Crain's Cleveland Business

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The people and events that made headlines in 2014.

Illustrations by Scott Pollack 50

Vol. 35, No. 50 — Entire contents © 2014 by Crain Communications Inc.

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‘It was a good year’ for the Port Authority — Page 4 Cavs walking ‘delicate’ line between ticket markets — Page 5 JumpStart teams with Magnet for unique pilot project — Page 5

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Solon building will get an ‘attractive’ makeover

By STAN BULLARD sbullard@crain.com

Beachwood-based real estate developers Jonathan Berns and Edward Schwartz are undertaking their first large-scale office redevelopment project in a decade by buying an older Solon office/warehouse building and repositioning it to snag tenants.

“From our work around the country, we’ve been learning about creative office spaces that accommodate the live-work-play environment,” Berns said. “With that in mind, we’ve been looking for opportunities. This is not a terribly attractive building, but it has great bones and needs to be attractive. It’s

perfect for people who work all the time and want a key to the front door to come and go as they please.”

Look for Ping-Pong tables, perhaps shuffleboard and coffee areas for impromptu meetings in these offices, like those typically home to tech companies in urban areas.

“What I see, really, is the tech company that is working out of someone’s house or in something terrible,” Berns said. “There are a lot of talented, progressive people in the Solon area who want creative space in Solon. We see this all the time in other markets, especially near Hollywood.”

Through an affiliate of their ORG development company, Berns and Schwartz agreed to buy a ware-

house-turned-office building at 5821 Harper Road for $2.1 million.

A couple million dollars in improvements will go into the property, Berns said.

The seller is an affiliate of Los Angeles-based Hackman Capital Ltd., which bought the structure in 2013 for $1.75 million as one of 11 industrial properties in a portfolio shed by the California State Teachers Retirement System. The building has 66,000 square feet of rentable space and dates from 1969.

Terry Coyne, executive managing director of Newmark Grubb Knight Frank’s Cleveland office, represents Hackman and confirmed ORG has the property under contract. He expects the deal to

close soon. Newmark Grubb also will market the building for ORG. Berns is excited about the firm’s first Solon project.

“This building has 16-foot ceilings. That’s small for a warehouse today but terrific for creative offices,” Berns said. “We will completely reface the building. The old idea of private offices on the perimeter with a cube farm inside does not work anymore. We’ll maximize the light by having open areas at the exterior spread natural light throughout the space.”

Peggy Weil Dorfman, Solon economic development coordinator, called the planned project “good news for the city.” She said property owners making older buildings

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more marketable is helpful for the suburb, which encourages it with a grant program that provides as much a $70,000 depending on the scale of the project. She said ORG has applied for such a grant.

The building has substantial vacancy, in part because an international reservation center operated

by Marriott Corp. exited 25,000 square feet there for another Solon site this year, Dorfman said.

The last speculative project of this scale developed by ORG, which has a Northeast Ohio portfolio of about 2 million square feet of office, industrial and retail properties, was converting the one-time Leaseway Corp. headquarters in Beachwood to multitenant use in 2004.

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Another NE Ohio rebound: A busy year on the docks The Port Authority has substantial increases in ships and cargo in 2014

By JAY MILLER jmiller@crain.com

When it arrived in the Port of Cleveland from Antwerp, Belgium, on April 19, the Dutch cargo liner Fortunagracht heralded the beginning of the first regularly scheduled, international cargo shipping service to a U.S. port on the Great Lakes in decades.

It was the highlight of a busy year for the Cleveland-Cuyahoga County Port Authority: ■Shipping through the lakefront docks of the Port of Cleveland was up significantly over 2013. ■While the monthly international shuttle of the Fortunagracht continues to operate at a loss for the Port Authority, its Dutch partner and ship owner, the Spliethoff Group, plans to make its own investment of a second monthly sailing, making the service more attractive to shippers. ■The Port Authority’s development finance operation, which helps cut costs for developers, was significantly busier than in 2013, providing the agency with $3 million in fee income. ■It found an affordable solution for what to do with the silt that reduces the depth of the Cuyahoga River that, left untouched, would hurt upriver shipping. (The Port Authority does still need the U.S. Army Corps of Engineers and the Ohio Environmental Protection Agency to solve their differences.)

“It was a good year,� Port Authority president William Friedman said in an interview at the authority’s 1100 W. Ninth St. office, which it bought in late 2013 and moved in last February. “Looking out at the docks every day, it’s a lot busier.

That’s more man-hours for the longshoremen; it’s more work for the truckers.�

The local port rebound is partly the result of the strengthening economy. But the improvement also is the result of a revamping that began when Friedman joined the organization in June 2010 and returned the focus to the Port Authority’s core maritime shipping business.

The results are satisfying for Friedman and the Port Authority’s board of directors. Overall, the Port Authority has seen the number of ships calling on the Port of Cleveland increase from 316 in 2013 to 360 so far in 2014, a 14% increase.

Volume 35, Number 50 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for combined issues on the fourth week of December and fifth week of December at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright Š 2014 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373.

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The shipping season tapers off and usually ends in December, as the lake begins to freeze.

The agency expects international shipping tonnage to increase 23% between 2013 and 2014, while bulk tonnage, including iron ore, stone and salt, is expected to be up 4%.

Pump up the volume Friedman believes the agency’s big gamble — an investment that is subsidizing cargo service between Europe and Cleveland but is running a deficit in its first year — eventually will pay off. CEE-way, as the service is being called (short for the Cleveland-Europe Express operating in the St. Lawrence Seaway), is the only scheduled direct, European shipping service to a Great Lakes port.

When the Fortunagracht arrived last spring, it carried containers of See PORT, page 21

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The costly diff in Cavs tickets Team’s season tickets might actually be ‘underpriced,’ but on secondary market, seats are easily league’s most costly

By KEVIN KLEPS kkleps@crain.com

Karen Hill really wants to attend a Cleveland Cavaliers game.

“My wife has told me to suck it up and pay the extra margin and get her seats,” said Ned Hill, dean of the Levin College of Urban Affairs at Cleveland State University.

It’s a pretty common request.

LeBron James’ return is great for Northeast Ohio and even better for the Cavs, but it’s not quite as encouraging for frugal NBA fans who were accustomed to scooping up cheap seats for a few games per season.

Since the Cavs reached their self-imposed season-ticket cap just hours after James announced he would sign with the team in July, and because of the very limited inventory of individual tickets for the 2014-15 season, the secondary-market demand for Cavs games has reached nearly unprecedented levels.

The frenzy has been very profitable for brokers, and it’s presented an opportunity for ticket holders to make a few bucks by peddling their seats on the secondary market. But those looking to buy tickets on markets such as the Dan Gilbert-owned Flash Seats might not be feeling so merry.

SeatGeek, which bills itself as the “Web’s largest event ticket search engine,” said the average price paid for Cavs games on the secondary market from Dec. 6 until the end of the season has jumped 26%, to $283.87, since 2014-15 campaign began. The New York Knicks have the NBA’s second-highest average sales price in that span, at $148.02.

SeatGeek communications analyst Connor Gregoire said it’s “definitely very rare” for a team’s secondary-market sales to increase that substantially after the season starts. The Cavs, in fact, are the only NBA team whose average sales price for games in the Dec. 6April 15 window has increased since Oct. 28.

The other 29 clubs have experienced drops ranging from 2% to 40%, according to SeatGeek.

The Cavs’ $256 average sales price for the season is on pace to easily eclipse the largest norm SeatGeek has seen since it started tracking the NBA in 2010-11. The highest average from the previous four years is $213, set by the 2012-13 Los Angeles Lakers. The Cavs’ secondary-market average last season was $53.

Secondary-market giant StubHub said sales for Cavs games are up 594% year-overyear, “which is pretty much unprecedented in terms of jump in demand for a team,” said communications specialist Cameron Papp.

The average sale of a Cavs game on the site is $180 — 137% above the league average of $76.

New York-based TiqIQ tracks only list prices, which includes Flash Seats, the secondary market operated by the Cavs. The company said the average list price of Cavs games is $349.97, which is 32.8% ahead of the second-place Knicks and is at a level only the

Knicks and Lakers have reached since TiqIQ launched five years ago.

Are Cavs tickets ‘underpriced’?

Hill, the CSU economist, said secondarymarket prices that are $100 greater than the face value of a ticket aren’t a bad thing. It’s a free market operating as it should.

“The real point is not whether the tickets are $100 or $200, it’s what is the markup over the face value of the seats?” Hill said. “In some cases, these are $40 and $80 seats, and if it’s only a $20 markup, that isn’t bad at all.

A $20 to $100 markup, as long as the team is as good as it is and it has a must-see player — and this team in fact has three (James, Kyrie Irving and Kevin Love) — it’s clear to me that this is sustainable.”

Hill said that part of the reason for the discrepancy between the secondary-market prices and the average cost of a Cavs season ticket, which is a little above $60 (including premium seats), is the team’s tickets are underpriced.

“And if they’re underpriced in the primary market, there will be markups in the secondary market,” he added.

Team Marketing Report’s annual NBA ticket analysis backs up Hill’s belief.

The Chicago-based sports marketing firm’s analysis showed that the Cavs’ average ticket price of $43.31 (the firm doesn’t factor premium seats into its figures) is the league’s 13th

cheapest, and is $10.67 below the league norm of $53.98. The Cavs — who kept their season-ticket prices flat even after James’ announcement sparked the majority of their sales — are one of 14 teams that didn’t increase their prices from the previous season, according to Team Marketing Report.

When Gilbert met with the Cleveland media on Oct. 29, a day before the Cavs’ season opener against the Knicks, he was asked if his team was missing out on ticket revenue.

“You always say that, ‘Yeah, we could have raised prices and taken that revenue instead of letting the secondary market have it,’ but what we’re trying to do is have a reasonablepriced ticket,” he said. “We didn’t really raise tickets across the board at all this year.”

In a conversation with Crain’s, Cavs CEO Len Komoroski echoed the owner’s sentiments.

“Throughout our history, we’ve strived to provide a great experience and great value for our fans at a fair and reasonable price,” Komoroski said. “That’s been our guiding light.

That’s really the essence of it.”

It’s a ‘delicate’ problem No one is feeling sorry for Gilbert, of course. James’ comeback has some analysts predicting the team is worth more than $1 billion, and the Cavs’ owner stands to make millions in fees from Cavs tickets that are sold via Flash Seats. The marketplace charges a 23% fee to the buyer for every ticket that is resold,

and non-Wine and Gold United members (the Cavs’ season-ticket club) are charged a 5% seller fee.

An additional Cavs source said the organization is always concerned about pricing, “but when it comes to the secondary market, it’s the free market. It’s supply and demand.”

The team, the source said, feels “pretty strongly about that, and the market’s ability to adjust itself.”

The source also said that reports of average secondary-market sales of $200 and $300 seemed “extremely high.” The Cavs aren’t permitted to disclose their ticket sales numbers because of league rules, but a source said the Flash Seats marketplace, though “very active,” wasn’t producing sales prices nearly as high as some of the figures that SeatGeek, TiqIQ and other brokers said they are experiencing for the team’s games.

Mark Klang, owner of Amazing Tickets, a Mayfield Village ticket broker, said he knows the Cleveland secondary market as well as anyone. But when it comes to pricing, he cautions that “what people are asking and what they’re getting are two totally different figures.”

Klang said he has yet to crunch the numbers on his busy Cavs season, but guesses that Amazing Tickets has seen average sales of tickets for the Wine and Gold in the $150 to $175 range — which is closer to StubHub’s data.

“Did brokers double their prices? Yes,” Klang said. “But that doesn’t mean they’re getting those prices.”

Klang certainly isn’t complaining.

He said there were some Cavs weekend games in November that were fetching prices in line with the premium matchups from the first seven years of the LeBron era. Some of the weekday games have “softened up a little,” Klang said, but the sales usually pick back up after the holidays.

“I think the market is going to stay strong all year,” he said.

The demand to see James, Irving, Love and Co. on the road might be even greater.

The Cavs are included in the premium ticketing tier for every NBA team, and the average prices for those seats often soar into triple figures. On the secondary market, the median list price prior to the start of the season was 138.6% greater when a home team had the Cavs on the schedule, according to Vivid Seats. Only eight other teams had a median impact of 7.5% or more on its opponents’ secondary-market list price.

Those numbers suggest the prices for a Cavs game at Quicken Loans Arena are more reasonable than you might think.

The Cavs, Hill said, have a “delightful, but delicate” problem on their hands — walking the fine line between capitalizing on the “value they’re creating” and maintaining a fan base that has a “strong emotional attachment to the team.”

As for Karen Hill, she has a simple message to her husband: “Go get tickets.”

Aided by pilot project, JumpStart is moving up

By CHUCK SODER csoder@crain.com

JumpStart isn’t just for startups anymore.

The nonprofit is teaming up with Magnet to find small businesses that could become big businesses — with some help.

The pilot project could lead to a big shift in direction for JumpStart: The organization still will work with startup companies, but the scale-up project will focus on older businesses that have hit a plateau.

And they won’t all look like the software de-

velopers and medical device makers that make up most of JumpStart’s existing client base. The effort was designed to help any small business with a lot of growth potential, according to JumpStart CEO Ray Leach.

“It could be a bakery,” he said. “It could be a high-tech manufacturer. It could be (a business that) was a startup company eight years ago.”

The pilot project emerged from an ongoing series of meetings between local leaders who believe that existing economic development programs aren’t creating jobs fast enough.

The so-called Regional Competitiveness Council includes some of the organizations that fund JumpStart and Magnet, a nonprofit that assists local manufacturers. The council made waves last month when it announced the merger of two local economic development groups, NorTech and Team NEO. The scale-up project is part of the council’s effort to spark growth at existing businesses.

The theory is that established companies should be able to create jobs faster than new ones, because they already have most of the

infrastructure they need to grow.

The six local businesses in the pilot project will work with JumpStart and Magnet through the spring. If the program appears to be working, that number could rise.

That’s what happened with Magnet’s Prism program, which inspired the scale-ups project.

A few years ago, Magnet mainly focused on helping companies develop new products and improve their manufacturing processes.

But the nonprofit set its sights a lot higher See JUMPSTART, page 20

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CONTRIBUTED PHOTOS

Ernst & Young consulting manager Marc Ursick (above center) recently spent more than six weeks in Bogota, Colombia, where he immersed himself in the culture and helped a company with its finances.

WHO TO WATCH IN NONPROFITS SUGGESTIONS DUE: JAN. 12

The Feb. 16 section will highlight up-andcomers and innovators in nonprofits. Have a suggestion? Drop an email to sections editor Amy Ann Stoessel, astoessel@crain.com, or call 216-771-5155.

Ernst & Young manager adds international work to résumé Employee’s stay in Colombia part of company’s philanthropic program

By JEREMY NOBILE jnobile@crain.com

It’s not often an adviser at a global, Fortune 500-focused financial services firm works directly with the CEO of a small, budding company.

Sending that person to a foreign country for the same experience is even rarer.

But armed with plenty of notes, an open mind and a Spanish-language app on his smart phone, Marc Ursick, a consulting manager at Ernst & Young, did just that this fall.

The 27-year-old Ursick thrust himself out of his native Cleveland to Bogota, Colombia, to be immersed in the city and culture for nearly two months as part of EY’s philanthropic Vantage Program, which pairs top employees with small businesses in the Latin Americas on a pro bono basis to help them grow professionally and provide an opportunity to gain a more worldly perspective.

Ursick stayed in Bogota from late September through Nov. 14, working directly with Groncol — a company that designs “green” roofs and walls, like those with live vegetation — on financial processes and reporting.

With a fiancee in Willoughby and having never been outside the country save for a stint in London, Ursick was reluctant to leave, but equally eager for the adventure.

Cultural ambassador Groncol has only a couple dozen employees, so working with a small business is inherently different for Ursick, who split his project at the company into two phases About the first two weeks were spent doing a rapid assessment of functions to establish a general understanding of business operations.

The remainder of his time was devoted to creating an overall gover-

nance structure and implementing financial reporting processes, including features such as a scorecard to track specific metrics significant to the CEO. Many of the roughly 25 employees spoke at least some English.

Others, like the CEO, were fluent.

The work atmosphere itself, he said, was one of the starkest differences from work in America.

“It was almost like a group of friends working together, versus how we might view coworkers as just coworkers in the U.S.,” he said.

“They didn’t want business expertise right away. They really wanted to get to know me before we started the project.”

Day one on the job was largely used for getting to know each other on a deep level. Work came second.

The Groncol employees wanted to know about his family, personal life and interests, and he obliged happily, earning their respect. They asked

about Cleveland and cross-checked their Hollywood-driven impressions of America with the personal experiences of Ursick, who reciprocated the same interest in the local culture. Some other EY employees working in a regional office there helped Ursick as tour guides and translators where needed.

Ursick also learned quickly that Colombians love showing their guests a good time. He typically stayed in a hotel, but his new friends and other locals took him around different regions of Colombia at the end of every week.

His many trips took him from Cartagena to the region’s salt mines. He was regularly offered home-cooked meals at his new friends’ homes. He’s been cooking his favorite dish — a Colombian staple called bandeja paisa, a complex platter-type stew made with pork, meat, red beans, rice and a variety See ERNST & YOUNG, page 8

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HealthSpan is poised for a hearty 2015 Money-losing insurance arm of Mercy Health believes new concepts it’s introducing in plans will pump up its clientele

By TIMOTHY MAGAW tmagaw@crain.com

Two years ago, Cincinnati-based Mercy Health — the state’s largest health system, then known as Catholic Health Partners — had only a peppered presence in northern Ohio, with community hospitals in Lorain, Lima, Toledo, Warren and Youngstown.

Today, the group has a strong anchor in Summit County thanks to its minority ownership, through a subsidiary, of Summa Health System in Akron.

However, the fuel that’s driving Mercy Health’s northern conquest isn’t so much its bricks and mortar, but rather the health insurance plan — Kaiser Permanente Ohio — it acquired in fall 2013.

Since then, HealthSpan — Mercy Health’s insurance arm — believes it has pieced together a strategy to turn the money-losing health plan into a profitable operation.

The former Kaiser operation, which boasts about 1,200 employees in the Cleveland area, is still swimming in the red, having lost about $44.7 million through the third quarter of 2014, according to the most recent state filings.

But now that they’ve expanded access to physicians in Greater Cleveland, introduced a variety of new products for next year and taken its insurance offerings statewide, HealthSpan officials are hopeful for a strong 2015.

“We clearly have a model of care here that has been perfected over the years,” HealthSpan president and CEO Kenneth Page said in a recent interview with Crain’s. “We want to expand and develop throughout the state of Ohio. The outcomes are just tremendous for patients.”

Simply put, HealthSpan’s model of care is

centered on the notion of keeping minor health problems from becoming big ones.

They do that by piecing together narrow provider networks that work in tandem to keep patients healthy, rather than only treating them when sick.

While those narrow networks, particularly Kaiser’s, have been well received in the western part of the country, the Midwest has been slow to embrace traditional HMO plans.

HealthSpan, however, believes it’s built a product portfolio — one anchored by a strong HMO — that will appeal to employers by promising to improve their employees’ health and lower costs.

“I think there’s that natural tendency to maintain the status quo,” Page said.

“We’re introducing some new concepts and new ways of managing health care that we think creates value for employers. It’s a challenge getting that message out and getting folks familiar with our brand and the model of care we’re providing.”

The growth plan With HealthSpan in charge, the plan is going after more self-funded clients and even introduced a PPO plan — a more expensive offering with a larger provider network — to lure in more clients.

In many cases, the former Kaiser plan would hold an employer’s HMO offering while another insurer held the PPO line, so Page said that should help HealthSpan capture employers’ entire business.

Kaiser never quite caught on in northern Ohio despite its success out West for a variety of factors, said Dr. Nabil Chehade, president and market CEO for HealthSpan Physicians Inc., the insurer’s provider group that boasts more than 250 clinicians in the region.

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For one, the plan didn’t quite carry the same clout it did in California because it was confined only to the Northeast Ohio region.

He said having the backing of the state’s largest health system in Mercy Health should position HealthSpan for success.

“Being limited to Northeast Ohio, not being a statewide player and having fixed costs you can’t spread throughout a larger population made it very difficult to survive in this market,” said Chehade, who for 15 years had been part of the Ohio Permanente Medical Group, the medical group that served Kaiser’s enrollees.

HealthSpan retained about 90% of the former Kaiser business after the acquisition was made official — something of which the organization is particularly proud.

“We’re introducing some new concepts and new ways of managing health care that we think creates value for employers.”

– Kenneth Page President and CEO, HealthSpan Officials said the bulk of the lost accounts were national employers affiliated with Kaiser in other markets where they had employees.

HealthSpan officials said another reason for the retained business is the fact that about 95% of the physicians employed by the former Ohio Permanente Medical Group joined the newly formed organization that now serves HealthSpan members.

Since the acquisition, Page said HealthSpan has been working to reintroduce itself to the market.

Just recently, for the third year in a row, the former Kaiser plan was ranked by the National Committee for Quality Assurance as the No. 1 health plan for both commercial and Medicare products in the state.

Under the Kaiser umbrella, Page said the

health plan rarely touted such accomplishments.

Mercy Health had long looked at building a statewide system, and the Kaiser acquisition, in a sense, made that vision a reality much more quickly than it could have on its own.

“It was a plan with an already built-in membership, facilities and physicians,” said AnnJeanette Colwell, an analyst who studies the Ohio market for Decision Resources Group, a Massachusetts-based health care research firm.

“It offered Mercy a jumpstart for that growth in Northeast Ohio.”

And since the acquisition, Mercy’s deepened its relationship with University Hospitals, the region’s second largest system, which gave it the ability to compete head on with the Cleveland Clinic — the region’s largest and most powerful health care enterprise. Kaiser had used the Clinic as its acute-care and surgery provider for its members, but HealthSpan shifted that business to UH after the acquisition.

Since, HealthSpan even launched a selffunded insurance product along with UH and Mercy’s hospitals in Lorain County — a region the Clinic sees as ripe for growth — to bring more big employers into their respective systems.

In addition, health systems across the country are looking to position themselves at the front-end of payment reform, as the government and commercial payers transition from a fee-for-service model to one that rewards value and keeping people healthy.

One way health systems, such as Mercy Health, are exerting that influence is getting more involved in the health insurance arena.

“Purchasing a plan like Kaiser that’s been held up as a model of clinical integration made sense,” Colwell said.

“I think Mercy was hoping to step in and attach its strong brand and reputation in hopes they could be successful in furthering their own strategy toward clinical integration of a statewide system.”

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Company has safeguards in place for preserving values Valley View business has new training center to help clients maintain foreclosed properties

By STAN BULLARD sbullard@crain.com

Jeffrey Dicenzi recently hammered nails through shingles, pulled out the pegs and put the shingles in place on a roof — all to make a point.

“It’s impossible to see a hole in a shingle from above,” said Dicenzi, a training specialist at Valley Viewbased Safeguard Properties Inc. His point was that employees of the property preservation company need to look carefully at attic photos of a roof’s underside from contractors who provide field services to spot problems.

This kind of thing is all in a day’s work for Dicenzi, who operates training classes at Safeguard’s new education center a short walk from the company’s headquarters. Safeguard believes the training center is a first of its kind for companies in the property preservation business overseeing houses for lenders as the properties go through foreclosure.

The training center is inside a 3,000-square-foot suite in an office/warehouse building. It brings to mind a house exploded into component parts or a building materials showroom. However, in this case the building components are designed to help keep houses together and retain their value through the foreclosure process for Safeguard’s clients.

There’s a bathroom on a platform — complete with running water but no sanitary hookup — next to an air compressor to teach how contractors should winterize empty houses

by clearing water lines and putting antifreeze in commodes.

A gable stands a few feet tall on the floor to show how a roof is built.

Two walls that demonstrate the way a basement is put together stand nearby, complete with studs to replicate a basement’s ceiling.

Four doors are ready to teach how contractors should replace a lock in each house to gain future entry through a lock box. There even are sheets of plywood to show the correct way to cover windows in an empty house.

Russ Klein, Safeguard’s assistant vice president for training and quality assurance, said the full-size house mock-up was created to improve on videos, classroom work and other training the company gives its hires.

“Different people learn in different ways,” Klein said. “Some are OK watching a video. Others benefit from doing things directly. This allows employees to have a hands-on experience. It may help an employee spot something in a photo a contractor sends in that they might not otherwise (see).”

John Gonos, Safeguard director of training and development, said adding the hands-on experience increases the likelihood someone will remember the lessons compared with reading about it or watching a video. Safeguard’s staffers can receive multiple pictures from a contractor of conditions in a house, so extra knowledge goes far. With the nation’s foreclosure epidemic that has fueled Safeguard’s growth the past decade, its staffers today receive 60 million photos a month to document field conditions.

Moreover, Gonos said, if contractors call in with questions, additional knowledge may help employees find a quicker solution.

If hands-on experience is so terrific, why not take employees to a

ERNST & YOUNG continued from page 6

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of other ingredients — at home in Cleveland. One person opened their restaurant exclusively to serve their American guest and his friends food and drink.

“They’re probably the most friendly people I’ve ever met,” he said, adding he’s remained in contact with his new pals and plans to return for a visit.

The weather is one interesting misconception. Many might assume Ursick enjoyed warm, tropical weather in the South American country. But the conditions in Bogota, which has an elevation close to twice that of Denver, were quite similar to a fall-like Ohio, with plenty of rain and temperatures shifting between 40 and 60 degrees. It was hoodie weather, Ursick recalls.

“There was no sitting on a beach in 90 degree weather,” he laughed.

Global perspective Ursick was one of 18 top-performing EY employees chosen for this year’s program, which celebrated its decade anniversary this year.

Over 10 years, the program has provided 35,000 pro bono hours of work to more than 100 businesses.

Brazil, Mexico, Argentina and Chile are some of the other locations where participants serve growing businesses. EY works with nonprofit organization Endeavor to identify potential partner companies in emerging markets.

“When we originally started 10 years ago, the goal was to give our people an overseas mobility experience,” said Deborah Holmes, EY America’s corporate responsibility director and founder of the Vantage Program. She said many employees have a chance to work around the world on a three-year rotational basis with EY’s global reach, but many simply can’t leave their home country that long.

“Those experiences living and working in a different culture are just so important for our business leaders today,” Holmes said. “Making an investment in these people to take their leadership skills to the next level just makes sense.”

Working with a small business provided a unique opportunity for

house to see an actual distressed property?

“We can control the environment here,” Gonos said. “We can teach what we need to teach. There could be an example of a problem in a house we would want to show, but we would not think of slowing repairs to use it as an example.”

With a total of 1,700 employees in its Greater Cleveland locations — it has satellites in Brooklyn Heights and Mentor in addition to its Valley View headquarters — Safeguard’s training needs are prodigious.

Safeguard estimates that about 200 employees a month, including both new and more senior employees, receive some type of training.

In the month since the center was opened, 800 employees went through the home winterization training. Gonos said the company also does more typical computer and customer service training, but the center reflects the residential nature of the business.

The training center has some extra space to allow the firm to display other malfunctioning home components as they become available.

Waving an old strip of copper water pipe with a valve in the middle, Gonos asked, “How many people can recognize an exploded pipe?”

He then rotates the pipe to reveal a hairline crack. The crack could spew gallons of water into a house in no time.

“Water from exploding pipes can lead to ice and mold forming,” said Klein, who is not related to Robert Klein, Safeguard’s founder and chairman. Russ Klein said the company held an open house at the training center for its staff and netted 100 suggestions when the training staff asked for input.

Klein was not deterred by the volume of comments; he calls it a basis for continuous improvement.

an employee at a massive company.

Doing that in South America just added another layer to the experience.

“Rather than understanding how clients in large businesses operate in the United States, it’s good to understand a small business environment,” Ursick said. “To do that in another country just adds another level of learning.”

But adding to an American’s overall global perspective is equally significant.

“Being in the U.S., and from Cleveland, you just have a small mindset sometimes — you think everything operates this way,” Ursick said. “Learning a new culture is beyond valuable versus what I thought before I went there.”

In a twist of fate, Ursick’s first project back in the state paired him with a senior manager at EY from Colombia. He assures the coincidence was unplanned.

“Before this, I wouldn’t have thought anything about it. It really wouldn’t have meant anything to me,” Ursick said. “But now I have a better understanding of them, who they are. It’s just crazy how many people from Colombia I’ve come into. Maybe I just notice it now.”

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GOING PLACES JOB CHANGES CONSULTING CHAPMAN AND CHAPMAN INC.: Amy Miklos to implementation and wellness specialist; Courtney Briggs to account manager; Jewel Truman to support assistant; Shaun Cox to retirement support associate; Jason Zangmeister to financial services case manager.

DISTRIBUTION TRIMARK SS KEMP: Karen Williams to vice president, controller.

ENTERTAINMENT HARD ROCK INTERNATIONAL AND HARD ROCK ROCKSINO NORTHFIELD PARK: Mark Birtha to senior vice president and general manager.

Send information for Going Places to dhillyer@crain.com

AWARDS NORTHEAST OHIO MEDICAL UNIVERSITY ALUMNI ASSOCIATION: Michael Miladore, M.D. (University Orthopedics), received the 2014 Distinguished Alumni Award; Thomas Boniface, M.D. (Boniface Orthopaedics Inc. and St. Elizabeth Health Center), received the 2014 Distinguished Service Award; George Litman, M.D. (Northeast Ohio Medical University and Akron General Medical Center), received the 2014 Lifetime Achievement Award.

UNIVERSITY AVIATION ASSOCIATION: I. Richmond Nettey (Kent State University College of Applied Engineering, Sustainability and Technology) received the William A. Wheatley Award.

MUSIC BOX SUPPER CLUB: Mitchell Grattan to vice president, operations.

FINANCE LIBERTY BANK NA: Dan Minick to vice president, commercial lender.

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RETIREMENT MEDICAL MUTUAL: Tom Greene, vice president, human resources, after 30 years of service; Paula Sauer, senior vice president, care management, after 28 years of service; Bob West, vice president, strategic initiatives, after 44 years of service.

2015

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LORAIN NATIONAL BANK: Paul McKelvey to mortgage loan officer.

FINANCIAL SERVICE

CIO of the Year Awards

ANCORA ADVISORS LLC: Nick Koenigsknecht to associate, equities analyst; Ben Rodeffer to associate, client operations.

April 14, 2015 Crain’s honors the standout chief information officers who lead the technology strategies and vision of Northeast Ohio’s businesses, institutions and non profits.

ERNST & YOUNG LLP: Michael J. Morris to tax principal.

MEADEN & MOORE: Angelina Milo to vice president, tax services group.

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HEALTH CARE BRAVO WELLNESS: Sara Green to director of sales operations.

INSURANCE AON RISK SOLUTIONS: Jay Moroscak to senior vice president, Cleveland.

METLIFE PREMIER CLIENT GROUP OF OHIO: Brent Affolter to agency sales director.

LEGAL REMINGER CO. LPA: Brian P. Nally to chair, eDiscovery Practice Group; Bethanie R. Murray to co-chair, Woman’s Initiative; Katie Lynn Farrell and Catherine Sturik to associates.

MARKETING AKHIA: Mike Lawrence and Nick Pfahler to creative directors; Chris Jackson to creative strategist; Amanda Vasil to change agent; Courtney Strah to senior account executive; Bridget Fanta to account executive; Giovanna DelGarbino and Lauren English to assistant account executives; DeAnne Bohl to bookkeeper.

SBN INTERACTIVE: David Searls to senior content strategist; Terri Brown to senior marketing manager.

SERVICE DAVEY INSTITUTE: Christine Balk to plant biologist.

BOARDS LIBERTY BANK NA: Ralph R. Razinger (CABMAT LLC) to vice chairman.

9

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Crain’s honors the dedication and achievements of Northeast Ohio’s top female business leaders who enrich our region with their professional talents and unique perspectives.

NOMINATION DEADLINE: MARCH 30, 2015

Forty Under 40 November 23, 2015 A tribute to the next generation of young rising stars who have taken a leading role in our business community.

NOMINATION DEADLINE: JUNE 1, 2015

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PUBLISHER:

John Campanelli (jcampanelli@crain.com) EDITOR:

Elizabeth McIntyre (emcintyre@crain.com) MANAGING EDITOR:

Scott Suttell (ssuttell@crain.com)

OPINION

Fair share The grime of corruption that coated Cuyahoga County government for years is gone. In its place, we have a cleaner and more accountable form of county rule.

Cuyahoga County Executive Ed FitzGerald and county council should be applauded for their work these past four years in restoring integrity and confidence to the workings of county government.

But corruption isn’t the only barrier to good government. An unfair and unequal system of hiring outside contractors — what some have called a “good ol’ boy” network — continues to plague the county.

In what could be one of his final major acts as the county’s first executive, FitzGerald is giving the county council an opportunity to address that problem.

Last week, FitzGerald introduced legislation to create an economic inclusion program for county contracting. As Crain’s Jay Miller reported, the program would increase opportunities for businesses owned by women and minorities to compete for county work and would establish small business set-asides that are race and gender neutral.

Ideally, qualified businesses wouldn’t need the help of such specific legislation. All businesses, regardless of who owns them, ought to win a proportionately fair share of government contracts.

But that’s clearly not happening here.

A disparity study commissioned by the county and conducted last year shows that “there is substantial underutilization of minorities and women in both prime and subcontracting” in Cuyahoga County.

And that underutilization, the report states, breeds distrust of the county in the minority business community.

Fixing that problem and rebuilding that trust, as FitzGerald has proposed, is good for the minority and women contractors and also good for the county. Those who do business with the county should reflect the broad diversity of the people in it.

And adding more contractors will guard against the cronyism that so often creeps into deals where the public’s money is involved.

The study is key in fulfilling a Supreme Court requirement to show that disparity exists. It’s clear that it does exist, and it’s time to do something about it.

“We have made some incredible progress when it comes to development in the city of Cleveland and Greater Cleveland in terms of economic development funds and programs, but all of that will be for naught if it isn’t felt in the community in an equitable and a just and a fair way,” FitzGerald told council.

He’s right.

Council, and FitzGerald’s successor, Armond Budish, must be committed to fixing that by developing an enforceable, meaningful and trustworthy policy that makes sure county contracts aren’t awarded to just a chosen few.

FROM THE PUBLISHER

The long game is a proven winner Back in May, MetroHealth neighborhood-based faciliCEO Dr. Akram Boutros ties. stopped by Crain’s newsroom I waited for the plans, the to reveal plans for a complete drawings, the renderings, the transformation of the health schematics. system’s main campus on There weren’t any, aside West 25th Street. from a “what’s possible” imDr. Boutros is an engaging age of a potential new camguy. I’d heard about his coffeepus. As a journalist in the age fueled, frenetic schedule: arof Instagram and Twitter pics, riving at work at 4:30 a.m., JOHN I was confused. walking the halls of the hospiWhy announce such an imCAMPANELLI tal, stopping to connect with portant project — with a price everyone, from surgeons to well into the hundreds of milnurse’s aides to, of course, the patients. lions of dollars — without the motivatBest of all, it was real. This guy was ining power of images? spiring everyone he met.

Turns out there was a pretty good Although he’d been in town less than reason: Dr. Boutros is playing the long a year at that point, his reputation was game. already solidifying: This guy was someLast week marked my one-year anthing special. niversary as publisher of Crain’s. I’ve So I sat down at the meeting in May learned a ton of lessons over the last 12 expecting to see a complete plan for the months — from the power of listening new Metro: beautiful glass buildings, to the importance of personal relationsprawling greenspace, a public health ships to making sure your suit pants are center campus the residents of Cuyaunder your suit coat before leaving for hoga County deserve. the gym in the morning.

Dr. Boutros discussed the importance One of the most important lessons? of Metro to the residents, the dire need The power of the long game. for a facility upgrade, the goal of imI am trying my hardest to adopt a meproved public health (our county is near thodical and deliberate approach to the bottom in Ohio) and the changing market research, decision-making and way health care is delivered in America: business itself, to invest resources with away from buildings full of beds and toyears and decades in mind instead of ward outpatient care and school- and months, to build sustainable revenue

streams instead of the hot trends that will soon flame out, and to find solid partners who share the same vision. In other words, to do things the right way.

It doesn’t mean abandoning creativity and going vanilla. In fact, the long game gives creativity more time to blossom.

The deliberate method is certainly not sexy or exciting. It’s akin to the index-fund, check-the-stock-pages-oncea-year approach to investing. The beaches of Florida are filled with people who adopted such a boring strategy.

The long game works.

Dr. Boutros came back to our newsroom last week. He and his team have spent the last six months listening to the community on what a transformed Metro should look like.

They’ve studied “evidence-based” hospital design. They’ve built life-sized, cardboard hospital-room mock-ups where patients and families can interact with doctors and nurses to see what designs work best.

All the while, he’s been working to improve Metro’s finances, employee engagement, operations and the diversity of his management team.

During the meeting, he unveiled the first specifics of the Metro transformation long game: an $80 million addition to the critical care pavilion, to be completed in 2016.

Pictures coming soon.

LETTER TO THE EDITOR

Children are at foundation of everything Regarding the Dec. 1, 2014, opinion piece “Early childhood education is smart choice as high-priority policy item,” kudos to Paul Clark and Barry Doggett for their insightful article on the importance of early childhood education and other early childhood programs and to Crain’s for publishing this important piece.

While many in our city and county

are experiencing an exciting “turnaround” period, we must as a local community and state continue to invest more in the very early years of a child’s life.

This kind of investment in all children, and especially in those children with disabilities or those living in poverty, will yield great results.

We know that building a strong

foundation in children positively impacts health and health care, education, and economic development and growth — all important factors in a better future and quality of life for all of us.

Patricia W. Nobili President and CEO Achievement Centers for Children

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CRAIN’S BUSINESS DIVERSITY COUNCIL

MICHAEL OBI CEO, Spectrum Global Solutions, LLC

cause he learned the chain had openings in Northeast Ohio and saw it as a local business that is scalable, perhaps someday even adding franchises in Nigeria.

The other reason he liked the Little Caesars franchise idea is that it allows him the opportunity to mentor young people.

“Often young people want to land their first job,” Obi said. “I thought, ‘Wouldn’t it be cool to mentor and be able to hire them for their first job? ’ ” Mentoring other entrepreneurs is also a big cause for Obi. He is a member of the Presidents Council, which consists of CEOs of the largest African-American businesses in Northeast Ohio, where he works on

11

CLASS A SUBURBAN OFFICE FOR LEASE

Earlier this year, Crain’s Cleveland Business formed an 11-member minority advisory board to provide objective, constructive input on minority-based issues for Crain’s. The Crain’s Business Diversity Council has met regularly since April. This is one in a series of profiles of its members.

After 17 years in banking, Michael Obi left a position as a senior vice president of Key Bank to launch Spectrum Global Solutions because, he said, “Entrepreneurship is in my blood.”

He got his love for small business from his late father, Edwin Obi, who had operated a business importing parts for Peugeot automobiles to his home in a small town in eastern Nigeria. As a teenager, Michael Obi expanded the business to Lagos, the capital of Nigeria, because he sought opportunities in the big city. At 18, he immigrated to Florida and earned his undergraduate degree and an MBA from the University of North Florida in Jacksonville.

Spectrum’s core business is helping businesses grow and plan for ownership and leadership transitions. Spectrum also does import and export work for Nigerian companies that need help securing products from or taking them overseas.

However, Spectrum is not the only outlet now for his small business bug. He operates four Little Caesars franchises in Northeast Ohio with a total of 38 employees.

He invested in the franchises be-

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strategy for promoting inclusion as well as wealth creation.

He is also a member of the Nigerian American Chamber of Commerce and has worked in various roles on entrepreneurship training and expansion efforts with the Urban League and University Circle Inc. Although he left corporate life for his own business, Obi said he believes his small business experience was valuable to his corporate career.

“Because I had run a small business, managers turned to me when they had something new to do or needed to get something done,” Obi said. He is a frequent speaker and conference participant on small business and effectiveness.

With all his passions and pursuits, Obi said, “I’m not stressed,” even though he and his wife, Anulika, have three children under 10.

How does he juggle all that and remain stress-free?

“That’s what I like to teach,” Obi said. “I use my time wisely. If you prioritize yourself, it’s amazing how much you can get done.”

Obi signed on to become a member of the Crain’s Business Diversity Council because he sees it as a chance to help improve the image of minorities and get more diverse images into the local and business media.

“I was intrigued by the opportunity,” Obi said.

— Stan Bullard

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TALK ON THE WEB Re: JetBlue starts Hopkins-to-Boston service Ummm, so another destination that we already have with United Airlines, at least for now?

It’s all fine and good that new entrants drive price competition, but if one can’t get anywhere direct, who cares? Business people need regional day trip options — out in the morning and back at night. I figure the total cost of a connecting flight is at LEAST double the cost of a direct flight: hotels, time, misconnects, brain damage.

Try going to Louisville, Kansas City, Albany, Memphis, etc., for the day. Coming to the Global Center for Health Innovation for a two-day conference? It will cost you two travel days instead of one and an extra hotel night.

We need to replace lost city pairs, not just more flights to places we already have.

— jdsjr

It is proven that the first steps made by children in their studies are usually the most important ones and can influence their whole life. Some of them will realize that essay-writing is a piece of cake, while others will show their outstanding communicative skills.

We can continue this list for a very long time, but one thing is evident: Early education is worthy of investment.

— Clin_Ton

Re: Getting through undergraduate work efficiently Students accumulate many credit hours because they don’t know what they want to major in, or they change majors midstream.

Advising by schools needs to cover more than just how many credits you need for graduation. It needs to help students figure out what they want to do early in their college careers.

— disqus_quObWlwKEk

Re: The value of early childhood education

Re: Making diversity a priority

It would be fantastic if all little kids had an opportunity to get proper education being so young. It is just the perfect start for them.

Having been involved in working with MBE businesses especially related to the construction industry, I have witnessed firsthand the many

failures that some tried to solve by throwing money at them.

The real problem is that many, while very technically astute, did not grow up in a business culture and do not get help on the running of the business.

If we want to create more success, we need to help provide the tools they need to run a profitable business. I suggest that support groups … add people and programs to provide that help. Otherwise, we will continue to see a much too high failure rate among the many startup DBE/MBE/WBE firms.

— Neil Dick

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Re: Strong November jobs report The pattern that unemployment drops under Democratic presidents and rises under Republican presidents is so stark that people assume the data is fake, or else nobody would ever vote Republican.

But it really is that stark, and yet people do still vote Republican.

— tuhaybey

Re: Hugo Boss plant in Brooklyn to close The moral of the story is don’t buy Hugo Boss clothes.

— Gary

IN SEARCH OF ‘WHO TO WATCH IN NONPROFITS’ CANDIDATES The first “Who to Watch” section of 2015, “Who to Watch in Nonprofits,” is scheduled for publication Feb. 16. It will highlight up-and-comers and innovators in nonprofits. If you think you know who will be among those leading the Northeast Ohio nonprofit sector of the future, drop an email to sections editor Amy Ann Stoessel, astoessel@crain.com, or call 216-771-5155. Send your suggestions no later than noon on Monday, Jan. 12.

Please include the person’s name, position and a paragraph explaining why he or she stands out. There are no hard and fast requirements for this section, other than that the candidate needs to exhibit the kind of potential that makes him or her someone to watch in the field of nonprofits.

for your support, on behalf of St. Augustine Hunger Center.

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Counting on Talent A CFO’s guide to the new human capital

By James Ritchie

s firms throughout the U.S. undertake growth initiatives such as introducing new products, entering new markets, and acquiring other companies, they’re looking to their CFOs for much more than financial leadership. They’re depending on them John Masters to oversee a wide range of new areas Managing Director and play a key role in setting corporate Cleveland Bank of America direction and identity.

Merrill Lynch “The CFO has evolved from this accounting function — the most senior accountant in a company — to being this strategic leader who, by the way, is also involved in finance,” says John Masters, Bank of America Merrill Lynch managing director for Cleveland.

One task in particular associated with an aggressive growth enterprise is acquiring and retaining talent.

Companies need top people in every department in order to sustain high growth rates. And the key strategic role that CFOs play in such firms means that helping to find and keep the best employees is part of their job, too.

Hiring is a top concern for a growing number of companies as the economy picks up and corporate confidence grows, according to the Bank of America Merrill Lynch CFO Outlook Survey.

CFOs might not become directly involved in hiring decisions except for finance and accounting positions.

But their influence on the company’s human resources (HR) strategy means they are key players in talent acquisition and retention efforts.

“The CFO gets involved more strategically with the culture you are creating,” Masters says. “The culture that the CFO and CEO shape trumps everything.”

These efforts help ensure that the organization has the human capital, not just the financial resources, to get where it wants to be. Compensation and benefit packages, including healthcare, are important variables.

companies, and the Affordable Care Act has brought additional worries.

A crucial part of the solution in many cases is an expansion of wellness and disease management programs, which boost employees’ health and productivity while lowering companies’ long-term healthcare costs. About seven in 10 middle-market companies now offer a wellness plan, according to the Bank of America Merrill Lynch Benefits Solutions Survey.

“Healthcare is now a financial metric,” Masters says.

“Human capital is on the radar. In the past, these issues did not make it to the CFO.” Companies are looking for help to deliver compelling employee plans with options from financial literacy programs and advice to 401Ks to health savings accounts. In the war for talent, how well they fare depends in no small part on the decisions of their CFOs. For ideas on how to boost your hiring and talent retention efforts in Cleveland, contact john.masters@baml.com

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A BALANCED APPROACH Many CFOs are insisting that their firms incorporate big data into their hiring, placement, compensation and other HR decisions. A Bersin by Deloitte study of 436 North American firms found that advanced talent analytics helped in several areas: leadership pipelines, talent cost reductions, efficiency gains, and talent mobility.

There was a market impact, too. Companies with mature talent analytics capacity beat the Standard & Poor’s 500 stock index by an average of 30 percent over three years, according to High-Impact Talent Analytics: Building a World-Class HR Measurement and Analytics Function.

A challenge in rapidly growing companies is designing packages to meet the needs of both experienced employees and those just starting out. Achieving the right balance of offerings helps organizations take advantage of what each generation brings to the workplace.

Most of the detail work on these matters falls to the HR department. Still, it’s ultimately up to the CFO to make sure the packages are competitive in the market while remaining affordable for the company.

THE HEALTH METRIC Our CFO Outlook Survey also reports that healthcare coverage has long been a top issue for middle-market

Most importantly, it’s totally pro-business. baml.com/explorecashpro

The power of global connections™

“Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and members of SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed. THE POWER OF GLOBAL CONNECTIONS is a trademark of Bank of America Corporation, registered in the U.S. Patent and Trademark Office. ©2014 Bank of America Corporation 10-14-1034

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ILLUSTRATIONS BY SCOTT POLLOCK

DAN GILBERT & LEBRON JAMES — CLEVELAND CAVALIERS separate interviews within a day of each other in late October, as the Cleveland Cavaliers were Iandngetting ready to tip off a new season by welcoming back their hometown superstar, Dan Gilbert LeBron James reminisced about the “great” times they had enjoyed together.

They had only had one bad night, they said — though it was one that brought the franchise, and James for a little while, down a dark path.

Four seasons after James spurned the Cavs via “The Decision,” a made-for-TV special that might go down as the most criticized free-agent exit in professional sports history, the four-time NBA MVP was improbably reunited with the franchise that drafted him first overall as an 18-year-old phenom in 2003.

Convincing the soon-to-be 30-year-old James to sign a contract in free agency in July required a series of steps — WHAT THEY SAID... some shrewd and some sheer luck — that might have Gilbert, in a meeting with seemed far-fetched even for Hollywood. the media on Oct. 29, on The Cavs won three NBA draft lotteries in a four-year his rapport with James: span, which gave them an All-Star point guard (Kyrie Irv“Our relationship is very good, ing) to pair with James and two valuable trade chips (2014 very solid. Things are great. and ’13 top draft picks Andrew Wiggins and Anthony BenWe had five great years and nett, respectively) that were used to acquire All-Star forone bad night is the way I’ve ward Kevin Love in a trade with the Minnesota Timberbeen describing it.” wolves.

James, prior to the Cavs’ The Cavs also needed James’ former team, the Miami season opener the followHeat, to bow out of the 2014 playoffs in disappointing fashing day: “I think it’s really ion — a task the San Antonio Spurs graciously accepted. good. We had one bad moMost importantly, Gilbert had to mend fences with the ment, and it just overshadplayer he so famously slammed in a scathing letter the owed all the great times we Cavs owner wrote a few hours after The Decision. had together. And now we’re “I told him how sorry I was, expressed regret for how that back together.” night went and how I let all the emotion and passion for the situation carry me away,” Gilbert told Yahoo Sports in WHAT OTHERS July, not long after James announced his return via a Sports Illustrated essay.

ARE SAYING...

“I told him I wish I had never done it, that I wish I could David Gilbert, president of take it back.” the Greater Cleveland The pitch, combined with James’ strong desire to return Sports Commission and to his roots, worked, and it’s Gilbert who stands to benefit Positively Cleveland, to as much as anyone from the powerful partnership.

Crain’s in July on James Analysts have said the Cavs are now worth at least $1 bilreturning to the Cavs: lion, which is almost double Forbes’ $515 million valuation “That gets everyone excited. It from January 2014. gives us one more reason for Within hours of James saying he was coming back, the Clevelanders to galvanize.

Cavs reached their self-imposed cap of 12,000 season tickThat’s awesome.” ets, and the demand for the rest of the seats to their games Cavaliers CEO Len at Quicken Loans Arena was so fierce that they instituted a Komoroski, to Crain’s on monthly lottery process to sell what remains of their limitAug. 20: “It’s been an incredied allotment of individual tickets. bly special time for Cleveland, After ranking 19th, 22nd and 16th in the NBA in attendance and as you know with Dan, the previous three seasons, the Cavs will average a packed Dan Gilbert and our ownership house of 20,562 in 2014-15, which should place them in the team have been at the table top two in the league. with Cleveland every step of Their local television ratings are up more than 160%, and the way in terms of being in the secondary market for Cavs games is easily fetching the Cleveland and doing whatever highest prices in the league. we can to be a partner in the The Cavs even entered their game Dec. 11 riding an eightcommunity and be a true live, game winning streak, as their play on the court was starting work and play 24/7 city.” to measure up to their monstrous productivity off it.

— Kevin Kleps

TIMELINE JUNE 15: The San Antonio Spurs end the Miami Heat’s bid for a three-peat in dominant fashion, winning Game 5 of the NBA Finals 104-87. It’s the second time the Spurs defeated a James-led team in the Finals — only this time, it leads to a breakup of Miami’s “Big Three.”

JUNE 24: In a move that is viewed as procedural and not a sign of a monumental shift in the NBA’s hierarchy, James exercises the early termination option in his contract with the Heat, meaning he will become a free agent one week later.

JULY 6: Twitter goes berserk when WKRK-FM, 92.3, reporter Joe Lull tweets that Gilbert was en route to South Florida to court James. The Cavs owner denies it 50 minutes later, tweeting that he was “enjoying the weather in my backyard today.” It turns out Gilbert did meet with James that day, paving a path to the biggest free-agent haul in franchise history.

JULY 11: James ends all of the speculation over his latest free-agent decision by committing to the Cavs via a letter that was posted on Sports Illustrated’s website. “My relationship with Northeast Ohio is bigger than basketball,” he writes. “I didn’t realize that four years ago. I do now.”

OCT. 30: The revamped Cavs open their season to a ton of fanfare. There is a pregame concert outside The Q, a humongous new scoreboard (the largest at any arena in the country) and plenty of celebrities inside. The team, however, loses to the New York Knicks 95-90.

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LORETTA MESTER — PRESIDENT AND CEO FEDERAL RESERVE BANK OF CLEVELAND oretta Mester, the new president and CEO of the Federal Reserve Bank of Lpacting Cleveland, is in a unique position to not only shape monetary policy imNortheast Ohio and the rest of country, but also to enhance the institution’s transparency by influencing how policy developments within the Federal Reserve System are reported to the public.

Mester was appointed to her new role in June. She took the reins from Sandra Pianalto, who retired after more than a decade as the top leader of the Cleveland Fed, which serves the Fourth Federal Reserve District comprising Ohio, western Pennsylvania, eastern Kentucky and the northern West Virginia panhandle.

Formerly the executive vice president and director of research at the Federal Reserve Bank of Philadelphia, which she joined in 1985 as an economist, Mester takes over during one of the alternating years in which the Cleveland Fed participates as a voting member in the Federal Open Market Committee. That positioned her to articulate Greater Cleveland’s perspectives on the Fed’s monetary policymaking body.

The FOMC sets key interest rates, like the discount rate, and decides whether to increase or decrease the money supply, which is achieved through the buying and selling of government securities. Voting powers on the committee are rotated annually between the Cleveland Fed and its counterpart in Chicago in a unique arrangement — the other 10 regional Fed presidents, besides New York which always has a voting membership, get to vote only every third year.

Among her various duties, Mester has also been named to a Fed committee exploring new methods to improve the way the Fed issues economic forecasts and otherwise communicates about monetary policy. As such, she’s spent much of her near seven months on the job owning headlines as she makes numerous rounds with popular national and international media. At a time when Cleveland is realizing its own economic renaissance, the city is also drawing the spotlight via Mester on the stage of monetary policymaking.

Expect the speeches and interviews to continue well into the future as Mester pursues her goals for transparency.

Throughout her many interviews, Mester has carried a message of optimism about the economy in contrast to her more conservative colleagues in economic policy.

In September, Mester predicted the economy would expand about 3% annually over the next couple years, with long-term growth hovering around 2.5% a year. She’s stated her positive outlook stems from optimism about new innovations that could drive growth in the economy. Meanwhile this fall, the Fed announced it will start hiking short-term interest rates in 2015, underscoring an initiative to level out interest rates that have been historically low in the wake of the Great Recession.

Through her tenure, Mester’s actions will have a direct impact on how the entire country manages the sweeping issues of monetary policy.

— Jeremy Nobile

TIMELINE FEB. 13: The Federal Reserve Bank of Cleveland announces that Mester is selected to succeed Sandy Pianalto as president and CEO effective June 1, transitioning from her role as executive vice president and director of research at the Federal Reserve Bank of Philadelphia. Pianalto retired from the Fed following a decade of service there. Mester says she is taking over as the institution covering the Fourth Federal Reserve District is poised to become a premier Federal Reserve Bank.

MAY 30: Mester delivers first speech as incoming president at the Cleveland Fed headquarters.

She sets the tone for an auspicious research agenda by posing six questions focused on inflation.

JUNE 17-18: The first meeting of the Federal Open Market Committee, which sets U.S. interest rates, is held in Washington, D.C. The Cleveland Fed is a voting member on the FOMC this year, positioning Mester to voice the Cleveland Fed’s perspectives in the committee. At the first meeting, Mester voted in support of accommodative monetary policy to support ongoing national economic expansion.

SEPT. 4: Mester issues her first public speech as president in Pittsburgh, along with her first public economic forecast. Mester states she’s “more optimistic than some” about longer-run growth.

WHAT SHE SAID...

The Plain Dealer, Sept. 29: “I find the (Greater Cleveland and the bank’s Fourth District) economy very similar to the economy in the Third District where I came from. … The Philadelphia district is very similar in terms of having a manufacturing base for a long, long time and having to do the transition to a more ‘eds and meds’ kind of economy (education and medicine). That’s kind of how I view the Northern Ohio area. It’s basically having to do the transition from a very manufacturing intensive (economy) to a service/highskilled manufacturing/eds/meds. I think that’s very interesting, being able to do that transition.”

WHAT OTHERS ARE SAYING...

Christopher Connor, CEO at The Sherwin-Williams Company and incoming chair of the Cleveland Fed board of directors who led the search committee that selected Mester: “We’re really blessed to have her in Cleveland. … This is a big workforce in Cleveland and an important group of people. We wanted someone embracing the culture and a supportive team leader who could create excitement and fellowship, and she has hit the ground running. The best is yet to come.”

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GOV. JOHN KASICH ohn Kasich started 2014 with a re-election campaign that was on the bubJpublican ble. A November 2013 Quinnipiac University poll gave the incumbent Reonly a 44-37 lead over Cuyahoga County Executive Ed FitzGerald, his little known Democratic challenger.

The former congressman lost whatever labor backing he had by his support in 2011 of Senate Bill 5. That legislation he signed would have banned strikes by public employees, limited their bargaining rights and set minimums for public employee pension and health care contributions. It was overturned by a ballot referendum 61-39.

He also got battered by some quarters of his own party with several of his proposals.

In 2013, he did an end run around the Republican-dominated Legislature to expand Medicaid. He also tried to tinker with taxes.

In his budget plan, the governor proposed an 8.5% across-the-board income tax cut and a 15% boost in the Commercial Activity Tax (CAT) rate. His proposal for a gas severance tax was 2.75% of drillers’ gross receipts, higher than the 2.25% that the legislature had been considering.

He also wanted a 48% jump in WHAT HE SAID... the tax on cigarettes. None of Though it’s a Democratic strongthose proposals cleared the legishold, Republican Gov. Kasich has lature. made some inroads in Cleveland Then in June, he stirred the pot and Cuyahoga County for his even more by signing the controsupport of the Cleveland schools versial Senate Bill 310. Legislation plan and by turning over several passed nearly unanimously in rundown state-owned lakefront 2008 had said that 25% of electricparks to Cleveland Metroparks. ity passed by Ohio utilities must He’s even won favor with some come from renewable sources like in the African-American communisolar or wind power by 2025, ty of the county by his committhrough annual step increases. SB ment to create jobs for minori310 froze energy efficiency stanties on state-run construction dards for two years. projects.

SB 310 was supported by the “We’re going to meet them,” Kastate’s utilities, which said rates sich told a largely African-Ameriwould skyrocket if the renewable can crowd in September about requirements were kept in place. his commitment to meeting Environmental groups argued that goals for minority inclusion on its the change will allow power plants construction projects, such as to burn dirty coal for longer while the Opportunity Corridor on a group of 51 manufacturers said Cleveland’s East Side. “We’re gothe freeze would also slow a growing to meet the numbers on seting wind and solar energy industry asides for the first time in Ohio in the state. history.”

Still, by the Quinnipiac poll released July 31 Kasich had built a WHAT OTHERS growing, but not-yet-comfortable ARE SAYING...

48-36 lead. The same poll showed that 65% of those asked still did The Call & Post, a weekly not know enough about FitzGerpublication serving the ald to view him favorably or unfaAfrican-American communivorably. ty, in endorsing Kasich: “Our If the FitzGerald campaign view of Kasich, over the last four could build favorable name recogyears, is an exceptional study in nition outside Northeast Ohio in contradiction. .. Over the last the three months left before Elecfour years, we have watched as tion Day, the former Lakewood this governor time and again mayor had at least a slim chance stands up for Black people. We to close the gap. have seen with our own eyes Then, on Aug. 1, a story on how he has championed the cleveland.com appeared, based poor and underserved. For inon a 2012 Westlake police report stance, when most of the Repubthat placed FitzGerald in a car at lican Party (the party Kasich be4:30 a.m. in a parking lot with a longs to) was prepared to fight woman visiting Cleveland with a until the bitter end to push back delegation from Ireland. against Medicaid expansion, KaFitzGerald’s campaign went sich bypassed his own GOP conrapidly downhill. The tailspin was trolled legislature by making use aggravated again on Aug. 4 by a reof the Ohio Controlling Board, port in the Columbus Dispatch providing hundreds of thousands about FitzGerald’s lack of a perof uninsured Ohioans with covermanent driver’s license for the age.” better part of a decade prior to The Economist, Nov. 8: “Mr. Nov. 15, 2012.

Kasich’s pragmatism outweighs By the October Quinnipiac poll, his flaws. ... He tries to do what Kasich had a 22-point lead, 57-35, works, not what will win him a and went on to win the election by standing ovation from conservaan even larger point margin, 64tive purists. Unlike many Republi33, carrying 86 of the state’s 88 cans, he sought a positive mancounties, including Cuyahoga date from voters this week — County, where FitzGerald is counand he won it triumphantly in ty executive.

Ohio, the ultimate bellwether And, some people are saying state. The crowded Republican Kasich has a chance to be the Refield for the White House in 2016 publican candidate for president surely has room for him.” in 2016.

— Jay Miller

TIMELINE FEB. 24: The governor gives his State of the State address in Medina, outlining his plans for tax cuts.

JUNE 13: Kasich signs Senate Bill 310 freezing utility requirements to increase their use of renewable energy for power.

AUG. 1: News story appears that damages the chances of Kasich’s opponent in the governor’s race, Ed FitzGerald.

NOV. 4: Kasich is re-elected governor, defeating FitzGerald by a 31-point margin.

Organizational changes at

One of the strong points about the COVENTYA group is its ability to recognize the need for change, especially when it relates to growing our business on a global level.

In recent years, we have experienced tremendous growth with our expanding footprint, inspiring the need for organizational changes at group and local levels.

Effective October 1, 2014, Erik Weyls (former President of COVENTYA, Inc.) has taken on the role of Chief Operating Officer (“COO”), with a strong focus and involvement in Asia and corporate business development.

In parallel, Lon Thrasher (former Executive Vice President) will assume the position of President of COVENTYA, Inc.

We wish both Erik and Lon the best of luck and success in their new roles. www.coventya.com

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WARD J. ‘TIM’ TIMKEN JR. — TIMKENSTEEL TIMELINE JUNE 30: TimkenSteel Corp. officially splits from Timken Co. The leaders of the new public company celebrated the spinoff by ringing the opening bell at the New York Stock Exchange the following day.

OCT. 8: TimkenSteel announced plans to put a $40 million advanced quench-andtemper plant in Northeast Ohio. It will be located at the Gambrinus Steel Plant in Perry Township.

NOV. 10: NorTech votes to merge with Team Northeast Ohio as part of the Regional Economic Competitiveness Strategy, a plan developed by the Regional Competitiveness Council, of which Timken is co-chair with David Abbott of the George Gund Foundation. summer, Canton-based TimkenSteel Corp. completed its spinoff from the 115Tideahis year-old Timken Co., more than a year after shareholders voiced their approval of the following a contentious campaign by two large investor groups. Timken officially announced that its directors had approved of the split in September 2013, saying Ward J. “Tim” Timken Jr. would lead the new company. The split was officially complete on June 30, 2014.

Timken, now the chairman, CEO and president of TimkenSteel, had been serving as Timken’s board chairman and previously served in leadership roles, including president, of its steel business. The new TimkenSteel is significantly smaller than Timken, but it still stands to be quite the force in Northeast Ohio. Of its nearly 3,000 employees, about 2,600 are in Ohio, spokesman Joe Milicia said in an email.

The company, which makes custom alloy steel, had a strong third quarter in 2014, its first, fully independent quarter. Net income increased 50.3% to $25.7 million year over year in the quarter, compared to the performance of what was then Timken’s steel segment. And the company expects full-year sales to grow 20% to 22% in 2014 compared with 2013, it said in a news release. In the release, Timken attributed this growth to the team’s “focus on executing the company’s strategy” and said the company continues to focus on growing sales through its existing capabilities and through investments like a new jumbo bloom vertical caster.

Timken is still on the Timken Co. board, in addition to his duties at TimkenSteel, the TimkenSteel Charitable Fund and the Timken Foundation. But his influence spreads beyond the two Timken companies. His company bio also notes his involvement on national, statewide and regional groups, including the National Association of Manufacturers Executive Committee and the Ohio Business Roundtable Executive Committee.

In addition to leading what stands to be a major employer in the region, Timken cochairs the Regional Competitiveness Council along with David Abbott, executive director of the George Gund Foundation. The competitiveness council in November orchestrated the merger of two of Northeast Ohio’s most recognizable economic development groups: Team Northeast Ohio and NorTech.

The merged organization will put an increased focus on job creation in the region, and on how to bring that growth up to the rate seen across the country. The council has created a plan known as the Regional Economic Competitiveness Strategy to help guide the group through the transition.

Bob Smith, chair and CEO of Spero-Smith Investment Advisers Inc. and a Team NEO board member, said regionalism is something a lot of people say should happen, but it takes hard work. Timken has the “right temperament” for it, and it’s important that he’s the CEO of a public company in the southern part of the region.

And, Timken will be “outspoken” about making sure the plan is carried out correctly, Smith said.

— Rachel Abbey McCafferty

WHAT HE SAID ...

In a June 30 news release on the company’s spinoff: “As a 100-year-old startup, we are excited to write this next chapter of our history. Our long record of solving customers’ toughest challenges has delivered the financial performance shareholders value. We plan to grow that value through continued focus on product innovation, core business expansion and new investments.”

On the need to focus on the economy of the region’s urban core and the training of the unemployed and underemployed, in an interview with Crain’s: “More and more of us have come to realize that unless you solve that problem, the region can’t prosper. You’re going to create pockets where nothing is happening. It can’t just be suburbs and greenfield sites. We’ve got a lot of work to do there.”

WHAT OTHERS ARE SAYING ...

DECEMBER 15 - 21, 2014

BARBARA R. SNYDER — CASE WESTERN RESERVE UNIVERSITY the last few years, Barbara R. Snyder has been widely credited with turning Case WestOLewisver ern Reserve University around from what former Progressive Corp. chairman Peter B. once described as “a diseased university that is collapsing and sucking Cleveland into a hole with it.”

Her past year at the helm may have been her most impressive yet, though there was some heartbreak. This year, Snyder led Case Western Reserve to its most impressive fundraising haul ever, having brought in $151.6 million in gifts and pledges for its most recent fiscal year. The university met its $1 billion fundraising drive two and a half years ahead of schedule and decided to raise another $500 million. It opened an impressive new student center and embarked on an even bolder collaboration with the Cleveland Clinic to reinvent medical education.

She also guided the university through one of its biggest heartbreaks in years — a plane crash that resulted in the death of four students. In her November State of the University address, which was distributed to the campus in written form, Snyder said, “Like many of you, I think of those families often. And of their friends on our campus. And of the extraordinary people who stepped forward with such sensitivity and grace to give support and assistance when it was so urgently needed.”

Snyder’s known in Northeast Ohio’s civic circles as a disciplined and focused leader. Since taking the reins in 2007, she’s positioned the university well financially. This year, the university failed to increase its surplus over the previous year — a first for the university since Snyder’s arrival. However, the surplus was still slightly better than what was budgeted, and Case’s overall finances appear to remain strong.

Snyder also cooled what quickly became a firestorm for the university’s law school. Last year, the law school made headlines when professor Raymond Ku filed a lawsuit claiming dean Lawrence E. Mitchell retaliated against him after reporting to various university officials that the dean potentially had sexually harassed law school faculty and staff. Mitchell resigned in March, but Ku and Case announced in a joint statement in July they had “resolved their differences” that arose from a lawsuit.

Moreover, Snyder announced in August the university would stick with its interim law school leadership — Jessica Berg and Michael Scharf — through the 2014-2015 academic year and wouldn’t launch a search for a new leader any time soon. The school appeared to recover from any negative press it received given that applications and enrollment are both on the upswing.

— Timothy Magaw

WHAT SHE SAID ...

In her annual State of the University address, which this year was presented in written form: “We have suffered enormous pain, yet also have seen exceptional kindness. In one sense, our challenge going forward is to find ways to bring more of our ‘better selves’ to those circumstances that are less tragic, but nevertheless essential to who we are as an institution. Case Western Reserve needs every bit of your involvement, insight and inspiration if we are to capitalize on what we have achieved to date and hope to accomplish in the near future.”

WHAT OTHERS ARE SAYING ...

Campaign chairman Frank Linsalata in commenting on a $1 million contribution toward student scholarships from Barbara Snyder and her husband, Michael: “Barbara told us that she had wanted to do something substantial for the university from the moment she arrived at Case Western Reserve. This pledge underscores her commitment to ensure that cost does not keep talented students from receiving an education at Case Western Reserve.”

TIMELINE JULY 1: University Hospitals and Case announced a major joint fundraising initiative focused on battling cancer in adolescents and young adults. The announcement came on the heels of a $6.7 million gift to the university from Chuck Fowler — former Fairmount Minerals CEO — and his wife, Char, in honor of their daughter, Angie, who died from the disease in 1983.

AUG. 6: Case announced its law school would stick with its interim leadership — Jessica Berg and Michael Scharf — through the 2014-2015 academic year and would put the search for a permanent successor to Lawrence E. Mitchell on hold, who resigned amid allegations of sexual harassment.

AUG. 24: During a dedication of Case’s new, 89,000-square-foot Tinkham Veale University Center, Snyder announced the university topped off its $1 billion fundraising drive more than two years ahead of schedule and has decided to raise an additional $500 million. A few days earlier, the university announced it brought in a recordsetting $151.6 million in gifts and pledges for its most recent fiscal year.

Bob Smith, chair and CEO of Spero-Smith Investment Advisers Inc. and a Team NEO board member, on Timken’s role in the Regional Competitiveness Council:: “Tim just brought the right temperament for it. … The issues where there was disagreement, he didn’t put them aside.”

AUG. 25: Four Case students were killed when a plane they were flying crashed at the Cuyahoga County Airport. In a statement, Snyder said “We are truly heartbroken about these promising lives cut short and feel profound sympathy for their loved ones and friends.”

Don Misheff, TimkenSteel board member, on Timken’s leadership qualities: “He always puts his shareholders and the company first.”

NOV. 25: Case and the Clinic announced they had expanded their plans for a medical education hub near the Clinic’s campus by about 300,000 square feet. The project now calls for a 485,000square-foot quadrangle building on East 93rd Street between Euclid and Chester avenues.

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BOB STARK — PRESIDENT, CEO, STARK ENTERPRISES eal estate developer Bob Stark likes to deR scribe himself as the poet-developer because of the passion and beauty he instills in property projects.

However, the sheer volume and variety of real estate developments he and his small concern started building or proposed in 2014 brings to mind other terms: risk-taker, aggressive and visionary.

Stark Enterprises was everywhere, geographically speaking, in 2014 in Northeast Ohio. In addition to shelling out $26 million with a partner to buy parking lots downtown, including one where it plans the massive nuCLEus mixed use complex, Stark also started, finished or advanced real estate developments in Cuyahoga Falls, Westlake and Woodmere Village.

Admittedly, two of the developments were years in the making. In September, construction of the long-planned headquarters for American Greetings Corp. got underway in Westlake as part of the third phase of Crocker Park.

By year’s end, two parking garages had risen from the ground and the steel frame of the social expression-maker’s new building was taking shape south of Crocker Park on Crocker Road in Westlake.

Stark also made good on a years-long goal to add a hotel to the Crocker Park office, retail and residential complex with a six-story Hyatt Place Hotel. This phase of Crocker Park, which Stark is co-developing with the Westlakebased Carney family, also includes about 400,000 square feet of additional retail space and 400 more apartments.

Meanwhile, in Cuyahoga Falls, retailers began opening in time for the holidays at Stark’s Portage Crossing shopping center project, which has been in the works for years in Summit County’s second-largest city.

Finally, out east, Stark bought additional properties that will allow it to expand Eton Chagrin Boulevard, a lifestyle center with retailers and restaurants that repositioned the long-suffering Eton Place specialty mall in 2005. Today, the busy center in Woodmere Village is a go-to place near the tony eastern sub-

urbs.

The suburban projects alone would create envy for many real estate developers after the Great Recession, but Stark’s efforts also reached inside the Cleveland city limits.

Rather than pace himself, Stark joined up with J-Dek Investments of Solon to propose a massive project on what city planners have dreamed of as a spin-off development site since the Progressive Field ballpark and Quicken Loans Arena were planned 20-plus years ago. The estimated $250 million project incorporates two towers — one of 18 floors and another of 31 floors.

Usually projects of the scale of nuCLEus take years to conceive and design. However, two months after buying the site for the project, Stark and J-Dek received preliminary approvals from the city of Cleveland for NuCLEus. Stark has discussed having more than 1,500 parking spaces and as much as 140,000 square feet of ground-floor retail open by the time the Republican National Convention convenes in Cleveland in 2016 — a prodigious task. He’s also talking about having 200,000 square feet of office space in the complex ready for the RNC if it needs it.

NuCLEus is not Stark’s first go at downtown.

Stark had made an unsuccessful attempt to develop a big project downtown that became a cropper in 2009 when he lost site control for his plan.

With nuCLEus, the land was under contract before he breathed a word about the project.

Stark often has talked about his desire to try to rekindle some of the vibrancy he saw downtown when he was a child. His enthusiasm for the undertaking turns heads at Cleveland City Hall as well as among downtown property owners and boosters.

Although known as primarily a suburban shopping center developer, Stark also has built apartments and hotels in his career. That positions the self-made developer to catch the next wave as the nation and property business fall in love with mixed-use projects that include several property types on urban sites or a single densely developed site.

— Stan Bullard

TIMELINE FEB. 6: Westlake City Council adopts legislation authorizing the sale of bonds for streets, parking garages and other infrastructure for the expansion of Crocker Park. When Westlake Mayor Dennis Clough said he hoped to see shovels in the ground by spring he sounded over-optimistic. He proved correct. Site work began months before American Greetings threw a party in September for the ceremonial ground breaking for its new headquarters for 3,000 employees, their families and business contacts.

OCT. 31: Through Chagrin Retail LLC, Stark Enterprises pays $4.5 million for Maryland Arms, a 42-suite apartment building, to add an acre to land it has accumulated since 2005 to expand the Eton Chagrin Boulevard retail center. Along with other sites Stark has slowly acquired the last few years, the developer has assembled enough land to expand the lifestyle center. However, Stark itself is mum on its plans for the land.

NOV. 7: Cleveland City Planning Commission approves the massing concept for nuCLEus, which gives the developer guidance for what the city will accept when more detailed designs are ready. Stark and partner J-Dek Enterprises want to construct on a massive parking lot at East Fourth Street between Prospect Avenue and Huron Road.

WHAT HE SAID ...

In an Aug. 7 Crain’s Cleveland Business story about nascent plans for the site that would become known as the location for nuCLEus project: “I think we have reached a strong tipping point downtown with the conversion of older buildings to residential uses. ... More importantly, there is an international movement of people back to an urban context. On this site we have enough critical mass to drive the numbers (sales) that national retailers and national restaurants are looking for; companies that want to drive millions of dollars in sales through their stores.”

WHAT OTHERS ARE SAYING...

Tom Yablonsky, executive vice president of Downtown Cleveland Alliance and executive director of the Historic Warehouse District and Historic Gateway Neighborhood development corporations: “I’m grateful to Stark for buying downtown parking lots from an out-of-town owner and working to develop them. He is also open-minded. I give him credit for listening to our goals and objectives for the Historic Gateway Neighborhood.

He bought into our vision for the Herold Building (at 310 Prospect Ave. which the prior parking lot owner wanted to demolish) and incorporated a historic preservation project in NuCLEus with the Herold.”

The Lee Fa

mily

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DECEMBER 15 - 21, 2014

BRIAN ZIMMERMAN — CLEVELAND METROPARKS

TIMELINE

t’s been a busy year for the Cleveland Metroparks, one that saw the further manifestation of a strategic plan that includes efforts to create connectors and have a greater presence on the waterfront.

And at the head of the park system is its CEO Brian Zimmerman, who took over the organization in 2010.

Zimmerman, a graduate of the University of Wisconsin, came to Cleveland four years ago from Milwaukee, where he was chief of operations for the Milwaukee County Parks.

Since taking the helm of the local system, Zimmerman has played a role in some of the most transformative changes the park district has seen in its nearly 100-year history.

In 2012, the Cleveland Metroparks completed a comprehensive planning process, creating “Cleveland Metroparks 2020: The Emerald Necklace Centennial Plan.”

Included in that plan, according to a summary on the parks’ website, is a focus on a regional greenway system, the lakefront, green infrastructure, financial sustainability and Cleveland and the inner-ring suburbs.

“Strategic plans are often well-intended, but poorly implemented dust collectors. Brian Zimmerman not only made sure that we were fully engaged at all levels of the park organization in developing a comprehensive plan — one with tangible performance benchmarks — he has made sure that we implement them,” said Bruce G. Rinker, Cleveland Metroparks commissioner. “He has galvanized staff, and we see the results in public appreciation for the direction in which we are heading.”

To that end, 2014 was a critical one in terms of steering the park system toward its reimagined future.

For one, it has been more than a year since the region’s lakefront parks (Villa Angela, Wildwood, Euclid Beach, Gordon Park, East 55th Street Marina and Edgewater) came under control of the Metroparks — a transition that, by most accounts, has resulted in cleaner, better-maintained waterfronts.

The park district also is in the midst of a creating a strategic plan for these lakefront parks, a process that included public meetings held this month.

Proposals range from a new beach house at Edgewater Park and renovations to the pier at Euclid Beach Park to a pedestrian bridge over Euclid Creek linking Villa Angela and Wildwood parks.

In May, it was announced that the Cleveland Metroparks and Cuyahoga County had agreed for the park system to take over ownership of Whiskey Island, Heritage Park 1 and green spaces on the Flats East and West banks, a move that further solidifies the organization’s efforts to build a presence along the water and in the city.

Not to be overlooked, meanwhile, are a slew of other advancements, such as the Metroparks’ continuing efforts to create connectors throughout the region; plans for a new events center at the zoo; and the opening of a full-service restaurant along the Cuyahoga River.

— Amy Ann Stoessel

I

WHAT HE SAID ...

In announcing the agreement between Cuyahoga County and the Metroparks to transfer ownership of Whiskey Island, Heritage Park 1 and greenspaces on the Flats East and West banks: “This property acquisition is an important step as Cleveland Metroparks continues its strategic focus to link people with our waterfronts. … The Park District is committed to playing a leadership role in increasing the urban vitality of our lakefront and the Cuyahoga River and spurring opportunities for economic development.”

WHAT OTHERS ARE SAYING ...

Bruce G. Rinker, Cleveland Metroparks commissioner: “Brian has excelled in engaging the greater Cleveland community at so many levels and in achieving genuine, productive working relationships that are crucial to a sustainable park system. The energy and enthusiasm we see across the landscape reflect his commitment and his style of leadership. Community engagement is a mantra for Metroparks personnel.”

MAY 5: The Cleveland Metroparks and Cuyahoga County announce an agreement for the park system to take over ownership of Whiskey Island, Heritage Park 1 and green spaces on the Flats East and West banks. Under the agreement, the transfer of ownership would be completed for the cost of $1. In exchange, Cleveland Metroparks will commit $6.25 million to be further invested in capital improvements.

JULY: The park system opened full-service restaurant, Merwin’s Wharf, on the East Bank of the Flats.

AUG. 14: Ground is broken for Phase 2 of the Mill Creek Trail, a key connector in Cleveland Metroparks 300-mile trail system that will link the Ohio & Erie Canal Reservation in Cuyahoga Heights to Garfield Park Reservation in Garfield Heights.

NOV. 14: The Cleveland Metroparks receives the Award of Distinction from the Ohio Auditor of State for its Comprehensive Annual Financial Report for the end of the fiscal year Dec. 31, 2013. The Award of Distinction is the highest form of recognition in the area of governmental accounting and financial reporting. It was the park district’s first time receiving the honor.

DEC. 2-4: The Cleveland Metroparks hosts a series of meetings to collect input on its plans for the Cleveland lakefront parks.

DAVID GILBERT — DESTINATION CLEVELAND/ GREATER CLEVELAND SPORTS COMMISSION f you had a year as big as the one the city’s Imaybe convention and visitors bureau just had, you’d change your name, too.

For one, David Gilbert and his team at Destination Cleveland — which was called Positively Cleveland until October — helped the city attract the 2016 Republican National Convention. Winning such a massive event legitimized Cleveland as a convention destination, and the development already is having a big influence on the organization’s ability to attract more events to Cleveland.

But it would’ve been a big year for Gilbert, who sits on the local RNC host committee, and his colleagues even if the GOP decided to hold the convention elsewhere. The Republicans picked Cleveland partly because the downtown area has become much more attractive to event planners and other visitors over the past few years. The Cleveland Convention Center is up and running. The casino is, too. The number of hotels in the region is on the rise, as is the number of people living downtown. And LeBron is back.

Now, Gilbert — who is president and CEO of both Destination Cleveland and the Greater Cleveland Sports Commission — is working to capitalize on that momentum.

And he’ll have the resources to do it: Destination Cleveland’s operating budget jumped by roughly 40% on Sept. 1. The previous month, government agencies throughout Cuyahoga County voted to extend the 1.5% hotel bed tax by 40 years. Next year, Destination Cleveland is expected to receive roughly $3.5 million from the tax, which was created to fund construction of the Rock and Roll

Hall of Fame and Museum. The Rock Hall will still get about $1.2 million, according to a story The Plain Dealer published on Aug. 21.

Destination Cleveland not only changed its name, but in March it unveiled a gritty new marketing campaign that paints the city as a place that’s hip even if it’s not trendy. A bluesy music video designed to promote the region mixes in shots of tattoo parlors and punk rock venues with images of more traditional attractions, like the Cleveland Museum of Art and PlayhouseSquare. The organization’s research shows that people between the ages of 24 and 35 are more likely to consider visiting Cleveland than their elders.

“They have the best perception of Cleveland, and for them, the old jokes simply don’t resonate,” Gilbert said in a story published by the Cleveland Jewish News on June 3.

Cleveland certainly is establishing a new image for itself: For instance, in early August, Cleveland, Akron and other local cities played host to Gay Games 9. The Olympic-style sports extravaganza held this year was the culmination of another big win for both Destination Cleveland and the Greater Cleveland Sports Commission: It attracted more than 20,000 people who spent more than $38.8 million at local businesses, according to a study by Kent State University. Roughly 75% of participants and attendees came from outside of the Cleveland and Akron areas, the study said.

Gilbert served as vice chair for the Gay Games.

— Chuck Soder

TIMELINE MARCH 19: The organization — which was called Positively Cleveland at the time — unveils a gritty new marketing campaign that doesn’t shy away from the fact that Cleveland hasn’t always been flashy, trendy or perfect. That point is made in capital letters during an online music video that the group promoted with the hashtag, #ThisIsCLE.” JULY 8: The Republican National Committee announced that it would hold the 2016 Republican National Convention in Cleveland. David Gilbert is a member of the host committee that helped lure the massive event to Cleveland.

AUG. 9-16: Gay Games 9 takes place.

More than 20,000 people attended the Olympic-style sporting event, and 75% of them came from outside of Northeast Ohio, according to a study by Kent State University. Gilbert served as vice chair for the Gay Games.

WHAT HE SAID...

SEPT. 1: Positively Cleveland’s operating budget gets a 40% increase. Cuyahoga County Council and most suburban mayors previously voted to extend the county’s 1.5% hotel bed tax for another 40 years.

The tax is expected to generate roughly $3.5 million for the organization annually.

In Crain’s Cleveland Business, March 19: “People have a visceral reaction to the word ‘Cleveland.’ So before we can go out and promote our arts, sports, restaurants or great outdoors, we have to first change what they think of as Cleveland.”

OCT. 28: Positively Cleveland changes its name to Destination Cleveland. The new name reflects the organization’s mission of attracting visitors and events to Greater Cleveland.

Mark Leahy, Cleveland Convention Center general manager, on David Gilbert’s role in attracting the Republican National Convention: “If he didn’t have his act together … it wouldn’t have happened.”

WHAT OTHERS ARE SAYING...

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RNC HOST COMMITTEE leveland on July 8 learned it had been picked to host an event that will bring 40,000-plus people to the city in summer 2016 and will officially crown one of the two contenders to become the next president of the United States. And it wasn’t even the biggest local story that week.

Such is the hold that LeBron James, who picked July 11 to announce that he would return to the Cleveland Cavaliers, has on Northeast Ohio. But it’s safe to say that’s the last time the 2016 Republican National Convention will be overshadowed in Cleveland.

Cleveland has hosted two other national political conventions, but they came a long time ago — in 1924 and 1936, both times for the Republicans. City political and business leaders in more recent years made efforts to get the attention of either party, but only this time succeeded, in part due to a spate of new hotel and infrastructure developments that put the city in a better position to meet the heavy logistical demands of hosting a major party’s political convention. (Ohio’s status as a critical swing state didn’t hurt.)

When Cleveland was picked, Chris Connor, chairman and CEO of the Sherwin-Williams Co., noted the selection was the product of a decade of work in building a convention center and learning how to use past attempts to win conventions to make this bid successful.

“This is about our city and us improving our city in so many ways” over the last decade, Connor said.

That work, he said, “put us in the position to not only win this convention, but to win the hearts and minds of our citizens, and young kids moving back to Cleveland, and businesses who might come to Cleveland to set up shop.”

Landing the convention, in some respects, was the easy part. Before the Republicans arrive two summers from now, the Cleveland 2016 Host Committee Inc. has to finish raising the estimated $50 million to $55 million it will cost to put on the convention. New hotels need to be finished, digital and other technology infrastructure must be built out, security measures must be planned and the remaking of downtown’s Public Square must be finalized — all by early summer 2016.

Hard work, though, brings big rewards. The 2012 Republican convention, in Tampa, Fla., generated about $214 million in direct spending in

CRAIN’S CLEVELAND BUSINESS

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C

RONALD B. RICHARD — THE CLEVELAND FOUNDATION Cleveland Foundation has played an integral role, albeit an understatTtionsheedthat one, in the evolution of Cleveland and many of the important institucall the city home. But while its influence has no doubt been signif-

TIMELINE FEB. 20: The push began to attract a national political convention to Cleveland. Cleveland Mayor Frank Jackson and Cuyahoga County Executive Ed FitzGerald, both Democrats, announced they would ask their respective councils to pass resolutions that support spending money to woo either the Democrats or the Republicans to Cleveland in 2016. A week later, Cleveland was named one of eight cities that made the GOP’s initial cut.

The others: Cincinnati, Columbus, Denver, Dallas, Kansas City, Las Vegas and Phoenix.

APRIL 30: An advance team scouting locations for the 2016 Republican National Convention stopped in Cleveland. At a brief news conference at the Cleveland Convention Center, Enid Mickelson, chair of the convention’s technical site selection committee, said she was leaving Cleveland “with a favorable impression.”

MAY 22: The Republican National Committee selected Cleveland, along with Dallas, Denver and Kansas City, Mo., to move on to the next round in the competition to host the convention.

JUNE 25: And then there were two. And Cleveland was one of them. The Republican National Committee on Wednesday, June 25, said it narrowed to two cities — Cleveland and Dallas — its list for possible hosts of the 2016 GOP convention. Both cities then were put through their paces by GOP officials looking closely at logistics.

JULY 8: The hard work pays off as Cleveland is announced as the home for the 2016 Republican National Convention.

that metro area, according to a University of Tampa economic impact study.

The Cleveland convention will cap what’s expected to be a tremendously competitive race for the GOP nomination in 2016, since the party has a huge number of viable candidates — including, so far at least, Ohio Gov. John Kasich.

— Scott Suttell

WHAT THEY SAID ...

Terry Egger, former publisher of The Plain Dealer and chairman of the 2016 Cleveland Host Committee, on the day Cleveland received word it would host the 2016 Republican National Convention: “It’s an understatement to say it’s a great day for the city of Cleveland and for all of Northeast Ohio. I’ve heard many people say we’re not used to finishing first; today we finished first, in a very important competition, not only in politics and America but to showcase how far this region has come.”

WHAT OTHERS ARE SAYING ...

U.S. Sen. Sherrod Brown, D-Cleveland: “It’s not my side, but I’m glad they’re coming. It’s a great development for Cleveland and a symbol of the progress the city is making.” Brown is proud to be a little greedy, political convention-wise. He’s bullish on the chances that his own party could select Columbus for the 2016 Democratic National Convention, predicting that the choice will come down to Ohio’s capital and Philadelphia. “It think Columbus has an excellent chance,” he said, adding that “there’s enough support” from the corporate community throughout the state to meet the financial commitments that would be involved with Ohio hosting two political conventions in the same summer.

icant, many Clevelanders were unaware of how wide a net the foundation’s cast over the last 100 years. Plus, few knew the foundation, which now boasts assets north of $2 billion, was the first of its kind.

That all changed in 2014.

In celebration of its centennial, the foundation has made a concerted effort to get its story out. The man guiding much of that storytelling? Its CEO since 2003, Ronald B. Richard.

Over the last year, the foundation doled out monthly surprise gifts to the community, attracted The Council on Foundations — a national association of grantmaking foundations — to hold its national conference in Cleveland and made some of the largest grants in its history.

The monthly gifts to the community perhaps have been the foundation’s most effective vehicle to drum up awareness of the organization among Northeast Ohioans. So far, more than 170,000 Greater Clevelanders have enjoyed the foundation’s monthly gifts.

Including December’s gift — a day of free activities later this month at more than three dozen sites across the region — the foundation will have partnered with 28 local nonprofits and public agencies for the gifts.

Gifts included a free day of ridership with the Greater Cleveland Regional Transit Authority, free tickets to select screenings at the Cleveland International Film Festival and free admission to the city’s cultural institutions.

The foundation has never been one to shy away from getting long-talked-about projects off the ground.

This year was no different.

For one, it committed $8 million — one of its centennial legacy grants — toward the $30 million effort to dramatically overhaul downtown Cleveland’s iconic, yet dreary, central artery, Public Square. It was the first public financial commitment toward the fledgling project, which has since drawn funding from the KeyBank Foundation, George Gund Foundation and others.

The foundation also committed $5 million toward the Lake Link Trail Project — another major public works project expected to cost $15 million. The effort is designed to increase the public’s access to Lake Erie, connecting the riverfront to the lakefront.

— Timothy Magaw

19

TIMELINE JAN. 2: The Cleveland Foundation officially kicked off its year-long celebration by unveiling the first in a series of monthly gifts to the community — a free day of ridership with the Greater Cleveland Regional Transit Authority.

FEB. 11: The foundation announced it had received a $1.7 million gift from the Erwin & Katherine Geis Charitable Foundation, which established a fund to support programs for young people and provide scholarships. Erwin and Katherine Geis were the founders of what would become the Geis Cos. — a local construction powerhouse co-managed by their sons, Fred and Greg Geis.

JUNE 11: The foundation hosted its annual meeting at PlayhouseSquare. The meeting, which served more as a birthday party, was headlined by a keynote address from former U.S. Secretary of State Colin Powell.

JULY 15: The foundation announced an $8 million commitment — one of its centennial legacy grants — to LAND Studio Inc. for the Group Plan Commission’s effort to transform Public Square. It was the first public financial commitment toward the fledgling, $30 million project.

AUG. 19: The foundation committed $5 million toward the Lake Link Trail Project — a long-discussed endeavor expected to dramatically increase the public’s access to Lake Erie, connecting the riverfront to the lakefront, on the city’s West Side.

Nowacki Asset Management LLC

WHAT HE SAID ...

In commenting on the foundation’s centennial during an interview with Crain’s earlier this year: “If we can’t do 10 times more in the second century than we did in the first, there’s something wrong with us.”

WHAT OTHERS ARE SAYING ...

Case Western Reserve president Barbara R. Snyder on Richard’s impact on the region: “Ronn Richard’s exceptional leadership of The Cleveland Foundation has helped catalyze extraordinary progress in multiple realms across our community. He has focused on issues essential to the region’s projects and encouraged us all to be more strategic in our thinking and actions. This year’s monthly centennial gifts exemplify the foundation’s spirit of broad engagement and support of Northeast Ohio’s strengths.”

Period

Nowacki Asset Management (NET)

Growth of $1 Million

S&P 500 Total Return

Growth of $1 Million

May 2011 - Year End

-7.46%

$925,400

-6.37%

$936,300

2012

29.99%

$1,202,927

16.00%

$1,086,108

2013

51.76%

$1,825,563

32.39%

$1,437,898

10/31/2014

21.59%

$2,219,459

10.99%

$1,595,988

Note: Returns are shown in U.S. dollars after fees. Date of inception for Nowacki Asset Management is May 2nd, 2011.

Nowacki Asset Management (NAM) is a registered investment advisory firm specializing in value-oriented investment management. All client assets are included in one composite and invested using a value-oriented strategy. NAM claims compliance with the Global Investment Performance Standards (GIPS®). The S&P 500 Total Return index is subject to volatility and the NAM composite may or may not be more volatile than the index. Past performance is not aguarantee of future performance. Investments carry risks and the potential for loss. Results as of 10/31/2014 are still subject to final verification by an independent third-party. NAM only uses short-term margin or leverage to buy securities after a client commits to deposit funds and the funds are in the process of being transferred, but the money has not yet completed the transfer process. To receive a list of composite descriptions of NAM and/or a presentation that complies with the GIPS standards, contact Michael T. Nowacki at (440) 488-6936 or write Nowacki Asset Management, 29525 Chagrin Blvd. Suite 301, Pepper Pike, Ohio 44122, or michael@nowackiassetmgmt.com.

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Village Capital is enlarging NEO footprint Nonprofit, which has been vital to Cleveland since its 1992 launch, is aiming to help neighboring cities

By JEREMY NOBILE jnobile@crain.com

Village Capital Corp. quietly has driven catalytic change in Greater Cleveland for more than 20 years.

And while the nonprofit’s predominant focus always will be on the city of Cleveland, it’s increasingly looking to how it might spur revitalization in other neighboring communities in Northeast Ohio.

With the housing market finally stabilizing years removed from the Great Recession, Village Capital, the real-estate minded financing subsidiary of Cleveland’s Neighborhood Progress Inc., wants to expand its footprint with new funding partners and lending opportunities in Cleveland’s suburbs and throughout Northeast Ohio, said Linda Warren, president of Village Capital and senior vice president of placemaking for Neighborhood Progress.

Village Capital is a certified community development financial insti-

tution — one of only a few such groups in the state. Dione Alexander, senior vice president of lending, described Village Capital, founded in 1992, as a “non-bank bank.” The U.S. Treasury is to community development funds like Village Capital as the Federal Reserve is to banks. The institution provides loan capital to underserved communities predominantly for real estate projects with potential for spurring catalytic transformations, but the funding sources are many and varied, from the Gund and Cleveland foundations to US Bank, Huntington Bank and private donors.

Their money often is applied as part of financing packages — commonly called “baklava” financing because of the various layers — to cover projects’ shortfalls or leverage other available dollars, especially in complicated public-private partnerships. Every dollar Village Capital invests attracts at least $10 more, Alexander said.

JUMPSTART continued from page 5

when it created Prism in 2011.

Through Prism, Magnet started helping manufacturers create new strategies, break into new markets and hire employees — on top of the product development work Magnet already was doing.

The result? The first 10 companies that went through Prism say they created about 200 jobs specifically because of the program, according to data collected by Magnet, which gets paid if the company achieves those goals.

Now, JumpStart and Magnet aim to create more jobs at other companies. Magnet will take the lead with manufacturers, and JumpStart will manage the rest. But in most cases they’ll work together.

That has fluctuated over the years, from about $8 during the recession to nearly $20 prior to it.

Leveraging was higher pre-recession, as the nonprofit served as more of a secondary source of capital than a primary one.

Village Capital, which has about $18 million in total assets, is finalizing details for its 2014 report to the community. But in fiscal year 2013, Village Capital financed nine projects, including five low-income tax credit partnerships involving 183 units of scattered site lease purchase housing.

Village Capital also was the lead lender on Phase I of the Uptown Project in University Circle, a $45.1 million project for which Village Capital financed $8.2 million and kicked in nearly $750,000 of its own money. Typically, Village Capital’s loans are less than $1 million.

The group is headquartered in a building it helped revitalize beginning in the mid-2000s — the historic St. Luke’s Hospital on Shaker Boulevard. The building now includes 139 units of senior apartments, the Intergenerational School (a K-8 charter school) and offices for other nonprofits.

A couple recent contributions are helping fuel some of Village Capital’s coffers and, by extension, its goals.

That includes a $1.3 million award earlier this year from the Community Development Institution Fund of the U.S. Treasury, which will be injected into projects for Cleveland’s neighborhoods.

“We’re doing multiple projects across city neighborhoods where we can make an impact,” Warren said. “We’re all about community, and we’ll invest here to spur other development.”

A separate $1.5 million has come in from the Raymond John Wean Foundation of Warren, underscoring Village Capital’s efforts in establishing new partnerships in order to grow its footprint. That money is being used for similar real estate projects in Mahoning Valley.

Recently, Village Capital loaned $900,000 to the Tech Belt Energy Innovation Center in Warren to support the renovation of the center’s business incubator focused on tech and energy companies. And just this month, VCC approved lending $630,000 to the Youngstown Business Incubator as part of a $5.6 mil-

lion project there.

“The reason we’re expanding our footprint … is we are unique because there aren’t many CDFIs (community development financial institutions) nationally, and fewer are in Ohio,” Alexander said. “It’s pretty exciting. I think we’re filling this niche in the capital continuum.”

During the recession, when bank and private capital dried up, Village Capital was a primary lender for mortgage financing. But as the housing market recovers, Village Capital is considering additional opportunities.

“It’s not that we’re getting away from housing, but we’re seeing the housing market stabilize,” Warren said. “We’re also seeing banks interested in lending into that market again whereas five years ago they’d shy away from it.”

She said those other opportunities might also include financing of facility projects, referring to grocery stores, schools, health clinics and nonprofit headquarters.

“We’ve always done non-housing, too,” Warren said. “But in 2015, we will be looking at more of those.”

New JumpStart fund will loan cash to small businesses The two Cleveland-based organizations bring different skills to the table, said Ethan Karp, who directs the Prism program. Magnet knows manufacturing and has experience helping more than 40 established companies through Prism. Meanwhile, JumpStart has expertise in technology, recruiting and raising capital.

“It really is leveraging the talents of both groups,” Karp said.

And they’ll often bring in other organizations or outside consultants when they need other skills.

Like Prism, the scale-up program will only require companies to pay for the services they receive if they actually grow.

The pay-for-performance system helps “open doors the free market

Mansour Gavin is pleased to welcome to the firm

Charles T. Brown advising clients in their wealth management, estate planning, probate litigation, and mediation needs.

North Point Tower, 1001 Lakeside Avenue, Suite 1400, Cleveland, Ohio 44114 (216) 523 1500 mggmlpa.com

JumpStart now has a new source of funding for small businesses — be they startups or established companies.

The Cleveland-based nonprofit has raised $1.7 million for a new loan fund that will disproportionately target businesses in low-income parts of the region. JumpStart aims to get the federal government to certify the fund as a Community Development Financial Institution, which could help it raise more money.

Starting in January, the fund plans to start making loans of about $300,000 to small businesses that can’t get loans from banks. That includes loans backed by the U.S. Small Business Administration, which are designed to encourage banks to finance small businesses that don’t meet normal lending requirements.

Is that too risky? Michael Jeans, president of the loan fund, says no. The fund will avoid taking big risks because it will get to know the companies better than a bank normally would. Jeans also said that it will charge a slightly higher interest rate than most banks. Plus, he and his colleague, chief credit officer Jeff Clawson, each have spent more than 20 years working in finance.

“We will find opportunities,” Jeans said.

JumpStart contributed $1 million to the loan fund. The rest of the money came from the Cleveland Foundation, the Fund for Our Economic Future and the U.S. Department of the Treasury.

— Chuck Soder won’t open,” Karp said. Companies in the scale-up program are modestly profitable at best, so they often can’t afford to hire a big management consulting firm like McKinsey & Co. or Deloitte, according to Karp, who worked at McKinsey before joining Magnet this past March.

“There’s no way one of these scale-ups is going to hire a Deloitte,” he said.

Private equity firms play a similar role in the economy: Many of them buy underperforming companies and help them improve their performance.

But the companies in the scaleup program aren’t likely to catch their attention, according to Bill Mulligan, a managing partner at

Primus, a private equity firm in Mayfield Heights. To be eligible for the program, companies can’t generate more than $20 million in sales annually.

“Many of these companies are small and probably under the radar of most private equity groups,” said Mulligan, who led the Regional Competitiveness Council’s working group focused on the scale-up program.

The program won’t impact JumpStart’s existing programs for startups, Leach said. And it won’t use any money that JumpStart has received from state programs designed to spur entrepreneurship.

JumpStart was designed to help startups, but Deborah Hoover said she thinks it has the flexibility to

switch gears and help established companies in industries it hasn’t worked with before. Hoover is CEO of the Burton D. Morgan Foundation and chair of the Fund for Our Economic Future — the organizations that paid for the pilot.

Hoover added that the scale-up program “has the potential to create jobs at a faster pace” than programs that target startups.

The program likely would need more funding if it is to go beyond the pilot, said Karp, of Magnet. It’s unclear whether payments from companies that receive services could eventually sustain the entire program, but it is a possibility, he added.

“There is a world in which it is self-sustaining,” he said.

CRAIN’S BLOGS GET THE LATEST FROM OUR EDITORS AND REPORTERS, INCLUDING: EDITOR’S CHOICE: Managing editor Scott Suttell rounds up news and views about business, and stories of interest in Northeast Ohio. Weekdays

HEALTH CARE: Reporter Timothy Magaw breaks down the latest news about the region’s hospitals.

Tuesdays

SPORTS BIZ: Assistant editor Kevin Kleps writes about the Browns, Cavaliers, Indians and much more.

Weekdays

WHAT’S COOKING: Twice per month, freelance reporter Kathy Ames Carr has morsels on the local restaurant scene.

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DECEMBER 15 - 21, 2014

CRAIN’S CLEVELAND BUSINESS

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21

PORT said. “The container service really needs the regularity.”

Abbey Greenfield, metal trader for River Recycling Industries Inc., a Cleveland scrap metal dealer, is shipping about four containers of copper scrap a month on the Fortunagracht. It’s saving some money, but Greenfield has been especially pleased with the service.

“They coordinate with the local truckers to take the metal to the port and they handle the customs paperwork,” she said.

Greenfield said Spliethoff is helping River Recycling move its metal from Antwerp to the rest of Europe.

“When we started, we thought only about Cleveland to Antwerp,” she said. “The more we have gotten to know them, they have been very helpful with suggesting how, while using the route to Antwerp, to put (the cargo) on ships to other cities in Europe.”

While the service is still costing the Port Authority money, losses are narrowing. For the first six months, the service has cost the Port Authority $3.7 million, but losses dropped from $905,000 for the first sailing in April to $522,000 in September.

In addition, Spliethoff will bear the entire financial burden of a second monthly sailing. The Port Au-

continued from page 4

consumer and industrial goods, wind energy parts, machinery and other industrial equipment. It loaded up with similar goods, and a handful of school buses, bound for European customers of regional companies and made the 14-day trip back to Antwerp. It has been back every month since April.

Customers appear pleased. They avoid the expense of shipping cargo by rail or truck to East Coast ports where congested docks can cause delays, and they can save money since mile for mile, transporting cargo on water is far cheaper than rail or truck hauling.

“It’s been a very good service so far,” said William Yankow, vice president for Eastern operations of OIA Global, an international logistics and transportation firm with an office in Middleburg Heights. “We use it mostly on the export side for Ohio customers who would otherwise ship by rail or truck to the East Coast.”

Yankow said the addition of the second monthly sailing will make the service even more attractive, especially for customers who need more frequent service for containers of finished goods.

“That will really help us” expand the use of the Cleveland port, he

thority and Spliethoff will share in the revenue generated by the additional monthly trip.

“We are hoping that by doubling the frequency we can triple the volume,” said Bart Peters, director of Spliethoff’s Atlantic Department.

Dredging up the past Under Friedman, the Port Authority has developed a strategy that could save the community and the state millions of dollars in the local share of the cost of dredging to keep the shipping channel open to the ArcelorMittal steel mill and the other private docks along the Cuyahoga River.

For years, the river silt has been used as landfill in what are called contained disposal facilities, or CDFs, because it was considered an environmental hazard. The Corps of Engineers estimated a cost of as much as $277 million over the next 20 years to continue building and filling CDFs, with 25% of the cost borne locally — nearly $3.5 million a year.

The Army Corps and the Ohio EPA are at odds over a Corps plan to dump dredge material — some of which, the Corps argues, no longer poses an environmental threat — directly into the lake. That

would reduce some of the cost, if Ohio EPA relents.

Either way, the Port Authority is developing programs to reduce whatever local cost the dredging might incur. It is developing techniques to increase the life of existing CDFs around Burke Lakefront Airport, and it’s contracting to sell a local landscaping supply firm — Kurtz Bros. Inc. — the cleanest sediment for road construction, to fill basements of demolished houses or to restore aquatic habitat areas.

Good to be nimble The Port Authority also saw a jump in its development financing business, which, Friedman said, will generate close to $3 million in fee income this year.

The agency uses its quasi-public status to offer private developers lower-cost bond financing. In 2014, it has floated 16 bond issues, including bonds that have helped developers finance the Ameritrust complex, the Crocker Park expansion for American Greetings Corp. and the Flats East Bank project.

“We’re going to have the best year ever” in finance, Friedman said. “(Those fees) help when we’re losing money on the liner service.”

For nearly five years prior to

Friedman’s arrival, the agency had been focused on a 25-year, $2 billion plan to relocate the port five miles to the east and redevelop the 80 acres of downtown lakefront for commercial and residential use.

But that plan proved overly ambitious and didn’t pan out.

Instead, Friedman has spent the last several years retrenching. Now, the Port Authority is more focused on maintaining and building on the nearly 18,000 jobs and $1.8 billion in economic activity derived from the movement of iron ore and other bulk materials, finished steel and other cargo through docks on the lake and Cuyahoga River.

The turnaround has pleased Richard Knoth, the Port Authority board member who in the past has been outspoken in his criticism of the agency’s operations.

“It turned out to be a pretty good year,” said Knoth, an attorney with Baker Hostetler LLP. “Even when you get into the non-maritime issues, I think the financing is a little more focused.”

He added, “I think that’s attributable to the staff and the professionalism of Will and (chief financial officer) Brent Leslie and the finance guys. They’re pretty nimble — unlike many other governmental entities.”

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CRAIN’S CLEVELAND BUSINESS

THE WEEK DECEMBER 8 - 14 The big story: The MetroHealth System plans to add two stories to its 10-year-old critical care pavilion — a project estimated to cost around $80 million. The project is the first piece of MetroHealth’s effort to overhaul its aging main campus on West 25th Boutros Street on the city’s West Side.

Until recently, health system officials offered few specifics of what the campus makeover could include other than conceding that the iconic — and dilapidated — patient towers likely would come down. MetroHealth CEO Dr. Akram Boutros said he’s pushing for the pavilion expansion, which will add about 75,000 square feet to the building, to be finished by summer 2016.

When complete, the pavilion will house 88 beds and include a landing pad for MetroHealth’s Life Flight.

End of an era: GrafTech International Ltd. selected new locations for its company headquarters and its new Innovation & Technology Center. The maker of graphite electrodes and other carbon-based products said it would move its global headquarters to Independence from Parma — its home for nearly 60 years. About 50 employees in areas such as finance and human resources will work there. The new Innovation & Technology Center will be in Brooklyn Heights.

The moves are expected to be completed by the end of the 2015 first quarter.

Clothing down: The Hugo Boss plant in Brooklyn will close on April 30, 2015, at a cost of about 170 jobs, the company said in a letter filed with the Ohio Department of Job and Family Services. The plant was slated to close in 2010, but representatives of Workers United SEIU and the German clothing manufacturer eventually reached a contract agreement. At the time, it had 375 employees, but the agreement included unspecified job cuts. In the new letter, Hugo Boss said it is moving manufacturing out of the United States.

Old building, new use: The Children’s Museum of Cleveland will be on the move to Midtown. The institution bought a property on Euclid Avenue between East 36th and East 40th streets that’s referred to as the Stager-Beckwith House. The property was built in the 1860s and was the longtime home of the University Club. It was renovated and became the home of Myers University about a decade ago but has been vacant since 2008. The $50,000 purchase of the property was a gift from a longtime donor and board member, Doreen Cahoon, and her husband, Richard. The museum will remain open in its current University Circle location until summer 2015.

Color them pleased: Cleveland-based Sherwin-Williams Co. won a huge piece of business with a deal to sell house paint at Lowe’s Cos. The companies said Sherwin-Williams paint, including a new brand called HGTV Home, will be available at Lowe’s stores and on Lowes.com beginning in March 2015. Additionally, SherwinWilliams will provide Lowe’s with two independent brands of paint that will serve professional painters and property managers: Painter’s Masterpiece and Property Advantage.

Flight plan: Cleveland Hopkins International Airport is getting a new carrier, as JetBlue Airways will launch twice-daily service between Hopkins and Boston Logan International Airport starting April 30, 2015. Cleveland will become JetBlue’s 88th destination. Since December began, both United and Frontier have announced service cuts at Hopkins, so the JetBlue announcement was a welcome win. JetBlue plans initially to serve Cleveland with its 100-seat Embraer 190 aircraft featuring two-by-two seating.

WWW.CRAINSCLEVELAND.COM

DECEMBER 15 - 21, 2014

REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

MetroHealth’s former CEO to receive token of appreciation Former MetroHealth CEO Mark Moran will return this week to the health system he led for about five years to receive a pat on the back from its current chief executive, Dr. Akram Boutros.

At a board meeting on Wednesday, Dec. 17, Boutros will present Moran with the Presidential Challenge Coin. The award is inspired by the military tradition of carrying a challenge coin — a small medal or token that signifies a person as a member of the organization. Boutros adopted the practice at MetroHealth to recognize those who make contributions of the highest level to the health system.

Boutros credits Moran with putting some of the initiatives in place that reversed the financial fortunes of the health system. For one, Moran was one of the architects of MetroHealth’s outpatient strategy that resulted in a new health center in Middleburg Heights, which has been a boon to the health system’s bottom line. Also, he oversaw the development of the experimental Medicaid waiver program that expanded access to the public insurance program ahead of the statewide Medicaid expansion. That said, Moran’s administration had been chastised by some in the community for its substantial payments to consultants and its disclosure practices.

Previous winners of the Presidential Challenge Coin are John Corlett, MetroHealth’s former vice president of government relations and community affairs who recently took the top job at the Center for Community Solutions; Dr. Jennifer Hanrahan, an in-

WHAT’S NEW

fectious disease specialist, for her work preparing for a possible, yet unlikely, Ebola outbreak; and Larisa Evans, a longtime nurse in the intensive care unit who recently retired.

— Timothy Magaw

Oberlin refuse fleet is moving quickly to hybrid Oberlin’s refuse and recycling fleet is getting a bit greener this year.

The city recently bought three trucks that are equipped with Parker Hannifin Corp.’s hydraulic hybrid truck systems. The trucks replace the fleet that was destroyed in a fire last February.

Parker has been producing the fuel-efficient systems since 2010, said Hybrid Drive Systems Division sales manager Mark McGrew, but this is the first RunWise fleet on the ground in Ohio. To date, the system is produced just for refuse trucks, but it’s also in pre-production for medium-duty vehicles, and Parker is looking at expanding to the bus market, McGrew said.

The system is able to capture energy in the braking process and store it for use at low speeds, said Oberlin’s public works director Jeff Baumann. That leads to reduced costs from diesel fuel consumption. Baumann said that for a small operation like Oberlin’s, those savings aren’t enough to offset the cost of the system entirely, but that it might in larger operations. Oberlin plans to track its fuel consumption for comparison purposes.

McGrew said the vehicles can produce up to 50% savings in diesel. It also reduces emissions and extends the life of the brakes, he said.

Smart move

COMPANY: Bar 145, a Toledo-based gastro pub LOCATION: Avon, the company’s fifth restaurant in Ohio Just in time for the holidays, Bar 145, a gastro-pub and live music venue based in Toledo, has opened its fifth Ohio location, at 35566 Detroit Road in Avon.

The Avon restaurant is the largest to date for Bar 145, which says it specializes in “burgers, bands and Bourbon.”

Bar 145 owner-operator Jeremy Fitzgerald called Avon “an ideal location” for the company’s concept.

“We’re hoping to fill a niche for higherend, chef-driven restaurants with great drinks and great live entertainment,” Fitzgerald said.

He said Bar 145 is supplied by local farmers and buys fresh products daily for a menu that features gourmet burgers, entrees and small plates. The restaurant also boasts an extensive list of craft beers and more than 45 bourbons and bourbon-based cocktails.

Executive chef Robby Lucas oversees Bar 145’s menu at each of its locations.

The first Bar 145 first opened in Toledo in May 2011. The company launched a franchise program in July 2012 and since then has opened restaurants in Columbus, Kent and Norwalk, in addition to Avon. Ft. Wayne, Ind., is the next market for the company’s expansion.

Ship finally has come in for Great Lakes ore Great Lakes ore shippers can say they’ve had a good year, as shipments are up, yearto-date, over 2013. But it took them until November to catch up, thanks to an early 2014 shipping season shut down by ice.

As of the end of November, though, ore shipments topped 53.2 million tons and were 86,721 tons ahead of last year’s pace.

“While the increase is minute, the achievement is huge. The winter of 2013/2014 was the most brutal in decades,” reports the Cleveland-based Lake Carriers’ Association. “The U.S. Coast Guard started breaking ice on Dec. 6, the earliest on record. Iron ore shipments slipped 20% in December and then plunged 37% in January. A few cargos moved in February, but one voyage that should have taken 50 hours stretched 10 days.”

So, while it seems cold, take heart. Better yet, take a look at Lake Erie, where freighters and not ice ridges still dot the horizon.

— Dan Shingler

BEST OF THE BLOGS Excerpts from recent blog entries on CrainsCleveland.com.

Bar 145 owner Jeremy Fitzgerald, left, and executive chef Robby Lucas.

Oberlin planned to introduce the trucks to the public with an event on Friday, Dec. 12.

Baumann said two of the trucks already were in service. Those trucks each cost about $375,000; one more yet to launch cost about $425,000. The city also bought two trucks without the Parker system to replenish its fleet.

Baumann said the city had set aside about $853,000 to buy new trucks. It also received insurance reimbursement, a grant from the Ohio EPA to go to single-stream recycling, and some funding from Oberlin College’s Green Edge fund. — Rachel Abbey McCafferty

Cleveland State University is among colleges that “are trying to make sure students understand a basic math lesson: 120 credits equals a bachelor’s degree.”

So wrote The Wall Street Journal, which said that as student-loan debt hovers near all-time highs and operational costs for colleges continue to rise, “administrators are pushing to get students through their undergraduate educations more efficiently, particularly at public institutions.”

Full-time students “complete four-year degrees with an average of 134 credit hours, according to Complete College America, a nonprofit focused on boosting collegegraduation rates,” The Journal reported.

“That is well over the minimum of 120 hours … required by most undergraduate degree programs.”

That, in turn, “means many students don’t graduate after the typical four years, which can weigh on a school’s reputation and a student’s wallet,” the newspaper said.

At Cleveland State, where students graduate with an average of 148.8 credits, administrators are trying to minimize students’ scheduling mistakes.

President Ronald Berkman told the paper that the school was standing in its own way by requiring well over 120 credits for certain degrees and by making it difficult for students to map out their course plans. Two years ago, The Journal said, Cleveland State began allowing students to register for fall, spring and summer classes at the same time so they don’t accidentally wait until spring for a class that was only offered once a year.

Cream of the crop Innovation in Ohio doesn’t just come in the technology and medical sectors.

Bloomberg Businessweek profiled Cody Schultz, 27, a farmer in Youngstown. But Schultz is not your typical farmer.

“His scraggly beard, his Eminem skullcap,

his yen for the first-person shooter video game ‘Borderlands’ should fool no one,” the magazine said. “This is not some slacker looking to dodge the 40-hour week. Schultz is a cricket farmer, joining two other Wisconsin-bred millennials this summer in a Youngstown warehouse to create Big Cricket Farms, which they say is the first in the U.S. to produce the insects for human consumption.”

Crickets, it turns out, are becoming popular for use in nachos, cookies, pesto and, for braver foodies, in butter and garlic, sautéed whole.

The magazine said farm founder Kevin Bachhuber “scouted the most needy of urban settings, not simply for the economic incentives that distressed areas offer. … He wants the bug startup to inspire others to join in a Rust Belt revival, to come to build their own job-creators and repaint the gloomy landscape.”

The farm’s website dedicates its effort to the Hebrew phrase “tikkun olam,” or “repair of the world.” The current cricket census at the farm: 2 million.

“If it can happen in Youngstown,” Schultz said of his crop surge, “it can happen anywhere.”

Lighting it up Northeast Ohio native Anthony Doerr got a nice early holiday present: A spot on The New York Times’ list of the 10 best books of the year for his novel “All The Light We Cannot See.” “With brisk chapters and sumptuous language, Doerr’s second novel follows two characters whose paths will intersect in the waning days of World War II: an orphaned engineering prodigy recruited into the Nazi ranks, and a blind French girl who joins the Resistance,” The Times said of the novel by the Novelty native, who graduated from Bowling Green State University.

“Tackling questions of survival, endurance and moral obligations during wartime, the book is as precise and artful and ingenious as the puzzle boxes the heroine’s locksmith father builds for her,” the paper noted.

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