Crain's Cleveland Business

CRAINSCLEVELAND.COM I January 25, 2021

NEWSMAKERS OF THE YEAR

Against COVID-19, essential workers were, in a word, essential Each year, Crain’s Cleveland Business, through our Newsmakers section, recognizes the individuals and organizations that made the biggest headlines — often because they made a big deal, or made a big move, or, even sometimes, were involved in a big scandal.

Each year, Crain’s names a Newsmaker of the Year as well.

As the COVID-19 pandemic gripped the globe in 2020, resulting in a tragic loss of life and sending millions of people to work from their homes to help prevent the spread, it became clear who deserved special recognition — those who could not stay home.

From health care workers and grocery store employees to those on manufacturing lines, these everyday heroes rose above all others to keep our communities going and made a difference in Northeast Ohio.

Essential workers are Crain’s Newsmakers of the Year for 2020 and will be recognized at a virtual event on Tuesday, March 23.

NEWSMAKERS 2020 | PAGES 10-17

Gov. Mike DeWine

Ohio House Bill 6

Marcia Fudge

Loretta Mester

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Andrew Berry

Lourenco Goncalves

Carey Jaros

John Morikis

Business diversity, equity and inclusion efforts

CRAIN’S WEBCAST EVENT: Hear from our top Newsmakers of 2020 about how these everyday heroes held our communities together in a Crain’s virtual event in March. To sign up for the free event, go to crainscleveland.com/newsmakerevent REAL ESTATE

Cleveland’s Artcraft Building is poised for apartment makeover BBY MICHELLE JARBOE

NEWSPAPER

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Since 1919, the Artcraft Building on Superior Avenue has been a space for makers, from early 20th century textile workers to today’s eclectic mix of artists’ studios and small businesses.

Now, the largest building in Cleveland’s onetime garment district is poised to don a new look. A major apartment landlord is partnering with GBX Group, the property’s owner, on a plan to transform Artcraft’s

sprawling, raw workspaces into roughly 159 apartments.

The K&D Group of Willoughby will be the majority owner and developer of the project, while Cleveland-based GBX will retain a stake in the deal, said Doug Price, K&D’s CEO. “We’re still in a due diligence phase,” said Price, who is venturing into the Superior Arts District as development creeps east from downtown and north from Cleveland State University.

The Artcraft restoration is a key piece of GBX’s vision for remaking a once-downtrodden stretch of Superior between East 18th and East 26th streets. The company, which specializes in tax credits and complicated preservation deals, amassed a substantial portfolio in the district before moving its headquarters to a historic building at Superior and East 21st Street in 2018.

See ARTCRAFT on Page 19

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EDUCATION

Community colleges earn more in latest federal relief package With enrollment down and many students in need, institutions say gains were crucial BBY AMY MORONA

One of the criticisms with the higher education allocation of the CARES Act was that community colleges didn’t get enough support. But the recently passed second federal relief package is changing that as the pandemic rages on.

The institutions are slated to get a much bigger slice of the $20.5 billion earmarked for public and nonprofit colleges nationwide in the Coronavirus Response and Relief Supplemental Appropriations Act. The boost comes thanks in part to a formula change that places more emphasis on a campus’ total student headcount and not just its full-time enrollment. Administrators say it’s an important shift for community colleges, where the average age is reportedly 28, roughly half are students of color, and 57% are women. The majority of students are enrolled part time.

“We have to provide the same services to every student whether that student is part-time or full-time,” said Stark State College president Para Jones. “The cost of education can be, frankly, overwhelming for a community college while we try to keep our tuition low.”

Another big complaint surrounding the first allocation of higher edu-

cation funding was the shifting rules that came along with it. Lakeland Community College’s Mike Mayher said that caused a lot of anxiety during an already stressful time in 2020.

“We were grateful that the federal government was doing this, but it took a long time to get guidance and guidelines into place,” said Mayher, Lakeland’s executive vice president and treasurer.

There’s hope that things go smoother now, though institutions point out they’re still awaiting the act’s final interpretation and any additional direction that may come from the U.S. Department of Education.

This time, colleges and universities that received CARES funds didn’t have to submit a new application to tap into the latest pool. Plus, this tranche offers some leeway on how funds marked for institutions can be spent.

There’s money available for students again, slated to go toward things like the cost of attendance or paying any pandemic-related emergency costs like housing, food or child care. Institutions now have to prioritize helping those with exceptional needs first. Another change is that students enrolled in distance education courses are now eligible to apply for help, too.

Lakeland received more than $6.5

An instructor teaches at Stark State. The community college is one of several that will see more federal funding in the latest relief package. | STARK STATE COLLEGE

million in total, higher than the $3 million it saw from the first relief package. The Lake County campus is required to distribute at least $1.5 million in student aid awards, an amount Mayher said officials hope to exceed.

A December 2020 survey done by the New America think tank found these community college students are struggling economically. More than one-third of respondents said they fell behind on a bill or received free food from a pantry or other resource after the pandemic hit, researchers said.

“It’s important for us to get money out to our students as quickly as possible,” Lakeland’s Mayher said.

Money from the institutional portion can cover pandemic-related expenses, like lost revenue, staff training sessions, or costs incurred from boosting tech-

nology. That’s one area Cuyahoga Community College officials plan to use with their $23 million, which is more than double its CARES allocation. They also plan to invest more into ensuring facilities are clean and safe.

This federal help comes as campuses’ enrollments are declining.

Community colleges were the hardest hit across all higher education institutions on this front this past fall, reporting a 10% drop nationwide.

That trend is continuing at Stark State. The North Canton campus’ early numbers show its headcount clocking in at about 10% lower this spring than the same time last year, though officials said they expect to see their final end-of-term number rise after a second eight-week semester begins later.

They want to help boost those enrollment numbers by working with local economic development organizations to reach out to people who are unemployed, underemployed, or otherwise impacted by COVID-19.

“We want to actually get the message out to more of those people in our communities that we can help them start, continue and complete their academic program thanks to these funds,” college president Jones said.

But overall, this still may not be enough to help cash-strapped campuses. The amount in the passed package fell far below the $120 billion higher education advocates had requested. And while some institutions reported stretching out their CARES Act funding because they didn’t know when additional help would arrive, that may not work this time around.

“Reduced enrollments resulting in reduced revenues plus state budget cuts will certainly necessitate or require colleges to use a lot of the money sooner rather than later,” said David Baime, senior vice president for government relations and policy analysis at the American Association of Community Colleges.

More support may be on the way.

President Joe Biden called for $35 billion of his $1.9 trillion “rescue plan” to go toward public colleges.

Amy Morona: amy.morona@crain. com, (216) 771-5229, @AmyMorona

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2 | CRAIN’S CLEVELAND BUSINESS | January 25, 2021

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REAL ESTATE

Cleveland apartment owners see brighter days ahead

BY STAN BULLARD

Although downtown Cleveland apartment vacancy has hit 19%, according to online data source CoStar, Michael Sabracos, U.S. CEO of the Istanbul-based AltoPartners realty firm, is more optimistic than last year.

Last month AltoPartners opened Euclid Grand, a $90 million conversion of the former John Hartness Brown complex at 1101 Euclid Ave., to 200 apartments from long-vacant office space. He won’t say how many suites are leased, but he’s bullish on the market and Cleveland.

“We’re getting tenants. We’re getting looks,” Sabracos said in a phone interview, noting the 15 prospects that toured the building last week exceeded his expectations. He said he feels more optimistic now than when lockdowns due to the pandemic hit last spring and the company could not test the market, as it had no suites then.

“We’re getting tenants from other buildings downtown, and the staff is saying something like one in five prospects is someone from Chicago or New York who wants to come home to Cleveland and pay less rent, if only for a short time,” he added.

The developer of the project that replaced three buildings with one apartment building after 20 years of vacancy has company in his rosier outlook. The advent of COVID-19

vaccines is prompting hope that normalcy in the market may emerge later in the year.

In a big switch from last year, Doug Price, CEO of K&D Group of Willoughby, is sanguine about downtown’s residential prospects.

“We’re looking for a quick snapback in the market next summer,” Price said in a phone interview.

“When office tenants return, things will look up. I’m also amazed at how often I meet young people who are living with their parents and can’t wait to move to their own apartments.”

And with its portfolio of thousands of suburban apartment suites and six downtown apartment complexes, Price argues the central business district will be the beneficiary of the uptick. That’s because suburban occupancy is so high. Price believes it will prompt prospects to look downtown as well as at other new properties in the central city.

“In the suburbs, we’re about 95% leased in every complex,” Price said.

“When people start to look, they’ll find the most opportunities downtown.”

CoStar puts suburban vacancy at 6% and the region’s at 7%, which are considered healthy numbers.

Noting that K&D is now pursuing two downtown buildings as potential apartment conversion prospects, Price said, “It’s what I believe will happen. And I’m putting my money where my mouth is.”

That doesn’t mean all is rosy.

The Lumen high-rise, which opened last year, is just one of two central downtown apartment buildings that are tall enough to alter the city’s skyline.

Most apartments downtown have been created by converting existing buildings to residential use. | MICHELLE JARBOE/ CLEVELAND BUSINESS

K&D was lucky it reached 85% occupancy at The Residences at Terminal Tower, its latest development, before last year’s lockdowns quieted things down. Price said that with K&D’s downtown buildings at more than 80% occupancy, he’s glad he’s not in the position of owners and operators of Euclid Grand, the Lumen, 1600 Euclid Ave., and May Co., which opened after the pandemic and the resulting recession were in full swing.

All the new units flooded the market almost at once amid the pandemic and social unrest over the summer that damaged storefronts on Euclid.

And it generally takes about two years for a new rental project to stabilize. Fewer projects will hit the down-

town market this year, to further help stabilize the market.

All the new competition means there are concessions galore to woo prospects.

Bedrock Cleveland’s May Co. apartments on Public Square are offering a month of free rent for tenants who move in by Jan. 31 and $500 off move in-costs if they lease a suite for 13 months, according to a spokeswoman. She said Bedrock does not disclose leasing or occupancy statistics for its properties.

Likewise, the newly constructed 34-story skyscraper The Lumen at Playhouse Square, 1600 Euclid, is offering a month’s free rent on a 13-month lease.

Even more established downtown

apartments are offering concessions, such as Huron Square and Osborn Apartments, 1001 Huron Road, which offer discounted rents, a reduced $99 deposit and waiving more than $150 in fees, according to Apartments.com.

However, the profusion of discounts has had an impact on rents. A report by CoStar said Cleveland’s apartment market softened this year and noted concessions are running about 7% as of Jan. 22, in a market where they were scarce in the past.

A report by ApartmentList.com, another apartment marketing website, found Cleveland rents have declined 0.5% over the past month and have decreased sharply, by 4.7%, in comparison to the same time last year.

Currently, median rents in Cleveland stand at $596 for a one-bedroom apartment and $761 for a two-bedroom, ApartmentList.com found.

The report noted that the city has seen rent decreases for the last five months after an increase in July.

However, the addition of all the new suites, mostly downtown, means Cleveland’s year-over-year rent growth lags the state average of 2.5%.

Meantime, rents fell 1.7% nationally in the same period, and much more in bigger coastal cities that were hit harder by the pandemic.

Stan Bullard: sbullard@crain.com, (216) 771-5228, @CrainRltywriter

Industry veteran is a new entry in the new-home business Frank Amato says ‘it was time’ to start his own company, sets lofty goal for this year

BY STAN BULLARD

Frank Amato is a veteran of the ranks in Northeast Ohio home building. Yet he’s also a new recruit, less than a year into Amato Homes, his own company.

Even so, Amato has lined up control of more than 30 lots and has foundations going in on a total of 14 houses at locations from Euclid to Vermilion.

From having agreed to sell seven homes by the end of last year with one deal closed, he’s pursuing a lofty goal: 50 in 2021.

However, the aggressive goal makes sense given the brisk pace of the home-building business. Record-low interest rates and an undeniable shortage of existing homes produce a rare window for builders.

The timing makes sense for Amato, as he has the footing of 25 years in the business, from starting as a laborer at Petros Homes to leaving a post last July as a director of construction overseeing projects in Ohio, Pennsylvania and West Virginia for K. Hovnanian, the Matwan, N.J.-based publicly traded builder.

“I felt it was time for me to go on my own,” Amato said of launching his own home venture. “It’s the same way I felt about retiring from the military: It was time.”

The Garfield Heights native who now lives in Copley has a different kind of war story to tell.

He was trained in construction in the U.S. Naval Reserves — a Seabee — and retired from the U.S. Army Reserves in 2013 as a chief warrant officer.

Amato was deployed for a year in 2011 in Afghanistan, where he was on a team that surveyed and designed a water crossing over a gully, a sort of

low bridge just above a river that remains passable as water flows over it.

“For the military, getting there is part of the task,” Amato said. The project, which also benefits Afghan locals, reflects what Amato sees as his company’s mission today: “making life better.”

Amato started working for builders in 1992 after completing basic training for the Naval Reserves. He had worked as a laborer on waterproofing jobs until a friend told him about a laborer’s job at Petros Homes of Broadview Heights.

It attracted him because the pay was better and, as a young family man, offered a steadier paycheck than staying in the trenches.

“The business was booming then,” Amato recalled. “There was a lot of opportunity to move up. I feel blessed.”

Along the way, he picked up the feeling that drives most builders: the pride of taking an empty lot and putting a house on it.

As Amato launched Amato Homes in 2020, he did not quite go it alone. He has financial support from two Colorado home builders, Brian Bahr and Jordan Savage, whose advice encouraged him to start his own concern. He declined to say how much of a stake the partners have in the firm, which just gained its first staffer, a job superintendent to help oversee construction.

Amato’s business model is to build homes on a speculative basis, without advance buyer commitments, so they are ready for buyers to inspect.

It’s a niche he feels national builders increasingly avoid.

Don’t call him a custom builder, though. Custom homes are a different business, he argues, and that higher-end market is well-served with existing companies.

He also targets the lowest rung of the stick-built home market. The exterior design for the ranches, colonials and Cape Cod-style homes would not grace the cover of ArAmato chitectural Digest. But the interiors have abovebuilder-grade finishes that buyers crave, such as granite counter tops.

Prices vary due to location, but the houses range in size from 1,600 to 2,700 square feet and cost from $220,000 in Euclid to $300,000 elsewhere. The Colonials he plans to erect this spring, at the first two of six Euclid sites, also will benefit from seven-year tax abatements.

“I’m super excited to be working in Euclid,” Amato said. “It’s part of giving back to the community.”

On its surface, the busy new-home market would seem to attract many startups, as in the past. But today’s reality is different.

Lori Howerton, CEO of the Home Builders Association of Summit and Portage counties, labeled Amato (a member of the association) as the exception today with a startup.

“We’re not seeing an influx of builders at this time,” she said. “We are seeing an influx of roofing and general contractors, but not builders.”

Howerton said tight labor supplies make it hard to add staff and gain subcontractors.

Bob Dyer, director of acquisitions at Redwood Living of Independence, has substantial experience working for builders, and with a variety of them, in land development at the former Forest City Realty Trust before it exited the land business.

Dyer said he can see how a new venture can line up lots that are still available from subdivisions abandoned in the housing bust, but he believes getting subcontractors will be the rub.

“A small builder always comes last

for a subcontractor,” Dyer said. “Their first priority is to satisfy their largest clients. It can lead to delays in finishing projects for the small guy.”

For his part, Amato said he has deep contacts and knowledge of the industry to help him and is pleased with the building side of things so far.

So where does Amato hope to go with this venture?

“Our goal is to be a regional builder doing about 100 homes a year,” he said. “We want to get our share of the market.”

Stan Bullard: sbullard@crain.com, (216) 771-5228, @CrainRltywriter

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After being stymied by pandemic, legal job market could pick up in ’21

Firms that could adapt to other practices fared better in downturn

BY JEREMY NOBILE

Economic impact of legal services in Greater Cleveland

As layoffs and hiring freezes washed over many law firms grappling with a COVID-19 downturn in business, the job market for attorneys in an already competitive field tightened.

Now that courts have reopened, and optimism for vaccines is helping to wake up the broader economy, legal employers may once again look to grow their ranks in 2021 — barring a turn for the worse in the global health crisis.

“Most of the hiring is need-based right now versus opportunistic hiring, which is how the legal market was preCOVID,” said Chery Jacobs, a Cleveland-based legal recruiter with SCI, a legal staffing division of Special Counsel. “But that’s starting to come back.”

According to recent data from the Bureau of Labor Statistics, the legal services field lost 33,000 jobs between December 2019 and December 2020. Certainly not all, but many of those were in attorney-supporting roles, such as legal assistants.

In Ohio, the latest BLS short-term forecast points to a flat or slightly down job market for legal services between 2019 and 2021. The BLS has projected drops of 0.3% and 0.4% for total jobs and lawyers themselves, respectively. The report was conducted prior to the pandemic that has pinched the country’s workforce, suggesting that drop may be even steeper.

The jury is out on that, though.

Several firms report avoiding layoffs — in many instances, securing millions in Paycheck Protection Program loans certainly helped. However, The American Lawyer reported in the fall that layoffs were quietly working their way through Big Law, including firms like Kirkland & Ellis.

And it’s not as though legal worked stopped. But what’s in demand has shifted. Where some practices slowed, others have picked up.

Corporate M&A was largely put on hold in the earlier months of the pandemic. Work there is beginning to come back on the heels of pent-up demand.

Meanwhile, labor and employment practices could barely keep up with demand. Real estate attorneys kept busy. In-house legal departments staffed up to handle work internally to control costs. And in a sign of the poorer overall health of the economy, bankruptcy work is picking up. Attorneys and solo firms nimble enough to adapt to another practice have fared better than some who haven’t adjusted.

These trends are resulting in mixed outcomes for firms in particular, depending on their areas of focus.

“I am aware of firms who had 2020 as the best year on record and they are in full-blown growth mode,” said Rebecca Ruppert McMahon, CEO of the Cleveland Metropolitan Bar Association. “And I know firms on the other end where practices are decimated. They’re not in growth mode, but constriction.”

General uncertainty, however, made many employers conservative with new hires, even those performing well. Hiring programs for new law school grads frequently were canceled in 2020.

Hires that were made centered more

The Cleveland MSA accounted for 32.9% of the earnings impact and 29.4% of the employment impact in Ohio’s legal services industry in 2019. Figures are in 2019 dollars.

Type of impact

Earnings

Payrolled establishments Direct Indirect Total Self-employed and extended proprietors Direct Indirect Total Total Direct Indirect Total SOURCE: UNIVERSITY OF CINCINNATI ECONOMICS CENTER CALCULATIONS

on experienced lawyers who could hit the ground running in a challenging landscape for racking up billable hours. It’s a trend that’s been in motion for a few years, McMahon said. But it became more acute last year.

“Employers are looking for newer lawyers but who at least have some experience over a true, fresh and green right-out-of-law-school lawyer,” she said. “That is because law firms in part want to put those new hires to work immediately.”

Nonetheless, there are “still great

“IT’S A DIFFICULT TIME TO BE IN THE PREDICTION BUSINESS, PARTICULARLY WITH THE PANDEMIC BEING SO DISRUPTIVE AND CHANGING HOW THE LEGAL SERVICES INDUSTRY DOES BUSINESS.” — Mary Amos Augsburger, CEO of the Ohio State Bar Association

opportunities for brand new lawyers, those who are really sophisticated in understanding how to network and how to go after clients,” McMahon said. “Those people for sure do better than those waiting for a position to come to them.”

The longer-term outlook for legal services is relatively promising, too.

The BLS projects increases of 5% and 4% in total legal services jobs and lawyer positions, respectively, between 2019 and 2029.

But with more grads coming out of law school, and incoming classes usually picking up during an economic downturn, the competition for those jobs will still be fierce.

In the nearer term, legal job trends will be tough to predict as long as the pandemic lingers.

“It’s a difficult time to be in the prediction business, particularly with the pandemic being so disruptive and changing how the legal services industry does business,” said Mary Amos Augsburger, CEO of the Ohio State Bar Association, referencing the impact of technology on the industry.

According to Crain’s research, cumulative employment among some 70 Northeast Ohio law firms fell by 1% from 2019 to 2020.

Employment

$1,024,668,019 $689,022,528 $1,713,690,547

9,921 12,404 22,325

$220,140,593 $148,056,427 $368,197,020

3,487 4,395 7,882

$1,244,808,612 $837,078,955 $2,081,887,567

13,408 16,799 30,207

CRAIN’S CLEVELAND BUSINESS GRAPHIC

What does Ohio’s legal market look like?

According to an economic impact report completed by the University of Cincinnati Economics Center for the OSBA, the Ohio legal services industry directly employed 44,427 people in 2019. That is more than the 38,351 reported by the BLS in 2019. (The bulk of those are lawyers.)

Citing researchers, the OSBA says the discrepancy between the figures is because the data set used in its report comes from Emsi, a labor markets analytics firm, which includes self-employed and extended proprietors the BLS data does not account for.

The economic impact study is the first since 2012 and was inspired by this being a state budget year. The OSBA is looking to illustrate the size of the legal industry as it advocates for favorable tax policies when those are reviewed as part of a budget review process.

In 2019, Ohio’s attorneys were caught off guard when the state passed a budget in mid-July that excluded lawyers and lobbyists from the state’s business income deduction. Attorneys fumed, and the deduction was soon restored. The OSBA wants to avoid a repeat of this.

Legal services paid $3.6 billion in earnings in 2019, according to the study completed for the OSBA. It estimates the total economic impact of those earnings to be $6.3 billion, with cumulative supported jobs totaling nearly 103,000.

The study estimates statewide spend on legal services in 2019 to be more than $7 billion. That would be a nearly 42% increase from the 2012 study, according to OSBA. The three biggest-spending industries on legal services in 2019 were finance and insurance ($1.3 billion spent), manufacturing ($1.1 billion) and health care and social assistance ($995 million).

Of total earnings impact (so of that $6.3 billion), the MSAs with the greatest share are Cleveland (32.9%), Columbus (20.3%) and Cincinnati (14.8%).

According to the BLS, the median annual lawyer salary in Ohio in 2019 was $101,961, compared to $122,960 for the profession countrywide.

Jeremy Nobile: jnobile@crain.com, (216) 771-5362, @JeremyNobile

4 | CRAIN’S CLEVELAND BUSINESS | JANUARY 25, 2021

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HEALTH CARE

University Hospitals’ Tom Zenty leaving a legacy of transformational growth

CEO is retiring this month after nearly two decades of leading and inspiring those at the health system BBY LYDIA COUTRÉ

Thomas F. Zenty III came to Cleveland in 2003 with a grand vision for University Hospitals to dramatically expand its footprint and deliver care across the region.

The health system’s transformation since has been immense. Under Zenty’s leadership, UH grew from three hospitals to soon-to-be 22 hospitals, with its recent addition of Lake Health and minority ownership in Western Reserve Hospital in Cuyahoga Falls. Now a super-regional health care system, UH cares for more than 1.3 million people each year across a 17-county region.

“When he arrived, by many measures, UH was a one ZIP code opera-

tion,” said Dr. Cliff Megerian, president of UH. “He has been the horsepower behind its growth to soon-to-be a 22 hospital system.”

Megerian will become CEO on Feb. 1, when Zenty retires after nearly two decades.

During Zenty’s tenure, the system recruited new physicians, added new technology and massively grew its research capabilities. UH has built new hospitals and locations, added existing community hospitals into the system and renovated and expanded facilities. There are many ways to measure the ways UH has grown and changed since Zenty took over.

Other accomplishments are harder to quantify.

Asked about his achievements in

the near two decades he led University Hospitals, Zenty is quick to point to his team.

“I really, as an individual, I didn’t accomplish anything in the past two decades,” he said. “We accomplished a lot collectively.”

His ability to build, grow and inspire the teams that made these changes possible is one of his greatest assets to UH. “What makes Tom an exceptional leader is he is very good at communicating and engaging with all stakeholders you need to bring together to get results,” said Paul Tait, chief strategic planning officer at UH. M. Steven Jones, president of University Hospitals Community Hospitals — East region, first met Zenty in

the 1990s when the two worked at Cedars-Sinai, a nonprofit hospital in Southern California.

Zenty was a “visionary” who worked to develop institutes at Cedars-Sinai, ultimately transforming the hospital, raising the level of medical care provided there and assembling a top-notch leadership team, Jones said.

In 2003, Zenty brought those skills to University Hospitals.

What drew Zenty to UH was the opportunity and challenge to distinguish the system above others in a region full of hospitals offering world-class care, he said. He was also struck by a concept laid out in the system’s founding principles: the needy are the most worthy.

Tom Zenty helped University Hospitals grow from three to 22 hospitals.

See ZENTY on Page 21

HEALTH CARE | Q&A

Dr. Cliff Megerian

After a yearlong transition, University Hospitals president will take on CEO duties Cleveland Clinic in the past, but also Metro, St. Vincent and others, we are now locked arm in arm. And then finally, for us, it’s given launch to a whole bunch of new research projects. We’ve launched over 150 clinical trials specifically around treatment and prevention of COVID and COVID-related complications.

``Why did you want to lead UH? I think anybody would be honored to lead UH. UH has a legacy of caring for its community that spans over 150 years and is really a time-tested organization that has incredible fortitude in its DNA. I never grew up wanting to be the CEO of a hospital. I grew up wanting to be a respected and caring surgeon. When the board and Tom came to the decision that Tom wanted to move on at the end of 2020, beginning of 2021, I was approached by the board and by human resources to consider applying to be CEO. I was overjoyed and frankly a little intimidated, but the good news is Tom and the board were very thoughtful in putting in place a yearlong transition the whole year of 2020, which turned out to be a real challenging year. When I first started out, I never dreamed of being in this role, but I’m absolutely overjoyed that I am. ``When you accepted the role, what were your initial goals for the system?

The goals that I really have put before the organization is to make UH the most trusted health provider in the region. I want to double down as an organization on being consumerfocused by providing our patients the most consistent quality of care, but also the most, if you will, five-star patient experience no matter where they access

KEITH BERR VIA UNIVERSITY HOSPITALS

After serving as president of University Hospitals through a yearlong transition process, Dr. Cliff Megerian will add CEO to his title on Feb. 1, succeeding Tom Zenty.

Megerian received his medical degree from the University of Michigan Medical School and first came to UH in 1988 as a 25-year-old surgical intern. He went on to complete a fellowship at the Massachusetts Eye and Ear Infirmary and Harvard Medical School. He also holds a management certificate from CWRU’s Weatherhead School of Management.

He returned to UH in 2002 and has since risen through the ranks of leadership. He spoke with Crain’s about his decision to lead UH and his goals in the role. This conversation has been edited for length and clarity.

— Lydia Coutré

UH. I had a part with this over the last six years, but we have now emerged as clearly the highest-value provider.

If we can now do that throughout all swaths of patients that we touch, we will continue to be successful, we will continue to grow and we’ll continue to do what the community needs.

And then finally, my goal is to create an organization that is even more agile than it is today. Our agility was tested during the 2020 pandemic. We have to be agile because all health care centers are going to be facing a number of things. There’s going to be a continued cost pressure. There’s going to be a continued transparency with regard to consumerism. We are going to be moving a lot of our business from the inpatient world to the outpatient world, which changes the complexity of our earnings and our delivery system.

And we’re now going to be moving — thanks, I think, as a silver lining to COVID — a portion of our day-to-day ambulatory care to the virtual world. ``A lot of the challenges of the pandemic are ones health care has been grappling with for a while. Is it fair to say the pandemic really highlighted those challenges and accelerated not just UH but the health care industry as a whole toward some of the solutions?

The pandemic is obviously a tragedy — injured lives, lost lives, lives changed, finances injured and disrupted. We in health care have been trying for years to offer telehealth services. We never got off the ground. At UH, we were less than 1%, even though we tried our darndest.

During the height of the pandemic, we were up to 75% of our visits were tele.

We learned how to do it, we learned

how to be agile and our patients learned how to do it. And that has been a good kick-start for American health care because it’s more efficient, it’s lower cost, and it’s more highly accessible. (The pandemic) taught us how in a modern era to manage during the release of a contagion. I’m hopeful and I pray that here will never be another contagion. But I also know that’s naive, and I think that having the entire United States learn how to continue to function with masking, gowning, gloving, hand-washing and even more sophisticated PPE efforts, we will be better prepared for something in the future. We’ve had to think about our supply chain, and we pivoted by creating relationships and actually investing in domestic companies. The COVID pandemic has caused hospitals in town that historically have not always collaborated, specifically us and the

``Looking at whatever our next normal is after the pandemic, what do you see as the next challenges for UH? I’m very bullish on UH, first. UH is really positioned well, with especially some of great things that have been happening both in terms of partnerships with others — not only hospitals but also some insurance companies. I think many of our long-term challenges are going to be similar to those challenges at any hospital in this region. One is our aging population, and that increases obviously our Medicare patient mix, so we’ll be increasingly beholden to government payments. It’s going to intensify our focus on cost containment. The other challenge is the consistent movement, especially lately, from inpatient activity to outpatient activity, which really changes your financial picture a little bit and you have to evolve your infrastructure to match that. I think the other challenge that we have to face is that increasingly, health care will be more and more and more — rightly so — consumer focused. It’s really incumbent upon us to demonstrate that we have and we bring the highest value for those consumers. ``What are the next opportunities for UH? I think the major opportunities for UH is built on the backbone of an organization — and Tom Zenty deserves incredible accolades for this achievement — but UH’s care delivery is built on the backbone of providing the highest compassion, individualized, personalized, kindest care within a framework that is high value. And that has got a halo around it of one of the most legacy academic teaching hospitals that is now the eighth-most funded research hospital in the United States in terms of total federal funding.

6 | CRAIN’S CLEVELAND BUSINESS | January 25, 2021

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PERSONAL VIEW

How leadership can adapt to see new opportunities

RICH WILLIAMS FOR CRAIN’S CLEVELAND BUSINESS

BBY MATT KAULIG

EDITORIAL

Fresh starts M

aybe those New Year’s resolutions already aren’t going so well. (OK, they probably aren’t.) Don’t sweat it. The country hit reset last week, and you can, too, in a year that’s also going to see significant leadership changes throughout Northeast Ohio.

Joe Biden was sworn in as the nation’s 46th president, and regardless of how you feel about November’s election results, you should hope Biden is successful in addressing our twin huge challenges — the pandemic/vaccine distribution and the slowing economy — while also making progress on the broader goal of narrowing divisions in the country. Tall orders, all.

The president rolled out a $1.9 trillion stimulus package, but some initial Republican opposition means the final total, if it’s enacted at all, almost certainly will be smaller. Most of the recent data, in particular bad numbers on jobs and retail sales in December, point to a need for continued stimulus to keep the economy from tipping back into a significant downturn. We hope that a change in administration means our representatives in Washington can place the country’s needs above partisanship. “Politics does not have to be a raging fire, destroying everything in its path,” Biden said. It would be refreshing if that could be the case.

In this region, there will be new players in key places, with their own chance to offer a fresh start.

Cleveland will have a mayoral election later this year, with the possibility of a change from an uninspiring incumbent. The seat of influential U.S. Rep. Marcia Fudge, who’s heading to Biden’s cabinet to lead the Department of Housing and Urban Development, will need to be filled. The Greater Cleveland Partnership and the Downtown Cleveland Alliance both are looking for new leaders. University Hospitals, in Dr. Cliff Megerian, and Case Western Reserve University, in Eric Kaler, already have named the individuals who will take over soon.

All these changes offer a chance for fresh thinking. We encourage the people making the decisions — voters in some cases, boards in others — to be expansive in their outlook and find leaders who are willing to challenge a status quo in

THE COUNTRY HIT RESET LAST WEEK, AND YOU CAN, TOO.

Northeast Ohio that in many cases has not been good enough for the region to advance.

In the dark T

he state Legislature’s inability to repeal and replace House Bill 6 — the energy bill that provided subsidies for two nuclear and two coal power plants while rolling back some clean energy standards and energy efficiency programs, and then became tainted as federal prosecutors alleged FirstEnergy and affiliated companies spent nearly $61 million in a bribery scheme aimed at passing the legislation — remains an embarrassment for the state.

And legislators haven’t even gotten to the root of the problem, which is the abundance of “dark money” — funds meant to influence voter decisions where the donor is not disclosed and the source of the money is unknown.

There have been near-weekly revelations about how former Ohio House Speaker Larry Householder and four others who were arrested in connection with the bribery scheme took advantage of dark money to get their way on HB 6. A Cleveland.com investigation last month looked at how dark money was used by a nonprofit called Partners for Progress that obtained $20 million from FirstEnergy and its affiliates and directed $200,000 to Consumers Against Deceptive Fees, a group designed to attack Cleveland Public Power. Crain’s wrote extensively last fall about the mysterious and well-funded opposition to the Cleveland Metropolitan School District levy. (Didn’t work; the levy passed.)

Examples are numerous. And they’re corrupting our political system.

It’s one thing (totally appropriate) for advocates to spend money on issues or campaigns. But when the public doesn’t know where the money is coming from, or why it’s being spent, citizens can’t make good decisions about the information, and the advocates can too easily spread false information.

Lawmakers this year have to get serious about passing a bill that eliminates the use of dark money. Until they do, we’re going to see more HB 6-style disasters.

Executive Editor: Elizabeth McIntyre (emcintyre@crain.com) Managing Editor: Scott Suttell (ssuttell@crain.com) Contact Crain’s: 216-522-1383 Read Crain’s online: crainscleveland.com

There’s no mistaking it, the COVID-19 pandemic has changed the world as we know it, and that includes the business world.

In every industry, it has forced companies to reevaluate their purpose, search for alternate paths of revenue, and try to recover from the knockout punch of a changing landscape.

It has even exposed the instability of Kaulig is how companies operate from supply executive chains to other critical systems, all while chairman sending shockwaves through major and of Kaulig local businesses’ bottom line.

Companies.

Because the business environment is He lives in becoming more and more unpredict- Hudson. able, it’s important now more than ever for leadership to plan for resiliency and adaptability. But how?

It starts by tapping into the mindset that the way things were done isn’t always going to be the way they will be done again. From my experience in leading businesses and overcoming growth challenges, change can be scary, but it’s necessary to take calculated risks in order to have a chance at new success.

By using today’s technology like Zoom calls, social media, virtual meet-and-greet interviews and meetings, companies can go from surviving to thriving through a new environment — all by realigning their priorities and adapting to the current landscape.

That’s exactly what our team and the Cleveland Indians did with our annual 2020 Cleveland Indians Charities (CIC) Giveathon. In 2019, we helped raise more than $180,000 in the first ever CIC Giveathon, but could we pull this off in 2020? We debated doing nothing — canceling the event and chalking it up as a natural response to the unfortunate events of a pandemic year. We also considered what it might look like to move forward and come up short on our 2020 goal.

Great leadership means you to look for opportunities everywhere. That means we couldn’t just sit idle. Ultimately, we decided that moving forward was the right thing to do, but it would require adaptability and resiliency.

We made the tough decision to not only adapt our traditional in-person event to an all-new virtual showcase but to adapt our fundraising focus as well. These changes would require a different set of resources and reliance on technology in new ways.

We partnered with the Cleveland Metropolitan School District, Breakthrough Public Schools, and the Boys & Girls Clubs of Northeast Ohio to launch something that’s never been done before. It was impactful having partnerships that wanted to give it a shot and take this next step together.

Each dollar raised went to best address the “digital divide,” the gap between children who have access to necessary technology for education and those who don’t.

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

IT STARTS BY TAPPING INTO THE MINDSET THAT THE WAY THINGS WERE DONE ISN’T ALWAYS GOING TO BE THE WAY THEY WILL BE DONE AGAIN.

See KAULIG on Page 9

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

8 | CRAIN’S CLEVELAND BUSINESS | January 25, 2021

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OPINION

BY BRUCE HENNES AND NORA JACOBS

a website that makes it easy to discover, by year, how much individual organizations have donated to which parties and Aesop perhaps said it best: “You are known by the to which House and Senate candidates or incumbents. Accompany you keep.” It appears many organizations are cess to comparable information at the state level varies, but learning the true meaning of that phrase in the wake of likely will move toward more transparency given recent events. All the above is true, as well, for the Republican vote against certifiindividuals making political contribucation of the Electoral College retions, apart from their PAC contribusults and the Jan. 6 U.S. Capitol riots. tions. A quick visit to www.fec.gov/ In a mere week’s time, corporate data/ opens a page with a simple engiants including Marriott Internater-a-name-here search box. Within tional, Dow, JPMorgan, American seconds, one can see campaign donaExpress, Nike, Google, Facebook and tions made by co-workers, friends, Microsoft publicly declared they are competitors, spouses, children, expausing contributions from their potended relatives and celebrities. Similitical action committees (PACS). lar easy-to-search databases are availThey are joined by a growing chorus Hennes is CEO and Jacobs is able at the state level and most that contains some of the world’s executive vice president of Hennes counties across the country. most well-known brands. While Communications, a Cleveland-based Combine this access to informamost of these organizations have tar- crisis management and crisis tion with social media’s role as the geted the members of Congress who communications firm. global town crier and it’s naïve at best voted against certification, many are to assume no one will notice an indimaking larger declarations, including Charles Schwab, which announced it is shutting vidual or PAC’s significant contribution to a recipient of down its PAC and donating the money to charity and to note — especially one with a highly controversial position on high-profile issues or a questionable voting record. historically Black colleges and universities.

While there are many reasons why an individual or Since the first PAC was established in 1943 by the Congress of Industrial Organizations after Congress organization might decide to support a specific lawprohibited unions from donating directly to political maker, those reasons may not be as readily apparent to candidates, PACs have been a strategic tool to help law stakeholders (including employees), the media or the firms, corporations, banks, unions, trade associations public. If yours is not one of the many organizations that and others achieve strategic business objectives affect- have publicly announced that they are withdrawing ed by the laws and regulations that govern — or hinder some or all of their PAC support, now would be a good — their growth. Corporate PACs, at companies like time to get ready to explain why you’ve supported the those listed above, rely on voluntary contributions from individuals you have, and what your path going forward employees — and that is likely one of the reasons the may be. Here are some messages to consider: decisions announced this past week came so swiftly. It  How does this recipient’s voting record and position is challenging to keep employees motivated — or to align with your organization’s mission and values? How keep them at all — if they suddenly find that their own have your contributions helped your organization grow values are diametrically opposed to those held by the and thrive so it can better serve its stakeholders?  If your organization has a strong commitment to cororganization they work for.

For an example of how employee values can shape porate social responsibility, how do these contributions corporate decision-making, read the piece we wrote support that work? when household goods retailer Wayfair ran into an em-  If there are other reasons you support this individual, ployee buzz saw after it was discovered the company what are they? was supplying bedroom furniture to a federal detention  If there are reasons why you no longer support this incenter in Texas. Note too, the story describing the pull- dividual, what prompted you to end your support?

In a similar manner, if your organization took a public back by law firms including Porter Wright and Jones Day after colleagues in the firms raised concerns about position in support of hot-button issues like Black Lives Matter and #MeToo, but your political contributions their work on the 2020 election challenges.

Aside from employee pushback, the values of other speak otherwise, how will you address that discrepancy stakeholders that organizations prize no doubt factored (which is likely to be defined by others as hypocrisy)?

If your organization stands behind its record of politinto the decisions regarding PAC contributions. Those important audiences include customers and clients, inves- ical support, be prepared to defend that record with tors, suppliers and even the communities in which these transparency and honesty. And, be prepared to do so organizations operate. Here, social media’s power to har- before media and social media seize the advantage they ness and broadcast stakeholder outrage are important fac- have in galvanizing opinion quickly. While your PAC — or the personal checks you’ve written — may be only tors for the PAC distribution committee to consider.

No doubt some of the PAC decisions also were colored by one small portion of your organization’s government the fact that PAC contributions are now relatively easy to un- affairs program, these days, it’s the one everyone seems cover. The Center for Responsive Politics, for instance, hosts to be talking about.

We learned this was a critical space for local area kids, especially when many were starting off the school year learning remotely due to COVID-19. In our discussions, we knew things were going to be different, but we didn’t want that to stop us from helping the community. We found this to be the most appropriate response and goal for our organizations during such a time as this.

Sadly, countless children and families don’t have the right technology or even the internet. And coupled with this data, we learned that Cleveland is the fourth-worst “connected” city in America. More than 76,000 Cleveland households (44%) do not have cable, DSL or fiber internet subscriptions.

And even when we hopefully move beyond

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COVID-19, students and families still need WiFi access to learn and have the same resources as other students in more connected areas.

By adapting our mindset, collaborating with other organizations and being resilient in our actions, we were able to crush our goal and raise over $235,000 in the special game telecast produced by SportsTime Ohio and simulcast on WKYC. The second annual CIC Giveathon was a major success, thanks to Cleveland Indians fans, our partners and our resilient team.

When I started LeafFilter in my basement in 2005, I knew that resilience was the key to success. Fifteen years later, I’m reminded that resilience isn’t just about our passion, it’s also about our willingness to adapt. Overcoming obstacles is nothing new for companies, but by leaning into what’s happening in the world, we’re better prepared for success and ready to adapt to what comes next.

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G

A ap

BY K

ANDREA LEVY FOR CRAIN’S CLEVELAND BUSINESS

NEWSMAKERS OF THE YEAR

Essential workers

From hospitals and factories to grocery stores, those on the front lines are the heroes of 2020 BY LYDIA COUTRÉ | While an unprecedented number of

Americans converted corners of their homes into temporary offices in 2020, millions had no choice but to go to work every day.

They are the health care providers battling COVID-19, the manufacturing workers responding to and keeping up with new and shifting demands, people along the food supply chain — from agricultural workers to grocery store employees — feeding communities. They are the first responders, cleaning staff, teachers, airline workers, community service providers, postal workers and delivery drivers. They worked in childcare, nursing homes, public transportation, warehouses, drug stores, retail and restaurants.

The pandemic has underscored what has always been true: The work of who we now call “essential workers” is absolutely vital.

Last March, Ohio’s stay-at-home order forced nonessential businesses to temporarily close. Beyond broad categories, what work was essential was left to businesses.

The definition of this new category of workers continued to be flexible in many ways throughout the rest of the year.

Under an often critical spotlight, the state worked through its balancing act of allowing businesses to reopen under health and safety guidelines, shifting from a stay-athome order to a Stay Safe Ohio order in May. “As governor, I have two jobs: Get people back to work and keep people safe,” Gov. Mike DeWine said in April. “If Ohioans go back to busi-

ness as usual, the curve would go straight back up.”

However they were ultimately defined, essential workers throughout the year risked COVID-19 exposure to keep society functioning.

They are, without a doubt, the heroes of 2020.

They are also more likely to have a household income of less than $40,000 and more likely to be Black, according to the Kaiser Family Foundation. They disproportionately lack health insurance during a pandemic, according to various analyses, leaving them exposed to potential out-ofpocket health care costs.

See WORKERS on Page 16

Essential workers timeline March 9, 2020: COVID-19 first detected in Ohio, with three cases in Cuyahoga County. (Later testing shows cases may have been in Ohio for weeks prior.) Gov. Mike DeWine declares state of emergency.

March 23: Ohio’s staty-at-home order goes into effect. It lays out essential businesses that will remain open.

May: Stay Safe Ohio order replaces the stay-at-home order, allowing some businesses to reopen.

Mid- to late May: Restaurants, bars, personal services and gyms are allowed to reopen, with safety protocol conditions.

10 | CRAIN’S CLEVELAND BUSINESS | JANUARY 25, 2021

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Gov. Mike DeWine’s decisive, science-driven public health actions at the onset of the COVID-19 pandemic won the long-serving politician a national reputation, bipartisan support and some unlikely critics.

His actions in March 2020 — ordering business and school closures, and stay-at-home advisories, and holding daily press conferences — made the now 74-year-old governor a frequent guest on a number of national news programs.

“The governor’s response was highly praised, and it set Ohio apart against other states,” J.P. Nauseef, president and CEO of JobsOhio, said in December.

Nauseef estimated that DeWine generated about $25 million in free media during the early months of the pandemic, and JobsOhio, the state’s nonprofit economic development organization, has used the positive awareness to market the state to those looking to leave the coasts.

In the early months of the pandemic, the governor used this newfound influence to urge the U.S. Food and Drug Administration to provide emergency approval of Columbus-based Battelle’s surgical-mask sterilization process to help ease scarcity in personal protection equipment and bolster one of the state’s largest organizations.

The conservative Republican also deftly walked the line with a White House that easily took offense to any disagreement with the federal response to the pandemic, and DeWine attempted to balance public health and business needs as he methodically reopened the state economy.

“As governor, I have two jobs: Get people back to work and keep people safe. ... I am optimistic about our future, but I’m not going to be reckless about it,” DeWine said in spring.

He also tasked JobsOhio to distribute $250 million to help Ohioans find work and to fund job training, and another $250 million for manufacturers to retool and produce PPE. Partnering in April with Michigan, Wisconsin, Minnesota, Illinois and Kentucky officials to collectively work to mitigate the regional economic crisis caused by the virus, Ohio under DeWine’s direction was seen as the standard-bearer for effective policy.

“Here in the Midwest, we are bound by our commitment to our people and the community,” DeWine said at the time. “We recognize that our economies are all reliant on each other, and we must work together to safely reopen them so hardworking people can get back to work and businesses can get back on their feet.”

In October, the state announced that $429.5 million in federal CARES Act dollars would go to low-income families, small business relief, restaurants and bars, higher educa-

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Gov. Mike DeWine timeline March 3, 2020: DeWine cancels the Arnold Sports Festival in Columbus before any COVID-19 cases are reported in Ohio.

March 16: Hours before the polls were set to open for the state’s primary election, DeWine announces voting will be delayed.

April 29: DeWine announces Ohio “has flattened the COVID-19 curve” and stopped hospitals from being overwhelmed.

Aug. 7: DeWine tests positive for COVID-19, but his results are negative in a second test later the same day.

Aug. 24: Republican state Reps. John Becker, Candice Keller, Nino Vitale and Paul Zeltwanger introduce articles of impeachment over disagreements with how DeWine handled public health orders during the pandemic.

Nov. 2: DeWine announces a $5 billion dividend from the Ohio Bureau of Workers’ Compensation after a $1.54 billion dividend in April and one for $1.3 billion in October.

Dec. 4: DeWine vetoes a legislative measure meant to limit the state’s health orders, saying it’s “not in the best interest of protecting the health and safety of all Ohioans.”

Advice for the life you lead

Dec. 14: The first doses of COVID-19 vaccines in the state are given to health care workers in Ohio.

Let your goals be your guide

tion, nonprofits and the arts. As part of that funding, Lt. Gov. Jon Husted unveiled the creation of the Small Business Relief Grant program, which beginning in November offered a total of $125 million, in $10,000 grants, to Ohio businesses with no more than 25 employees.

“Business can use the grants to pay for various expenses, including mortgages, rent, utilities, salaries, health care premiums, business supplies and other related costs that help keep that business open,” Husted said in October.

Throughout the tumultuous year, DeWine weathered the resignation of his hand-picked health department director, Dr. Amy Acton, and the deferral of another potential pick before appointing Stephanie McCloud, former BWC director, to the post. Members of his own party

would bring impeachment articles against DeWine, as other state politicians introduced and passed legislation aimed at stripping him of his public health powers.

As the year ended, though, a ray of hope emerged as Ohio’s frontline health care worker and nursing home workers and residents were first in line to receive one of the two FDA-authorized coronavirus vaccines with plans to add Ohioans 65 and older by early 2021.

“The plan for the vaccine distribution will continue to be finetuned, but the objectives are to save lives, slow the spread of the virus and ensure those on the front line receive the vaccine quickly,” DeWine said in December.

Kim Palmer: kpalmer@crain.com, (216) 771-5384, @kimfouroffive

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Ohio’s House Bill 6

A bailout embroils FirstEnergy, the state and political leaders in controversy

BY DAN SHINGLER

House Bill 6 timeline

House Bill 6, the law that federal prosecutors say traded a subsidy for FirstEnergy Corp.’s former nuclear and coal power plants for the credibility of the Ohio Legislature, has provided no shortage of news and controversy.

The love child of Republican lawmakers and FirstEnergy, which wanted state ratepayers to subsidize its nuclear and coal-fired power plants, the law was passed in the summer of 2019.

It was immediately lambasted by those who support renewables, such as Vox News, which termed it “the worst energy bill of the 21st century” and a “corrupt bailout for dinosaur power plants that screws renewable energy in the process.”

And that was before the summer of 2020, when federal prosecutors claimed the law was passed via a $60 million bribery scheme orchestrated by former Ohio House Speaker Larry Householder, a Republican from Perry County.

There’s been much talk about repealing the law, but there has yet to be action to do so in the statehouse.

HB 6 was meant to set much of Ohio’s energy policy into law. Lawmakers, primarily Republicans, saw the law as a way to do away with mandates that require energy efficiency and the use of renewable energy.

At the time of HB 6’s proposal, FirstEnergy claimed it was struggling with its Perry and Davis-Besse nuclear power plants, owned by former subsidiary FirstEnergy Solutions,

July 23, 2019: House Bill 6 is signed into law by Gov. Mike DeWine.

July 21, 2020: Federal agents arrest Ohio House Speaker Larry Householder on charges related to a $60 million bribery scheme to pass and defend the bill.

Oct. 29: FirstEnergy fires its CEO, Charles Jones, along with two senior vice presidents for violating the company’s code of conduct.

Nov. 9: FirstEnergy reveals it has separated itself from its chief legal officer and chief ethics officer.

Jones

CRAIN’S FILE

along with some coal-fired plants. The Akron company said it was increasingly difficult to compete in a new era of cheap natural gas and plummeting renewable power prices.

HB 6 was a way to address all these of issues at once. It did away with Ohio’s renewable energy standards — which Republican lawmakers said were making Ohio’s electricity too expensive but which others said were supporting a new, needed industry in the state — and at the same time provided ratepayer subsidies to coal and nuclear plants, including Ohio’s Davis-Besse and Perry plants.

Controversy was baked in from the time the bill was proposed, but it intensified as lobbying efforts gained steam and Ohioans were subject to a rash of advertisements, most of them supporting HB 6’s passage and many

of them paid for with so-called dark money that could not be traced.

Some of the claims were outrageous, including that without the bill the Chinese would take over Ohio’s electric grid and the state’s energy jobs.

After more than three months of lobbying, advertising and intense debate, the bill passed and was signed into law by Gov. Mike DeWine.

For some time afterward, what followed was mostly complaints from those who opposed the law and a failed effort to get a statewide referendum on the ballot to repeal the measure. The complaints often were dismissed as grousing from clean-energy proponents, though backers of new natural gas-fired plants built or being planned in Ohio without subsidies also complained bitterly about unfair competition.

Nov. 20: PUCO chairman Sam Randazzo resigns after his home is raided by federal agents.

Dec. 22: After months of debating whether and how to repeal the tainted law, Ohio legislators adjourn their lame duck session without addressing the issue.

Analysis also continued about the law’s real impact on Ohio and its ratepayers, and there was continued head scratching over who had paid for all of those dark-money ads.

A lot of heads stopped itching and the minds inside were blown on July 21, though. That’s the day FBI agents arrested Householder and alleged he had orchestrated a $60 million bribery scheme to pass and defend HB 6, which he had championed in the Legislature. Former Ohio Republican Party chairman Matt Borges, Householder adviser Jeffrey Longstreth and lobbyists Neil Clark and Juan Cespedes also were arrested that day.

The largest scandal in Ohio’s history, it was also a political earthquake that created tsunamis that went on to engulf other high-profile Ohioans.

While federal prosecutors only

said the bribes were paid, or perhaps extorted, from “Company A,” the assumption is that Company A was FirstEnergy.

And on Oct. 29, FirstEnergy fired its CEO, Akron native Charles Jones, along with senior vice presidents Dennis Chack and Michael Dowling.

The company did not specifically say they were linked to the scandal, but did say they were let go because they had “violated certain FirstEnergy polices and its code of conduct.”

In November, FirstEnergy disclosed it had also “separated” itself from its senior vice president and chief legal officer Robert Reffner, as well as vice president, general counsel and chief ethics officer Ebony Yeboah-Amankwah.

See HOUSE BILL 6 on Page 17

Marcia Fudge

A longtime housing advocate, U.S. representative gets Biden administration Cabinet nod

BY JAY MILLER

That U.S. Rep. Marcia Fudge was a candidate for two spots in the Cabinet of President-elect Joe Biden attests to the power the former mayor of Warrensville Heights has amassed in her political career.

Her nomination to the top spot at the Department of Housing and Urban Development would put her at the helm of an organization with a budget of nearly $50 billion that is focused on promoting affordable housing and ending homelessness, both of which are important focuses for Northeast Ohio.

She may have been hoping to get the job as Secretary of Agriculture, but she has not overlooked housing issues in a 12-year congressional career that began when she won a special election to succeed the late Stephanie Tubbs Jones, who died suddenly from a brain aneurysm in 2008.

Shelterforce, a national media platform that covers the worlds of housing, community development and neighborhoods, recently noted that housing advocates who have worked with Fudge in Ohio believe

she understands the issues of housing stability and affordability.

A release from Biden’s transition office called Fudge a “longtime champion of affordable housing, urban revitalization, infrastructure investment and other reforms to enhance the safety, prosperity and sustainability of American communities.”

In 2012, for example, she and the late Steve LaTourette, a Lake County Republican Congressman, unsuccessfully pushed a bill that would have made $4 billion available to the states to help communities swamped by the need to demolish vacant and abandoned properties.

Fudge also has been a strong advocate for reducing the disparity between the pay of men and women.

“We can’t continue to have more than 51% of the people who live in this country, as well as 54% of the people who vote in this country, continue to be underpaid,” she told Crain’s in 2013.

More recently, Fudge was a co-sponsor, with Rep. Anthony Gonzalez, a Republican who represents the 16th District in Northeast Ohio, of a bill that would allow college ath-

letes to benefit financially from their name, image and likeness through endorsements deals.

Fudge was a close friend of Tubbs Jones, serving under her in the office of the Cuyahoga County prosecutor.

Fudge later became chief of staff in Tubbs Jones’ congressional office.

While in the prosecutor’s office, Fudge was elected president of Delta Sigma Theta sorority, an organization for Black women committed to public service. A predecessor of Fudge’s at the head of HUD, Patricia Roberts Harris, who served under President Jimmy Carter, was also a member of the sorority.

While in Congress, Fudge served a two-year term, beginning in November 2012, as chair of the Congressional Black Caucus. Among that group’s founding members was Louis Stokes, who preceded Tubbs Jones in representing Cleveland’s East Side.

Fudge was an early critic of President Donald Trump, skipping his inauguration in 2017 in support of the late Georgia Rep. John Lewis, who did not consider Trump a legitimate president. She also, briefly in 2018, considered mounting a challenge to House Speaker Nancy Pelosi.

Fudge’s political life began at a young age, campaigning for Carl Stokes in his run to be mayor of Cleveland in 1967. She graduated from Shaker Heights High School with future political leaders Jane Campbell, mayor of Cleveland from 2002 to 2006, and Peter Lawson Jones, a former state representative and Cuyahoga County commissioner.

Fudge’s two passions were sports and politics. In high school, she played several sports, including basketball, field hockey and soccer. She was voted outstanding female athlete of her graduating class.

After high school, she earned degrees from Ohio State University and Cleveland-Marshall College of Law at Cleveland State University before launching her career in public life.

“I’m a competitive person, but a team sports person,” she said in 2013, when she was honored in Crain’s Women of Note feature. “In team sports, you’re not competing against the people around you, you’re competing with the people around you.”

Jay Miller: jmiller@crain.com, (216) 771-5362, @millerjh

Marcia Fudge timeline 1996: Elected to a four-year term as national president of the Delta Sigma Theta sorority.

1998: Follows newly elected U.S. Rep. Fudge Stephanie Tubbs Jones to Washington, D.C., serving as her chief of staff.

1999: Elected mayor of Warrensville Heights, the first woman and first Black individual to hold the office.

2008: Running unopposed, elected at a Nov. 18 special election to succeed Tubbs Jones as the representative for 11th District of Ohio after Tubbs Jones’ sudden death from a brain aneurysm.

2012: Elected chair of the Congressional Black Caucus.

2020: Nominated by President-elect Joe Biden to serve as Secretary of Housing and Urban Development.

12 | CRAIN’S CLEVELAND BUSINESS | JANUARY 25, 2021

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Loretta Mester

Loretta Mester timeline March 3, 2020: The Fed agrees to an emergency rate cut of half of a percentage point to combat a coronavirus-induced economic slowdown. Mester votes yes.

President of Cleveland Fed brings local perspective to monetary policy

BY JEREMY NOBILE

Last spring, as the Federal Reserve System moved to cut the federal funds rate to help shore up the economy and financial markets amid a recession spurred by a global health crisis, Loretta Mester stood out as a lone dissenter on sinking those rates to zero.

As president of the Federal Reserve Bank of Cleveland, Mester is an every-other-year voting member on the Federal Open Market Committee (FOMC), which is composed of Fed governors who decide the direction of central banking system’s monetary policy.

For Mester, 2020 was one of those voting terms — and what a term it turned out to be.

While economic expansion felt a little long in the tooth going into last year, little did anyone expect the even greater significance Fed policy might have as the country would be soon reeling from the COVID-19 pandemic.

Through Mester, the Cleveland region had a voice in the Fed policies that attempted to achieve stability in a period of unique economic uncertainty that continues to linger. The same can be said for the entire Fourth Federal Reserve District served by the Cleveland Fed, which comprises Ohio, western Pennsylvania, eastern Kentucky and the northern panhandle of West Virginia.

But being based in Cleveland means Mester brings a unique local

perspective to the broader picture in the region.

Mester is considered relatively more of a monetary hawk than a dove — hawks tend to favor low inflation and higher interest rates — so it follows that she may want to avoid rock-bottom rates.

Being the lone dissenter in an emergency FOMC vote on March 15 to drop rates to a range of 0%-0.25%, however, made headlines all the same.

Less than two weeks earlier, the FOMC unanimously agreed to drop rates from 1.50%-1.75% to 1%-1.25%.

But at the March 15 meeting, Mester said she would’ve preferred a cut to a range of no lower than 0.5%-0.75% A sharp, outspoken and research-minded Fed economist, Mester typically explains her decisions in myriad speaking engagements. With those canceled amid coronavirus, she posted her comments to the Fed website.

“When markets are not functioning well, the transmission mechanism of monetary policy to the economy is disrupted, and any reduction in the target federal funds rate will have less of an impact on the real economy,” Mester explained. “In current circumstances, with social distancing and the stoppage of spending activity, rate cuts are also less impactful. I dissented because I viewed a 50 basis point reduction in the federal funds rate as appropriate, in

March 15: The Fed again moves to drop interest rates, this time taking them down to a range of 0%-0.25%. Mester stands out as a lone dissenter among Federal Open Market Committee voting members.

Sept. 16: The Fed votes to keep the federal funds rate at rock-bottom levels and reaffirms seeking maximum employment and inflation at the rate of 2% over the longer run.

Mester votes yes on the policies while two others dissent.

Oct. 7: Mester joins Minneapolis Fed president Neel Kashkari (who grew up in Akron) and other central bankers in calling for additional government aid as President Donald Trump looks to block government stimulus until after the November election.

JASON MILLER FOR CRAIN’S

support of the liquidity actions we were taking and in light of the outlook. I did not favor returning the funds rate to zero and using up all of our interest-rate policy space at this time when the transmission mechanism of monetary policy to the economy is impaired. “ Mester, a respected financial scholar, later told the Wall Street Journal she didn’t regret the dissenting FOMC vote. There’s ultimately less “bang for the buck” in a rate cut amid conditions at the time, she said.

Come September, Mester agreed to keep the federal funds rate at its existing low levels.

Never reticent to share her educated opinions, Mester in the fall began advocating for more fiscal policies from the federal government. She postulated that fiscal policy is need-

Nov. 19: Doubling down on previous comments, Mester, in an interview with Bloomberg, advocates for more fiscal policy support over additional monetary policy to better stimulate the economy.

ed more than monetary policy to better stimulate a languishing economy.

The perspective was shared by some other central bankers, and their related comments gained steam around the time President Donald Trump looked to block fiscal stimulus until after the November election.

While Mester has rotated out of a voting post with the FOMC this year — Cleveland and Chicago Fed presidents rotate in and out of the same seat — she’ll be back in 2022. The fact the leader of the Cleveland Fed district gets a vote every other year means this region and the companies in it get more weight in the Fed system compared to those who participate every third year, like the Richmond, Boston and Philadelphia districts.

Yet, whether or not she’s a voting

member on the FOMC, the significance in her post in representing the Rust Belt during such a tumultuous economic period can’t be understated.

So what does Mester think of the future of policy from here? Well, don’t expect many drastic changes. She anticipates interest rates will likely remain on the floor and the purchasing of government bonds to continue.

“Monetary policy will need to remain highly accommodative for quite some time because achieving our monetary policy goals is likely to be a journey and not a sprint,” said Mester this January at a virtual meeting of the Allied Social Science Associations, as reported by Reuters.

Jeremy Nobile: jnobile@crain.com, (216) 771-5362, @JeremyNobile

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JANUARY 25, 2021 | CRAIN’S CLEVELAND BUSINESS | 13

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Andrew Berry

NFL’s youngest GM and Browns are ready to win big

BY KEVIN KLEPS

“Alignment” and a “shared vision” are buzzwords in almost every major professional sports hire.

When it comes to the Cleveland Browns, whose history of front office dysfunction has coincided with two-plus decades of mostly terrible results, those phrases were met with derision.

“It can’t just be corporate speak or talk,” Andrew Berry said last February, when he was introduced as the Browns’ sixth six general manager since the Haslams purchased the team in 2012. “It has to be something that we demonstrate in action on a daily basis.”

How would Berry, the youngest GM in NFL history, and Kevin Stefanski, a first-time head coach who was only 15 years removed from his playing days in the Ivy League, turn around the franchise?

Berry, who was the Browns’ vice president of player personnel from 2016-18, was well aware of the history. He was there for the lowest point: the 1-31 stretch that included the winless 2017 season.

But he made it clear from the onset that this situation was different.

The Browns, after a much-hyped 2019 season ended with another round of firings, were ready to win.

He was right.

The Browns’ 11-5 record in 2020 was the franchise’s best in 26 years.

More importantly, the club ended the NFL’s longest playoff drought — 18 years — and won a playoff game for the first time since 1995.

The 38-year-old Stefanski is a

Jan. 28, 2020: Berry is announced as the Browns’ next general manager.

At 32, he’s the youngest GM in league history.

March 16: The Browns Berry get off to an aggressive start in free agency, signing tight end Austin Hooper, right tackle Jack Conklin and backup quarterback Case Keenum to lucrative deals.

April 23: Berry’s first draft as the Browns’ GM kicks off with the selection of left tackle Jedrick Wills at No. 10 overall. The former Alabama standout started all but one game as a rookie.

Baker Mayfield and Myles Garrett celebrate after the Browns beat the Pittsburgh Steelers on Jan. 10 for the franchise’s first playoff win since Jan. 1, 1995. | JUSTIN K. ALLER/GETTY IMAGES

leading Coach of the Year candidate. The former Minnesota Vikings offensive coordinator was hired a couple weeks before Berry, now 33, joined Miami’s Chris Grier as the only Black general managers in the NFL. While Berry can’t take credit for the decision to hire Stefanski, the GM, along with chief strategy officer Paul DePodesta, favored Stefanski over Freddie Kitchens during the 2019 coaching search.

John Dorsey, then the GM, went with Kitchens, and Berry left for

the Philadelphia Eagles, with whom he was the VP of football operations.

A year later, Berry returned to Cleveland. Like Stefanski (a former University of Pennsylvania defensive back) and DePodesta (a Harvard alumnus who is a former GM of the Los Angeles Dodgers), he’s an Ivy Leaguer who is analytically inclined.

Berry, a Harvard graduate with a bachelor’s degree in economics and a master’s degree in computer science, also has a very strong football background. The three-time

Jan. 3, 2021: The Browns clinch their first playoff berth in 18 years with a 24-22 win over a Pittsburgh Steelers team that was resting several key starters.

Jan. 10: The Browns, without head coach Kevin Stefanski and several key players because of COVID-19, rout the Steelers on the road for their first playoff win in 26 years.

all-Ivy League selection has been a scout and a pro scouting coordinator, in addition to his roles in player personnel with the Eagles and Browns.

Thus far, the Browns seem to have finally found the right mix.

Lourenco Goncalves The company Lourenco Goncalves leads today is significantly different from the one he was leading six years ago.

But they’re technically the same company.

Goncalves took over the helm of what was then known as Cliffs Natural Resources Inc. in 2014 after a contentious proxy battle. Today, he’s chairman, president and CEO of Cleveland-Cliffs Inc. The company changed its name in that time, but that’s the least of its transformation.

The 174-year-old company had been an iron ore producer, but after a series of acquisitions, it has grown into a steelmaker — and a large one at that.

It’s the vision of Goncalves that made Cleveland home to a new steelmaking giant, and it’s likely that the growth will continue.

Turning the iron ore company into an integrated steel producer was part of Goncalves’ goal from the start,

though he didn’t share that publicly early on, unsure if steelmakers would be interested in selling.

“I don’t promise what I can’t deliver,” he said in an interview to Crain’s in the fall.

Goncalves started by shedding the company’s less profitable international assets and focusing on its business in the U.S. Then, in 2020, the changes started in earnest. In March, Cleveland-Cliffs acquired AK Steel Holding Corp., a maker of flat-rolled carbon, stainless and electrical steel products. The significant deal was valued at more than $1 billion.

And the next acquisition, announced about six months later, was even bigger. Cleveland-Cliffs in December completed the acquisition of basically all the operations of ArcelorMittal USA LLC and its subsidiaries, a $1.4 billion deal. That deal made Cleveland-Cliffs North America’s largest flat-rolled steel producer.

Combined, the companies had pro forma revenues of about $17 billion

14 | CRAIN’S CLEVELAND BUSINESS | JANUARY 25, 2021

and combined adjusted EBITDA (earnings before interest, taxes, depcreciation and amortization) of about $1.7 billion for 2019, a news release at the time stated.

In the release, Goncalves said the acquisition “opens a new chapter in the history of the steel business in the United States.”

“Our new footprint expands our technological capability and enhances our operational flexibility, elevating Cleveland-Cliffs to a prominent role as a major player in supporting American manufacturing, American future investments in infrastructure, and the prosperity of the American people through good paying middle-class jobs,” he continued in the release.

Prior to 2020, Cleveland-Cliffs was a supplier of raw materials, but these acquisitions have put the production in Goncalves’ hands.

And the deals have greatly diversified the company’s customer base, which had previously been the steelmakers themselves. After the acqui-

Berry’s first draft as the Browns’ GM began with the selection of Jedrick Wills, who, at 21, could protect Baker Mayfield’s blind side at left tackle for the next decade. In free agency, the team signed starting tight end Austin Hooper and top right tackle Jack Conklin, along with backup quarterback Case Keenum, on the opening day last March. Conklin was a first-team allpro selection by the Associated Press and Pro Football Focus.

Mayfield excelled under Stefanski’s tutelage, and Berry likely will try to sign the quarterback to a long-term extension in the coming months. The combination of a solid young core, smart people in charge and an excellent salary-cap situation has the franchise in its best position in decades.

Berry also has been a key part of the Browns’ social justice efforts.

After George Floyd was killed in May while in police custody in Minneapolis, Berry sent a lengthy email to Browns employees that encouraged them to sign up to participate in social activism initiatives and dialogue, and donate anything to a social justice cause. Within a day, the Browns’ #BeTheSolution campaign had raised almost $200,000 for 14 charities.

“NFL teams, in general, have such an influence on their communities that if we can’t be at the front of the pack on some of these issues that impact all of us, then shame on us,” Berry said.

Kevin Kleps: kkleps@crain.com, (216) 771-5256, @KevinKleps

Lourenco Goncalves timeline

CEO transforms Cleveland-Cliffs into a steelmaker

BY RACHEL ABBEY MCCAFFERTY

C

Andrew Berry timeline

sitions, Cleveland-Cliffs provides steel products for industries as varied as HVAC and health care.

In his vision of Cleveland-Cliffs as a steelmaker, Goncalves wanted to see the company making value-added products, not commodity ones. And that’s just what it’s doing. The company even makes some automotive components through what had been an AK Steel subsidiary. That work takes place at a highly automated plant, which Goncalves said is the “future.”

Looking forward, Goncalves has said part of his focus will be on creating cleaner steel using raw materials like hot-briquetted iron that help the company lower its carbon emissions.

One thing’s for sure: The era of Cleveland-Cliffs as a behind-thescenes kind of company is in the past. Today’s Cleveland-Cliffs is focused on growth, change and the future. And it has Goncalves to thank for that.

Rachel Abbey McCafferty: (216) 771-5379, rmccafferty@crain.com

March 13, 2020: Iron ore producer Cleveland-Cliffs Inc. completes the acquisition of AK Steel Holding Goncalves Corp., effectively becoming a steelmaker.

March 19: As the COVID-19 pandemic takes hold, Cleveland-Cliffs temporarily shuts down construction at its hot-briquetted iron project in Toledo.

June 9: The company shares that it had started bringing back workers to complete the construction in Toledo.

Sept. 28: The company announces plans to acquire the operations of ArcelorMittal USA LLC and its subsidiaries for about $1.4 billion.

Dec. 9: Cleveland-Cliffs completes the ArcelorMittal USA acquisition.

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Carey Jaros

Carey Jaros timeline

CEO leads GOJO in stepping up as pandemic-stricken world needs its hand sanitizer

BY DAN SHINGLER

Carey Jaros knew it was an achievement to be named the next president and CEO of Akron’s GOJO Industries on Nov. 5, 2019.

After all, the 73-year-old business was closely held by the Kanfer family that founded it and largely ran it for its entire history.

What no one knew then was that she’d soon be running a company dramatically involved with helping the world deal with its worst pandemic in 100 years.

She seems to have taken to both her new role and its unexpected challenges with aplomb and effectiveness.

Jaros took the job with much fanfare and accolades. She had seemingly showed the Kanfers during her three years as GOJO’s chief strategy officer that she knew how to lead the company forward.

Outside the company, she was seen as an example of how to break through the glass ceiling that prevents many women from becoming chief executives.

Ironically, perhaps, one of her first challenges was dealing with a complaint from the U.S. Food and Drug Administration, which said in January 2020 that GOJO could not claim in its marketing that its Purell hand sanitizer helped eliminate specific viruses, including Ebola and flu.

GOJO addressed that quickly, changing its marketing message to claim only that Purell “kills more than 99.99% of most common germs that may cause illness.”

The whole matter soon started sounding like a silly controversy as the Centers for Disease Control and Prevention was warning Americans to protect themselves from the apparent threat of a new disease, COVID-19.

The chief recommendation? Wash your hands regularly, or if soap and water are not available, use a hand sanitizer that is at least 60% alcohol.

Purell is made of 70% alcohol.

Soon, Purell was out of stock in just about every store that carried it.

Americans and people around the world bought it up. Hospitals and health care providers did the same.

GOJO couldn’t keep up with demand.

Connecting your life’s work to their life together

HOME

Suddenly, the chief challenge for Jaros and the company wasn’t marketing itself to sell more of its flagship product. It was finding ways to quickly ramp up production to meet demand that showed no sign of slowing down.

When the World Health Organization declared on March 11 that COVID-19 was a pandemic, Jaros was not only ready, but she was able to say that the company already had been responding for months.

“After becoming aware of the developing situation in China last December, we immediately activated our demand surge preparedness team and began significantly increasing production at our two Ohio manufacturing facilities and a manufacturing facility in France,” Jaros wrote in a March 13 statement.

That still wasn’t enough, though, and in April GOJO found itself doing a sort of sales triage, deciding to sell its products to health care and other front-line workers before it would focus on getting retailers’ shelves restocked. At the same time, it was preparing to expand with new facilities

ABOUT

January 2020: Jaros begins her tenure as president and CEO at GOJO. GOJO addresses FDA concerns about claims that Purell kills specific pathogens.

Jaros

April: GOJO explores sites for further expansion, including in Stark County.

June: GOJO announces it is opening new facilities in Maple Heights and in Stark County.

November: GOJO leases 700,000 square feet in the Cleveland I-X Center for warehousing.

in Ohio, including in Stark County.

In June, GOJO had not only secured its expansion site in Stark County, but also announced it was adding a site in Maple Heights and was expanding in Cuyahoga Falls. It said it would be hiring more than 200 more people to help match production with demand.

The production increase continued throughout the year, culminating in November when GOJO announced it would be leasing 700,000 square feet of Cleveland’s shuttered I-X Center because the company needed a lot more space to manage its inventory.

While others began making hand sanitizer for the retail market, many of those producers have been small, including many distillers who were looking for ways to effectively use their own production capacity. Purell seems to have maintained its market dominance among health care facilities and with other front-line workers — something that will likely only bolster its reputation going forward. The company appears to be finally catching up with demand, too, as there’s now Purell available at retailers and places like Amazon, though it still often sells out.

Under Jaros’ leadership, the company not only has sold a record amount of Purell, but it also might have saved lives and no doubt has added peace of mind for many.

Dan Shingler: dshingler@crain.com, (216) 771-5290, @DanShingler

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John Morikis

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CEO steers Sherwin-Williams to stay in Greater Cleveland

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BY MICHELLE JARBOE

The Sherwin-Williams Co. dominated local headlines in early 2020, when the company announced it would keep its headquarters, and thousands of jobs, in Greater Cleveland.

The Fortune 500 company plans to reshape downtown just west of Public Square, where 1 million square feet of offices will rise from long-languishing parking lots. In Brecksville, the company is planning a consolidated research and development campus, spanning roughly 500,000 square feet.

Together, the projects will carry a price tag in excess of $600 million.

In the midst of a pandemic that has caused major corporations to reconsider where and how their employees work, Sherwin-Williams hasn’t backed away from those plans.

“We recognize that the development, engagement and sense of community our employees share has been essential to our success for more than 150 years and would be difficult to sustain over the long term with a remote-based workforce,” John Morikis, the company’s chairman and CEO, said in a news release in September.

A company spokeswoman said Morikis was unavailable for an interview.

The 57-year-old Bay Village resident has worked at Sherwin-Williams since 1984, when he started out as a management trainee in the company’s paint stores group. He became chief executive in January 2016 and chairman a year later.

Joe Roman, president and CEO of the Greater Cleveland Partnership, described Morikis as a “behind-thescenes civic leader” with a relatively quiet, but confident, style.

“When he has something that he believes is important for the community to say, he’ll say it,” Roman said of Morikis, a director on the partnership’s board.

Last year, Sherwin-Williams donated thousands of gloves and N95 masks to local hospitals and first responders. The company joined a slew of donors in seeding a regional fund launched to help nonprofit groups provide targeted support during the coronavirus crisis. With little fanfare, Sherwin-Williams also contributed $100,000 to a fundraising effort aimed at helping small businesses rebuild after a May 30 riot downtown.

The global paint and coatings giant, which acquired competitor Valspar

WORKERS

From Page 10

The Center for Economic Policy and Research published a basic demographic profile of front-line workers in six broad industries: grocery, convenience and drug stores; public transit; trucking, warehouse and postal service; building cleaning services; health care, child care and social services.

The center found workers in frontline industries are disproportionate-

The ‘superblock’ near downtown Cleveland’s Public Square, currently four blocks of parking lots, will soon house the new headquarters of Sherwin-Williams Co. The property is viewed from the 52nd floor of the Terminal Tower. | DAVID KORDALSKI/CRAIN’S CLEVELAND BUSINESS

John Morikis timeline February 2020: Sherwin-Williams ends a national site search by announcing that it will stay in Cleveland. The company picks parking lots just west of Public Square as the site of its future headquarters and earmarks land in Brecksville for a consolidated R&D center.

March: Brecksville, Cleveland, Cuyahoga County and JobsOhio OK incentives for the headquarters and R&D deals. As COVID-19 upends the economy, the state temporarily shelves two proposed loans for the projects. Sherwin-Williams buys its intended site downtown.

July: CEO John Morikis says Sherwin-Williams is seeing “unprecedented” demand from do-it-yourself customers amid the pandemic.

Morikis

September: The company confirms that it’s still committed to the headquarters and R&D projects despite pandemic-induced uncertainty about the office market’s future.

The company delays its anticipated move-in date to 2024.

October: The company buys its Brecksville site, at I-77 and Miller Road.

December: The Ohio Controlling Board approves $70 million in interestfree, potentially forgivable loans for the projects.

ly women, who represent about half of all workers but nearly two thirds of front-line workers. People of color and immigrants are overrepresented in many occupations in front-line industries. More than a third of workers in many front-line industries live in low-income families, according to the center.

In short, the pandemic has highlighted and exacerbated financial and structural inequities that leave low-income workers vulnerable, particularly people of color.

In an adviser column for Crain’s

in April, Jill Rizika, executive director of Cleveland nonprofit Towards Employment, pointed to numerous factors that workers consistently cite as important to job satisfaction: quality supervision, safety, availability of paid time off and affordable health care, more control over their schedules, and opportunities for training and advancement.

“These issues are more important than ever for low-wage workers, and the current crisis certainly demonstrates that low wages are certainly not the equivalent of low value,” she

Corp. in 2017, employs more than 4,600 people in Northeast Ohio and upward of 53,000 full-time workers worldwide, according to Crain’s research.

The company’s share price climbed 28% last year, as housebound consumers tackled home-improvement projects and offset a slowdown in commercial construction. Sherwin-Williams responded with supply-chain adjustments, such as switching out 5 gallon pails for 1 gallon cans on some production lines.

“We’ve deliberately structured our business so that we are able to capture demand whichever way the market may tilt,” Morikis said during a September presentation to investors.

When the company launched a national site search to replace its antiquated headquarters in the historic Landmark Office Towers downtown, economic development officials teamed up to hang onto a household name — and a hefty payroll.

wrote. “These essential workers are now caring for the sick, driving buses, manning the checkouts at grocery stores and pharmacies, and preparing takeout food, while putting themselves and possibly their families at risk. They deserve better.

Offering them better serves everyone’s interests.”

And as the pandemic stretches into 2021 and hospitals continue to face a surge of patients, droves of their own caregivers have been out sick due to COVID-19 (confirmed cases or quarantined), posing an-

Brecksville and Cleveland pledged tax breaks and other aid that, collectively, could be worth more than $200 million over three decades.

Cuyahoga County offered a $14 million grant. JobsOhio, a statewide economic development corporation, has signed off on $37.5 million in grants for the projects.

In December, a legislative panel approved $70 million in interest-free loans that the state gradually will forgive if Sherwin-Williams maintains and creates enough jobs. The company has committed to retaining more than 3,500 jobs at the project sites and adding at least 400 more.

The new buildings aren’t scheduled to open until 2024. Sherwin-Williams hasn’t unveiled designs, though construction-industry sources think the company and its architects are getting close to finalizing their plans.

But the ripple effect already has started — and promises to grow over the next few years. Since Sherwin-Williams’ chose land between Superior and St. Clair avenues for its headquarters, developers have targeted the nearby Rockefeller Building and 55 Public Square office tower for largely residential overhauls.

The company’s decision to place its R&D operations in Brecksville will serve as a catalyst for a broader, mixed-use development. That choice, though, came as a blow to Warrensville Heights, where Sherwin-Williams expects to vacate an automotive finishes facility on 80 acres along Warrensville Center Road.

The company says it hasn’t made any decisions about selling or redeveloping the Warrensville Heights site, its longtime headquarters on Prospect Avenue or its current R&D center in the Flats.

In September, Jim Jaye, the company’s senior vice president of investor relations and corporate communications, telegraphed optimism despite the upheaval of 2020.

“While we’re very proud of what we’ve achieved here at Sherwin, we’re not content,” he told investors.

“We know there’s tremendous opportunity ahead of us, and we still have a lot of work to do. We expect to emerge from the pandemic as an even stronger company, and we hope that will continue.”

Michelle Jarboe: michelle.jarboe@ crain.com, (216) 771-5437, @mjarboe

other layer of challenges for health care providers.

“If we have many of our staff out because of exposure, while there’s a large influx of COVID patients, we will not be able to provide the best care to everyone who needs it,” Dr. Akram Boutros, MetroHealth president and CEO, said in November.

“So I’m asking you, everyone in the community, to be even more vigilant about washing hands, watching your distance and wearing a mask.”

Against the backdrop of a deadly

16 | CRAIN’S CLEVELAND BUSINESS | JANUARY 25, 2021

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Business diversity, equity and inclusion efforts The deaths of George Floyd and others spur an awakening to combat inequities

BY AMY MORONA

2020 saw a global pandemic and a reckoning on race —and both further exposed long established systematic inequalities in business and beyond.

Those inequities are especially apparent at organizations’ top levels. An analysis published in October by Crain’s Cleveland Business highlighted the “woefully poor” lack of women and minorities in the region’s corporate boardrooms, underscoring how the gap is far wider for people of color.

“It’s embarrassing. It’s unfortunate. And it needs to change,” Fred Nance, global managing partner with Squire Patton Boggs and a director on the board at RPM International Inc., told Crain’s.

With the protests and boycotts that followed the death of George Floyd in May at the hands of Minneapolis police serving as an inflection point, many companies in Northeast Ohio spent the second half of the year pledging to boost their diversity, equity and inclusion efforts.

Perhaps one of the most powerful statements in the wake of the deaths of Floyd, Ahmaud Arbery and Breonna Taylor came from Craig Arnold, CEO of Eaton, a global power management company whose North American headquarters are in Beachwood.

“I’m sure many of you are struggling to understand why,” Craig wrote in a letter titled “A call for compassion and courage in a time of unrest” that went out to employees. “Why does a police officer force his knee into the neck of another human being for nine minutes, ignoring pleas of ‘I can’t breathe,’ while three other police officers stand by and do nothing to help?”

Arnold talked of how little has changed since the assassination of civil rights leader Dr. Martin Luther King Jr. but pledged to be part of the solution and called others to do so as well.

“It’s time for us all to get involved and to have our voices heard. I often quote the words of writer and Holocaust survivor, Elie Wiesel, who said, ‘We must take sides. Neutrality helps the oppressor, never the victim. Silence encourages the tormentor, never the tormented,’” Arnold wrote.

In terms of looking at diversity and equality, among the early steps for several organizations, ranging from Case Western Reserve University to

pandemic, essential workers showed remarkable strength and courage in the past year. Whether they were in hospital intensive care units caring for patients, getting food and groceries to communities, driving buses that brought other essential workers to their jobs, or so many often invisible roles that hold our communities together, it was essential workers who helped keep us moving forward.

Lydia Coutré: lcoutre@crain.com, (216) 771-5479, @LydiaCoutre

Protesters rally in support of the Black Lives Matter movement at Wade Lagoon in University Circle prior to the presidential debate held in October in Cleveland. | STEPHEN ZENNER/SOPA IMAGES/LIGHTROCKET VIA GETTY IMAGES

Business diversity, equity and inclusion timeline May 25, 2020: George Floyd is killed by police officers in Minnesota. A summer of protests begins across America.

May 30: Peaceful protests in downtown Cleveland turn into a riot.

Seventy people are reportedly arrested, and many businesses are looted or damaged.

June 1: Eaton CEO Craig Arnold pens a powerful letter to employees about diversity and inclusion.

June 19: Several Cleveland-area companies mark “Juneteenth” as a paid holiday for employees.

Arnold

Sept. 2: The Haslam Sports Group introduces a Diversity and Opportunity Fellowship for the Cleveland Browns and Columbus Crew.

Dec. 15: The Cleveland Cavaliers unveil plans for a new banner championing diversity. It’s set to appear downtown at Sherwin-Williams’ headquarters.

software company Futuri Media, included marking June 19 — or “Juneteenth,” which commemorates the end of slavery in the U.S. — as a paid

HOUSE BILL 6

From Page 12

The waves didn’t subside, though.

They would go on to wash away Public Utilities Commission of Ohio chairman Sam Randazzo, who resigned later in November after the FBI conducted a raid of his Columbus home and searched it. That happened less than a day after FirstEnergy revealed in a regulatory filing that it had discovered a payment of $4 million in 2019 to end a six-year

company holiday.

A July editorial in Crain’s included a mention of a New York Times article that featured a look at FirstEner-

contract with a consulting company that fits the description of one linked to Randazzo.

Randazzo, who became head of the PUCO in early 2019, said in his resignation letter “the impression left by an FBI raid on our home, the statement included in FirstEnergy Corp.’s filing with the Securities and Exchange Commission yesterday and the accompanying publicity will, right or wrong, fuel suspicions about and controversy over decisions I may render in my current capacity.”

None of it has been enough to

gy’s hiring practices, saying how the company links part of executives’ bonuses to its goal of hiring and promoting more employees from diverse and underrepresented groups.

“Turns out not many companies actually do this,” the editorial said.

While FirstEnergy committed to doing more, another Akron institution was struggling. After facing claims of management engaging in racist and sexist practices and bullying in the spring, the Akron Art Musuem’s board of directors announced a “transformation plan” to move the organization in a better direction. It had seven components, including mandatory implicit bias training and the creation of a board transformation task force.

Other organizations formed groups or did research, too. The Greater Cleveland Partnership’s Equity & Inclusion Division surveyed businesses that were a part of its Inclusion Marketplace initiative. GCP’s

cause the GOP-controlled Legislature to address the situation. There have been several proposals to repeal and/or replace HB 6, in whole or in part, in the statehouse since shortly after the Householder arrest.

But so far, none has produced anything beyond lip service. The Legislature ended its last session of 2020 without addressing the issue.

Meanwhile, the communities of Perry and Oak Harbor, near Toledo, where Ohio’s two nuclear plants are located, have been left to twist in the wind while they wait to see what

senior vice president Brian Hall talked about some of the struggles organizations discussed in a “Personal View” column in August.

“COVID-19 did not create the economic disparity between minority-owned business suppliers and their counterparts: It has only magnified it,” Hall wrote.

He also included several suggestions for companies to embrace, encouraging leaders to have a minimum of one minority-owned business to compete for opportunities and develop mentoring programs for minority suppliers.

An offering like that was on the agenda for some of the state’s sports teams, too. Diversity for the top spots in NFL’s hiring record for top spots has been dismal. To help combat that, the Cleveland Browns introduced its Bill Willis Coaching Fellowship, where an up-and-coming minority works with and learn from the team’s coaching staff.

And in September, the Haslam Sports Group introduced a Diversity and Opportunity Fellowship. The program slates four spots for recent college graduates to spend a year rotating through several departments with both the Browns and the Columbus Crew. It provided a salary and housing stipend.

As the tumultuous year wound down, what some hope to be a lasting sentiment toward improving went up. The Cleveland Cavaliers unveiled plans for a huge new banner set to go on the wall of Sherwin-Williams’ downtown headquarters.

The renderings depict several hands — Black hands, Brown hands, tattooed hands, one with rainbow-colored nails, another displaying a Cavs championship ring — on top of a basketball.

“For the love, for the land,” the mural says in bold letters.

But perhaps Arnold said it best in a sentiment that many Northeast Ohio businesses and organizations are embracing more and more in terms of equity, diversity and inclusion.

“History is once again presenting an opportunity for us to become better. This is the time for us to come together, to truly listen and learn from one another, and to embrace this moment to become the nation we were meant to be,” Arnold wrote.

Amy Morona: amy.morona@crain. com, (216) 771-5229, @AmyMorona

happens. The two plants employ about 1,500 people between them.

What will happen this year is anyone’s guess, but there are still efforts to repeal the law, as well as to audit the nuclear plants to see if they really need the subsidies to remain open, as backers of HB 6 originally claimed. Courts have blocked the subsidies from being collected in the meantime. Householder has yet to be tried.

Dan Shingler: dshingler@crain.com, (216) 771-5290, @DanShingler

JANUARY 25, 2021 | CRAIN’S CLEVELAND BUSINESS | 17

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CRAIN'S LIST | LARGEST OHIO MERGERS & ACQUISITIONS ANNOUNCED IN 2020 Ranked by deal value DEAL VALUE (MILLIONS)

COMPANY/ASSET SOLD; LOCATION

BUYER; LOCATION

SELLER; LOCATION

1 2 3 4

$21,000.0 Announced

SPEEDWAY LLC Enon

7-Eleven Inc. Dallas

$3,300.0 Announced

EATON HYDRAULICS BUSINESS Beachwood

$3,288.7 Closed

RANK

DATE ANNOUNCED

DESCRIPTION OF COMPANY/ASSET SOLD

Marathon Petroleum Corp.

Findlay

Aug. 2, 2020

Speedway operates a chain of gas and convenience stores.

Danfoss A/S Norborg, Denmark

Eaton Beachwood

Jan. 21, 2020

The business provides hydraulics components, systems and services for industrial and mobile equipment.

ARCELORMITTAL USA LLC Chicago

Cleveland-Cliffs Inc. Cleveland

ArcelorMittal Luxembourg City, Luxembourg

Sept. 28, 2020

ArcelorMittal USA LLC manufactures steel products.

$2,933.6 Announced

CINCINNATI BELL INC. Cincinnati

Macquarie Infrastructure Partners New York

Various investors

Jan. 24, 2020

Cincinnati Bell provides diversified telecommunications and technology services.

5

$2,650.0 Closed

ION MEDIA NETWORKS INC. West Palm Beach, Fla.

Scripps Media Inc. Cincinnati

Black Diamond Capital Management LLC Greenwich, Conn.

Sept. 24, 2020

ION Media Networks owns and operates television broadcast stations.

6 7

$965.0 Closed

CHELTON LTD. Marlow, England

TransDigm Group Inc. Cleveland

Cobham Ltd. Wimborne, England

Nov. 24, 2020

Chelton Ltd. designs and manufactures airborne communications and navigation antennas and subsystems.

$850.0 Closed

KEY SURGICAL INC. Minneapolis

Steris Corp.

Mentor

Water Street Healthcare Partners LLC Chicago

Oct. 6, 2020

Key Surgical manufactures sterile processing, operating room and other instrument care supplies.

8

$789.0 Announced

SEVEN SENIOR HOUSING AND 29 OUTPATIENT MEDICAL ASSETS United States

Kayne Anderson Real Estate, unknown third party Boca Raton, Fla.

Welltower Inc. 1 Toledo

June 1, 2020

These are senior housing and outpatient medical facilities.

9 10

$702.0 Closed

SENIOR HOUSING PROPERTIES California, Nevada and Washington

Unknown

Welltower Inc. 2 Toledo

Feb. 12, 2020

The porfolio consists of 11 senior housing properties.

$550.0 Closed

CRISCO OILS AND SHORTENING BUSINESS Orrville; Cincinnati

B&G Foods Inc. Parsippany, N.J.

The J. M. Smucker Co. Orrville

Oct. 26, 2020

The business comprises the Crisco vegetable oil brand and a manufacturing facility and warehouse in Cincinnati.

11 12 13 14

$510.0 Closed

BRAKE PARTS INC. McHenry, Ill.

First Brands Group LLC Cleveland

Torque Capital Group LLC Stamford, Conn.

July 31, 2020

Brake Parts Inc. manufactures and supplies brake parts for the aftermarket automotive industry.

$450.0 Closed

LON OPERATIONS LLC (DBA BREAD) New York

Alliance Data Systems Corp.

Columbus

Various investors

Oct. 29, 2020

Lon Operations LLC develops a financing platform that enables users to pay for online purchases in monthly installments.

$426.5 Closed

AML RIGHTSOURCE LLC Cleveland

Gridiron Capital LLC New Canaan, Conn.

Clarion Capital Partners LLC New York

Sept. 11, 2020

AML RightSource LLC provides anti-money laundering services.

$425.0 Announced

HEXION PSR Russia

InvestIndustrial; Black Diamond Capital Management Ltd. London

Hexion Inc. Columbus

Sept. 28, 2020

Hexion PSR is a resins manufacturing business.

15

$340.0 Closed

VERAN MEDICAL TECHNOLOGIES St. Louis

Olympus Corporation of the Americas Center Valley, Pa.

Various investors, including River Cities Capital Fund Management of Cincinnati

Dec. 4, 2020

Veran Medical Technologies develops minimally invasive therapeutic devices for interventional oncology procedures.

16

$331.0 Closed

HOSPITAL PROPERTIES United Kingdom

NorthWest Healthcare Properties Real Estate Investment Trust Toronto, Ontario

Welltower Inc. Toledo

Sept. 22, 2020

The properties consist of four hospitals operated by Aspen Healthcare.

17

$329.0 Closed

17 OUTPATIENT MEDICAL PROPERTIES United States

Unknown

Welltower Inc. Toledo

Aug. 5, 2020

The portfolio consists of outpatient medical properties.

18

$325.0 Closed

PATRIOTS PARK Reston, Va.

Boyd Watterson Asset Management LLC Cleveland

Hyundai Group Co. Ltd. Seoul, South Korea

Oct. 23, 2020

Patriots Park is a 705,000-square-foot office complex.

18 20 20

$325.0 Closed

STITCHER INC. San Francisco

Sirius XM Holdings Inc. New York

The E.W. Scripps Co. Cincinnati

July 13, 2020

Stitcher is a mobile application for discovering podcasts and radio shows.

$250.0 Closed

CIMCOOL BUSINESS OF MILACRON Cincinnati

DuBois Chemicals Inc. Sharonville

Milacron LLC Cincinnati

March 20, 2020

Cimcool manufactures metalworking fluids.

$250.0 Announced

GABRIEL PERFORMANCE PRODUCTS LLC Akron

Huntsman Corp.

The Woodlands, Texas

Audax Management Co. Boston

Dec. 7, 2020

Gabriel Performance Products manufactures specialty additives and epoxy curing agents for the coatings, adhesives, sealants and composite end markets.

22 23 24

$243.0 Closed

ARX HOLDING CORP. (12.3% STAKE) St. Petersburg, Fla.

The Progressive Corp.

Mayfield Village

Minority shareholders

March 2, 2020

ARX Holding Corp. offers property insurance products.

$234.2 Closed

SIX SENIOR HOUSING ASSETS Midwest

Unknown

Welltower Inc. 3 Toledo

June 1, 2020

The portfolio consists of six senior housing assets.

$218.0 Closed

SHILOH INDUSTRIES INC. (SUBSTANTIALLY ALL ASSETS) Valley City

MiddleGround Capital LLC Lexington, Ky.

Shiloh Industries Inc. Valley City

Aug. 30, 2020

Shiloh Industries is an automotive supplier providing lightweighting and noise and vibration solutions.

25

$200.0 Closed

SENIOR HOUSING PROPERTIES (80% STAKE) Massachusetts

Taurus Investment Holdings LLC; Northbridge Asset Management Massachusetts

Welltower Inc. Toledo

Oct. 5, 2020

The portfolio consists of six properties containing 507 senior housing units operated by Northbridge Senior Housing.

26 27 27

$192.0 Closed

QUEEN CITY HOSPICE LLC Mason

Addus HomeCare Corp.

Frisco, Texas

Stonehenge Partners Inc. Columbus

Nov. 11, 2020

Queen City Hospice LLC owns and operates hospice and palliative care centers.

$180.0 Closed

RENTPAYMENT United States

MRI Software LLC Solon

Priority Real Estate Technology Alpharetta, Ga.

Sept. 1, 2020

RentPayment consists of RentPayment.com, StorageRentPayment.com and DuesPayment.com.

$180.0 Closed

POPPIN INC. New York

Kimball International Inc. Jasper, Ind.

Various investors, including West Capital Advisors LLC of Cincinnati

Nov. 4, 2020

Poppin Inc. manufactures and sells office products.

Source: S&P Global Market Intelligence (spglobal.com/marketintelligence); additional research by Chuck Soder (csoder@crain.com) | The list excludes deals that were announced in 2019 but closed in 2020. Deal value includes earn outs and other payments occurring only when certain conditions are met. Crain's does not verify all information; there is no guarantee these listings are complete or accurate. NOTES: 1. Welltower owned 53.6% of six senior housing facilities and 97.3% of the seventh; it owned 100% of the outpatient facilities. Most of these sales had closed as of Oct. 28, 2020. 2. Welltower owned 80%; third-party operator owned 20%.

3. Welltower sold a 90% stake in three properties and a 75% stake in three other properties.

Get the Excel version of this list with detailed transaction notes. Become a Data Member: CrainsCleveland.com/data 18 | CRAIN’S CLEVELAND BUSINESS | January 25, 2021

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ARTCRAFT

Elevator operator Duane Clemmons salts a step outside one of the entrances to the Artcraft Building in Cleveland’s Superior Arts District. Located on Superior Avenue, between East 25th and 26th streets, the building anchors the eastern edge of the district.

From Page 1

Artcraft, at seven stories and approximately 260,000 square feet, is the most formidable challenge in that portfolio. Located at 2530-2570 Superior Ave., it anchors the eastern edge of the Superior Avenue Historic District, greeting commuters as they exit Interstate 90 for downtown.

Redeveloping the building will be a costly undertaking — and a delicate dance, as GBX and the Campus District, a neighborhood nonprofit, attempt to lure new investment to the area without displacing the artists who saw early potential in cheap, light-filled warehouses.

GBX is keenly aware of that balancing act. In an emailed statement, the company noted that planning and preparing for an Artcraft conversion will take 12 to 18 months.

“Partnering with Doug Price and the K&D team, with their vast experience in residential apartments and historic redevelopment, will be great for this district and our vision for this connector to downtown Cleveland,” the statement read. “We will work closely with our partner as this development plan is completed.

“We will be proactive, transparent and united with the community in creating positive outcomes for our artists and tenants,” GBX added, noting that the company has other buildings nearby that could provide opportunities for artists.

The reddish-brown brick Artcraft Building still bears the name of an early and short-lived tenant, the Art-

MICHELLE JARBOE/ CRAIN’S CLEVELAND BUSINESS

craft Cloak Co. Behind expansive windows, the studios and offices are half full today. Tenants are on shortterm leases. Elevator operators still manually ferry artists and visitors between the floors.

GBX executives started talking publicly about an Artcraft overhaul, for revamped offices or housing, in late 2014. But the company has been waiting for the right moment, and partner.

“The neighborhood has known for some time that there was a possibility

that that building would end up being rehabilitated. … We’re confident that we can keep the artists in the arts district,” said Mark Lammon, executive director of the Campus District.

Recent and planned projects nearby caught K&D’s attention. In addition to GBX’s offices and the new 2125 Superior Living apartments next door, a café and bar called the Green Goat is scheduled to open in the spring. And CrossCountry Mortgage plans to move its headquarters to the district from Brecksville in a

deal projected to add more than 500 jobs and revive a cluster of vacant buildings and empty parking lots at East 22nd Street and Superior.

“It’s sort of exciting to me to look at that as a new, emerging neighborhood,” Price said.

K&D, which has remade historic downtown buildings as housing or mixed-use projects, expects to seek state preservation tax credits for the Artcraft renovations in March. The state is scheduled to announce the next round of awards, which are hotly

competitive, in June. Projects often apply at least twice before winning.

The developer’s early plans call for large apartments, many of them with home offices. K&D would install retail space along Superior and tuck parking into other areas of the first floor.

Peter Ketter of Sandvick Architects, a Cleveland-based firm that studied Artcraft for GBX in 2014, said K&D’s plan is a logical approach to repurposing the space.

“I’ve always thought it was an ideal property for residential conversion and have assumed that would come eventually. It’s got great views, a lot of character,” he said.

In its statement, GBX noted that residential growth and other investments, including the Midway protected bicycle corridor planned along Superior between Public Square and East 55th Street, will bring more traffic to the neighborhood and more exposure for artists.

The company is looking for anchor tenants to kick-start other renovation projects in the area, across buildings that range from a former church to multistory offices, said Rico Pietro of the Cushman & Wakefield/Cresco Real Estate brokerage, which is marketing space for GBX. “I think multiple projects all hitting at the same time start to create enough of a buzz that this isn’t a neighborhood that we’re really upselling,” said Pietro, who also works with K&D. “This is a neighborhood that people are asking about.”

Michelle Jarboe: michelle.jarboe@ crain.com, (216) 771-5437, @mjarboe

Crain’s Cleveland Business will honor eight individuals in their 80s or older who are still working tirelessly to advance Northeast Ohio and its residents.

Do you know someone 80 or older who has seemingly tossed the word “retirement” from his or her vocabulary and continues to make an impact in Northeast Ohio’s business, civic and philanthropic circles?

NOMINATION DEADLINE: FEB. 15 | Issue Date: April 19

NOMINATE TODAY: CrainsCleveland.com/nominate JANUARY 25, 2021 | CRAIN’S CLEVELAND BUSINESS | 19

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AKRON ENTREPRENEURSHIP

Bounce cultivating software accelerator with diverse founders Program that assists local startup companies reflects diversified race, gender BBY DAN SHINGLER

The tech software sector has struggled with diversity, traditionally being dominated by white males. But the software accelerator at Akron’s Bounce Innovation Hub is bucking that trend.

“It’s a very diverse group — three female founders and four persons of color,” said Jeanine Black, Bounce’s chief marketing officer, referring to the accelerator’s current enrollment.

And that’s with only six companies in the accelerator, which is a threemonth, renewable, mentorship-driven program for early stage startups.

The companies’ founders are a diverse group, whether you measure by race, gender, age, experience or even product offerings.

What they have in common is a need for help. Most are not software developers themselves, but they have unique ideas on how to use software for new businesses.

There’s Billy Taylor, for example, a Black entrepreneur with a 30-year career at Goodyear Tire & Rubber Co. behind him, including the role of director of its North American commercial manufacturing.

He’s working on a software offering called LinkedXL to help users better manage their businesses with performance-measurement tools that also communicate responsibilities to individual employees and business units alike.

Taylor has the credentials and chops to be a consultant already, something he said he employed to help his business quickly reach profitability. But Taylor said the Bounce Software Accelerator has been crucial to getting his idea coded so his expertise can reach a larger audience.

“I grew up in a corporation, and the small elements of starting a business are what they (the accelerator)

Weintraub

Taylor The Bounce Innovation Hub in Akron runs a software accelerator program that helps early stage tech startups.

CONTRIBUTED

really help me with — framing my value proposition and helping with software development so that I don’t spend money on mistakes,” Taylor said.

He also uses Bounce’s cavernous space in downtown Akron.

“I have my office in Bounce, and we actually have a simulator room that we built for businesses that we use to demonstrate the process,” Taylor said.

Then there’s Lynn Puryear, a 55-year-old West Akronite, who is also Black. She’s using her experi-

ence working at newspaper classified departments to develop EveryObit, a website that enables users to place, manage and keep their loved ones’ obituaries and to purchase funeral arrangements and things like floral arrangements.

Like Taylor, Puryear is not a software developer herself. But she also doesn’t have Taylor’s corporate experience and has relied on mentoring from the accelerator to navigate some of the trickier parts of starting her business.

“They’ve been so helpful, from helping me from the legal perspective to making sure that all of my intellectual property is owned,” Puryear said.

“What I love about them is they don’t try to take over my idea, but they push back hard enough to make me think more about what I’m doing.”

Brittany Corsi, a 30-year-old Clevelander, is also working on her first startup, though she’s worked on startups for others in the past. Her upcoming website, EarthXYZ, will allow users to put in their address and

see how viable solar or wind energy options are where they live and to connect to companies that provide green services.

Corsi had worked with FedTech, a startup-support organization just outside of Washington, D.C., that she said referred her to Bounce for more help locally.

“I had a couple of options between accelerator and incubator programs to join, and I picked Bounce because I really liked Jack Hilton’s direct communication,” Corsi said, referring to her mentor at Bounce. “It really helps to have someone who will just be honest and say, ‘This is good, this is bad.’ ” Jack Hilton and his twin brother, James Hilton, 33, are both mentors at the accelerator and each has his own startup experience. They were also co-founders of the Bit Factory, a program for software entrepreneurs in Akron that was replaced by Bounce and its accelerator in 2018. Both say they’ve been impressed with the quality of the people and ideas that the software accelerator has been able to attract.

The diversity makes the place hum, providing more insight and perspective than any homogeneous environment could offer, the Hiltons said. Bounce works hard on diversity issues, but it didn’t have to recruit the current software accelerator participants, according to Jack Hilton.

“This kind of just happened naturally. I think that’s a really good sign for our ecosystem,” he said, noting that many of the current participants found the accelerator through word of mouth.

Bounce CEO Doug Weintraub said he sees that as a sign that Bounce is doing the right things to reach a diverse audience.

“It represents what is going on in the world, that’s what it’s all about,” said Weintraub, a 25-year veteran of

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MANUFACTURING

SDMyers to revamp HQ while expanding on West Coast Tallmadge-based transformer service company plans to add about 20 employees BBY DAN SHINGLER

SDMyers in Tallmadge has a new president with plans to expand the company nationally and cement its presence in the Akron suburb with a major renovation of its local headquarters.

Jon Bucciarelli, previously the company’s vice president of operations, has been promoted to president and said he’s already looking for new space on the West Coast while he prepares for a major upgrade of SDMyers’ Tallmadge headquarters, where most of the company’s 200 employees work.

“There are currently 200 people employed at SDMyers,” Bucciarelli said. “We’re looking to grow in 2021 to about 220, so we’re expanding and starting a center of excellence in West Sacramento, Calif., this year.”

The company is a specialist in the maintenance and monitoring of transformers — electrical devices found at electric substations, big industrial fa-

cilities and just about anywhere large amounts of power are handled.

The company services a broad swathe of industries, including steel mills in Cleveland and other locations, Bucciarelli said.

“We have a lot of customers that are steel plants that have furnace transformers. Pulp and paper, we have a lot of customers in that space and in renewables. … Every windmill turbine has a transformer.”

Transformers, commonly used to increase or decrease the voltage between one part of an electrical system and another, are very expensive.

They also have lifespans that can be increased from an average of about 25 years to more than 50 years with proper care, Bucciarelli said.

SDMyers, formed in 1965, made its name with innovative new ways to clean and renew the oil inside of transformers without having to take the devices offline or shut off the flow of power through them.

Today, it still does that but has made significant advancements throughout its history, Bucciarelli said. For example, it provides customers with real-time monitoring systems that can remotely monitor a transformer’s health 24/7 and others that allow for infrared thermal inspections and oil treatment or changes that can be done without opening transformer enclosures.

Not having to open those enclosures greatly reduces the exposure of workers to potentially deadly shocks from the devices, which the company touts in its marketing.

The company’s work is important from both a safety and economic perspective, Bucciarelli said. The value of a worker’s life is priceless and the transformers themselves cost anywhere from $50,000 to more than $1 million each, he said.

If a transformer goes down or is destroyed because of internal degradation, it not only costs a lot to replace, but can also disrupt power and

shut down an industrial plant. It can even stop power distribution from a utility substation.

“We have sites with 150 to 200 transformers. So, a little bit of testing and monitoring has a big payoff on the back end,” Bucciarelli said.

The company has a few technicians on the West Coast already — among about 60 who are not housed in Tallmadge and are scattered across about 40 states — but wants to expand in California to be closer to existing customers and be better able to grow.

“SDMyers used to have a more national presence in the field-service business. We have a national presence in testing and diagnostics today, but we used to have more of a national presence in field service, but that was sold to GE,” Bucciarelli said.

To rebuild that business out West, the company is looking to lease more space and will send more of its people and assets to support it. SDMyers currently leases about 4,000 square

feet in the city of West Sacramento and has not yet determined how much more space it will need. It sent one of its seven transformer service rigs — full-size semi trailers loaded with equipment — to California on a trek from Tallmadge that was set to begin Jan. 15, Bucciarelli said. The company already has a rig stationed in Houston to be closer to customers in that part of the U.S. Meanwhile, it’s preparing to redo its 220,000-square-foot headquarters on South Avenue in Tallmadge. The building is sound but needs updating, Bucciarelli said.

“The building here is a pretty old building, so we’re looking to renovate, redo the interior and make it more conducive to today’s business. … We want to stay at the forefront of being able to attract talent to our company,” he said.

The building will be remodeled and upgraded to better comply with the Americans with Disabilities Act — including the addition of new ADA-com-

20 | CRAIN’S CLEVELAND BUSINESS | January 25, 2021

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Bounce Software Accelerator startups Bramework Founders: Nichelle McCall-Browne and Handy Metellus `An ` artificial intelligence-based software that helps develop and produce content marketing materials.

EarthXYZ (launching soon) Founder: Brittany Corsi ``Software that will allow users to evaluate renewable energy options available at their home address and connect them with providers of green services, from solar panel installations to compost pickup.

EveryObit Founder: Lynn Puryear `An ` online platform that seeks to help users track and distribute obituaries of their loved ones and to purchase and manage funeral arrangement costs and remembrance items.

LinkedXL Founder: Billy Taylor ``A business operating development system that helps managers and executives track performance from the company level down to individual employees.

Nevermaps Founders: Vishnu Kammari and Krish Machiraju ``An artificial intelligence app that helps tourism boards and travel companies improve travelers’ experiences and drive call-center efficiencies.

Pongo Founder: Ashley Matula ``A web-based service that enables pet owners to contribute monthly payments that can be used later for veterinary expenses, similar to the way health savings accounts work for people.

SignalCortex Founder: Matt Crowley ``Software that enables building and field services companies to better manage tasks and employees.

software companies himself. “The people in the program are comfortable with diversity and the differentiation between their companies.

They’re all trying to start software companies, and they all need help.”

Weintraub and others hope the accelerator companies succeed, in part because that should attract future participants to the program and help Bounce get new tenants. Weintraub said that’s something he is already seeing as some of the accelerator participants take space in the building.

“There are a couple that have taken space as a result of the accelerator and then, in Billy Taylor’s case, it’s the opposite.” Weintraub said. “He came into the incubator, we had a conversation about the accelerator, and he realized he needed some help and said, ‘This is great.’ ” Bounce also offers an incubator program for growing tech companies looking for both space and access to counseling and mentorship.

Weintraub said he always wants to see more tenants in the incubator and more participants in the accelerator, the latter of which is offered by Bounce at no cost to participants.

He said he thinks Bounce now has the right software accelerator program in place and that it will grow once things in the world at large normalize a bit.

“I think this latest iteration of what we’ve put out there is working. The rolling admissions have been helpful, and the numbers show that we’re hitting on all cylinders,” Weintraub said. “Sometimes you have a slowdown in the people that apply. I’d like to see more people apply … but we hope to see even more (participation in the accelerator) once people can be more comfortable being out.”

Dan Shingler: dshingler@crain.com, (216) 771-5290, @DanShingler

“THE BUILDING HERE IS A PRETTY OLD BUILDING, SO WE’RE LOOKING TO RENOVATE, REDO THE INTERIOR AND MAKE IT MORE CONDUCIVE TO TODAY’S BUSINESS. ”

said. “He could see beyond what our current moment was.”

People on his leadership team From Page 6 each point to various highlights of his “I always believed that working for tenure, from Vision 2010 and beyond.

Harrington Discovery Institute at an organization that has a higher social purpose is the kind of organiza- University Hospitals — part of the tion that resonates with me,” he said. Harrington Project for Discovery & Monte Ahuja, executive chairman Development, launched in 2012 — of Transtar Industries and a long- engages physician-scientists at more time UH board member, was part of than 50 universities nationally and the committee that interviewed Zen- internationally.

The system added UH Parma Medity during the search for a new leader.

Zenty restructured and realigned the cal Center and UH Elyria Medical system to establish its foundation for Center to its portfolio in 2014. UH Porgrowth and helped ensure UH had a tage Medical Center (formerly Robinmodern and intentional infrastruc- son Memorial Hospital) was integratture in its resources, facilities and ed into UH in 2015. Months later, UH added UH Samaritan Medical Center technology, Ahuja said.

“One of the most challenging in Ashland and assumed full ownertasks that I would say Tom Zenty had ship of UH St. John Medical Center. is changing the culture internally to UH invested in and launched in make people accept the change and 2016 the first proton therapy center then begin to see that the institution in Ohio, offering a form of radiation has to be balanced in research and treatment that targets a tumor more developing clinical services and the directly while reducing the effects on satisfaction and ultimate outcome of surrounding healthy tissue. the patients,” Ahuja said. “I would A new arm of the system, UH Vensay without that, we could not have tures, was launched in 2017 to work really transformed the institution.” with innovators to develop business In his first several years, Zenty led models and new revenue for the orthe system through Vision 2010, a ganization. strategic facility and technology exIn 2018, the system opened the pansion, including the Seidman UH Rainbow Center for Women & Cancer Center, Ahuja Medical Cen- Children in Cleveland’s Midtown ter in Beachwood and a new neona- area, offering primary pediatric care tal intensive care unit at UH Rain- and women’s health care.

In 2019, UH announced a $200 bow Babies & Children’s Hospital, as well as Center for Emergency Medi- million campus expansion for Ahuja cine and the Marcy R. Horvitz Pedi- Medical Center in Beachwood, atric Emergency Center. Vision 2010 which was constructed under Zeninvested significant capital into ty’s leadership.

Earlier this year, UH worked with bringing UH to the suburbs and moving from just an acute care hos- Cleveland Clinic to develop a joint testing center for COVID-19, the first pital to a more ambulatory world. joint “That brought a whole new marketC R Asignificant IN’S CLEV E L Aeffort N D B Ubetween S I N E S Sthe| in Crecent Tom| to UH,” Jones said.

C R Atwo IN’S L E V E Lhistory, A N D B said U S I NDr. ESS But his early years also brought Mihaljevic, president and CEO of the some difficult decisions, including Clinic. The testing center is a testaclosing a hospital and selling UH’s ment to Zenty’s values and the colinsurance company, said Heidi laborative nature he has brought to Gartland, chief government and the table, he said. community relations officer for UH. “The relationship between UH “He’s a risk taker, bold,” she and Cleveland Clinic has never been Advertising Section

P020_021_CL_20210125.indd 21

much it will spend on the headquarters improvements, but Bucciarelli said it will be significant.

That’s good news for Tallmadge, where SDMyers is one of the city’s largest employers, said Matthew Springer, Tallmadge’s planning director and economic developer.

“We certainly support SDMyers.

They’re one of our single-largest employers in the community,” said Springer, who said he has discussed with the company its plans several times.

Springer said the company is not only a very important part of the city’s tax base, but a good corporate citizen.

“They’re great individuals and a great company. We’re honored to have them,” Springer said.

Dan Shingler: dshingler@crain.com, (216) 771-5290, @DanShingler

Lydia Coutré: lcoutre@crain.com, (216) 771-5479, @LydiaCoutre

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pliant restrooms and an elevator. The company will also renovate its 40-person presentation space, which it will make available to the community as well, Bucciarelli said.

SDMyers has strong ties to Tallmadge, and the company’s not-forprofit affiliate, Good Place Holdings, is active with several local community organizations, Bucciarelli said.

Dale Bissonett, who was SDMyers’ president before handing the reins to Bucciarelli on Jan. 1, will remain as president of Good Place Holdings.

In addition to Bucciarelli’s promotion, Jason Dennison has been named director of diagnostic and analytical services, Jon Karas has been promoted to lab manager and Brittany Ruehs has been promoted to the role of diagnostics manager.

The company isn’t saying yet how

better to the point that two longterm competitors now have our leadership teams, our executive teams actually meet on a regular basis,” Mihaljevic said. “We are advancing those areas in which we do not compete but collaborate. And a lot of credit goes to Tom Zenty.”

Year after year, the UH system continued to expand. Underlining all of these efforts was Zenty’s ability to clearly, passionately communicate his vision and inspire individuals to jump in on the work and support his colleagues throughout all of it.

“The one thing that Tom does so well is he really cares about his colleagues,” Gartland said. “He expects the most out of you, but when you have a moment where you have a success, he calls you personally to thank you. He takes nothing for granted. And that’s very appreciated.”

Also under Zenty’s leadership, the system raised more than $2 billion in philanthropic support of the three parts of its mission: to heal, teach and discover.

“Who would have thought 18 years ago that was ever possible?” Jones said.

“We used to raise a million a year.”

The tremendous community support is one of the most heartening pieces of the past two decades, Zenty said.

As for his next chapter, Zenty has agreed to work with a venture capital firm on the West Coast and a private equity group on the East Coast after he’s finished at UH at the end of the month.

Though he plans to spend some time in warmer climates, he said he will keep his house in Shaker Heights, the place he’s called home the longest.

“All in all, I would have done nothing differently in terms of my move here,” a wonderful S EZenty P T E Msaid.

B E R “This 3 - 9 ,was 2 018 | PA G Eop37 for3 me work |in PA a worldS Eportunity PTEMBER - 9 , to 2 018 GE 37 class organization at UH in a worldclass city like Cleveland, Ohio. And I will look back on these two decades as some of the finest years of my life.”

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Apple Growth Partners

Apple Growth Partners

J.P. Morgan Private Bank

Brouse McDowell LPA

Hahn Loeser & Parks LLP

Apple Growth Partners welcomes David Garrett as chief information officer.

As a product development and information technology executive specializing in high-growth startups and small businesses, David has more than 20 years of experience designing, developing, and managing business critical applications and infrastructure. David will lead AGP’s information technology team, supporting the firm remotely and scaling to a work from anywhere strategy.

Apple Growth Partners welcomes Brittany Williams as senior director, project management officer.

Brittany is a seasoned project manager with more than a decade of experience designing and implementing multi-disciplinary initiatives.

Brittany will provide structure and oversight of strategic-level projects to deliver alignment in resources, talent, and priorities.

She is a graduate of Case Western Reserve University and Johns Hopkins University School of Advanced International Studies.

J.P. Morgan has appointed David Allen as Executive Director, Team Lead for the Cleveland office of J.P. Morgan Private Bank, covering Northern Ohio. David oversees a team of bankers and other financial specialists serving high-net-worth individuals, families, foundations and endowments across investments, wealth planning and trust services, banking, lending and philanthropic giving.

With a career spanning more than 20 years, he has extensive experience in the financial services space. Before joining J.P. Morgan, David was Chief Operating Officer for Equity Trust Company and spent most of his career in senior roles with Goldman Sachs. David, a native of Cleveland, contributes to the development of his community as a City Plan Commissioner.

Molly Brown joins Brouse McDowell’s Business Transactions & Corporate Counseling Practice Group in an Of Counsel capacity in our Cleveland office. She has extensive experience advising clients on public and private securities offerings, mergers and acquisitions, corporate governance and compliance matters. In addition, she brings a wealth of knowledge on financial institution regulation and banking finance. Molly earned her JD from Case Western Reserve University School of Law.

Hahn Loeser & Parks LLP is pleased to announce Gregory Thompson, of the firm’s Cleveland office, has been elected as a partner based on his professional achievements, depth of legal experience, and commitment to his clients. Gregory focuses his practice on complex commercial and construction litigation. He has first-chair experience handling non-compete disputes; shareholder, fiduciary, and business tort litigation; and contract disputes.

Apple Growth Partners ACCOUNTING

Maloney + Novotny LLC Dana Patterson has been promoted the newest Principal at Maloney + Novotny LLC (M+N). Dana began her career at M+N in 1999 and works with clients out of our Canton office in a variety of industries such as manufacturing, real estate, retail and not-for-profits. Dana is a Certified QuickBooks ProAdvisor, a member of the American Institute of CPAs and Ohio Society of CPAs and is an active member of the music ministry of her church.

ACCOUNTING

Apple Growth Partners Apple Growth Partners is proud to announce Brittany White has been promoted to senior director of marketing. Brittany has transformed the marketing department for the firm, including significant expansion across social media channels, website redesign, and content strategy and production. She managed the communications for the firm’s COVID-19 Response Team in 2020. Brittany has a Bachelor of Science in Marketing from Ashland University and a Master of Management from the University of Phoenix.

ACCOUNTING

Meaden & Moore Meaden & Moore is pleased to announce the promotion of Brian Dunfee, CPA, CEBS to Director. With over 19 years in public practice, Brian has extensive audit experience, especially in the field of employee benefit plan audits. He has a strong understanding of the operations and compliance of many types of employee benefit plans, which he developed through planning, preparing and supervising those audit engagements.

22 | CRAIN’S CLEVELAND BUSINESS | January 25, 2021

INSURANCE

Western Reserve Group Western Reserve Group is pleased to announce that Greg Brunn has been promoted to Executive Vice President. Since joining WRG in 1997 as a Marketing Manager and later becoming Vice President of Insurance Operations/COO, Greg has had responsibility and oversight in Underwriting, Product Development, Pricing, and Business Operations. Greg’s additional leadership will further align WRG to achieve its corporate objectives and continue to provide the highest quality services and products.

Catherine Stone (Katie) joins Brouse McDowell’s Trusts & Estates Practice Group in an Of Counsel capacity in our Youngstown office.

She focuses on estate planning and probate law, business law, and real estate law. She counsels clients on the creation of estate plans and drafts all types of estate planning documents. Her business law experience includes mergers and acquisitions, contract drafting and negotiation, and general corporate matters. She earned her JD from Case Western Reserve University School of Law.

The Center for Community Solutions Community Solutions is proud to announce David Miller, PhD., MSW, MPH has been elected as the chair of its board of directors. Miller is an Associate Professor at the Jack, Joseph and Morton Mandel School of Applied Social Sciences at Case Western Reserve University.

Cleveland-based Community Solutions is a more than 100-year-old nonpartisan, nonprofit think-tank focused on health and human services issues in Ohio. Miller has served on the board of directors since 2016.

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Apple Growth Partners is proud to announce Steve Mazza, CPA, has been promoted to principal in the tax department. Beginning his career as an intern with AGP, Steve has continuously grown in his tax expertise and client services for nearly 10 years. He specializes in tax planning and preparation, business consulting, mergers and acquisitions, trust and estate planning, and bookkeeping. He holds a Bachelor of Business Administration/Accounting degree from The University of Akron.

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