnesses. “To the degree that their symptoms have an impact on their ability to successfully navigate the community — whether that be accessing housing or employment or any other types of assistance — you can help people to navigate those symptoms and teach them the skills that they need in order to be able to do that on their own in the future,�

Morse said.

Housing First is able to bill Medicaid for these services for about 50% to 60% of the people they house, he said.

Encouraging trajectory The CMS bulletin opens the possibility that Medicaid dollars could fund support services like CPST does and offer assistance in accessing and maintaining housing to anyone with a disability condition who is chronically homeless. “This is where we really see the

impact,� Morse said of the opportunity that would still require the state to add that to its Medicaid plan. “That would be a huge increase in our ability to leverage Medicaid.�

From a community provider perspective, DiPietro said the CMS bulletin opens some exciting possibilities when it comes to funding services that are often supported by grants. “If you can get your states to fold these services into the Medicaid program, not only do you have a more sustainable funding stream for your case managers, but then you can also refocus those grant dollars into all the stuff that Medicaid’s not going to pay for, “ she said.

The Housing First team is working to gather baseline data to look at the impact of the mobile health clinic on individual health as well as costs to the health care system, said Kate Nagel, chief operating officer at Care Alliance Health Center of Cleveland, which operates the Mobile Health Clinic for Housing First.

Already, of the patients seen at the mobile clinic, many have been able to control conditions like diabetes and hypertension and have started following their medication regimens.

The population the mobile clinic serves tends to be some of the more frequent users of health care services. “When people don’t have healthy environments, a place to live, food to eat, like those kinds of things, that’s going to back up on the health care system,� DiPietro said.

Of those that are known highusers, Nagel said they’ve begun tracking visits to emergency departments and other high-cost services to see what kind of effect on-site treatment can have.

While it’s too early to capture data in a statistically significant manner, she said they’ve already seen some individual decreases in visits and positive outcomes.

DiPietro is seeing more approaches that combine housing and health services, but said more models like that are needed — and would be welcome. “I think we are now on a trajectory where you’re going to see more of that,� she said.

20151214-NEWS--7-NAT-CCI-CL_--

12/11/2015

1:58 PM

Page 1

CRAIN’S CLEVELAND BUSINESS z DECEMBER 14 - 20, 2015 z PAGE 7

The Week THE BIG STORY Lakewood City Council is pursuing an agreement with the Lakewood Hospital Association and the Cleveland Clinic that, if adopted by council, would close Lakewood Hospital and shift health care in the suburb to a $34 million family health care facility funded by the Clinic. A vote on the measure could come as early as Dec. 21. Under the agreement, the Clinic would pay $34 million for a 62,100square-foot modern family health center at the southwest corner of Detroit and Belle avenues. The new facility, the Lakewood Family Health Center, would include outpatient-based programs, a 24/7/365 emergency department, wellness activities and outreach services to shift focus to prevention.

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

KEEPING SCORE The Cleveland Indians are going big — really big — during the second phase of renovations at Progressive Field. The team announced that a 13,000-squarefoot scoreboard — the largest in Major League Baseball — will be installed prior to the 2016 season.

The new display will be manufactured and installed by Daktronics.

The 59-by-221-foot scoreboard will replace the Tribe’s 5,364square-foot display, which was built in 2004 and believed to be one of the five oldest in MLB.

Publisher Editor Managing editor Sections editor Associate editor/Akron Assistant editor Senior reporter Reporters

John Campanelli Elizabeth McIntyre Scott Suttell Tim Magaw Sue Walton Kevin Kleps Stan Bullard Real estate/construction Jay Miller, Government Chuck Soder Technology Dan Shingler Energy/steel/auto Rachel McCafferty Manufacturing/energy Jeremy Nobile, Finance Lydia Coutré, Health care

Research editor Art director Cartoonist

Deborah W. Hillyer Rebecca R. Markovitz Rich Williams

Events manager Events coordinator Marketing strategist Managing editor, custom and special projects Advertising director Senior account exec.

Account executives

***

Office coordinator Web editor Digital strategy director Audience development director Production director Production assistant/ video editor Billing Credit

Jessica Rasmussen Kim Hill Michelle Sustar Amy Ann Stoessel Nicole Mastrangelo Dawn Donegan Lindsie Bowman John Banks Laura Kulber Mintz Denise Donaldson Damon Sims Nancy Hanus Eric Cedo Craig L. Mackey Steven Bennett Lana Semaan Todd Masura

CRAIN COMMUNICATIONS INC. Chairman President Treasurer CIO CFO Group publisher Exec. VP/operations Exec. VP/director of strategic operations

Keith E. Crain Rance Crain Mary Kay Crain Anthony DiPonio Thomas Stevens Mary Kramer William A. Morrow

Exec. VP/director of corporate operations VP of production and manufacturing

Chris Crain

KC Crain Dave Kamis

G.D. Crain Jr., Founder (1885-1973) Mrs. G.D. Crain Jr., Chairman (1911-1996)

***

Reprints: 212-210-0750 Krista Bora kbora@crain.com, Customer service and subscriptions 877-824-9373

POWER PLAY FirstEnergy Corp.’s Davis-Besse Nuclear Power Station near Toledo received federal approval to operate until 2037. The Nuclear Regulatory Commission on Dec. 8 approved a 20-year license extension for DavisBesse. The plant’s original license was set to expire on April 22, 2017.

The license extension was hardly short work; FirstEnergy submitted the license renewal application to the NRC in 2010. The company said Davis-Besse is capable of generating 908 megawatts — enough electricity to power more than one million households. The plant employs more than 700 people and has an annual payroll of nearly $65 million.

Frances Floriano Goins

Patricia A. Shlonsky

DATA DRIVEN Fidelity Voice & Data was acquired by a larger data center company called Fusion in a $30 million deal.

Now the 30 employees who work out of Fidelity’s Beachwood office and downtown data center will be part of a publicly traded company working to become a major player in the fast-growing data center services business. The deal gives New York-based Fusion “substantial opportunity for cost savings through elimination of redundancies,” according to a news release from the company. But CEO Matthew Rosen told Crain’s the company doesn’t expect to cut staff, noting that Fidelity now will be able to get better contracts with thirdparty vendors, through Fusion.

COLOR THEM PLEASED PolyOne Corp., an Avon Lake-based provider of specialized polymer materials, services and solutions, said acquired Magenta Master Fibers of Italy, a developer of specialty solid color concentrates for the global fiber industry, from BASF for $22 million. The acquisition is expected to add $16 million to revenues and to be accretive to earnings in 2016, PolyOne said.

Magenta’s products are used in clothing, outdoor equipment, high-performance products and multiple materials used in the transportation industry. PolyOne said Magenta’s operations are in Milan and Shanghai, and that 65% of its revenues are outside North America.

CONGRATULATIONS Ulmer & Berne is proud to congratulate partners Frances Floriano Goins and Patricia A. Shlonsky for their dedication to professionalism, commitment to client service, and the excellent results that follow.

Frances Floriano Goins Ranked in the top 25 female attorneys in Cleveland – Ohio Super Lawyers 2016 Ranked in the top 50 female attorneys in Ohio – Ohio Super Lawyers 2016 Ranked in the top 250 female litigators in the U.S. – Benchmark Litigation 2015 Patricia A. Shlonsky Ranked in the top 25 female attorneys in Cleveland – Ohio Super Lawyers 2016 Ranked in the top 50 female attorneys in Ohio – Ohio Super Lawyers 2016

Learn more at ulmer.com

Ranked in the top 25 female attorneys in Cleveland – Ohio Super Lawyers 2016 Cleveland | Columbus | Cincinnati | Chicago

20151214-NEWS--8-NAT-CCI-CL_--

PAGE 8

12/11/2015

4:42 PM

Page 1

z DECEMBER 14 - 20, 2015 z CRAIN’S CLEVELAND BUSINESS

At a glance: Fun sources of financial aid CONOR COAKLEY is proud to have represented

in their move to

Worthington Square 800 West St. Clair Avenue | 4th Floor | Cleveland, OH

CBRE, Inc. 950 Main Avenue Suite 200 Cleveland, OH 44113 T +216 687 1800

FIG. 4-B

Nice house Successful in business

Family person

Par golfer

Good neighbor

Makes a difference in the world

What’s better than a well-balanced portfolio?

A well-balanced life.

Whether your needs are local, national, or international, Nesco Works for You.

At Akron Community Foundation, we can help simplify giving to your favorite nonprofits — leaving you more time to focus on what matters.

A Donor-Advised Fund offers significant tax advantages and no start-up costs. What’s more, we handle all the paperwork and offer important data on local nonprofits, helping you make informed giving decisions.

It’s a balanced approach to giving, so you can lead a balanced life.

PHILANTHROPY FOR THE

BUSINESS SAVVY.

Download our free Guide to Donor-Advised Funds at www.akroncf.org/life. Or, call us at 330-436-5610.

20151214-NEWS--9-NAT-CCI-CL_--

12/11/2015

4:43 PM

Page 1

20151214-NEWS--10-NAT-CCI-CL_--

PAGE 10

12/10/2015

4:07 PM

Page 1

z DECEMBER 14 - 20, 2015 z CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

Lessons from the past can help grow our region’s future

Editorial

Pull the plug The Public Utilities Commission of Ohio should be applauded for putting the brakes on a proposed settlement plan with FirstEnergy Corp. that would leave ratepayers footing the bill for the utility’s plan to keep a handful of antiquated power plants online.

A PUCO administrative judge last Wednesday, Dec. 9, ruled that more hearings are needed on a long-negotiated plan that would guarantee ratepayer-funded subsidies to keep aging, inefficient and costly coal and nuclear plants operating. More hearings are needed, and common sense must prevail.

FirstEnergy says ratepayers would pay more for their electricity initially — about $3.25 a month for residential customers — but would save money later on, leading to a total cost savings of $560 million. The Ohio Consumers’ Counsel, however, says the plan could cost consumers up to $3.9 billion.

When FirstEnergy advocated deregulation almost two decades ago, coal-fired plants provided electricity for consumers and still generated a profit when FirstEnergy sold it on the regional grid.

Low-price natural gas has changed that. Coal-fired power plants now are more expensive to run and can’t compete on price with natural gas. FirstEnergy argues that natural gas prices won’t always be so low, which is why it wants to keep the coal and nuclear plants operating, so that they will still be available when natural gas prices go up. And its promise of consumer savings is predicated on coal-fired power being cheaper than natural gas down the line.

Under FirstEnergy’s plan, two of the aging plants its unregulated subsidiary FirstEnergy Solutions owns — the DavisBesse nuclear power plant near Toledo and the W.H. Sammis coal-fired plant on the Ohio River — would have the luxury of zero competition.

Every bit of power those plants generated would have to be purchased by FirstEnergy’s Ohio utilities — The Illuminating Co., Ohio Edison and Toledo Edison. Those power companies would have to buy from those plants regardless of cost.

That sounds like a pretty sweet deal for FirstEnergy.

It’s not so sweet for ratepayers and lower cost competitors, though. And it would delay further efforts to transition to clean energy.

Critics rightfully say this is a subsidy. It allows FirstEnergy to avoid marketplace fluctuations. FirstEnergy will avoid the risk and shift it to consumers. And that’s not right. An original FirstEnergy proposal would have required the exclusive purchase mandate for 15 years. The company lowered it to eight years. But a bad deal is a bad deal, regardless of the length of the term.

The Ohio Consumers’ Counsel, the Northeast Ohio Public Energy Council, independent power companies, businesses and environmental groups oppose the plan. The presumption was that the PUCO would rubber-stamp this sweetheart deal. The fact that the decision has been pushed back to allow more comment is a good.

After listening to those critics and gathering the facts, the PUCO should pull the plug on FirstEnergy’s proposal.

PUBLISHER: John Campanelli (jcampanelli@crain.com) EDITOR: Elizabeth McIntyre (emcintyre@crain.com)

CLEVELAND BUSINESS

MANAGING EDITOR: Scott Suttell (ssuttell@crain.com)

Imagine Cleveland as an incubator of new ideas, groundbreaking research and accelerated production. A city that welcomes workers regardless of where they come from. One that embraces its natural resources. A place where industry is humming, the population is exploding and innovation is sparking an enormous outlay of patents.

One hundred years ago, that was Cleveland. The Silicon Valley of its time, some say. What made Cleveland such a hotbed for innovation in the late 19th and early 20th centuries? And how do we recapture that entrepreneurial spirit?

The keys to that time machine and its wealth of knowledge can be found in the 100 Year Club of the Western Reserve, an honor society that recognizes businesses, nonprofits and educational and cultural institutions that have been in continuous operation in Northeast Ohio for a century or more.

Don’t believe how hard it is for an organiElizabeth zation to stick around for 100 years? Yale UniMcIntyre versity professor Richard Foster found that the average lifespan of an S&P 500 company has decreased from 67 years in the 1920s to only 15 years today.

Last week, 13 organizations joined the ranks of the 100 Year Club at a ceremony at the Western Reserve Historical Society.

Their stories provide a template for longevity. John Grabowski, a Cleveland historian who serves as the WRHS’ senior vice president of research and associate professor at Case Western Reserve University, explained that many Northeast Ohio companies that thrived between 1880 and 1920 did so based on industrialized times that demanded “bang, clunk and thunk.”

The companies founded in 1915, and even earlier, however, provided a transition from the manufacturing and industrialization that had been going strong for decades. “They show what successful entrepreneurs can do to transform their community,” Grabowski said. They also show what can happen when businesspeople are willing to take risks, evolve and persist through challenging times. And that’s exactly what these organizations did. Many became anchors in their communities, serving immigrants, migrants and people from all walks of life. Others started in one industry only to switch to another when an opportunity presented itself. All embraced innovation and reinvention. Most invested in their employees and listened to their customers and those they serve.

The Western Reserve Historical Society knows the value of lessons learned from the past and has wisely used the wisdom of these older corporate citizens to inspire the incubators, startups and entrepreneurs of today. The historical society, with the help of the Burton D. Morgan Foundation, has even taken it a step further with its Youth Entrepreneurship Education program, which aims to spark the entrepreneurial spirit in students.

This year’s inductees, who now join more than 200 other organizations in the 100 Year Club, are the Cleveland Play House, Farmers National Bank, Fay Sharpe, the Federal Reserve Bank of Cleveland, the Greater Cleveland Automobile Dealers’ Association, Hawken School, Jewish Family Service Association, Karamu House, the Kiwanis Club of Cleveland, Ohio Awning & Manufacturing, SeibertKeck, the Spitzer Organization and St. Vincent Charity Medical Center.

Let’s hope that a century from now, when a 2015 Cleveland startup is inducted into the 100 Year Club, these organizations form the nucleus of a 200 Year Club. An intergenerational business community makes for a strong business community.

To learn more about this year’s inductees, visit www.wrhs.org/get-involved/100-year-club.

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.

20151214-NEWS--11-NAT-CCI-CL_--

12/10/2015

3:27 PM

Page 1

CRAIN’S CLEVELAND BUSINESS z DECEMBER 14 - 20, 2015 z PAGE 11

SPIRE CONTINUED FROM PAGE 1

Re: A new low for the Browns I’m not even watching anymore as another pathetic season rides into the sunset. Apathy set in a long time ago. — Ted Grabowski Please get rid of (general manager) Ray Farmer now, so that his successor has time to get ready for the draft. It looks like we will be getting a very high bunch of picks. It doesn’t really matter when they fire Mike Pettine, because the market for head coaches has lots of supply at the end of every season. — Mark Wallach It’s really a shame that they’ve sunk this low. Hate to say I told you so, but last spring you could see this trainwreck coming from a mile away.

So many things they haven’t done right.

(And yeah, it’s really easy to be a critic.)

Ray Farmer absolutely must go, and the new guy should pick the next head coach. — Scott Vranic

Re: FirstEnergy’s rate plan What is most shameless is that FirstEnergy wants to be paid its usual profit upcharge on the thing. Perhaps a case could be made that electricity prices might rise in the future and that ratepayers MIGHT benefit from having these plants, but it would seem that under such a deal, there should be no profits for FirstEnergy until such time as these plants are actually cheaper, and then split the difference. I guess they think they should be paid for the privilege of ratepayers being forced to speculate on energy prices. And if they’re so sure prices are going up in future, shouldn’t some private speculator want to buy these plants to participate in that? FirstEnergy is pathetic. — Ricky

Re: Economic outlook for 2016

Re: For-sale downtown housing Downtown Cleveland is really growing up. I think the renting vs. purchase will resolve itself. When everyone sees the long-term viability of the downtown marketplace and when the support network is put in place, condos will happen.

What we have to do is recognize what is and will be needed to make it happen. Someday very soon, we will even have an K-8 school downtown!

Neil Dick A real neighborhood.

PRESENTED BY

ARCHER AWARDS DO YOU KNOW AN HR PROFESSIONAL WHO

HITS THE MARK?

Nominations for the 6th annual Archer Awards are open! • HR Executive of the Year • Leadership in Diversity • Innovation • Professional Development Award • Excellence in Talent Management • HR Team or Department Award • Rising Star

To nominate, visit

CrainsCleveland.com/Nominations SAVE THE DATE

AUGUST 14, 2016

Full Circle

s for you and tegie you a r t s rb e v u ti Estate planning Business Executive succession compensation planning and governance Family and closely-held Employee business benefits counseling Taxation

ess sin

George Mokrzan, the director of economics at Huntington National Bank who provided a rosy forecast for next year, needs to get out of the office and visit a few manufacturing facilities.

Things are not good these days. Many (companies) have laid off numerous people, and the outlook for both 2016 and 2017 does not look good. I doubt we will see anything like 2009, but things are slow and show no signs of improving in the short term. Please — get off your chair and visit some of — RazorsEdge these shops.

“The situation could have become negative, but patience and hard work turned it into a positive. We are looking forward to the bright future Spire has in front of it.�

Donate new, unwrapped toys at an ofďŹ cial drop-off near you.

Inn ov a

Web Talk

interview last Tuesday, Dec. 8, that the final lien payment was made to Hughes-Roller within the last week. “I think everyone is satisfied with the way it went and how it got paid off, because it was getting paid off all along,�

Orloff said.

Clutter said Spire has also made payments to the contractors who furnished labor and materials to the 293,000square-foot aquatics center, which is recognized as one of the best in the world. “We were able to make these payments by working together, which has been to the benefit of all involved in the project, as well as our students and other participants, and our community and region,� the Spire founder said. “The situation could have become negative, but patience and hard work turned it into a positive. We are looking forward to the bright future Spire has in front of it.�

Despite the financial pitfalls it’s experienced along the way, Orloff said the facility is doing well.

The COO and former IMG senior vice president said the Spire Academy Sports Training Program has more than 60 students enrolled, the most in its history.

The program got a significant boost after Spire signed a deal with FINA, the international swimming federation, in early 2015 that has resulted in more Olympic hopefuls living and working out at the facility. — Ron Clutter That deal occurred founder, Spire Institute about 11 months after Spire announced that it had been selected as an official training site for USA Wrestling. Spire in 2013 struck an agreement that made it a training home for USA Track and Field and the U.S. Paralympic basketball teams.

Students train at the complex, which has more than 750,000 square feet of enclosed space and 160 acres in all, and attend classes at four high schools with which Spire works, in addition to a postgraduate program it offers.

Orloff said the basketball program, which is directed by Bobby Bossman, is “the biggest driver� of revenue for the academy. “It’s definitely nationally known,� Orloff said.

At least 50 NCAA Division I basketball coaches have visited the academy since its 2012 inception, Orloff said.

Boston College, Clemson, Cleveland State, Florida, Kansas State, Michigan State, Mississippi, Mississippi State, Purdue, Texas Tech, Valparaiso and Virginia Commonwealth are among the universities that have scouted Spire’s hoops hopefuls. High school sophomores Maurice Calloo and Kajon Gordon-Stephens took unofficial visits to Kentucky in the fall, and Calloo already has offers from Florida, Mississippi State and Kansas State.

In all, Spire’s academy has students from 17 states and 17 countries. The relationship with FINA has resulted in swimmers who aren’t part of the international federation coming to Spire because of the group’s recommendation, Orloff said.

Spire recently added swimmers from Fiji, Uruguay, Grenada, the Bahamas and Guyana. Some swimmers stay at the facility for three months, and others are there for six or more months, Orloff said. More are expected to join as the 2016 Summer Olympics in Rio de Janeiro approach. Expenses are paid by FINA or the athlete’s swimming federation. “It is really neat,� Orloff said. “We have 17 different countries (represented), and it will go up.�

The Atlantic 10 men’s and women’s swimming and diving championships, and the Big East outdoor and Big Ten indoor men’s and women’s track and field championships are returning in 2016. Spire is also preparing to submit bids to host several NCAA championship events, Orloff said. “It’s just a matter of putting pieces together and being patient and doing the right things at the right time — putting ourselves in the best position to continue to grow,� he said.

McDonald Hopkins LLC 4VQFSJPS "WF &BTU 4VJUF $MFWFMBOE 0) t Shawn M. Riley Jeffrey P. Consolo David M. Kall Cleveland Managing Member

Chair, Tax and Benefits Department

Vice-Chair, Tax and Benefits Department

$IJDBHP t $MFWFMBOE t $PMVNCVT t %FUSPJU t .JBNJ t 8FTU 1BMN #FBDI mcdonaldhopkins.com

Carl J. Grassi, President

20151214-NEWS--12-NAT-CCI-CL_--

PAGE 12

12/10/2015

2:47 PM

Page 1

z DECEMBER 14 - 20, 2015 z CRAIN’S CLEVELAND BUSINESS

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 INCREDIBLE KIDS CHILDCARE & PRESCHOOL CENTER P.O. Box 670308, Northfield Date filed: Nov. 12, 2015 Type: Employer’s withholding, unemployment, corporate income Amount: $259,960 PRIVATE LABEL MFG CORP. 7424 Bessemer Ave., Cleveland

We build

TRUST Because relationships matter to us

Date filed: Nov. 12, 2015 Type: Corporate income Amount: $217,502 SYROWSKI & SYROWSKI INC. 169 Northfield Road, Bedford Date filed: Nov. 12, 2015 Type: Employer’s withholding Amount: $143,268 SECURITY MANAGEMENT GROUP INC. 6433 Gale Drive, Seven Hills Date filed: Nov. 12, 2015 Type: Employer’s withholding Amount: $126,158 HARMON WEB INNOVATIONS INC. 4635 Richmond Road, Suite 105, Cleveland Date filed: Nov. 12, 2015 Type: Corporate income Amount: $83,966 MR. ALBERTS MENS WORLD 618 Prospect Ave., Cleveland Date filed: Nov. 12, 2015 Type: Employer’s withholding, unemployment Amount: $43,250 APPLIED GRAPHITE INC. 1381 E. 34 St., Cleveland Date filed: Nov. 12, 2015 Type: Unemployment, failure to file complete return Amount: $24,925 APPLE CHILD CARE INC. 6827 Bunker Road, North Royalton Date filed: Nov. 12, 2015 Type: Employer’s withholding, unemployment, failure to file complete return Amount: $22,547

HARD

WORK

PLAY

HARD

Conference Center with 22,000 sq. ft. of flexible meeting space that accommodates up to 400.

270-room Wilson Lodge featuring 59 premium rooms and The West Spa. Creative cuisine served in banquet rooms or catered in various locations throughout the resort.

Legendary customer service & personal attention.

1,700 acres of year-round recreation in an inspiring natural setting.

Date filed: Nov. 12, 2015 Type: Employer’s withholding Amount: $10,910

GALA CATERING CO. LLC PAZZOS GRAND BALLROOM 7874 Broadview Road, Parma Date filed: Oct. 9, 2015 Type: Employer’s withholding Amount: $17,375

GORDONS ADULT DAYCARE INC. 12200 Fairhill Road, Cleveland Date filed: Oct. 8, 2015 Type: Employer’s withholding, unemployment Amount: $9,621

SNOW ROAD BAR LLC 15119 Snow Road, Brook Park Date filed: Oct. 9, 2015 Type: Employer’s withholding, corporate income Amount: $14,373

AETNA WELDING CO. 4613 Broadway Ave., Cleveland Date filed: Oct. 9, 2015 Type: Employer’s withholding Amount: $9,126

JMW FOOD CORP. JOEYS RESTAURANT 28500 Miles Road, Unit A., Solon Date filed: Oct. 8, 2015 Type: Employer’s withholding, unemployment Amount: $13,428

THREE B MANUFACTURING LLC 9761 York Alpha Drive, North Royalton Date filed: Oct. 9, 2015 Type: Employer’s withholding Amount: $9,094

SHUMAKERS HARDWOOD FLOORS LLC 3773 Glenwood Road, Cleveland Heights Date filed: Nov. 12, 2015 Type: Employer’s withholding Amount: $13,313

FIELD DAY CLEANING INC. 14713 Granger Road, Maple Heights Date filed: Oct. 8, 2015 Type: Employer’s withholding Amount: $6,587

IMANI TEMPLE MINISTRIES INC. 2463 N. Taylor Road, Cleveland Heights Date filed: Oct. 9, 2015 Type: Employer’s withholding Amount: $12,594 P L A N ENTERPRISES INC. 20898 Drake Road, Strongsville Date filed: Nov. 12, 2015 Type: Employer’s withholding, corporate income Amount: $11,622 METROPOLITAN FOOD SERVICES LLC ISLAND CAFE 22901 Millcreek Blvd., Highland Hills

LIENS RELEASED BAJAN ENTERPRISES LLC 15700 Benhoff Drive, Maple Heights Date filed: Feb. 5, 2015 Date released: Oct. 9, 2015 Type: Employer’s withholding Amount: $16,061 KYRON PLATING CORP. 1336 W. 114 St., Cleveland Date filed: July 26, 2011 Date released: Oct. 9, 2015 Type: Employer’s withholding Amount: $21,517

FOR COMMERCIAL LEASING INFORMATION, CONTACT: DYANN DAVISON | 216.781.4828 ddavison@KandD.com www.KandDRealEstateServices.com

A Natural Setting for Success with the Perfect Blend of Work and Play Conveniently located just 3 miles from I-70 Exit 2A in Wheeling, WV. An easy 3 hour drive from Cleveland!

R ESERV E SQUA R E 1701 EAST 12TH STREET | CLEVELAND, OHIO 44114 Commercial space available, Brand new indoor salt water pool with saunas, locker rooms and roof top sundeck.

3,000 sq. ft. to 30,000 sq. ft.

1HZO\ XSGDWHG VWDWH RI WKH DUW ¿WQHVV FHQWHU Complete renovation.

Convenience market.

Brand new build out.

Phone: 800-972-1991 Email: sales@oglebay-resort.com Web: www.oglebay-resort.com

On-site management and maintenance.

Access to the building on E. 12th St. and E. 13th St. with 2 manned security stations, 24/7. Key fob access for tenants.

Wireless, cable and IT services.

Attached garage parking.

Central conferencing center and lounge.

Dry cleaning service.

On-site restaurants.

On-site car rental agency.

Florist.

Concierge services.

ATM machine.

Bike storage.

20151214-NEWS--13-NAT-CCI-CL_--

12/10/2015

12:20 PM

Page 1

CRAIN’S CLEVELAND BUSINESS z DECEMBER 14 - 20, 2015 z PAGE 13

Focus MIDDLE MARKET

TAX TIPS - P. 14

z

ADVISER - P. 15

z

WIRELESS ENVIRONMENT - P. 16

Leaving time for dads

Paid paternity leave isn’t the norm, but change could be on way

BY DOUGLAS GUTH clbfreelancer@crain.com

Kevin Ruminski, a senior manager at Ernst & Young, had no concerns about taking time off following the birth of his daughter, Adeline, in mid-October.

The accounting giant he works for offers two weeks of paid leave to new fathers — a benefit Ruminski was happy to embrace.

“I had no worry at all about leaving,” he said. “This is a program the firm encourages individuals to use.

They know (having a child) can be a once-in-a-lifetime opportunity.”

Ruminski, a 14-year veteran at the company’s Cleveland office, took his paid fortnight as well as an additional week of vacation while his wife, Shannon, recovered from a Cesarean section. During his absence from work, the Avon resident helped with his infant daughter and had full-time care duty for his 2-year-old son, Colin.

“The demand for paternity leave has not always been there from an employee standpoint, but that’s changing.”

— Stephen Ligus Vice president and employee benefits department leader, Cleveland Society of Human Resource Management

“We don’t have family close by so it was really important for me to be home,” said Ruminski, 36. “Without that support system, paternity leave was a great benefit to have.”

With U.S men spending more time on housework and child rearing compared to 50 years ago — about 11 additional hours combined per week, according to a 2011 survey from Pew Research Center — employers still are catching up when it comes to supporting dads with policies that promote a better work/life balance, observers say.

Only about 14% of U.S. companies offer some kind of paid paternity leave, according to a recent Families and Work Institute report. Meanwhile, male workers across the country are calling for some form of paternity benefits from their companies.

For one, 89% of respondents interviewed for a 2014 Boston College Center for Work & Family study said it was important for employers to provide paid paternity or parental leave.

Surveyed fathers from the millennial generation were the strongest proponents, clocking in at 93% in favor of the benefit.

“This (trend) is something that will continue as millennials take up larger chunks of the workforce,” said Stephen Ligus, vice president and employee benefits department leader of the Cleveland Society of Human Resource Management. “The demand for paternity leave has not always been there from an employee standpoint, but that’s changing.”

Federal law allows new parents up to 12 weeks of unpaid leave following the birth of a child, a requirement SEE DADS, PAGE 14

20151214-NEWS--14-NAT-CCI-CL_--

PAGE 14

12/10/2015

12:39 PM

Page 1

z DECEMBER 14 - 20, 2015 z CRAIN’S CLEVELAND BUSINESS

MIDDLE MARKET

SET THE BAR HIGHER.

WEATHERHEAD EXECUTIVE MBA PROGRAM Designed for working executives, this program is delivered by internationally renowned faculty who have pioneered the advancement of leadership on four levels: self, team, organization and society.

Make our difference your advantage with an Executive MBA from Weatherhead.

APPLY TODAY AT WEATHERHEAD.CASE.EDU/EMBA

HEALTH CARE HEROES

Do you know a Hero?

CrainsCleveland.com/Nominations Deadline - January 8

DADS CONTINUED FROM PAGE 13

that applies only to companies with 50 or more employees and to parents who have worked there for at least a year. Working dads, lacking the disability benefits of new mothers, may have to use vacation time if they want to bond with a new baby, Ligus noted.

“That wouldn’t be paid paternity or parental leave, but based upon the individual desires of that person,” he said.

Ernst & Young introduced its paternity leave policy 13 years ago.

Along with the two weeks of paid leave the firm gives new dads, it offers up to six weeks of compensated time off for fathers who are the primary caregiver. Between 500 and 600 Ernst & Young employees make use of the benefit annually, said Priyanka Chaudhry, a tax partner and “inclusiveness champion” at the company’s Cleveland office.

Ernst & Young has been ahead of the cultural curve even as tech companies like Facebook make news about their own generous paternity programs. Though EY doesn’t offer Facebook’s four months of leave, it proposed the benefit years ahead of other businesses.

“Paternity leave started off as a perk, but it’s become essential to our sustainability,” Chaudhry said. “It’s now the nature of a complex and globally connected work environment.”

A global study commissioned by EY earlier this year of 9,700 full-time workers found one-third struggling to maintain work/life balance, with parents and younger generations being the hardest hit. Paternity leave can help ease these difficulties while serving as a potent catalyst for overall employee engagement, said Chaudhry.

“The perception internally was, will men take advantage of this benefit?” she said. “That was the initial barrier. Now we know men will be more satisfied with their jobs with this kind of flexibility.”

Easing a hardship Customer engagement agency Rosetta gives male employees one week of paid paternity leave. The benefit is expected to expand in 2016, a change aligning with policy established by the Publicis.Sapient platform, which carries Rosetta and other digital marketing brands under its banner.

In Rosetta’s current system, workers must be with the company for six months before they are eligible for paternity leave. Total rewards manager Becky Nisius has been among those with the company’s human resources department lobbying for an extended leave program.

“We can’t run with the big dogs, but we’ll do what we can to be more competitive,” Nisius said.

As familial norms continue to shift and more women assume the role of breadwinner, paid paternity leave can result in one less hardship for newly minted American families, Nisius said.

“It’s an exciting time when a child is born, but it’s also naturally stressful,” she said. “Fathers knowing they can take time off and not be negatively impacted will reduce some of that stress.”

TAX TIPS: Carl Grassi

New rules should bring change to partnerships The budget bill signed by President Barack Obama on Nov. 2 included a significant change in the way IRS partnership audits will be handled.

Partnership audits have become a more pressing issue for the IRS as more businesses are taxed as partnerships, including limited liability companies.

Because the IRS must generally assess and collect any deficiencies from the individual partners after a partnership audit, enforcement can be difficult.

The new rules will allow the IRS in most cases to assess any additional tax against the partnership itself instead of having to proceed against the individual partners.

These changes are significant enough that partnerships and LLCs should review and consider revising their governing documents in anticipation of the effective date.

Under the current audit rules (which are generally still effective until 2018), there are basically three different types of partnership audits.

Electing Large Partnerships, or ELPs, have audits done at the partnership level, and any adjustments are reflected on the partners’ current year returns (as opposed to having to amended prior year returns).

Other partnerships with more than 10 partners are audited under the unified partnership audit rules.

After an audit of the partnership under these rules, any assessment must be made (and collected) from the individual partners. A partnership with fewer than 10 partners is generally audited by auditing the individual partners. A report from the U.S. Government Accountability Office issued last year determined — and the IRS has long complained — that these rules make it difficult to audit partnership and LLCs, especially those with large numbers of partners.

The budget bill eliminates these distinctions and provides for a single set of rules governing partnership audits.

After the effective date of these rules, the IRS will examine the partnership’s return, and the partnership will (with a number of exceptions) be responsible for any adjustments in the year that the audit was completed, or in the year that any judicial proceeding relating to the audit becomes final.

The partnership will generally pay tax on any assessment at the highest individual or corporate tax rate, although procedures will be available for a partnership to show that this rate is not appropriate.

This is a significant change because partnerships have never before been required to pay tax at the entity level as opposed to the partner or member level.

There are a number of ways that a partnership can essentially opt out of these rules.

An election will be available whereby the partnership can choose to issue adjusted information returns to its partners instead of hav-

Grassi is president of McDonald Hopkins LLC.

ing the partnership pay the tax liability. Partnerships with 100 or fewer partners that have only certain types of partners (essentially individuals and corporations) would also be allowed to opt out of these rules and have audits performed at the individual partner level by making an annual election and meeting certain reporting requirements.

There are a number of changes that partnerships and LLCs should consider making to their partnership agreement or operating agreement as a result of these new rules.

First, should the partnership opt out of the new audit provisions? The decision to opt out of these rules can be made either annually or within a set period of time after the IRS assessment. Who makes this decision, and if the annual opt out is chosen, should the agreement contain transfer restrictions to keep a partner from transferring an interest to a non-qualifying partner (such as an LLC) that will prevent the partnership from making this election?

Other possible agreement revisions could address what happens when partners buy and sell partnership interests. If the partnership does not opt out of these rules, a new partner buying in during the current year could be responsible for taxes that relate to a year prior to the purchase.

Should the agreement provide that the partnership has recourse against partners who have left the partnership if a tax is assessed for a year during which they were a partner? The answer to each of these issues depends on the nature of the partnership and the relationship between the partners, but some thought should be given to the possibly of amending the agreement to address these issues.

While these rules are applicable to tax years beginning after 2017, some partnerships can elect to have these rules effective as of Jan. 1, 2016.

These provisions were designed to raise $9 billion over the next 10 years — a clear sign that more partnership and LLC audits are on the way. Partnerships and LLCs should therefore review their agreements now to consider whether any changes need to be made.

20151214-NEWS--15-NAT-CCI-CL_--

12/10/2015

12:23 PM

Page 1

CRAIN’S CLEVELAND BUSINESS z DECEMBER 14 - 20, 2015 z PAGE 15

ADVISER: Joe Mosbrook

Web messaging should be part of company’s sales pitch New research reveals that the average sales cycle in nearly all industries has shortened dramatically. Just a decade ago, closing a sale required an average of 5.6 personal interactions. Today, the decision to buy develops in a blistering 1.7 meetings.

What’s more, many prospects reach their decision before the salesperson slams the car door shut in the parking lot.

The shrinking sales cycle spells good news for a business’s bottom line. It provides the ability to reduce salesforce and control ballooning expenses. The downside is that buyers now make many decisions based not on what they learn during a pitch, but what they discover online. So when a company’s web messaging falls flat, prospects grow skeptical and the sale heads toward an uphill battle.

Most prospects know a product’s benefits and features before the first sales call, and they’re equally aware of their alternatives. They know where the salesperson went to college, who their friends are and where their kids go to school. Car dealers are challenged daily by an increasing number of walk-in customers armed with more powerful negotiating knowledge than their salespeople.

Like most of us, corporate decision makers shop their information online before meeting a representative in person. This has driven businesses to place greater importance on the role of their website and retool the messaging in ways that more actively sells. This is especially true for industries that have long relied on a relationship- and referral-based sales models, such as manufacturing and professional services.

Every touch point of information that represents an organization — whether it’s digital, printed or even spoken — must be driven by a unique value proposition, something that defines the brand and sets it apart. A website can state that a company makes widgets for the steel industry; or it can explain that those widgets reduce downtime, increase productivity and last longer than other widgets.

When prospects aren’t hit over the head with differentiators, they assume there are none and move on.

The tendency for a website to merely explain what a company does is being replaced by the need for more aggressive sales language. Whether that pitch is based on price, value, service, quality or even lifestyle, it must speak effectively to its targeted audience.

But the evolution of sales hasn’t rendered the salesperson obsolete.

To the contrary, the role has become more complex. After prospects form their opinions online, they need reassurance that a company’s proposed value is, in fact, real and not just marketing hype. They need to gain a higher level of confidence in the brand and in a human being who represents that brand.

This leaves the sales team with the tall task of concisely articulating their differentiators, while activating the unique value in ways that are meaningful to each prospect. This demands a deeper level of due diligence on the part of the salesperson to research each prospect before the

call and tailor every pitch.

The shortening sales cycle has prompted more efficient and targeted pitching.

Salespeople are now faced with overcoming a deeper set of objections from an increasingly knowledgeable market of prospects. Before any salesperson places a call, a company’s web messaging must tell an unmistakable story. When a company’s materials don’t send the right

message, it’s perceived as a commodity and the sales process intuitively defaults to a relationship and referral model.

Every company has a great story to tell. It’s what started the business in the first place and compels customers to buy. Capture your business story and tell it in ways that better engage employees, shorten the sales cycle and widen your reach to a much larger market.

Mosbrook is managing partner at Acclaim Communications.

Acclaim is a Clevelandbased public relations and marketing firm focused on helping small and midsized organizations maximize their return on marketing investments.

Using my skills as an

architect attorney. and an

I design successful projects.

It’s the nature of the construction industry.

Big projects can quickly turn into big problems.

Using my experience as an architect, I understand the project from the ground up.

As your attorney, I protect your interests from beginning to end.

I provide guidance and support through the project organization, contracting and occupancy phases.

Our Construction Practice Group has handled all types of projects and corresponding disputes, often involving multiple parties and huge financial stakes.

That’s why you want me to represent you.

I provide the project design that safely navigates the big problems.

I’m BARRY MILLER. I’m on your team.

MY BENESCH MY TEAM > Construction Practice Group > Representing owners, contractors, design professionals, subcontractors, sureties on public and private projects. > Legal Services Include: Project Counseling; Litigation; Alternative Dispute Resolution (ADR); Mediation; Arbitration; Preparation and Negotiation of Project Delivery Agreements, Bid Protests, Extra Work, Delay and Disruption Claims, E&O Claims and Building Defect Claims. > 216.363.4454 | bmiller@beneschlaw.com

www.beneschlaw.com

20151214-NEWS--16-NAT-CCI-CL_--

PAGE 16

12/10/2015

12:24 PM

Page 1

z DECEMBER 14 - 20, 2015 z CRAIN’S CLEVELAND BUSINESS

MIDDLE MARKET

Mr. Beams is brightening prospects of local biz Wireless Environment is thriving, thanks to motion-sensing light

BY LEE CHILCOTE

increasingly viable for the mass consumer market. They also saw demand for security lighting that could be installed without the expense and hassle of running wires.

Today, the company has 19 patents and a core product that is cost-effective and has gained traction with consumers. They’ve been successful despite constant threats from Chinese knockoffs; some companies have gone to the point of copying warranty information and using photos of Levine’s daughter, who is featured on Mr. Beams packaging, in their promotions. “It’s actually a joke that we didn’t file patents on our initial products for two reasons — we had no money, but also we knew people could change things slightly,� Levine said. “But the guys in China copy everything.

Through Amazon, we’re constantly fighting the battle of knockoffs.�

Recently, Wireless Environment hired someone whose sole job is to spot fakes on Amazon. They’ve been successful, but it’s a bit like a game of whack-a-mole — no sooner do they convince Amazon to remove a third-party seller for copying their product, when another one pops up.

These days, Mr. Beams is among the top three Amazon lighting brands, going head-to-head with bigger players like Kichler and Phillips. Levine says the company’s growth would not be possible without Amazon, which has given it a foothold in the lighting industry.

Mr. Beams lights are more than

clbfreelancer@crain.com @leechilcote

Wireless Environment may not yet be a household name, but the company’s products are quickly finding their way into households worldwide.

Mr. Beams, its signature product, is a battery-powered, motion-sensing light that sells for under $20 and can be installed in minutes.

The popularity of Mr. Beams, a top seller on Amazon since 2012, has spurred growth of 40% a year or more at the Solon-based company.

Its leaders anticipate another big jump next year, from $15 million to $25 million in revenue, due to rising international sales and the release of the company’s products at Home Depot and Target. “The thing we’re doing is improving safety and security — that’s what gets us going,� said David Levine, president of Wireless Environment, who co-founded the company with chief technology officer Michael Recker. “We have people constantly telling us we save them from falling down the stairs with our nightlight, or they feel better because of our security lights.�

The company has grown through creating innovative products for the lighting industry, which Levine says has been slow to change. With technological advances, the founders recognized that wireless lighting was

just battery-powered spotlights; they also can be networked so that they work together. “You can surround the house with wireless spotlights,� Levine said. “When someone sneaks up on a back corner, the entire house lights up. It’s a really simple system; we don’t use a router or central program, the lights just talk to each other.�

Wireless Environment also has developed a number of other lighting products, including emergency lighting, networked lighting and backup power for any light socket.

In the future, as the electrical grid becomes stretched, more of its business will come from energy management, Levine said. The company’s products will allow companies and homeowners to switch off the grid at peak times and immediately transition to backup battery lights if there’s a brownout or power outage.

Alex Dinh, a Mr. Beams customer who lives in San Francisco with his elderly grandmother, has bought more than 20 lights. They not only enhance safety, but are also energyefficient, he said. “If you’re going to the kitchen in the middle of the night, you don’t have to turn the light on and off, because you’re only going in there for a few seconds. It goes on and off automatically,� he said.

Dinh has purchased knockoffs in the past, but he said they were inferior in quality and ran out of battery sooner.

Above, Wireless Environment co-founders David Levine, left, and Michael Recker. Below, a Mr. Beams light is shown in action.

(Contributed photos)

SM

Trusted Advisors. Respected Advocates.

JUST ASK AROUND. BUSINESSES YOU TRUST IN CLEVELAND ALREADY TRUST US.

COX BUSINESS INTERNETSM 15

$

69

99

mo *

For 12 months with a 2-year agreement*

CALL 877-903-7884 | VISIT COXBUSINESS.COM *Offer valid until 1/3/16. Minimum service term, equipment, installation, fees, taxes, and other restrictions may apply. See coxbusiness.com. Š2015 Cox Communications, Inc. All rights reserved.

| 1 -u|_ ;0b|ġ ; hmo _-| b| |-h;v |o ]uo - 0 vbm;vv u ;m|u;ru;m; ub-Ń´ vrbub| -m7 |;-l -rruo-1_ _;Ń´r 1Ń´b;m|v m- b]-|; |_uo ]_ |uo 0Ń´;7 -|;uv -m7 v-bŃ´ vloo|_Ń´ |o v 11;vv $_-|Ä˝v _ =ou lou; |_-m ƔƔ ;-uvġ 0 vbm;vv;v o= -Ń´Ń´ hbm7v _- ; | um;7 |o v -v |_;bu |u v|;7 0 vbm;vv -m7 Ń´;]-Ń´ -7 bvouv Ń´|;um-া ; bvr |; !;voŃ´ াom Ĺ€ -mhbm] Ĺ&#x; bm-m1; Ĺ€ vbm;vv Ĺ&#x; ourou-|; u;7b|ou Ĺ&#x; ;0|ou !b]_|v Ĺ€ ublbm-Ѵġ 0;u Ĺ&#x; )_b|; oŃ´Ń´-u Ĺ€ ;=-l-াom Ĺ€ 7 1-াom lrŃ´o l;m| Ĺ€ -lbŃ´ - Ĺ€ mv u-m1; o ;u-]; Ĺ€ m|;Ń´Ń´;1| -Ń´ uor;u| Ĺ€ bা]-াom ;u];uv Ĺ&#x; 1t bvbাomv Ĺ€ ;uvom-Ń´ mf u Ĺ&#x; )uom]= Ń´ ;-|_ Ĺ€ 0Ń´b1 - !;-Ń´ v|-|; Ĺ&#x; omv|u 1াom Ĺ€ "rou|v Ĺ&#x; ;7b- Ĺ€ $- -াom Ĺ€ $u v|v Ĺ&#x; v|-|;v

20151214-NEWS--17-NAT-CCI-CL_--

12/10/2015

12:53 PM

Page 1

We make it our business to know your business.

That’s why these local organizations recently chose FirstMerit.

Stafast Products, Inc.

118 Development, LLC

Working Capital Financing

Multi-Family Construction Financing

Hawken School

The Elyria Manufacturing Corporation

Bank Qualified Bond Financing and Revolving Line of Credit

Acquisition and Debt Recapitalization Financing

The American Eagle Mortgage Co., LLC

Arrow Tru-Line, Inc.

Bentley Reserve One, LLC

Working Capital and Debt Recapitalization Financing

Senior Secured Credit Facility; Recapitalization Financing

Multi-Family Construction; Term Financing

Oberlin College Taxable Term Loan Financing

SP Franklin, LLC Reddy Equipment, Inc. Equipment Financing and Debt Financing

Multi-Family Redevelopment Construction Financing

T&K Logistics, Inc.

Cascade Management Services, Inc.

Working Capital and Equipment Financing

Working Capital and Real Estate Financing

Space Comfort Co. Secure ITADS, LLC

Lakeland Management Systems, Inc.

Real Estate Financing

Working Capital and Real Estate Financing

Resource Material Handling and Recycling, Inc.

Space Comfort Co.

Real Estate, Equipment and Working Capital Financing

Working Capital and Debt Recapitalization Financing

Libertytown Residential, LLC Libertytown Residential, LLC Prestwick Ridge One, LLC

Montville Plastics & Rubber, LLC

Multi-Family Construction; Term Financing

Acquisition, Working Capital and Equipment Financing

D. Todd Russell, DDS and Tanne Investments, LLC Tanne Investments, LLC Real Estate Financing

Apartment-Retail Lifestyle Center; FirstMerit-led Syndicated Construction Financing

Winar Connection, Inc. Working Capital, Equipment and Real Estate Financing

Morgan Warehouse Apartments, LLC/ National Terminal Warehouse Apartments Cotsworks, LLC Working Capital, Equipment and Term Loan Financing

Multi-Family Acquisition, and FirstMerit-led Syndicated Construction Financing

Beckett Gas, Inc. Working Capital and Equipment Lease Financing

Nerone & Sons, Inc. S & V Industries, Inc. Kent Summit, LLC Student Housing Construction Financing

Senior Secured Credit Facility; Refinancing

Mount Vernon Gateway, LTD

Crescent View Apartments VA, LLC

Retail Construction Financing

Multi-Family Acquisition Financing

Nerone & Sons, Inc.

WXZ Retail Group/ Ashland, LLC; Canton RA, LLC

Working Capital Financing

Retail Construction Financing

Allfasteners USA, LLC Working Capital, Equipment and Real Estate Financing

Burton Scot Contractors, LLC Working Capital and Equipment Financing

TO LEARN MORE, CONTACT:

Sean Richardson, President and CEO, FirstMerit NorthCoast Region, at 216-802-6565 or sean.richardson@firstmerit.com.

Member FDIC 4954_FM15

firstmerit.com

20151214-NEWS--18-NAT-CCI-CL_--

12/10/2015

12:24 PM

Page 1

IN THE

OIL GAS AND

BUSINESS, A LOT OF LAW FIRMS A R E P L A Y I N G C AT C H - U P.

NOT US. At Vorys, we have a history of setting standards in the oil and gas business. We have been instrumental in developing the statutory and regulatory initiatives that benefit the industry. We do unitizations for more producers than anyone else in the state of Ohio. And while other law firms are trying to keep up with changes in the industry, we are helping to create them.

For more information, visit vorys.com/shale.

Vorys, Sater, Seymour and Pease LLP 200 Public Square, Suite 1400, Cleveland, Ohio 44114 106 South Main Street, Suite 1100, Akron, Ohio 44308

Columbus

Washington

Cleveland

Cincinnati

Akron

Houston

Pittsburgh

20151214-NEWS--19-NAT-CCI-CL_--

12/10/2015

2:30 PM

Page 1

CRAIN’S CLEVELAND BUSINESS z DECEMBER 14 - 20, 2015 z PAGE 19

Report SHALE

Energy and Natural Resources

(PSOR\PHQW DQG /DERU

/LWLJDWLRQ (QYLURQPHQWDO

%XVLQHVV 6HUYLFHV

&RQVWUXFWLRQ

3XEOLF 6HFWRU 6HUYLFHV

&UHGLWRUV­ 5LJKWV DQG ,QVROYHQF\

A shale rig working for Oklahoma-based Gulfport Energy, drilling in Eastern Ohio. (Contributed photo)

&KRRVH D ´UP ZKHUH LQGXVWU\ LQWHOOLJHQFH SURGXFHV KLJK \LHOGLQJ UHVXOWV <RX FDQ WUXVW %DEVW &DOODQG WR EULQJ JUHDWHU YDOXH WR \RXU ERWWRP OLQH 7R OHDUQ PRUH FRQWDFW RXU DWWRUQH\V E\ YLVLWLQJ EDEVWFDOODQG FRP

Gulfportâ&#x20AC;&#x2122;s Utica play

Profitable, but patient, it is shutting-in its wells for now

BY DAN SHINGLER dshingler@crain.com @DanShingler

&$1721 2+ , &+$5/(6721 :9 , 67$7( &2//(*( 3$ , 3,776%85*+ 3$ , 6(:(// 1-

Oklahoma-based Gulfport Energy Corp. is one of the biggest drillers in the Utica, with more than 200 wells. Only Chesapeake Energy has more.

The company is pleased with its well results, its lease holdings and its trends of increasing drilling efficiency. It has flexible contracts with pipelines that can get much of its

gas to markets that pay far more than many Utica shale drillers get for their gas on other lines.

Still, to hear Gulfport CEO Michael Moore tell it, it sounds a little like having the best boat on a day when no boat should be on the water â&#x20AC;&#x201D; which is why Moore says the company is more or less battening its hatches, for the foreseeable future, on its Utica operations. â&#x20AC;&#x153;Even though weâ&#x20AC;&#x2122;re generating positive returns, we made the decision to curtail production, not SEE GULFPORT, PAGE 21

20151214-NEWS--20-NAT-CCI-CL_--

PAGE 20

12/10/2015

2:36 PM

Page 1

z DECEMBER 14 - 20, 2015 z CRAIN’S CLEVELAND BUSINESS

SHALE

Shale development creates possible petrochemical industry growth for Ohio

BY ANDREW THOMAS Drillers are pulling up stakes, drilling rigs are leaving the state and some drill crews are even looking for work, thanks to low oil and gas prices. So is Ohio’s Utica Shale boom already a bust, just three years into its development?

Not according to recent research.

Ohio is an energy-intensive manufacturing state. However the opportunity for exploiting low natural gas prices with manufacturing goes well beyond just burning gas as a fuel.

Low commodity prices also are driving new opportunity in Ohio for growth in the multibillion-dollar petrochemical industry, where natural gas and natural gas liquids are a principal feedstock.

This is the conclusion from a study recently completed at the Center for Economic Development and the Energy Policy Center at Cleveland State University’s Maxine Goodman Levin College of Urban Affairs. (This writer was one of several authors of that study.)

The study was commissioned by the economic development groups, TeamNEO, JobsOhio and the Regional Competitiveness Council because they want to better understand the ramifications of huge quantities of natural gas and liquid ethane being produced in Ohio.

The study group looked extensively at “throughput” — the volume of oil and gas that passes through a system per day — as well as the decline rates for wells, production and price history and other information.

It found that even with dismal prices for oil, gas and natural gas liquids like ethane, Ohio’s production kept chugging along and is positioned to increase.

Production is expected to increase

transportation cost savings.

It is possible that some of these cost savings will be passed along to markets downstream of any cracker facility, such as to distributers, compounders and converters.

Polyethylene wants a cracker

from 1.5 billion cubic feet in 2014 to about 4.75 bcf/d by 2020, the report found, and half of that gas will be “wet,” or full of ethane.

In other words, Ohio’s about to see an ethane tsunami.

The study team estimated that by 2020, the ethane throughput in Ohio should be around 162,000 barrels per day.

And that’s not counting even more ethane being produced next door in Pennsylvania’s Marcellus shale, which also could find its way here. What’s more, the study found that much of that ethane will be trapped here.

Even if planned pipelines take away all that they can carry, nearly 200,000 barrels of ethane likely will still be trapped in the region when takeaway capacity peaks in about 2020.

Ohio’s opportunity Such an ethane takeaway shortfall invites the development of a local ethane consumer market.

Ohio already is a significant national player in the chemical industry, exporting chemical commodities worth $6.5 billion a year, the study found.

The state’s concentration of employment in the chemical industry is twice that of the national average.

The petrochemical industry uses ethylene and polyethylene, among other refined hydrocarbon products, as raw material for its products, including plastics.

In the United States, ethylene and polyethylene are primarily made by “cracking” ethane, mostly at facilities on the Gulf Coast.

Typically, Ohio’s chemical and

GREEN Access & Fall Protection

The

Business Health of

WKSU News will air a 7-part health series about healthcare as an economic driver.

Listen every Tuesday during Morning Edition, between 5am – 9am December 8th – January 19th

Listen at 89.7 or wksu.org

plastics industries have purchased their feedstocks from these Gulf Coast suppliers.

The dream of the Utica for economic developers long has been to move that supply chain and ethane processing here, so Ohio could share in more of the wealth of its own natural resources.

If several crackers are built here, that dream could come true.

With the Appalachian area quickly developing into one of America’s largest sources of natural gas and natural gas liquids, long-term hydrocarbon prices in the region are making it more attractive to petrochemical companies, the study group reported.

Further, with a large market for commodity chemicals already located in the region, petrochemical companies also stand to gain from

Field-tested for over 50 years No job is too big or too small!

Manufacturer of access systems for safely working on the tops of tank trucks, railcars, and more. Custom designed to meet your specifications.

BenkoProducts.com (440)-934-2180 info@benkoproducts.com

The savings for ethane transportation, together with the savings on shipping polyethylene from the Gulf Coast back to the Midwest, is projected to be about $100 million per year for each prospective local largescale cracker.

In light of this opportunity, four petrochemical companies have said they are considering building ethane crackers in the Appalachian Basin, either in Ohio or along the Ohio River.

None of the four has pulled the trigger on their investment yet, and crackers cost billions to build.

But they have advanced far enough to choose potential sites and to project likely required ethane feedstock requirements. Shell reportedly is building railroad facilities near its proposed site on the river in Beaver, Pa. If all four crackers are built, they could process about one-third of the local ethane supply, or more than 200,000 barrels a day, by 2020, the study found.

The state’s projected ethane surplus will be sufficient to supply several crackers in addition to the takeaway market, which means petrochemical companies will be able to get the firm ethane supply commitments they need to move projects forward.

Equally important to access to inexpensive ethane will be access to downstream consumers of ethylene and polyethylene.

In this regard, Ohio has much to offer owners of cracker facilities.

About 69% of all U.S. chemical commodity employment is within a 500mile radius of the Ohio Valley — an effective one-day transportation distance. Likewise, $134 billion of the area’s gross regional product is generated by 57% of the commodity chemical companies within this radius, the study reported.

Ohio accounts for about a 10% share of the national employment in this industry, which is second in the nation after Texas.

So, will Ohio’s ethane dreams come true? Final investment decisions likely will be made by some of the petrochemical companies in the next two years.

From there, it will take several more years to build each facility and begin operations.

It is unlikely that multiple crackers will be built at once, however, due to labor shortages this might create.

But the study’s findings are clear: If Ohio’s investment opportunity does convince petrochemical companies to invest here, the state’s biggest returns on the Utica shale are still years down the road.

But they will be very significant.

20151214-NEWS--21-NAT-CCI-CL_--

12/10/2015

2:31 PM

Page 1

CRAIN’S CLEVELAND BUSINESS z DECEMBER 14 - 20, 2015 z PAGE 21

GULFPORT CONTINUED FROM PAGE 19

necessarily because if we curtailed some of our production we could alleviate the nation’s oversupply of gas,” Moore says, half joking. He’s joking about having any OPEC-like power over natural gas prices, but not about the decision the company made in November to cut its Utica production by 15%.

The cuts will continue in the coming year, too, Moore said during an interview on a trip to Cleveland early this month.

“We made a decision to shut-in all of our (well) completion activities in the first quarter of next year,” he said.

“So we are making a conscious decision to slow activity, but we have the luxury of doing that.”

Yes, he means his company has the luxury of not producing its primary product and not selling it to customers.

If that sounds like a strange business model, it’s the nature of the oil and gas business today — a business, by the way, in which Gulfport lost $388.2 million, or $3.59 per share, in the third quarter ended Sept. 30.

So where’s the luxury coming from?

From the fact that, operationally, Gulfport is making money, has a strong balance sheet and continues to drill wells faster, cheaper and with better results, Moore said.

That quarterly loss included a nearly $600 million writedown of Gulfport’s oil and gas properties — a consequence of the gas and oil beneath those properties losing value

when prices dropped.

Moore’s company, like just about all drillers, is tightening its belt — and will probably keep it tight through next year, since he’s not expecting any improvement in oil and gas prices until at least 2017.

But Gulfport’s better positioned than most to weather the storm, Moore believes.

For one thing, he said, it’s not leveraged; it hasn’t even drawn on its main $120 million credit facility, of which KeyBank is a major participant.

Molecular economics It also has a better way to get its “molecules out of the basin,” than a lot of other Utica drillers, Moore said, meaning that it can get its gas out of the Utica region, where there is a severe glut of gas, to other markets where prices are just low, not abysmal.

Moore said his company has been able to sell its gas for $1.80 per mcf or more through 2015.

That’s as much as a buck more than other drillers, including smaller Ohio drillers have been getting, according to the Ohio Oil and Gas Association, which has reported seeing its members sell gas for less than $1 per mcf in 2015.

“It’s brutal,” OOGA executive vice president Shawn Bennett said of the situation, over and over again throughout 2015, including recently.

Moore said Gulfport was able to negotiate for space on the Utica’s new pipelines early — long before

SALT • SALT • SALT • Water Softener • Industrial • Food • Ice Melt • Sea Salt

Call For Pricing!!

Minimum Delivery: 1Pallet

they were up and running.

By getting in early with substantial acreage, the company was able to negotiate terms under which it would promise to ship all of its gas through certain lines.

However, it did not commit to providing the pipelines with specific volumes.

“Everybody that came after us pretty much had to commit volume, so they’re now in a situation where they have to deliver these volumes or they’re going to pay for that space” on the pipeline, Moore said.

“We don’t have that overhang.”

That’s a huge deal.

Utica drillers in the play’s wet gas areas are in a sticky situation, Bennett said, because prices for ethane, the chief liquid found with Utica gas, have plummeted.

That means drillers who have wet gas can end up producing gas and ethane at a loss, he said.

They have to pay to separate their gas and ethane before the gas can be put in a pipeline, and that separa-

tion costs more than the ethane is worth.

Waiting for good dough To top it all off for Gulfport, Moore said most of the company’s acreage sits above dry gas.

As a result, Gulfport has the luxury of not having to drill or complete wells at all, until prices are higher and profits are greater.

“We can make pure economic decisions on our levels of activities that are appropriate to today’s commodity price environment,” Moore said.

All of these factors are some of the reasons that analysts mostly have faith in Gulfport. Its stock has fallen with the energy sector — from $75 per share in April 2014 to $22.48 per share on Tuesday, Dec. 8 — about where it was at the end of 2010, just before Gulfport entered the Utica boom.

But, according to Yahoo Finance, nine of the 10 analysts who follow the stock currently recommend

buying it.

Going forward, many observers expect a shakeout in the energy industry. Some companies just won’t have the balance sheets or the operating flexibility to survive, but Gulfport does not plan to be one of them, Moore said.

Some of those struggling companies might be driven into the arms of healthier acquirers, like Gulfport. Moore doesn’t rule that out in the long term, but right now he said valuations are still too high.

The market needs some discipline on the part of creditors before they’ll come down, he predicted.

Gulfport is keeping its drill bits sharp and is waiting for higher gas prices to support more drilling.

It will maintain no more than four drilling rigs in the Utica, down from eight in 2014, but it will drill only opportunistically and even then won’t complete wells in the first quarter and bring them online.

“In 2016, we’re planning for the worst, I suppose, which is that there is no recovery,” Moore said.

From our Family to yours,

May your Holidays be Bright!

myNYCB.com • (877) 786-6560

1-800-547-1538 Salt Distributors Since 1966

©2015 New York Community Bank

20151214-NEWS--22-NAT-CCI-CL_--

PAGE 22

12/11/2015

4:09 PM

Page 1

z DECEMBER 14 - 20, 2015 z CRAIN’S CLEVELAND BUSINESS

Business of Life AROUND TOWN: Apartment renovations

A new life for older properties

BY STAN BULLARD The Jay Hotel, at 2515 Jay Ave., and the West Side Community House, at 3000 Bridge Ave., reflect the diverse roots of Ohio City as the historic district near downtown Cleveland continues to evolve from a poor to increasingly well-to-do neighborhood.

Before the Jay went dark in the 1990s, generations of West Siders knew it as a flop house.

Meantime, the former West Side Community House opened in 1920 as a settlement house providing English classes and other services for immigrants and evolved to providing social services.

The organization shed the old building in 2007 as the neighborhood’s increasing gentrification made 9600 Lorain Ave. a better location for its mission.

A would-be condo developer bought the four-story building, but it sat empty for six years before the current owner, WSCH LLC, bought it.

Today, after multimillion-dollar renovations, both are or soon will be apartments serving young professionals and empty nesters gravitating to the neighborhood.

Lofts at West Side Community House have a full roster of residential tenants in its 19 suites, and two of its three offices are full. A Phoenix coffee house in the building gives it a buzz in the evenings as well as the mornings.

Blocks away, Jay owner Tom Gillespie recently sanded floors as he and his crews put finishing touches on converting the three-story building to eight luxury apartments on its upper floors with retail space on its first floor.

A motorcycle-themed clothing store already has set up shop.

Gillespie took an indirect route to the Jay apartment project. He bought it from a lender in 2011 because he needed more parking for commercial buildings with West 25th Street frontage he owns around the corner.

“When we got the building, the windows and stairs were gone,” Gillespie said. “At first we used ladders to get around.”

There was a lesson here: Aluminum ladders were stolen, so workers replaced them with wooden ones. A glass-encased elevator and open stairs provide vertical access to marble-covered floors as the property gets readied for a January opening.

The structure, built in 1924 to house a U.S. Post Office with a bowling alley in its basement, has a distinct character. Windows of a surprising variety of sizes look out on the West Side Market and downtown. The rooftop is a patio.

At the Lofts at West Side Community House, brothers Dan and Tom Mayer rent a second-floor suite and enjoy the building’s central location; Tom Mayer works downtown, Dan Mayer in Middleburg Heights.

“On Saturday, you walk outside and find people working in their garden,” Dan Mayer said.

“We walk to get groceries. At night, we walk to meet friends nearby. On Sunday, we walk to Mass instead of hopping in a car.”

The location also has an unexpected benefit: Tom Mayer said their parents love visiting Ohio City for a change of pace from their Bay Village home.

Since Lofts at West Side Community House opened, Mariner’s Walk apartments were built at 3000 Detroit Ave. Two more apartment buildings are underway; more are in the planning stages.

The new residents also are changing the neighborhood’s business patterns.

Sam McNulty, a brewery and restaurant owner, said that when he and his partners opened Bier Markt a decade ago at 1948 West 25th St., the Market District was busy on the weekends.

Now, he said, the group’s five West 25th locations definitely see more people on weekdays, which he credits to increased housing density and growing demand for urban living. Neither owner would disclose how much the redos cost.

Both properties benefited from Ohio State Historic Preservation Tax Credits.

State documents estimate each is about a $3 million development.

We don’t just see people for who they are; we see

20151214-NEWS--23-NAT-CCI-CL_--

12/11/2015

4:09 PM

Page 1

CRAINâ&#x20AC;&#x2122;S CLEVELAND BUSINESS z DECEMBER 14 - 20, 2015 z PAGE 23

In the past year,

84% At left, the former West Side Community House, which now has apartments, offices and a coffee house inside. Above and below, the former Jay Hotel, which houses retail spaces and luxury apartments. (Stan Bullard photos)

of people engaged in United Way-funded workforce development programs have obtained employment.

them for who they can become.

20151214-NEWS--24-NAT-CCI-CL_--

PAGE 24

12/11/2015

11:38 AM

Page 1

z DECEMBER 14 - 20, 2015 z CRAIN’S CLEVELAND BUSINESS

BUSINESS OF LIFE

Source Lunch When he was hired in 2014 as the Cleveland Indians’ senior director of ticket sales and service, Tim Salcer had no ticketing experience.

What he did possess is something that’s become pretty common for the Tribe’s front office — a career in the consumer goods industry. Salcer spent 14 years at Chattem Inc., a Chattanooga, Tenn.-based consumer packaged goods company. As director of Chattem’s Walmart business, he oversaw about $110 million of the company’s revenues.

Salcer wasn’t planning to leave Chattem, which allowed him to do his job from his native Northeast Ohio, but when the Indians, via an executive recruiter, reached out to him, he couldn’t pass it up.

“It was hard to leave,” said Salcer, a lifelong Tribe fan. “It was a family-based culture (at Chattem), but moving to — Kevin Kleps the Indians was a dream job.”

What type of transition has this been for you?

It’s interesting. A lot of people say, “What’s the comparison between consumer product goods and baseball?” The one person who really helped me get through the process of understanding it was Brian Barren (a former Procter & Gamble executive who joined the Indians two years ago as executive vice president of sales and marketing). Really, what I’ve learned from dealing with top executives at Walmart and Walgreens is everything is customer-centric. You have to have the focus on the customer all the time. For us, everything is fan-centric and finding ways to provide better solutions to our fans.

Did you have any ticketing experience?

I did not. I say I’m not a baseball industry guy. I’ve never been in the sports industry, but I’m a Cleveland guy. The opportunity came up, and it was very unique and interesting. Applying things I’ve learned in the past to what I’m doing now is fun. There’s a lot more correlation than you would think — to building a brand, to doing things that are very customer-focused and fan-centric, to helping to create a better relationship between our fans and the Cleveland Indians.

The Indians’ attendance is kind of a tired subject. Is attempting to pump that up part of your job?

It definitely is. One area of focus that we have is engaging our fans differently. Typically in the sports industry, sales is done by telemarketing — picking up the phone and calling people. What we have done is start to engage Northeast Ohio companies and their employees face-to-face. We want to build relationships and establish relationships on a one-on-one basis. That way, I feel we understand our fans better and we’re able to build up that trust. There’s no easy way to drive attendance higher. You have to earn that trust day-to-day by providing great experiences to fans. We’re very dedicated to doing that.

The season-ticket base grew in 2015. Do you anticipate that happening again prior to the 2016 season?

It’s too soon to tell. We’re trending above where we were last year, which is exciting. We have a lot of work to do. We’re not satisfied.

Tim Salcer TICKETING

What are you heavily focused on now?

FIVE THINGS:

It’s definitely driving season-ticket holder sales. Meeting and engaging with fans in a new way, face-to-face, and building those relationships. Also on the sales and service front, we’ve restructured what we’re doing. We built a lot more capacity on the service front by reorganizing how we were set up. We strive for best-inclass service, and I think we’re in much better position to deliver those goals in 2016. We have a service initiative training that’s going on right now. We’re definitely dedicated to providing better service to the fans and what they see are areas for us to grow and improve. We want to continue to gain the trust and earn the support of our fans.

NICE WORK

Why is working with special needs kids (as Salcer does at St. Paschal Baylon in Highland Heights) such a passion of yours?

We have 40 or 50 kids twice a year, once during the football season and once during the basketball season (who come to the school to participate in a camp with St. Paschal’s athletes).

They come out, they go through the drills, they get a trophy. I tell my wife (Kim) it’s the best day of the year. The St. Paschal community comes in and helps out. The interaction between the eighth graders and the special needs kids is amazing.

Salcer’s father, Roland, retired in 2011 after a 60-year career with the Cleveland Heights Police Department.

TRIPLE THREAT

Salcer played football, basketball and baseball at Notre Dame-Cathedral Latin High School. During his time as a student at John Carroll University, he served as a coach for all three sports at NDCL.

FAVORITE SPORT

LUNCH SPOT Vincenza’s Pizza & Pasta 603 Prospect Avenue 216-241-8382 www.vincenzaspizza.com

The meal

“It has to be baseball,” Salcer said with a laugh.

“Playing, I love football and baseball equally.”

Four slices of pizza (two pepperoni and sausage, and two cheese) that were as good as any we’ve had in Northeast Ohio, plus soft drinks

FAVORITE MOVIE

The vibe

Major League. “As a Clevelander, you have to love that last scene, and dream of it happening.” he said.

FAVORITE ATHLETES AS A CHILD

“I grew up in the ’90s, so all of those guys — Albert Belle, (Carlos) Baerga and (Kenny) Lofton,” he said.

It’s a New York-style pizza place ideally suited for the sometimes-mad downtown Cleveland lunch rush. The line at the counter, which overlooks the massive brick ovens, moves quickly, and one visit should tell you why it’s such a popular spot.

The Bill $14.04 + tip

20151214-NEWS--25-NAT-CCI-CL_--

12/11/2015

1:00 PM

Page 1

CRAIN’S CLEVELAND BUSINESS z DECEMBER 14 - 20, 2015 z PAGE 25

ADVERTISING

Crain’s has moved its complete list of appointments and promotions to www.crainscleveland.com/peopleonthemove.

Showcasing Northeast Ohio job changes and board appointments.

These paid People on the Move listings, publication is guaranteed in print, online and in a weekly e-newsletter.

HOSPITALITY & TOURISM

REAL ESTATE

Heidi Martin

Ira Krumholz, CPM

Business Transient Sales Manager

President

InterContinental Hotels Cleveland

Institute of Real Estate Management (Northern Ohio Chapter)

In this role Ms. Martin will forge new partnerships with organizations that depend on hospitality services in Cleveland, while positioning the InterContinental properties as preferred providers.

For the past five years, Ms. Martin served as the business travel manager for Marriott International, Renaissance Cleveland Hotel. There, she previously worked as a market researcher and a senior sales manager.

STAFFING & SERVICES Hannah Miller Sales Executive Direct Consulting Associates Direct Consulting Associates (DCA), IT Staffing & Consulting firm, is pleased to announce that Hannah Miller has joined them as a Sales Executive. Her focus is on developing new business opportunities and placing top IT talent into contract and permanent roles within IT Departments at healthcare facilities and business organizations across the country. Hannah is a high energy person with a positive attitude and a passion for customer service which is at the heart of DCA’s business model.

ARCHITECTURE Ben Gingrich Partner HSB Architects, Inc. HSB Architects is excited to welcome Ben as a partner in the firm. He is an integral part of client and business development and oversees the design and management of our medical and institutional clients. Ben has also been a key component to the AIA Associates committee where his efforts have been incredibly successful in the education of Associates and Young Architects alike.

Custom Publishing Section

DECISIONS TACKLING THE TOUGH CHOICES OF CARING FOR YOUR AGING LOVED ONE

This custom publishing section will serve as a resource and examine all the issues that come with becoming a caregiver.

ISSUE DATE: March 28 AD CLOSE: January 28 VARIOUS SPONSORSHIP AND CONTRIBUTION OPPORTUNITIES ARE AVAILABLE. Contact Nicole Mastrangelo at 216-771-5158 or nmastrangelo@crain.com for more information.

Ira Krumholz, CPM, has over 30+ years of real estate experience, the last 14 in real estate management with NAI Daus. He is currently the President on NAI Daus Property Management overseeing a portfolio of commercial, retail, office and multi-family properties throughout Northeast Ohio.

In addition, Ira serves as immediate Past Chair of the NAI Global Property Management Council. Follow IREM, Northern Ohio Chapter at: www.iremnorthernohio.com or @iremneo

20151214-NEWS--26-NAT-CCI-CL_--

PAGE 26

12/11/2015

4:00 PM

Page 1

z DECEMBER 14 - 20, 2015 z CRAIN’S CLEVELAND BUSINESS

ACCELERATORS CONTINUED FROM PAGE 1

of Terminal Tower, knowing full well that Flashstarts didn’t need all 35,000 square feet. Thus, it’s renting out the excess space to Flashstarts graduates and other entrepreneurs.

Though Stack hasn’t had much success renting out individual desks, almost all of the private offices that line the perimeter of the so-called StartMart are taken. They house about 15 companies.

And six Bizdom graduates have committed to taking space in the StartMart as well. After all, they’re being forced to leave Bizdom’s office, which is in a nearby building attached to Tower City Center complex.

Through those efforts, Stack hopes Flashstarts can help show that the accelerator model works, if done right.

It’s not easy But the model doesn’t work for everyone.

Officials from Bizdom and LaunchHouse noted that they achieved good things through their accelerator programs, and both organizations say they will continue investing in tech companies. But they also want to invest in other types of startups that might not gain much from a program tailored to

help software companies get off the ground in three or four months.

Bizdom — a nonprofit owned by Cleveland Cavaliers owner Dan Gilbert — plans to focus more on helping brick-and-mortar businesses in an effort to strengthen neighborhoods.

It also wants to help startups that can in some way work with the many companies that Gilbert owns.

LaunchHouse in recent years has focused more on working with companies that want to sell physical products, partly because local investors seem more comfortable funding them, said LaunchHouse CEO Todd Goldstein.

The accelerator model posed other challenges for LaunchHouse as well.

For example, the model typically includes a “Demo Day” event where fresh graduates pitch their products in front of an audience — and hope to catch the attention of investors.

But the companies could only make so much progress over the course of the program, and most of them weren’t ready for a Demo Day, Goldstein said.

It was hard for the companies to raise money immediately after graduation, he said. Other startups LaunchHouse has invested in over the years have done just as well if not better, he added.

“The most successful entrepreneurs we have seen have and will succeed whether we have a formal accelerator program or not,” said Goldstein, who noted that LaunchHouse still runs a coworking space in Shaker Heights and entrepreneurship education programs.

Up to speed So do accelerators work, on average? It’s hard to tell. Sure, there are at least a few clearly successful accelerators, such as YCombinator in Silicon Valley and TechStars, which was founded in Boulder, Colo. The companies they produce (Dropbox, Airbnb and Sendgrid are among them) often go on to raise millions of dollars from investors.

But the accelerator industry didn’t even exist until YCombinator was founded in 2005, and it took a few years before they started popping up in cities all over the world.

Thus, there hasn’t been much research on the topic, according to a 2014 report published by researchers from the University of Richmond and the Massachusetts Institute of Technology.

That report — Accelerating Startups: The Seed Accelerator Phenomenon — cited another study suggesting that top-shelf accelerators do help companies reach key mile-

REAL ESTATE Phone: (216) 522-1383 Fax: (216) 694-4264 Contact: Denise Donaldson E-mail: DDonaldson@crain.com

“In some sense it’s an unproven model, but … we felt like the market was there.”

— Anthony Margida president, Bit Factory stones faster, but many programs don’t have that kind of impact.

On the other hand, Scott Shane, an entrepreneurship professor at Case Western Reserve University, believes that accelerators do play a key role in the startup economy: They not only help entrepreneurs, but they also help investors identify high-potential companies, according to a column Entrepreneur.com posted last month.

Anthony Margida — who is president of the Bit Factory accelerator in Akron — likes the idea of giving en-

CLASSIFIED Copy Deadline: Wednesdays @ 2:00 p.m.

All Ads Pre-Paid: Check or Credit Card

COMMERCIAL SPACE

BUSINESS SERVICES Downtown 4800 sq ft office building for sale.

Near Justice Center, Playhouse Square, freeways. Ideal for law firm, owner occupant. Possible residential use. $169,000.

www.StClairOffice.com 216.235.2597

Upcoming Holiday Issues and deadlines Purchase/Rent to own or lease • Assumable mortgage • Close to Beachwood/Solon

• Individually controlled HVAC • From 800 - 2540

Steven Egar, Broker 216-789-9090

trepreneurs intensive assistance and helping them raise capital. But he noted that the Bit Factory didn’t try to follow the typical accelerator model.

Like other accelerators, the Bit Factory takes a single-digit percentage stake in each company and has them move into an office where they work alongside other entrepreneurs and receive a heavy dose of mentoring.

But the Bit Factory accepts companies on a rolling basis, and there’s no defined end to the program. The accelerator also doesn’t immediately invest in companies when they join the program. Instead, it aims to invest in companies as they need the money, Margida said The Bit Factory is in the process of investing in three of the six companies participating in the program, but its primary goal isn’t to make money on those investments. The city of Akron and the Akron Global Business Accelerator, which Margida also runs, started the accelerator to help entrepreneurs create businesses and jobs.

They apparently could use the help: A focus group consisting of local entrepreneurs said there was a need for an accelerator in Akron.

“In some sense it’s an unproven model, but … we felt like the market was there,” he said.

Crain’s Annual Book of Lists Dec. 14, 3 p.m.

FLYNN ENVIRONMENTAL UST REMOVALS • REMEDIATION DUE DILIGENCE INVESTIGATIONS

Global Expansion Consulting Construction • Acquisitions Exporting • Financing

(855) 707-1944

(800) 690-9409

Thinking of Selling?

Free Market Analysis No Upfront Fees See our listings at www.empirebusinesses.com

440-461-2202

Haul-My-Mess.com January 4 Dec. 29, Noon

C. W. JENNINGS INDUSTRIAL EXCHANGE

Full service Junk Removal and mini Dumpster rental

Call today 216-799-9911

BUSINESS OPPORTUNITY

BUSINESSES FOR SALE

For Sale

Selling a Business?

Stamping, Tool & Die operation Owner Retiring 12,000sf Building, Press Capacity up to 250 ton Strategic west side location

Ohio Business Brokers Assoc.

WWW.OBBA.ORG Find hundreds of businesses.

Find a good broker to help.

Call (440) 823-7185

Buying a Business?

E-MAIL OR FAX US YOUR AD E-MAIL: DDonaldson@Crain.com FAX: (216) 694-4264

Crain’s Executive Recruiter APPLICATION DEVELOPER III for Ohio Farmers Insurance, One Park Circle, P.O. Box 5001 Westfield Center OH 44251. Design, code, test, & analyze software programs & apps. Corrects complex incidents using standard processes & a variety of technologies. Research, design, document, & modify software specs throughout the software development lifecycle using legacy ins. apps, including PMS. Perform QA & ensure security standards & business continuity activities. Provides tech expertise & leadership for the mainframe app programs. Req. BS in CS, MIS, or related Engineering or IT field, +5 yrs of exp. w/ app develop. &/or production support. Exp. working on medium to large complex assignments/projects. Proficient in mainframe & related tools incl.

COBOL, JCL, REXX , DB2, CICS, VSAM, IAA XML, & MQ Series.

Req. exp. w/ legacy ins. app (PMS), to include coding & modularization.

Send resume (NO CALLS) to Renee Dusek at address above.

Vice President for Institutional Advancement Ursuline College The Vice President for Institutional Advancement (VPIA) is a member of the senior leadership team of the College and reports to the President.

The VPIA is responsible for planning and implementing comprehensive institutional advancement programs including annual fund, planned giving, corporate, government, and foundation relations, major gifts, grant writing, endowment, capital campaigns, alumnae relations, constituent relations, and marketing.

For complete information log onto http://www.ursuline.edu/About/Human_Resources/job_opportunities.html

Looking for an experienced individual with a proven track record who can assist in evaluating small sized business for investment purposes.

Must be able to evaluate the financials, research the particular industry and able to find leadership talent if needed.

Please send information to: P.O. Box 18874 Cleveland, Ohio 44118

Where to find your professional!

Confidential box numbers available @ $35 per ad.

To place your Crain’s Cleveland Business Executive Recruiter ad Call Denise Donaldson at 216-522-1383

20151214-NEWS--27-NAT-CCI-CL_--

12/11/2015

11:36 AM

Page 1

CRAINâ&#x20AC;&#x2122;S CLEVELAND BUSINESS z DECEMBER 14 - 20, 2015 z PAGE 27

The List THIS YEAR BUILDING

LARGEST OFFICE LEASES

Ranked by square feet

ADDRESS CITY, ZIP

SQUARE FEET TENANT

LANDLORD TENANT REPRESENTATIVE REPRESENTATIVE

1

Sky Park

21500 Aerospace Parkway Cleveland, 44142

79,621

MCPc

Allegro

NA

2

6000 Parkland Blvd.

Mayfield Heights, 44124

77,319

Howard Hanna Real Estate Services

NA

Playhouse Square Real Estate Services

3

AECOM Centre

1300 E. Ninth St. Cleveland, 44114

70,759

AECOM

CBRE

Newmark Grubb Knight Frank

4

31500 Solon Road

Solon, 44139

50,461

Saint Gobain Performance Plastics Inc.

Cushman & Wakefield/ CRESCO Real Estate

Cushman & Wakefield/CRESCO Real Estate

6000 Parkland Boulevard

Mayfield Heights, 44124

38,666

Smythe Cramer Co.

Hanna Commercial

Playhouse Square Real Estate

One Cleveland Center

1375 E. Ninth St. Cleveland, 44114

38,400

Roetzel & Andress LPA

CBRE

Newmark Grubb Knight Frank

1111 Superior Ave.

Cleveland, 44115

38,000

Asurint

Allegro

Kowit & Co.

8

Office Place

24200 Chagrin Blvd.

Beachwood, 44122

34,574

Northeast Ohio Health Systems

CBRE

API Global

9

Spectrum Building

6060 Rockside Woods Blvd.

Independence, 44131

34,315

Honeywell International Inc./Novar

CBRE

Dalad Realty

6100 Rockside Woods Blvd.

Independence, 44131

34,140

Vox Mobile

Newmark Grubb Knight Frank

NA

200 Public Square

Cleveland, 44114

30,779

Fox Sports Ohio

Allegro

Colliers International

12

Omni Keynote

925 Keynote Circle Brooklyn Heights, 44131

30,000

U.S. Immigration and Customs Enforcement

NA

Omni LLC

13

Corporate Place

25800 Science Park Drive Beachwood, 44122

28,160

MIM Software Inc.

NA

CBRE

14

North Point Tower

1001 Lakeside Ave. Cleveland, 44114

28,135

Towers Watson

CBRE

JLL

15

Oswald Centre

1100 Superior Ave. Cleveland, 44114

27,088

WB Doner & Co.

CBRE

Kowit & Co.

16

Oswald Centre

1100 Superior Ave. Cleveland, 44114

27,087

Penton Media

CBRE

Kowit & Co.

17

Plaza West Building

20220 Center Ridge Road Rocky River, 44116

23,933

JP Recovery Services

Allegro

NA

1111 Superior Ave.

Cleveland, 44114

23,781

Plante Moran

NA

Kowit & Co.

Oak Tree Place

6111 Oak Tree Blvd.

Independence, 44131

23,127

Sedgwick Claims Management Services Inc.

CBRE

JLL

982 Keynote Circle

Brooklyn Heights, 44131

23,078

Graftech International

CBRE

Ray Fogg Corporate Properties

21

Two Chagrin Highlands

3000 Auburn Drive Beachwood, 44122

22,704

Intellicorp Records Inc.

CBRE

Jacobs Real Estate Services

22

Key Bank Center

800 Superior Ave. Cleveland, 44114

22,546

AmTrust Financial Services

NA

Guggenheim Inc.

23

Park Center Plaza III

6050 Oak Tree Blvd.

Independence, 44131

22,369

Spectra Energy

CBRE

CBRE

24

Key Bank Center

800 Superior Ave. Cleveland, 44114

22,259

National General Insurance Co.

NA

Guggenheim Inc.

260 Springside Drive

Akron, 44333

20,543

TLT/Howden

NA

NAI Cummins Real Estate Inc.

Miles Pointe

24441 Miles Road Warrensville Heights, 44128

20,078

Ferguson Enterprises

Cushman & Wakefield/ CRESCO Real Estate

Cushman & Wakefield/CRESCO Real Estate

55 Public Square

Cleveland, 44113

19,985

Law Offices of Cleveland LLC

Hanna

Newmark Grubb Knight Frank

4825 Higbee Ave. NW

Canton, 44718

19,979

Alliance Health Services

Transwestern

NAI Cummins Real Estate Inc.

29

Fifth Third Centre

600 Superior Ave. Cleveland, 44115

19,235

Nurenberg, Paris, Heller & McCarthy

Newmark Grubb Knight Frank

JLL

30

Canal Place, Building 17

530 S. Main St. Akron, 44311

19,063

Hattie Larlham Community Services

NA

CBRE

31

Crown Centre I

5005 Rockside Road Independence, 44131

18,902

GSA U.S. Department of Justice

NA

Cushman & Wakefield/CRESCO Real Estate

32

Landerbrook Corporate Center II

5910 Landerbrook Drive Mayfield Heights, 44124

18,650

ABA Insurance Services Inc.

NA

CBRE

33

Park Center Plaza II

6150 Oak Tree Blvd.

Independence, 44131

18,238

University Hospitals

Coven-Goldman Associates

CBRE

34

Westlake Centre Building 2

24650 Center Ridge Road Westlake, 44145

17,401

Travel Centers of America

Cushman & Wakefield/ CRESCO Real Estate

NAI Daus

6565 Davis Industrial Parkway

Solon, 44139

16,794

Swagelok Co.

Hanna Commercial

NAI Daus

Heritage Corporate Center

6001 E. Royalton Road Broadview Heights, 44147

15,912

Sprint Nextel Corp.

CBRE

Dalad Realty

5 6 7

10 11

18 19 20

25 26 27 28

35 36

RESEARCHED BY DEBORAH W. HILLYER 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.

Information provided by CoStar Group Inc. www.costar.com and the tenant and landlord representatives. Information is for Ashland, Ashtabula, Cuyahoga, Erie, Geauga, Huron, Lake, Lorain, Mahoning, Medina, Portage, Stark, Summit, Trumbull and Wayne counties for Oct. 1, 2014, through Sept. 30, 2015, and includes new leases.

20151214-NEWS--28-NAT-CCI-CL_--

12/11/2015

11:37 AM

Page 1

This holiday give your business the best network.

Save up to $400 when you trade in your phone and buy a new 4G LTE smartphone.* New 2-yr activation on $34.99+ plan required. $400 = $150 instant credit + $150 bill credit + $100 smartphone trade-in credit.

vzw.com/myrep

Offer expires 12/31/15. Account credits applied within 2-3 billing cycles. Trade-in must be in good working condition. Bill Credit will be removed from account if line is suspended or changed to non-qualifying price plan after activation. Bill credit not available on upgrades. *Devices eligible for instant discount: Kyocera Brigadier, BlackBerry Classic, LG G3, Samsung Galaxy S5 16GB, DROID Turbo 32GB, DROID Turbo 64GB, Samsung Galaxy Note 4, LG G Pad 10.1, Novatel 6620, Samsung Galaxy Tab® 4 10.1, LG G4, Samsung Galaxy S6 32GB, Samsung Galaxy Note 5, Samsung Galaxy Tab E 9.6. Activation/upgrade fee/line: $40. IMPORTANT CONSUMER INFORMATION: Corporate Subscribers Only. Subject to Major Acct Agmt, Calling Plan, & credit approval. Up to $350 early termination fee/line. Offers & coverage, varying by svc, not available everywhere; see vzw.com. While supplies last. Restocking fee may apply. © 2015 Verizon.

80359