Crain's Cleveland Business

FIRM RAISES $38M TO FUND STARTUPS North Coast Ventures tapped more than 200 investors to create two new funds.

SMALL BUSINESS: Pandemic exposes fragility of local child-care industry. PAGE 10

PAGE 7 CRAINSCLEVELAND.COM I FEBRUARY 7, 2022

‘THE OPPORTUNITY IS ’

UNLIMITED

Dragon Seats on quest to grow bench business

BY JOE SCALZO

The most successful bench-warmer in the NFL is a 69-year-old Clevelander who flies helicopters in his free time, calls sleep a “waste of time” and who runs his company

with the energy and the work ethic of a 29-year-old, mainly because he believes he has a good 40 years still left in him.

“I’ll work until I’m 110,” said Frank Floyd, who then grinned and nodded to his kids. “Until they tell me to go.”

Floyd is the founder, CEO, president and chairman of Bourne Creation L.L.C., a holding company that designs, manufactures, sells, distributes and services heated — and, as of last fall, air-conditioned — benches under the name Dragon Seats.

Those benches can be found on the sidelines of 21 NFL teams, not to mention dozens of college football stadiums, college baseball dugouts, golf courses, tennis courts, ski resorts and anywhere else where you might want to heat (or

cool) your backfield — or your backside.

See DRAGON SEATS on Page 20 A Cleveland Browns Dragon Seats bench at FirstEnergy Stadium. | DRAGON SEATS

Nonprofits look to aid minority developers

Strong manufacturing M&A market continues

BY MICHELLE JARBOE

BY RACHEL ABBEY MCCAFFERTY

Two Cleveland nonprofits hope to help minority real estate developers scale up, with a new training program that, they say, must be part of a broader systemic shift.

Cleveland Development Advisors and Village Capital Corp. are exploring the potential for a local version of the Equitable Development Initiative, an effort born in Detroit in 2018.

Created by Capital Impact Partners, a nonprofit lender based in

Washington, D.C., the program is designed for minority developers with some experience in the industry. Participants not only take classes but also work with mentors and get assistance finding financing for deals.

The local push, toward a program launch this year, reflects a growing recognition that there are few developers in Cleveland who identify with the communities where they’re building.

See DEVELOPERS on Page 21

NEWSPAPER

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A rendering shows one of the early homes planned at the Allen Estates, a project in Hough being tackled by two Black, female developers. | UBIQUITOUS DESIGN

THE

LAND SCAPE

It’s a good time to want to sell a manufacturing business. Or to buy one.

The local M&A market is “robust” in all verticals, said Ben Cooke, shareholder in the corporate transactions group with Wickens Herzer Panza in Avon. There’s strong demand from private equity, he said, and the demographics are ripe for sales, as owners reach an age where they want to exit their businesses.

“The competition for deals right now is just remarkable,” he said.

Deal volumes and values were both up significantly in 2021 in the industrial manufacturing and automotive space, according to PwC’s 2022 M&A outlook for the sectors.

Part of the reason for this growth was “pent-up demand,” said Michelle Tomchak Ritchie, U.S. industrial products deals leader with professional services firm PwC. And See M&A MARKET on Page 19

A CRAIN’S CLEVELAND PODCAST

2/4/2022 1:55:36 PM

AKRON

Akron’s Vigeo Gardens stakes its life on rapid growth

BY DAN SHINGLER

over $3 million,” he predicts.

To get there, he’ll have to invest For farmers, perhaps more than more capital, something he’s now for any other profession, it’s literally a working to raise.

“A lot of the systems that get you grow-or-die world.

Akron entrepreneur Vincent Pe- from zero to $1 million have to be reterson is a farmer planning on the vamped to go from $1 million to $10 former, and there’s green aplenty at million (in annual revenue),” he his indoor agriculture business, Vi- said.

“It will cost about $1.5 million, and geo Gardens, located downtown in with the planned expansion, the the city’s Bounce Innovation Hub. Like his crops of live lettuce, herbs farm will produce about three-quarand microgreens — some of which ters of a million pounds of produce a go from planting to store shelves and year,” Peterson said.

That would mark an increase in restaurant tables in less than a week — Peterson’s business took root and production, relative to capital costs, grew rapidly. What began in 2015 in a over his current operation, which is 50-square-foot corner of a friend’s already producing staggering results.

“We built our farm with about basement has blossomed into a business that produced revenue of $1.2 $500,000, and we produce about 200,000 pounds of produce a year million last year, Peterson said.

As the primary tenant on an other- now,” Peterson said.

That’s about 550 pounds of prowise mostly vacant third floor at Bounce, which is the incubator’s last duce per day. Lettuce, herbs and mito rent out, Vigeo uses 16,000 square crogreens don’t take nights, weekfeet of space. In it, the company has ends or holidays off from growing, of created 18,000 square feet of what course, but nor do they weigh much.

Peterson terms “growable surface,” (We actually got in touch with him after an initial interview to thanks to a system of make sure we hadn’t added shelves and 5,000 LED an extra zero to his total. lights and other equipment “You have the correct numthat maximize the space and maintain perfect condiber,” Peterson confirmed.)

Even without the expantions for his crops, all of sion, Vigeo would be able which are short in stature. increase its output, thanks Vigeo’s recent growth is to what it’s learned along a even more impressive, conjourney that has included sidering that it lost a large collecting 120,000 pieces of portion of its restaurant Peterson data on his crops and syscustomers in 2020, but has still managed to increase its revenues tems that Peterson said the business has collected since the COVID panover 2019 levels.

“2019 was the first year that we demic began.

“This year, with or without an exbroke a million (dollars in revenue) — things were cooking. That was pansion, we’ll do better and should cross over to $1.5 (million) or $1.7 great,” Peterson said.

The following year was not so (million in sales),” Peterson said.

Or possibly no sales at all. great.

That growth rate is not acceptable “In one day, 50% of our customers to Peterson in the long run, he said, are gone,” Peterson recalls.

But he shrugged it off like a tempo- and if Vigeo fails to expand, he’s derary dry spell, rather than letting it cided to shut the operation down.

Yes, Vigeo is his pride and joy, but create a dust bowl in his mind. ”You just go, ‘OK, this stinks’ — but if it’s not going to grow into somethere are all kinds of hurdles along thing a whole lot bigger than it is the way, and if you don’t really love now, Peterson said he’ll find somewhat you do and really want to do it, thing else that will and devote his atthat’s when a lot of people quit,” he tention to it.

Elijah Stambaugh, a Youngstown said.

But Peterson isn’t satisfied. Far entrepreneur who runs the Guiding from it: He’s now hell-bent on taking Group Investment Corp. and also serves as an entrepreneur-in-resihis business to the next level.

“I think in a year or two we’ll be dence at Bounce, advises Peterson

Vigeo Production Team Lead Devon Smith tends to plants at the company’s indoor farm in Akron’s Bounce Innovation Hub. | CONTRIBUTED

Stambaugh said. “He’s always going to keep driving and keep pushing.

He’s like that with me, too. He says, ‘Elijah, when we’re on a call, I don’t want to you to take it easy on us.’”

To be clear, neither Stambaugh, “A LOT OF THE SYSTEMS THAT GET YOU nor the folks at FROM ZERO TO ONE MILLION HAVE TO Bounce, nor Peterson, thinks the farm BE REVAMPED TO GO FROM ONE is going to shut MILLION TO 10 MILLION (IN ANNUAL down.

Peterson said REVENUE).” he’s already begun — Vincent Peterson, Vigeo Gardens CEO discussions about financing the ex“That’s not a recent timeline,” pansion, and plans to fund it with Stambaugh said. “He’s said (to me), bank loans, which he also used to ‘Look, if we’re not in a position where help fund his initial startup. But he this is moving forward in a really also has other options with local instrong way, I’m moving on.’” vestors.

“Vinny is just a different character,” “I’ll exhaust every resource I have on his business. He might’ve been surprised that Peterson uttered such a thing publicly, but he knew of Peterson’s intentions — and his hardcharging personality.

to raise that money,” Peterson said. “I think I’ll have it done in two weeks. …

Why we take that radical approach to it is, you have to have a sense of urgency.”

That was on Feb. 1, for those watching the scoreboard clock.

No doubt his 18 employees are watching, and pulling for him, too.

His success will not only mean they can keep working, and learning, on the farm, but also make more money doing it.

Right now, Vigeo pays $15 an hour, with benefits.

“I think we’ll be able to take it to $21 with full benefits with the expansion,” Peterson said, adding that he plans to bring on four new employees, as well.

That increased wage would mean his staffers would each be making $42,000 a year for full-time work, which is more than the median Akron household income of $39,000, as reported by the U.S. Census Bureau.

Stambaugh, who’s more privy to Peterson’s dealings than outsiders, said he’s not worried the farm will close and is confident Peterson will get his financing and expand.

“I believe so,” Stambaugh said.

“He’s already been putting in the work, so I don’t think that (closing the farm) will happen. … It’s not like his goal is something he just had today. He’s already been in conversations with people.”

Stambaugh said Vigeo has already accomplished a lot, like getting its produce on the shelves of big grocers in the area, including Heinen’s, which shielded the farm from some of the impact of temporarily losing its restaurant business at the start of the pandemic.

“That’s not easy to do — and staying on those shelves isn’t easy either,” Stambaugh said. “But in his mind, it’s just an assumption — and it’s gonna happen.

“I work with many entrepreneurs and consult with a lot of different businesses,” Stambaugh said. “What I really appreciate about him and his team is they don’t take it out of gear. … They celebrate the wins, they work through the challenging times and losses, but they just keep pushing forward.”

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

THE WEEK REDEVELOPMENT AFOOT: The vacant 45 Erieview Plaza office building in downtown Cleveland finally has changed hands, setting the stage for an apartment redevelopment to kick off early this year. A Texas-based buyer group paid $21.15 million for the property, a nearly 493,000-squarefoot tower that once served as the headquarters for the Ohio Bell Telephone Co. Construction drawings are complete, and the new owners plan to submit permitting requests to the city soon, said Ike Bams, a co-founder of Dallas-based Bluelofts Inc. Bams and business partner John Williams formed a joint venture with fellow Texan Kenny Wolfe to acquire and remake the building. In December, the team secured $5 million in competitive state historic tax credits — a key piece of the financing to transform the 16-story tower at East Ninth Street and

Lakeside Avenue into 367 apartments.

The $102 million project will include a gym, an indoor dog park, an outdoor pool, rooftop decks and lower-floor commercial tenants, a restaurant and a coffee shop.

ENTERTAINING AN OFFER: SeaWorld Entertainment Inc. offered to buy amusement park owner Cedar Fair for around $3.4 billion. Orlando, Florida-based SeaWorld made a bid of about $60 per unit in cash for Sandusky-based Cedar Fair, according to people familiar with the matter. The companies are working with advisers on the proposal. Deliberations are ongoing, and it’s unclear whether the approach will lead to a transaction. Cedar Fair confirmed in a statement issued Tuesday, Feb. 1, that it had received and was reviewing an “unsolicited, non-binding” proposal from SeaWorld.

SeaWorld Entertainment Inc. offered to buy amusement park owner Cedar Fair for around $3.4 billion. | CEDAR POINT

BUILDING UP THE NEIGHBORHOOD: The NRP Group re-upped its option to buy 7.5 acres on Scranton

Peninsula, where the Cleveland-based developer plans to build more than 300 apartments. NRP

walked away from a similar deal in 2020, when the coronavirus pandemic rattled the urban apartment market. Now the company is dusting off its designs and seeking final approval from the Cleveland City Planning Commission. If the project moves forward, NRP will gobble up most of the remaining land at a 25-acre master-planned development called Thunderbird. The company’s site sits east of Carter Road. To the west, Edwards Communities and Silver Hills Development are planning another 300-unit apartment project on 4.2 acres near the river’s edge. To the south, Great Lakes Brewing Co. is still toying with ideas for 8 acres it purchased in 2018. And in December, Scottish craft brewer BrewDog opened a brewpub, with abundant outdoor space, in a former industrial building at 1956 Carter Road.

2 | CRAIN’S CLEVELAND BUSINESS | FEBRUARY 7, 2022

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ADVERTISING

Folgers looks to embrace ‘bad reputation’

BY JON SPRINGER | ADVERTISING AGE

A campaign that launched last week for Folgers, part of Orrville-based J.M. Smucker Co. (NYSE: SJM), aims to perk up a stale reputation for the 172-year-old coffee brand by switching its focus from the emotional benefits that have long been a part of its marketing story to the product itself — an asset that officials confess has been neglected over the years.

A 30-second spot kicking off the campaign begins in a grocery store coffee aisle where a woman examining the selection draws a quizzical look from a young couple. The Folgers’ jingle, “The Best Part of Waking Up,” plays faintly in the background.

The work comes from Publicis’ PSOne agency, which has worked with Folgers since 2019.

The woman shoots back a defiant glance before emptying the Folgers shelves into her shopping cart as Joan Jett’s punk anthem “Bad Reputation” plays. The ad then gallops through snippets that show the coffee and a wide range of its drinkers in their homes and businesses including a diner, a barber shop and a factory before arriving in the streets of New Orleans, where a brass street band led by jazz star Trombone Shorty performs a Dixieland countermelody. “Allow us to reintroduce ourselves,” a graphic reads. “Proudly

roasted in our hometown of New Orleans.”

According to Erica Roberts, chief creative officer of Publicis NY, the ad doesn’t represent a comeback so much as a “double click” on elements of the brand its fans appreciate without necessarily having known.

“We’ve always talked about the best part of waking up, but we never talked about the best parts of the best parts of waking up,” Roberts said.

“That’s things like what goes into the coffee itself, how it’s made, the farmers, the roasters, the master cuppers, and the 35 million Americans who don’t give a shit what people think and drink it every day nonetheless.”

In that sense, the campaign seeks new converts and reconsideration from those that may have left the franchise.

Folgers has a colorful advertising history including its signature jingle — ironically, a few years younger than Jett’s defiant “Bad Reputation.”

In 2009, a Saatchi & Saatchi remake of a 1980s ad known as “Peter Comes Home for Christmas” took on a life of its own behind R- and X-rated parodies that read sexual tension between its leading players. In late 2019, Folgers revived the “Best Part” jingle — and winked to its holiday history — in ads using a chorus in red pajamas singing the anthem as various calamities played out behind them.

Although Folgers remains the top-selling U.S. coffee brand, the in-

fluence of Starbucks and other specialty rivals in recent years has presented a challenge to legacy names.

“It’s safe to say there are other brands out there, including the one on every corner, that has shifted the way we think about coffee. It’s not just a commodity anymore,” Roberts said. “When we were younger, we just drank whatever was in the pot. Today we know what mountains the beans were grown on. It’s definitely become a more craft-focused, artisanal experience, even at the mass level, even at a McCafé level. Our vocabulary has expanded so much when it comes to coffee.”

Folgers can speak this language too, Roberts argued. “We have master cuppers, and best-in-class craft as far as how the coffee is prepared, but we’d never shared that part of the story before.”

At the same time, the company’s research indicated that consumers feel ‘Folgers is not for me,’” Geoff Tanner, chief commercial and marketing officer Smucker, said in a release. “In a competitive category that has dismissed the brand and labeled Folgers as their grandma’s coffee, we’re shaking things up by boldly choosing to overtly acknowledge any negative misperceptions and then loudly and proudly challenge them.”

A series of four 15-second spots directly address various misconceptions about the brand — including that it’s strictly for older consumers.

Artist Trombone Shorty is part of a new marketing campaign for the Folgers brand of Orrville-based J.M. Smucker Co. | THE J.M. SMUCKER CO.

“Think of us as your grandma’s coffee? Heck, yes we are,” a voiceover says as cameras reveal a hip grandma in red-framed eyeglasses and a worn denim jacket, “and 35 million more with equally excellent taste.”

The campaign will be deployed across TV, online video and streaming audio channels and supported with a social media campaign that will involve influencers and a hashtag, #Damnrightitsfolgers, that officials are confident will garner attention.

J.M. Smucker Co. has been in charge of Folgers’ marketing for more than a dozen years, having paid $3 billion to buy it from Procter & Gamble in 2008. Sales of Smucker’s retail coffee brands, which include the Café Bustelo and Dunkin’ brands,

rose 2% to nearly $1.19 billion in the first six months of fiscal 2022. It was Smucker’s most profitable business segment, though profit for the unit declined 7% in the first half of the fiscal year.

PSOne is a division of Publicis that works exclusively with Smucker’s brands including kitchen stalwarts like Jif and Meow Mix that have also exhibited ambitions to market beyond choosy moms under new campaigns. One key to making it work is a tight bond between the brand and its marketers, Roberts said. “You can’t tell where one of our company ends and the other begins.”

Springer is a senior reporter for Advertising Age, a sister publication of Crain’s Cleveland Business.

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FEBRUARY 7, 2022 | CRAIN’S CLEVELAND BUSINESS | 3

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Marijuana dispensaries eye provisional licenses post-drawing

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After submitting 73 applications for medical marijuana dispensary licenses — or 5% of all 1,457 applications considered in the state’s January license drawing — Akron’s Klutch Cannabis is in the lucky position of possibly winning at least three and possibly a couple more.

The most dispensaries any one business can operate in Ohio is five.

And there are just 73 new marijuana retail licenses available in this round, part of a process referred to as RFA II. Available licenses are divvied up among 31 state-designated districts based on population and an estimated medical marijuana patient customer base.

But Klutch CEO Adam Thomarios and his partners made an aggressive bid for some of these highly valuable and coveted licenses in hopes of paving the way for the next chapter of his business.

“We put a lot of time and effort into this project and have had a lot of folks working on it,” Thomarios said. “I’m very happy with possibly having the three or more stores. I’d be very upset if I came out of this project with not at least one store.”

The state is now commencing a review process to ensure prospective license winners, per its drawing, actually qualify for provisional licenses. Regulators intend to release a list of official provisional license winners sometime this spring.

Assuming all 73 new licenses are awarded, the state will grow from 57 dispensaries in operation today to 130.

As or if tentative winners are disqualified for any number of reasons — including a site not actually being the requisite 500 feet away from schools, parks and libraries — the next applicant up for consideration in a given district will be the next down the list.

Licenses also are first-come, firstserved. Therefore, in a situation where there are multiple potential license winners on the same property, only the first drawn wins out, unless the applicant ahead of them for the same site is disqualified.

Klutch operates a Level I grow house and processing facility in Akron. Its brand name on the retail side will be “The Citizen by Klutch.”

The cities in which Klutch is confident it will win provisional dispensary licenses due to its drawing numbers are Canton, Lorain and Euclid. It also could be in the running for additional licenses in Euclid, Caldwell and Oxford, depending on if some other applicants drawn ahead of Klutch are disqualified, Thomarios said, noting he is rather certain none of his business’ own applications will be disqualified.

Klutch officials declined to say what the all-in costs were for participating in RFA II. But the fees alone to simply submit those 73 applications total $365,000.

Other costs in the bid for licenses tend to include stiff fees or nonrefundable down payments to secure the requisite letters of intent from property owners to lease or sell sites where aspiring dispensary opera-

A preliminary rendering of a potential future marijuana dispensary from The Citizen

by Klutch at 3924 Mayfield Road in Cleveland Heights. The location is among a few for which Klutch Cannabis is slated to be awarded a provisional license. | CONTRIBUTED

tors have applied to do business.

Referred to by some as option fees, sources say those have run in the range from $5,000 to as much as $100,000 per property per applicant depending on the site. Thomarios said he encountered someone asking for $100,000 down and decided to walk away.

Amid tight competition for retail stores, some landlords have seemingly enjoyed a windfall just signing multiple letters of intent to prospective dispensaries regardless of whether the applicants win licenses.

For those participating who do secure a potentially lucrative dispensary tenant, that’s just more icing on the cake.

There were 15 applications connected to 554 N. Chestnut St. in Ravenna in the RFA II drawing. Applicant SIMPLE AG OHIO, which was the first draw for dispensary district Northeast-5 where just three new dispensary licenses are available, is now being considered for a provisional license there. The site includes a small medical office sitting on less than 0.4 acres and carries a total appraised value of $84,400, according to county records.

There were 68 applications filed in district Northeast-5, which comprises Geauga, Lake and Portage counties.

In district Northeast-2, which is comprised solely of Cuyahoga County, 208 applications were submitted for seven available licenses.

And in district Northeast-3, which is made up of only Summit County, 106 applications chased just two licenses.

Not only can these businesses be potentially lucrative, and possibly more so in the future should an adult-use program come into play, the potential future value of these licenses on the resale market could be massive.

“I think everyone knows one of these licenses could be a gold mine,” David Leb, a commercial real estate broker at Cushman & Wakefield, told Crain’s in the past.

Klutch remains in court appealing the rejection of a retail license by the state dating back to the awarding of the first licenses in 2018.

Avoiding litigation like this is one reason the state opted for a drawing dynamic this time instead of a ranked scoring system.

So, this new licensing round seems like it may result in Klutch’s

first stores, enabling the vertical integration Thomarios has longed for.

With advertising rules being extremely prohibitive in Ohio’s marijuana program, the store component also provides Klutch an opportunity to connect directly with consumer patients to discuss and promote its own products.

Klutch has 125 employees today.

Each of its dispensaries could be staffed with 20 to 25 employees.

“We feel like this is just a golden opportunity to put our best foot forward and participate in retail,” said Klutch chief compliance officer Pete Nischt, noting the company has been among those advocating for more marijuana shops in Ohio. “We are ecstatic to be able to serve people when these stores get online.”

Klutch owners seem committed to the marijuana business. After all, Klutch was formed following the separation of its parent company, AT-CPC of Ohio, from Massachusetts-based Calyx Peak in 2020 as Thomarios bought out his partners at the time.

But out-of-state companies want a piece of Ohio’s growing marijuana market. They’ve already acquired about one-third of the licenses in Northeast Ohio, according to Crain’s research.

Multi-state operators (MSOs) who don’t win a license in RFA II will likely be looking aggressively at acquisition opportunities, said Stephen Lenn, a Phoenix-based lawyer with Brennan Manna & Diamond who works with the cannabis industry on M&A deals.

“In Ohio, you do have to hold that license for a year before you can sell it. But I can tell you in other states, people get licenses in lotteries and flip them for $10 million to $15 million,” Lenn said. “The reasons those licenses are so valuable is specifically because they are in limited-license states.”

After regulators announce provisional license winners this spring, new dispensaries can officially work on completing their buildouts.

They’ll need to pass an inspection afterward to secure a certificate of operation and open for business.

This timeline in mind, the soonest most new shops could come online will likely be around late fall or winter 2022.

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

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GOVERNMENT

GCP: Region would benefit from economic competition bill Some officials worry the lack of provisions in the proposal would hurt the ability to take full advantage of funding

BY KIM PALMER

The Great Lakes region is poised to benefit from two complementary bills in Congress that would allocate hundreds of billions of dollars to boost America’s competitiveness globally, but officials at the Greater Cleveland Partnership and others worry that the lack of some provisions in the House proposal would hurt the region’s ability to take full advantage of funding.

The U.S. House of Representatives is moving forward on the America Creating Opportunities for Manufacturing, Pre-Eminence in Technology and Economic Strength, known as America COMPETES, which is a counterpart to similar legislation passed by the Senate last June that’s aimed at competing with China in the global marketplace.

Both bills include $52 billion to support domestic semiconductor production. The Senate bill also authorizes $190 billion in innovation funds for technology and research through a series of programs.

Baiju Shah, president and CEO of the Greater Cleveland Partnership, said that for the legislation to be successful in “restoring America’s competitiveness” and benefiting Cleveland and the Great Lakes, funding for university innovation centers, test bed facilities and regional technology and innovation hubs — all included in the Senate version but left out in the House — is essential.

GCP and the Great Lakes Metro Chamber Coalition, a collective of chambers of commerce across the Great Lakes region, issued a joint statement advocating for the reconciliation of the two bills — and specifically for the “major investments” in those programs included in the Senate’s United States Innovation and Competition Act (USICA) to be added to the COMPETES bill. The groups argued that “cities around the region are already organizing partnerships to implement complementary strategies that support that economic development.”

Shah said the Cleveland area is positioned to take advantage of a

Shah

Kaler

strategy that we knew would help our region to be a destination for innovators and give us that creation advantage,” Shah said.

The water alliance’s test bed facility kicked off over the last summer, as the group brought in companies looking to test technol“WE HAVE AN ARRAY OF ENVIRONMENTS ogies that inTHAT WE CAN CREATE FOR INNOVATORS TO clude smart for waDEMONSTRATE THEIR TECHNOLOGIES, AND buoys ter monitoring, Shah said.

WE CAN CREATE THESE TEST BEDS THAT The test DEMONSTRATE THE EFFECTIVENESS OF hubs provide a NEW TECHNOLOGIES AND NEW PRODUCTS space for small companies, in IN A REAL-WORLD ENVIRONMENT.” particular, to — Baiju Shah, president and CEO of the validate or Greater Cleveland Partnership demonstrate a technology or surge in funding around test bed fa- service and show evidence that a cilities, in which companies can de- viable product can be delivered, velop, deploy and demonstrate new Shah said. He said these facilities technologies in a real-world set- are particularly valuable because of the diversity of industries in Northting.

“Having test beds, which is some- east Ohio.

“We have auto and food processthing that we have started to do through the Cleveland Water Alli- ing, aerospace and water technoloance and water technology, is a gy,” he said. “We have an array of

environments that we can create for innovators to demonstrate their technologies, and we can create these test beds that demonstrate the Brown effectiveness of new technologies and new products in a real-world environment.

In the end, that is going to enable companies in our region, and in the U.S., to have a leg up in global competition.”

Another provision in the Senate bill, also absent from the House bill, is a little more than $4 billion for an academic technology transfer fund that essentially would supercharge the work research universities do, in order to boost innovation, said Eric W. Kaler, president of Case Western Reserve University.

“These bills have identified several pathways to bring government investment into innovation, into research and into manufacturing spaces,” Kaler said. “It is exactly where a leading research university, like Case Western Reserve, excels.”

The new funding would be like “adding fuel to the fire” to create technologies using applied research in a broad range of applications, Kaler said.

“It is not anything qualitatively different than what a research uni-

versity does, but these innovation centers would be quantitatively different from what we do now, in that much more would be invested to fund more people to work on more problems,” he said.

The innovation center funding would allow for the hiring of more students and research staff, as 60% to 70% of research grants go to paying for personnel, expanding the area’s skilled workforce, as well, Kaler said.

USICA’s regional technology hub program, Kaler said, represents an end point of the pipeline that begins at the university level with “fundamental academic research” and is then commercialized and spun off as businesses, benefiting efforts to build out key industry sectors.

The Senate passed USICA in a 68-32 vote, reflecting bipartisan agreement.

There remains political disagreement, though, over some of the climate and tariff provisions in House version of the bill.

The House passed the America COMPETES Act in a vote of 222-210 on Friday, Feb. 4, mainly on party lines. The House and Senate will now negotiate differences between the America COMPETES Act and the United States Innovation and Competition Act before a final piece of legislation is sent to President Joe Biden.

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

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AKRON

ANR Electric has found an answer to labor shortages

BY DAN SHINGLER

Labor shortage? Great Resignation?

Nick Gotto has heard of such things. But he hasn’t experienced them much at his company, ANR Electric, an electrical contracting firm located south of Akron in the Portage Lakes community of Coventry Township.

Gotto said he has had little trouble finding qualified electricians to drive the growth of his company, which has grown from a one-man operation when he founded it in 2011 to 40 trucks and a staff of 120 today. He hired 50 new electricians just last year.

His secret might not be one some CEOs are willing to copy, but Gotto says it works great for him: “I’m a signatory contractor with the local unions.”

He said he gets far and away most of his employees through the International Brotherhood of Electrical Workers Local 306 in Akron. When Gotto is working in Cleveland, he calls on IBEW Local 38, and if business takes him to Canton, he hires from Local 540 in Massillon, he added.

His staffing needs have not been small either. In 2019 the company had about 50 employees, which bumped up to 70 in 2020 and to 120 by the end of 2021, Gotto said.

Revenues have gone up along with that employment growth, and Gotto said his business was up by

more than 40% in 2020, a year he ended with revenue of more than $14 million.

The biggest chunk of that business came from work ANR does in its commercial construction division, which accounted for about 60% of last year’s sales, Gotto said. That was followed by residential and light construction work, at about 30%, with the rest made up of utilities work.

Gotto began his career as a nonunion electrician and worked in construction and then for Pittsburgh-based PPG Industries — now an ANR client — before founding his own company.

He said he started working with the IBEW in 2014. He credits the cooperative relationship he has with the union to his business being able to respond to customers’ needs quickly and consistently, whether it’s a large commercial project or a home electrical job.

“100 percent,” Gotto said. “My success is a partnership with the local union hall — whether or not we agree on everything, it’s a partnership.”

The arrangement hasn’t been too bad for the IBEW in Akron either, said Mike Might, the business manager of Local 306, which has about 750 working members, of which about 100 work at ANR. “I’d say he’s over a medium-sized contractor right now for us. But in the beginning, he was a one-, twoand three-man band. He’s worked

hard to get where he got, that’s for damn sure,” said Might.

Like its signatories, the union needs to be nimble and quick, Might said.

“Usually the calls (from contractors seeking electricians) are put in on Friday and are processed for work on Monday — and he could also do that if he had a job in Cleveland through the local there,” Might said.

The IBEW, like other trade unions, has a robust apprentice program that keeps its rolls full and ensures the local has qualified electricians for ANR and other contractors, Might said.

Currently, Local 306 has 122 enrolled in its apprentice programs, in which members generally spend three to five years attaining their journeyman status.

“Right now, we’re running 105 in the commercial program, and we have 17 in the residential program,” Might said, noting that those are both five-year apprenticeship programs.

Might said he can find workers because the pay is good, the journeyman status is mobile and, assuming a person doesn’t mind a bit of cold weather now and then, the conditions are often pleasant in outdoor environments.

Currently, union electricians in Akron make just over $37 an hour, Might said, not including any overtime they put in. That’s nearly twice the median income household in-

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IBEW members doing work at a local construction site as employees of ANR Electric, which is based just outside Akron. | CONTRIBUTED

come in Akron, which the U.S. Census Bureau reports is just less than $39,000 a year.

If workers ever decide to move, “once you are credentialed, you can work with the IBEW anywhere in the U.S.,” Might said. “I’ve been an electrician since 1983 — if it wasn’t a decent trade, I wouldn’t encourage my boys. Both of them are electricians.”

Might might (sorry, readers) need as many new recruits as he can get, too. Not only is work up overall for the local, which is now nearing the peak working membership of 800 it had 30 years ago, but Gotto said he’s on track to continue his rapid growth in 2022.

So far, Gotto said, 2022 is shaping up to be another good year. It will still have its challenges; he just doesn’t

expect finding more people to be one of them.

“We have a backlog. I’d say a $5 million to $6 million backlog, in general construction. We’re hoping it goes well, the challenge now is sourcing materials — that’s real,” Gotto said.

Soon, Gotto said, he’ll likely need more space, as well as people. He intends to stay in the Portage Lakes area, though.

“I want to be a staple in this local community — Green, Portage Lakes, Coventry and Manchester,” Gotto said. “But we will be looking to grow further … we’re a force to be reckoned with at the moment.”

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

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Transparency

Screens

TECHNOLOGY

Northeast Ohio investment firm raises $38M to fund startup companies

BY JAY MILLER

North Coast Ventures (NCV), the Cleveland-based investment fund that has raised over $60 million and invested in 57 regional companies since its founding, has raised and begun investing another $38 million in young businesses.

NCV is an early-stage fund that invests in young companies that are developing business-to-business software applications that have high growth potential, focusing on Northeast Ohio.

The investment group attracted capital from more than 200 individual investors, most from Northeast Ohio. These investments have created two funds that NCV managing director Todd Federman expects will allow the group to help nurture at least 15 companies per fund. In addition to these two new funds, NCV manages investments for four earlier funds.

NCV raised $15 million for Seed Fund IV and $23.5 million for Acceleration Fund II. A seed fund typically invests in a business in its earliest stages, when it might not have customers, much less revenue. It typically has what appears to be a viable product and a solid business plan, but it might need money to further develop its product and refine its business strategy. An acceleration fund invests in companies that have moved beyond the earliest stages of

which provides software used in the health care industry for hiring, scheduling and payroll services.

“North Coast Ventures placed an early bet on OnShift, and now I have placed bets on the next generation of great startups by investing in NCV,” he said.

In a telephone interview, Federman said NCV already has used the new money to invest in 10 companies, all but three of are in Ohio. The “THAT WE WERE ABLE TO BRING OVER which others are in Califor200 INVESTORS TO THE TABLE SPEAKS nia, Florida and REALLY WELL FOR THE IMPACT THAT Maine.

Among the 200 inOUR GROUP CAN HAVE ON STARTUPS vestors in the new funds, more than half IN OHIO AND BEYOND.” are founders of other startups or executives — Todd Federman, North Coast Ventures managing director with some of the region’s largest compainvestor-members help the firms nies. Many of these investors end they invest in with advice, serve on up advising the firms NCV invests their boards and offer young compa- in.

“Unlike most coastal (venture nies strategic industry connections.

“What makes North Coast unique capital) funds, North Coast Venis how such a large group of inves- tures brings a non-overlapping nettor-members help source deals or work of connections and has been serve as subject-matter experts and pivotal at creating commercial inopen doors for portfolio companies,” troductions for us throughout the Federman said. “That we were able to Midwest,” said Andrew Konya, now bring over 200 investors to the table an NCV investor who is co-founder speaks really well for the impact that and CEO of Remesh Inc., a compaour group can have on startups in ny that has benefited from NCV funding. Remesh’s software allows Ohio and beyond.”

Among the investors is Mark users to talk to an audience online Woodka, CEO of OnShift Inc., and uses artificial intelligence to creating the business.

“This influx of active and highly capable investors is a powerful new resource for the region’s startups,” Federman said.

NCV was created in 2006 to help Northeast Ohio do a better job of supporting startup and young businesses in order to create jobs and grow the regional economy, while providing a return for its investors. Its

North Coast Ventures managing director Todd Federman said he expects the firm’s two funds to allow the group to help nurture at least 15 companies per fund. | JASON MILLER/PIXELATE PHOTOGRAPHY

analyze and organize responses to assist in market research decision-making.

“The perspective he (Konya) brings, having built a software company to that stage, is very valuable for our early startups,” Federman said. “I’m sure he’s lived so many of the challenges and opportunities

that they’re going through.”

Seed Fund IV will focus on making investments in businesses that have a viable product and some sales, have five employees or less and revenue of under $250,000. Acceleration Fund II invests at a later stage than the seed fund. Its target companies will have had some success, having between $1 million and $10 million in annual revenue and between 50 and 100 employees.

As an early investor, NCV investments are not long term; they have a life cycle. In the best cases, that means a profit from later investors or from a sale to an established company, called an exit. In the worst cases, it means the loss of the investment through a business failure.

NCV believes that taking risks by investing in young companies is key to the region’s future prosperity.

“The way we’re going to grow is by building great companies here, not by attracting large businesses here from across the country,” Federman said during a recent Crain’s Landscape podcast. “Almost all of net new job growth over the past 20 years is created by startups. That’s how we’re going to create wealth and success in the region.”

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

ONLINE MASTER OF SCIENCE IN BUSINESS ANALYTICS www.kent.edu/crawford/online-msba

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PERSONAL VIEW

To see Cleveland move forward, we all must step up

RICH WILLIAMS FOR CRAIN’S CLEVELAND BUSINESS

APRIL MILLER BOISE

EDITORIAL

Get ready O

ne way or another, legalized recreational marijuana looks likely to come to Ohio.

It’s up to the state General Assembly to make sure this is done in the most orderly, and safest, way possible.

Ohio Secretary of State Frank LaRose at the end of January confirmed that a proposed initiated statute that would legalize recreational marijuana obtained 136,729 valid signatures, or nearly 4,000 more than the number needed to get on the November ballot.

There are two ways this could go.

State legislators have four months to decide whether to pass the proposed statute, which was crafted by the Coalition to Regulate Marijuana Like Alcohol, or an amended version of it. If they don’t do that, supporters can collect another 132,887 valid signatures and demand that voters get their say on Nov. 8.

We obviously can’t know what citizens would do if given the chance to vote on legalization, but trends in other states suggest such a measure would have a decent chance to pass.

Our preference, though, would be for the General Assembly — where both Democrats and Republicans have previously introduced bills that would legalize recreational marijuana, so far to no avail — to get in front of the issue and craft a version of legalization that works for all parties.

We’re ambivalent on the substance of the matter. We don’t advocate the use of marijuana or want more people smoking it, but we don’t believe it should be illegal. There appears to be fairly strong support for legalization among the public, both with conservatives and liberals.

Ohio typically hasn’t been a leader in recognizing cultural changes, but this might be an area where legislators accept and respond to a fundamental reality of consumer behavior.

The proposal advanced by the coalition would allow Ohioans age 21 and older to buy and possess marijuana, up to 2.5 ounces of cannabis and 15 grams of concentrates. They could also grow up to six plants individually and no more than 12 in a household with multiple adults.

The tax on marijuana purchases would be hefty — 10% at the point of sale per transaction. Revenue would go toward administrative costs, addiction treatment programs, municipalities with dispensaries and a social equity and jobs program. Ohio’s existing medical marijuana dispensaries could expand their businesses to sell to adults, while new marijuana businesses could be added as recreational demand rises.

Our preference in any legalization effort is for the state to be out front on health issues.

An analysis last year by Health Affairs on the population health impacts of legalization found that the states subject to the most research so far — Colorado, Oregon and Washington — “all had expansive medical programs established before recreational legalization and mostly adopted commercial approaches toward the recreational market.”

It found that there are numerous opportunities for policy makers “to incorporate a public health perspective in the design of legal cannabis markets.” These include “suggestions based on lessons learned from tobacco and alcohol policy and recommendations that focus on youth cannabis use,” according to Health Affairs. “Other important policy goals may include minimizing drugged driving, unwanted contaminants, and co-substance use. Policy makers may also consider adopting alternative legalization models beyond commercial markets and should thoughtfully incorporate social equity considerations into legalization design and oversight through provisions that address socioeconomic and health disparities.”

Those are excellent suggestions. Legislators also could set up a system to work with researchers to evaluate the health impacts of legalization as it unfolds.

This could still be a big lift for Ohio. Although support for legalization has been growing, it’s not clear if the GOP-controlled Legislature is quite ready to take this step, and even if it did, Gov. Mike DeWine likely would veto the measure.

Without legislative action, though, it’s only a matter of time before this issue makes it to the ballot and wins — if not in 2022, sometime soon. Better to be ready with a responsible legalization program.

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

Recently, Cleveland Mayor Justin Bibb provided a first look at the priorities his transition team has identified to shape his first 100 days in office. Tackling systemic racism, providing lead-safe housing, closing the digital divide, and improving both the transparency and responsiveness of City Hall were among the hundreds of issues the administration will be prioritizing in the coming weeks.

While the transition team’s summary of April Miller recommendations won’t be finalized until Boise is later in February, what the mayor and his executive vice team have shared offers some insight into president and the thorough transition process the team chief legal officer conducted. for Eaton.

As a member of Cleveland’s business community, I had the opportunity to participate in this effort. I served on the mayor’s economic development committee — one of 10 transition sub-committees he established to help research and identify the most pressing issues challenging the city today.

The effort was as inclusive as it was comprehensive. Over a period of six weeks, a team of 75 committee and task force members working on behalf of the administration engaged with stakeholders throughout the community. We connected with a broad and diverse range of business, community, nonprofit and neighborhood leaders and residents to listen to their concerns and learn about the urgent issues various groups are facing.

The economic development committee I was part of met with city stakeholders through a series of virtual townhall listening sessions. This forum gave us an opportunity to hear their thoughts and perspectives on the challenges impacting the communities they serve or the neighborhoods they live in, as well as their recommendations for the top five issues they believe deserve to be prioritized by the new administration. Ultimately, our committee was able to hear from more than 60 organizations.

The findings and recommendations developed by each committee are being used not only to shape the priorities of the administration’s first 100 days, but to develop comprehensive plans to move our great city forward.

The new administration is also leveraging national, state and local resources to develop their plans. This focus has been visible in Mayor Bibb’s December visit to the White House, his participation in the Ohio Conference of Mayors, and in the work he’s begun with other new mayors of urban cities across the nation to identify best practices for becoming a best-in-class city.

In addition, to ensure they stay on target and are transparent with the people of Cleveland about their efforts, the administration has plans to work with the Kennedy School of Government at Harvard University to develop a dashboard for tracking and reporting their progress to the community.

Throughout my involvement in the transition process, I was deeply impressed by the committee members and the diverse group of community leaders we met. They understand the complexity of the challenges our city and the administration face and stand ready to support the mayor and his team in the task ahead.

But like Mayor Bibb and his transition team, they also see the potential the city holds. They know his vision of what Cleveland can be — “a safer, healthier city with good jobs and great neighborhoods … a city of real opportunity for everyone, not just a few” — is a vision worth working for.

If the effort we’ve seen of his administration so far is an indicator, we can be assured Mayor Bibb and his team are more than willing to do the work needed to achieve that vision. Now, it’s time for all of us to roll up our sleeves and do the work we need to do to move our city forward. Cleveland can’t wait.

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

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

8 | CRAIN’S CLEVELAND BUSINESS | FEBRUARY 7, 2022

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OPINION

Pleasant Valley Corporation is the Leader in Janitorial/Cleaning Solutions

PERSONAL VIEW

The catchphrase for ’22: change management

BY MARK D'AGOSTINO

The pandemic has forced businesses of all sizes to become aficionados of change management to remain viable.

Typically, organizations embrace change management to tackle intentional changes such as a merger, new software platforms or a product launch. Primary tenets of change management center around understanding change, planning change, implementing change, communicating change and measuring the results.

When (as the saying goes) the only thing constant is change, how can you plan? In this new pandemic world, human resources professionals are leading the charge in equipping businesses to weather these changes. Especially for small businesses, a human resources partner can help establish guidelines and management practices to best manage disruptions and changes to work routines, sinking morale and productivity, heightened anxiety, remote work, recruiting challenges and other issues stemming from the pandemic.

The way things are shaping up, the pandemic problems of 2020 and 2021 will continue into 2022. But the good news is, we’ve learned how to adapt. Here’s a rundown on the challenges we’ll continue to meet in 2022, and how business management can team up with human resources to tackle changes — and challenges — head on.

Workplace culture A 2021 Gartner survey shows that 75% of executive leaders believe they are already operating within a culture of flexibility, yet only 57% of employees indicate that their organizational culture embraces flexible work.

Culture and flexibility have certainly been put to the test, and the numbers show there’s a gap between perception and reality. A company’s culture is reflected not only in professed workplace values, but in the total experience of the employee. Have you opened a dialogue with employees? You can’t establish good guidelines if you don’t know what your employees are concerned about. And be sure to continue to emphasize and clearly communicate safety/COVID protocols so employees feel safe.

The remote work conundrum The adoption of the remote work or hybrid work model has no doubt been significantly accelerated. But it’s not a fit for every business. The fifth edition of the

Mark D’Agostino is founder and president of ConnectedHR.

Small and Medium Business Trend report found that more than two in five SMBs plan to have employees work remotely at least half time, but a similar proportion will have most employees work in-person. You have to stay true to what works best for your business. And in doing so, clearly communicate to employees why.

Labor shortages and retention issues

In 2021, industry pundits labeled the tidal wave of resignations as the “Great Resignation.”

According to the U.S. Bureau of Labor Statistics, 4 million Americans quit their jobs in July 2021, leaving behind 10.9 million open jobs. You’re not alone if you, too, have positions to fill. How can you encourage retention?

As mentioned earlier, keeping an open dialogue with employees tells you what employees need to be happy.

Communicate consistently and constantly. Focus on building your culture.

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And don’t bypass the younger generation. By 2025, generation Z workers will make up 27% of the workforce.

While it’d be nice to say that 2022 will be drastically different, our experiences in 2020 and 2021 tell us otherwise. But take heart — human resources is management’s best ally in beating whatever challenges come next.

LETTER TO THE EDITOR

Removing Marshall’s name from CSU law school misguided If the law school down the street wants to change its name, so be it. But there should be good reasons for doing so.

Chief Justice John Marshall wrote three great American Indian law opinions (the Marshall trilogy), and a lawyer who supports the name change, and who is quoted at length in “Cleveland-Marshall continues to grapple with name” (Crain’s Jan. 24, 2022, edition), focuses on only one of them. (For what it’s worth, that opinion in Johnson v. McIntosh largely restated a doctrine, the Doctrine of Discovery, that predated the United States and John Marshall. It’s also a doctrine that arguably supports the idea that our city was rightly named after Moses Cleaveland, the first white man to step off the boat onto the banks of the Cuyahoga. Maybe Cleveland-Marshall should think about doing away with the first word in its name as well.)

Those interested in John Marshall might take the time to read the third opinion in the trilogy, Worcester v. Georgia, decided in 1832, in which Marshall wrote, among other things, “The Cherokee nation . . . is a distinct community occupying its own territory, with boundaries accurately described, in which the laws of Georgia can have no force,

and which the citizens of Georgia have no right to enter, but with the assent of the Cherokees themselves, or in conformity with treaties, and with the acts of Congress.”

That language isn’t the work of a man unfriendly to the interests of indigenous peoples. Indeed, it’s about that decision that President Andrew Jackson supposedly said, with scorn, “John Marshall has made his decision, now let him enforce it.” Jackson probably didn’t say that, but he might well have been thinking it. In any event, he did nothing to enforce the Worcester decision.

Jackson’s inaction was hardly Marshall’s fault.

Are there statements in the Marshall trilogy that make us cringe today? Of course. Is the work so cringeworthy that Marshall’s extraordinary accomplishments in so many areas should be summarily dismissed? To my mind, certainly not.

I might add that it makes me uncomfortable to see the renaming effort linked to the plight of Palestinians. For some, John Marshall seems to be an afterthought in all of this.

Erik M. Jensen Coleman P. Burke Professor Emeritus of Law Case Western Reserve University FEBRUARY 7, 2022 | CRAIN’S CLEVELAND BUSINESS | 9

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ENTREPRENEUR LETS LOOSE THE HOUNDS Plans three locations of doggy daycare franchise.

SMALL BUSINESS

PAGE 14

Children and staff members interact at one of the five Northeast Ohio Sweet Kiddles locations. These photos were taken before the pandemic hit in 2020. | PHOTOS BY MORIAH ICE PHOTOGRAPHY

A FRAGILE INDUSTRY

Pandemic exposes weaknesses in local child-care businesses

BY JUDY STRINGER

“Challenging” is the word local operators use to describe the current child-care business climate.

Cindy Lehnhoff, the Daytona Beach, Florida-based director of the National Child Care Association, insists that characterization is generous.

“We are a resilient group, and I think sometimes we choose our words carefully so people on the outside don’t get the impression we can’t handle it,” said Lehnhoff, a longtime preschool professional.

“But it’s beyond challenging. We are to the point now where even with owner-operators and directors and teachers working overtime, we can’t meet the needs of our parents.”

Not surprisingly, one major cause of service disruption is COVID infections, including breakthrough cases afflicting vaccinated workers. Having one or two teachers down can shutter a classroom.

margins are stretched to the limit when classrooms close.

“We can’t charge parents for time that we’re not providing services,” he said.

His business is “above breakeven,” Lane added, “but not much above, whereas before the pandemic, we were profitable.”

“WE ARE TO THE POINT NOW WHERE And teacher abEVEN WITH OWNER-OPERATORS AND sences come amid personnel DIRECTORS AND TEACHERS WORKING alarming shortages. Four out OVERTIME, WE CAN’T MEET THE NEEDS every five childcare centers across OF OUR PARENTS.” the country are un— Cindy Lehnhoff, the director of the derstaffed, accordNational Child Care Association ing to a summer 2021 study by the National Association for the Educapunch.” tion of Young Children. Among the The pandemic is delivering a more than 7,500 early childhood one-two — and then some — punch centers NAEYC surveyed, 15% reto providers as well. Thomas Lane, ported a “major shortage” of six to president of New Adventures Early 15 fewer workers than needed.

Learning and Child Development Center, with locations in Twinsburg and Mantua, said already thin profit See CHILD CARE on Page 17 Depending on the size of the facility, more than a few staff cases can jeopardize the entire operation.

“We not only have to tell the parents we can’t open because we don’t have the staff, but that their child has been exposed to COVID,” Lehnhoff said. “It’s a one-two

10 | CRAIN’S CLEVELAND BUSINESS | FEBRUARY 7, 2022

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32. Lora Lewis Kinetico Water Systems

33. Heather Lohr University Hospitals Harrington Heart & Vascular Institute

34. Nicole Lucas Hunter International Recruiting

35. Danielle Martincic Kinetico Water Systems

36. Stacey Mazzurco BSN, RN, CCRP University Hospitals Harrington Heart & Vascular Institute

37. Denise McGee Bellwether Enterprise

38. Kathleen Mekesa Fifth Third Bank

39. Tamra Moroski Marketing AI Institute

40. Jodi Nead KeyBank

41. Dani Neumann The Sherwin-Williams Company

42. Catherine O’Malley Kearney, JD KeyBank

43. Nicole Ponstingle McCaffrey Pandata

44. Sam Prewitt Radio 1

45. Beri Ridgeway, MD Cleveland Clinic

46. Monica Robins WKYC 3 Studios

47. Beth Sak The Sherwin-Williams Company

48. Mehdi Shishehbor, DO, MPH, PhD University Hospitals Harrington Heart & Vascular Institute

50. Erin Sleeth PwC

51. Brittany Stepp, MHI Dispatch Health

52. Christina Treu American Heart Association

53. April Trzop The MetroHealth System

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FOCUS | SMALL BUSINESS

EASY SELF-CONTAINED RECYCLING PROGRAM

Food producer spreads cheer with healthy ‘clean label’ offerings

RECYCLING MADE EASY!

BY DOUGLAS J. GUTH

At its most basic level, “clean label” represents a shift from highly processed food products to those with simpler ingredients, remarks Eric Hurwitz, co-creator of Cleveland-headquartered The Dairy Free Co. “The gap we saw is one we’re still filling,” said Hurwitz, who unveiled his plant-based dips and spreads business in 2019 alongside fellow founder Beth Meany. “There were not a lot of clean label, dairyfree options at the time. It was just products created in labs with ingredients you couldn’t pronounce — stuff with no junk was not out there.”

Today, The Dairy Free Co. presents a line-up of cashew-centric dips with names such as Take It Cheezy and a sour cream alternative called Dollop Lama. For 2022, the burgeoning food business is harnessing sunflower seeds for a new “Flower Power” selection of flavorful dips.

All products are Non-GMO Project-verified and safe for consumption for a cornucopia of dietary restrictions. Nor has the pandemic significantly stalled the emerging brand’s growth. The entrepreneurial pair point to double-digit sales increases despite COVID-spurred declines in retail foot traffic and a slowdown of new product placements.

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last two years concentrated on operations and ways to become more efficient. Online merchandising is a particular focus, as retailer websites were rife with vague descriptions and poor product photos.

Vegan, paleo and gluten-free certifications were sometimes missing, requiring a larger digital clean-up that the company has yet to complete.

“We have to articulate what we do,” Hurwitz said. “Taking care of those simple things has helped a lot.”

On the marketing side, The Dairy Free Co. offers digital coupons on retailer sites, as well as a menu of healthy recipes on its personal web page. Bespoke meals cover a gamut of goodness — soups, salads, muffins and more — all containing a hint of the brand’s dips or spreads.

Meany said, “People use our products on a bagel or sandwich, but they can be incorporated into recipes because they heat up so well. You can put our dips into a vegan pasta sauce. The complexity is in the flavorings.”

Building an amazing food experience Hurwitz and Meany bought Red Lotus Foods in 2017, rebranding it as The Dairy Free Co. two years later. Hurwitz has an entrepreneurial background, starting companies mostly in the branding and prod-

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Local influencers Jake Loughner, left, and Ian Taylor support Dairy Free Co. products on Instagram, where they’re known as the Vegan Guys From Ohio.

12 | CRAIN’S CLEVELAND BUSINESS | FEBRUARY 7, 2022

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Eric in So

FOCUS | SMALL BUSINESS

s

opmore ng is webriptos. ertiing, -up om-

we e of ed a

The couas a pereals — more the

our ich, into p so to a exity

Eric Hurwitz with some of his Dairy Free Co. products at the Giant Eagle Market District in Solon. “The gap we saw is one we’re still filling,” he said. | CONTRIBUTED PHOTOS

uct-licensing space. Meany has experience in finance and marketing, including a stint at Kraft Foods.

The Dairy Free Co. has moved twice since the changeover, most recently relocating to the Central Kitchen Food Hub on Carnegie Avenue in Cleveland. Another co-founder, LaunchHouse’s Todd Goldstein, now runs Whoa! Dough, a regional producer of edible cookie dough bars.

The existing owners manufacture their wares at Central Kitchen with a team of six employees. Their products are sold nationwide at Heinen’s, Giant Eagle, Sprouts, Whole Foods and a bevy of coffee shops and smaller retailers. The enterprise’s newest sunflower seed-centered product was born from necessity, as Hurwitz and Meany sought to diversify their line in response to potential cashew shortages in the supply chain.

“Plus, we had to look at tree-nut allergies, so we said let’s try sunflower seeds instead,” Meany said.

“It’s an awesome product that our customers are going crazy for. Seeds have a lower water footprint than tree nuts as well.”

Giant Eagle will carry the new line beginning this month, illuminating the grocery chain’s continuing foray into new and healthy offerings, notes spokesperson Jannah Jablonowski.

“We continually strive to find innovative partners, especially those

local to the communities we serve,” Jablonowski said in an email. “The Dairy Free Co.’s plant-based dips and spreads are a great example of the amazing food expertise that Northeast Ohio has to offer. Their products bring exciting flavor combinations to the table — whether as an ingredient for a meal or enjoyed on their own — and we are excited to make them available to our guests.”

Health and wellness influencers are perhaps the company’s most im-

ated their own category. Not only are their flavors unique, but their product is unlike any other spread out there.”

Creating new products during the pandemic hasn’t been easy, considering currently defunct college-age focus groups encompassed a large portion of the company’s taste testers. For their Take it Cheezy cashew-based dip, the partners tabbed friends and family for feedback, bringing the product to market in fall 2020.

Labor and “DAIRY FREE CHECKS ALL THE BOXES FOR US supply chain have WITHIN THE MARKET — VEGAN-FRIENDLY, issues not prevented the busiLOCAL, ENVIRONMENTALLY MINDED AND ness from VERSATILE.” fulfilling orders for key — Ian Taylor, a local Instagram influencer retail partportant champions, the owners say. ners. Meany expects further scaleIn a recent post, self-described up in 2022 as national chains wel“mom influencer” Paula Murdock come in new Dairy Free Co. can be seen posing with Dairy Free offerings. products for her 19,000 Instagram “Getting our product on the shelf followers. Locally, Ian Taylor and is half the goal — the other half is Jake Loughner — otherwise known getting it into the customer’s cart,” on Instagram as the Vegan Guys Meany said. “We’re smart enough to From Ohio — display similar sup- know what we don’t know, and port via recipes and reverential come at this business without ego.

We also want to build a passionate product write-ups.

“Dairy Free checks all the boxes team that understands our prodfor us within the market — veg- ucts. We’ve done well so far, and an-friendly, local, environmentally hope to keep building.” minded and versatile,” Taylor said in an email. “They don’t fall into any Contact Douglas J. Guth: pre-existing spread, and sort of cre- clbfreelancer@crain.com

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FOCUS | SMALL BUSINESS

Entrepreneur lets loose the hounds

B eigh scal whe ty. F of whe adv “A inte play that said mak and T spec he n nes dog fenc tion spac side in s fuzz “W (tha “We pet you

Northeast Ohio native plans three locations of doggy daycare franchise

BY DOUGLAS J. GUTH

while their human is away, Nor is cost a barrier for many in Roger Burzanko grew up on a 75- the working public: Boarding fees acre farm in Chardon, surrounded are $30 Monday through Friday, by dogs, cats and a menagerie of and $27 on Saturdays. Overnight other animals. Life as a “country boarding at the puppy hotel runs farm boy” helped prepare Burzan- $45, with larger “luxury suites” at ko for his newest adventure — $55-plus.

“What I like about Hounds Town opening Northeast Ohio’s first is that it’s a smaller brand with Hounds Town USA franchise.

Under Burzanko’s stewardship, more of a personal touch than what three new locations of the national you’d find in corporate America,” doggy daycare brand will open in said Burzanko, who came to the franchise with 30plus years of sales ex“THE CUSTOMER IS THE DOG — perience in the golf WE’LL GET THEM PAIRED UP AND industry.

“The customer is LET THEM PLAY TOGETHER WITHOUT the dog — we’ll get HUMAN INTERACTION.” them paired up and let them play together — Roger Burzanko, Hounds Town USA franchisee without human interCleveland over the next few years. action. When owners bring their The Avon resident is currently re- dog home, there’s also a ‘Hounds furbishing the first facility — a for- Town hangover’ where their pet is mer travel agency at 1148 Pearl ready to lay out and chill because Road in Brunswick — for its official they played so hard.”

Of course, Burzanko will have launch in early spring.

Similar to the 25 Hounds Town staff on hand to monitor, feed and sites already operating in 11 states, care for his furry clientele. Alongthe Brunswick space will cater to side renovating the 7,700-squareessential workers concerned about foot Brunswick space — with assisseparation anxiety from their four- tance from Cleveland’s Engelke legged family members. Dogs are Construction Solutions — the budgrouped by size and temperament, ding entrepreneur is seeking new so they’re more likely to play nicely hires to handle daily duties.

Sta

T on a the his ing golf

Hounds Town USA franchisee Roger Burzanko with his wife, Brigid, and their two dogs, Murphy and Buckeye. Murphy is the white one and Buckeye is the brown one. | CONTRIBUTED PHOTOS

Hounds Town USA founder Mike Gould captures the attention of his canine clients at his location in Detroit.

14 | CRAIN’S CLEVELAND BUSINESS | FEBRUARY 7, 2022

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e

FOCUS | SMALL BUSINESS Burzanko hopes to employ six to eight attendants by opening day, scaling up to at least a dozen hires when the franchise is at full maturity. Finding good employees is part of an ongoing learning process where fellow franchisees give sage advice.

“Applicants will come in to the interview thinking they can just play with dogs all day long, but that’s not what we do,” Burzanko said. “We provide for the dogs and make sure their water bowls are full and play areas are clean.”

The new owner also received a special use permit from Brunswick; he needed to prove that his business wasn’t a boarding house where dogs barked all day behind wire fencing. While the Brunswick location will have a small outdoor space, dogs will mostly remain inside by day. Overnight guests stay in suites, either individually or with fuzzy family members.

“We are much more upscale (than competitors),” said Burzanko.

“We’ll also have a spa service and pet taxi where we can transport your dog from your home.”

Start of a new adventure Though spending his childhood on a farm has readied Burzanko for the rigors of full-time animal care, his road to Hounds Town is a winding one. He began his career in the golf industry, including 14 years

we are a much-needed service,” Burzanko said. “The nice thing about Hounds Town is I came into the process from the beginning. I’ve been immersed in the training 24/7.”

Hounds Town USA founder Mike Gould expects nothing less than a learning curve among new franchisees. Although dog packs self-regu-

All aboard for the Hounds Town USA pet taxi.

selling equipment and apparel at Adidas. Burzanko had been around the game most of his life, thanks to an uncle who co-owned Pleasant Hill Golf Course in Chardon.

Adidas downsized Burzanko in October 2020, even as he’d been tracking franchise opportunities for a few years prior. He and his wife, Brigid, studied wellness, fast food and temporary staffing, eventually landing on another pet daycare op-

portunity that was quickly sunk by the pandemic.

For Hounds Town, the Burzankos embarked on a training course covering marketing, operations, daily routines and facility layout. Core business aspects such as grouping, managing and caring for dogs proved a new and exciting challenge, noted Burzanko.

“I’ve done nothing but golf my entire career, so I have to prove that

100 locations in 30 states to work alongside the two dozen already in action.

“Cleveland was a market we really wanted to penetrate, because there’s a demand here,” said Gould.

“Almost any city or populated suburb where working people have dogs is going to be good for us.”

Ramping up the Brunswick facility is Burzanko’s “CLEVELAND WAS A MARKET WE REALLY 2022 goal. By year’s end, he WANTED TO PENETRATE, BECAUSE plans to have a THERE’S A DEMAND HERE. ALMOST ANY complete team and a stream of CITY OR POPULATED SUBURB WHERE steady clientele.

WORKING PEOPLE HAVE DOGS IS GOING Following years will see Burzanko TO BE GOOD FOR US.” meeting the balance of his three— Mike Gould, Hounds Town USA founder store agreement; late, an understanding must be de- he currently has rights across veloped on what breeds to group Northeast Ohio, from Sheffield to together. At Hounds Town, staff en- downtown Cleveland to Fairlawn. gage pets in assessments that inFor now, Burzanko is raring to clude personality and play style. tackle a new industry while caring Gould said, “There are some bul- for the animals he’s always loved. ly breeds that have to be socialized, “It truly is exciting,” Burzanko but we are a process-driven compa- said. “I had a good job with Adidas, ny from the time the owner opens but it wore me down toward the the door and sets the thermostat. end. I’ve always want to build a Staff can determine a dog’s person- business of my own, where any sucality within minutes.” cesses or failures are based on the Gould, a founding member of the decisions I make. I see Hounds NYPD’s K-9 unit, conceived Hounds Town as a whole new opportunity, Town post-9/11 when harried res- and it’s super exciting.” cue workers needed help caring for their dogs.

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1/21/22 11:24 AM

CHILD CARE

From Page 10

“At one point a couple of months ago, we needed about 16 full-time people, which is a lot of openings across our five locations,” said Strongsville-based Sweet Kiddles CEO Andrea Kimmel. “We did do a successful wave of hiring. The problem is, candidly, not everyone is sticking around. … It’s like one little bump in the road, and they just ghost you.”

Kaye Gilleylen, director of education program operations for The Centers, said the Cleveland-based agency’s seven child-care centers are functioning at nearly 40% below capacity. Like Lane — whose enrollment is down some 30% since pre-pandemic days — Gilleylen credits parents not returning to work and/or having family or friends watch their kids as one factor in sagging admissions.

But, she said, staffing is the bigger roadblock.

“Currently, we have three classrooms closed due to lack of staff, so that affects our enrollment,” Gilleylen said.

If licensed facilities had to raise rates, children like these at a Sweet Kiddles location before the pandemic might be pushed to informal settings or home-based businesses where they aren’t exposed to preschool programming. | MORIAH ICE PHOTOGRAPHY

“WE DO TUITION REIMBURSEMENT ON TWO- AND FOUR-YEAR PROGRAMS, BUT FIRST WE HAVE TO GET THEM THROUGH THE DOOR, AND RIGHT NOW WE CAN’T KEEP UP WITH WENDY’S OFFERING $23 AN HOUR TO FLIP HAMBURGERS.”

Flipping burgers To be fair, the child-care industry’s talent woes predate COVID. Most young women and men who graduate with early childhood degrees, Lane explained, seek employment in an elementary school setting. Those jobs tend to offer higher pay, better benefits and more time off.

Yet for facilities to qualify for high ratings in Ohio’s Step Up To Quality early learning initiative, they must meet pretty stringent requirements for degreed faculty.

“We go as far as paying for it,” Lane said. “We do tuition reimbursement on two- and four-year programs, but first we have to get them through the door, and right now we can’t keep up with Wendy’s offering $23 an hour to flip hamburgers.”

This recent phenomenon of heightened hourly wages for lowskilled jobs is COVID’s bonus blow to the battered child-care field. Entry-level position pay used to sit comfortably above what one would made stocking shelves or dispensing Frosties, but that’s not a given anymore.

“We had a goal of ensuring that all of our staff earn a minimum of $15 per hour that we finally met, and I think that’s how we are retaining our staff,” said Lynn Palmer, The Centers’ vice president of education and family services. “Where we’re continuing to have difficulty is applicants. We start the process, pay for background checks, training, etc., and then they find somewhere else that pays more than we do.”

Kimmel said Sweet Kiddles has “raised wages three times” over the last two years in an effort to remain competitive and “at a time when we’re getting killed.”

“We really need to put through price increases to deal with how much wages have gone up, but they would never be stomached by the customer,” she said.

Gilleylen and Lehnhoff also worry that increasing care rates at licensed facilities would push more children into informal settings or home-based businesses where they aren’t exposed to preschool programming.

“It can be a safety issue, too, when you take a student out of a highly regulated environment like a licensed child-care center and put them into a

— Thomas Lane, president of New Adventures Early Learning and Child Development Center

private home,” Lehnhoff said. “So, if we can’t push on the tuition, where do we go from here?”

Not betting on BBB It’s story time at New Adventures Early Learning and Child Development Center, which has locations in Twinsburg and Mantua. | CONTRIBUTED

Finding and keeping trained staff to work with kids, as seen here, is a problem throughout the industry, notes Andrea Kimmel, CEO of Strongsville-based Sweet Kiddles. This photo was taken at one of her firm’s five locations before the pandemic hit in 2020. | MORIAH ICE PHOTOGRAPHY

One answer, these industry insiders say, is federally funded incentives to help working parents more easily afford child care and early learning programs. The Biden administration’s sweeping Build Back Better Act, for example, included a co-payment scale in which families making up to roughly $250,0000 a year would not spend more than 7% of their income on child care, according to Lehnhoff.

She and the others, however, are skeptical that provision will be part of the final bill.

“Even if it passes, it will take a long time to ramp up, up to four years until it’s fully funded,” Kimmel said.

“And the state of Ohio has to play along. There are a lot of variables and things that could go wrong.”

Still, the fact that child care was given a spotlight in BBB — and coldhard-cash help in recent federal and state stimulus packages — means people are finally listening.

“The pandemic has opened the eyes of many individuals to see that we really have hit the brick wall,” Lehnhoff said. “We can’t work any harder or longer, and we’re not really growing enough people to sustain this industry.”

Contact Judy Stringer: clbfreelancer@crain.com FEBRUARY 7, 2022 | CRAIN’S CLEVELAND BUSINESS | 17

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CRAIN'S LIST | LARGEST COMMERCIAL PROPERTY SALES OF 2021 Ranked by price RANK

PROPERTY

PROPERTY TYPE

PRICE

SQUARE FEET

PRICE PER SQ. FT.

DATE

BUYER

SELLER

1

WESTGATE SHOPPING CENTER 3211 Westgate Mall Fairview Park, 44126

Retail

$87,700,000 e

474,000

$185.02

July 16, 2021

The R.H. Johnson Co.

IRC Retail Centers/DRA Advisors

2

ARHAUS HEADQUARTERS AND DISTRUBUTION CENTER 51 E. Hines Hill Road Boston Heights, 44236

Industrial

$75,691,536

814,000

$92.99

Nov. 12, 2021

Morning Calm Management

Premier Development Partners

3

THE BINGHAM 1278 W. 9th St. Cleveland, 44113

Multifamily

$65,000,000 e

635,303

$102.31

Dec. 31, 2021

Town Management

Morgan Properties

4

BEACHWOOD MEDICAL CENTER 25501 Chagrin Blvd.

Beachwood, 44122

Health care

$58,250,000

69,800

$834.53

April 26, 2021

Montecito Medical

Manna Isle LLC

5

SOUTHPARK MALL 500-17450 Southpark Center Strongsville, 44136

Retail

$57,720,150

1,600,000

$36.08

April 16, 2021

Kize Capital LP, Spinoso Real Estate Group

Starwood Capital Group

6

GREAT NORTHERN PLAZAS 26315 Brookpark Road North Olmsted, 44070

Retail

$54,730,219

630,917

$86.75

Oct. 1, 2021

Bridge33 Capital

Retail Value Inc.

7

AMAZON DELIVERY STATION 24800 Miles Road Bedford Heights, 44146

Industrial

$46,800,000

145,200

$322.31

Feb. 22, 2021

Mirae Asset Global Investments

Scannell Properties

8

THE ARCHER 1220 W. 9th St. Cleveland, 44113

Multifamily

$45,000,000 e

648,054

$69.44

Dec. 31, 2021

Town Management

Morgan Properties

9

CEDAR CENTER 13908 Cedar Road University Heights, 44118

Retail

$38,750,000

134,549

$288.00

July 2, 2021

First National Realty Partners

DRA Advisors

10

SHILOH INDUSTRIES VALLEY CITY PROPERTIES 880 Steel Drive, 5580 Wegman Drive, 5569 Innovation Drive Valley City, 44280

Industrial

$38,555,585

774,328

$49.79

Feb. 4, 2021

Spirit Realty Capital Inc.

MiddleGround Capital LLC

11

ABB 23000 Harvard Road Highland Hills, 44122

Flex

$34,250,000

145,000

$236.21

Dec. 6, 2021

LaneStar Properties

Weston Inc., Ox Capital Partners

12

PARMA VETERANS ADMINISTRATION OUTPATIENT CLINIC 8787 Brookpark Road Parma, 44129

Health care

$33,514,721

75,000

$446.86

Aug. 13, 2021

Boyd Watterson Asset Management

Clarence Eugene Deal Living Trust

13

BUILDINGS 1 AND 2 30300-30310 Emerald Valley Parkway Glenwillow, 44139

Industrial

$31,667,231

351,000

$90.22

Nov. 12, 2021

Morning Calm Management

Premier Development Partners

14

FORMER FORD PLANT 18300 Snow Road Brook Park, 44142

Industrial

$31,500,000

1,700,000

$18.53

May 19, 2021

Scannell Properties, Weston Inc. and DiGeronimo Cos.

Ford Motor Co.

15

AMAZON DELIVERY STATION 10801 Madison Ave. Cleveland, 44102

Industrial

$30,800,000

168,750

$182.52

April 26, 2021

Cantor Fitzgerald & Co.

Weston Inc., DeGeronimo Cos.

16

VISTA 26151 Lakeshore Blvd.

Euclid, 44132

Multifamily

$30,100,000

764,492

$39.37

Jan. 6, 2021

AMG Realty Group

NorthPointe Towers Ltd.

17

SOUTHLAND CROSSINGS 1150-1300 Doral Drive Boardman, 44514

Retail

$28,400,000

245,678

$115.60

Dec. 16, 2021

First National Realty Partners

Broad Reach Retail Partners LLC

18

GREAT LAKES COLD STORAGE 6531 Cochran Road Solon, 44139

Industrial

$26,000,000

360,000

$72.22

Jan. 30, 2021

Lineage Logistics

Great Lakes Cold Storage

19

BORGERS OHIO FACTORY 400 Industrial Parkway Norwalk, 44857

Industrial

$24,750,000

329,701

$75.07

Aug. 16, 2021

Angelo, Gordon & Co.

Borgers Ohio Inc.

20

HAWTHORE VALLEY SHOPPING CENTER 23300 Broadway Ave. Oakwood Village, 44146

Retail

$24,250,000

139,333

$174.04

Oct. 6, 2021

Tabani Group Inc.

First Interstate Properties Ltd.

21

OMNI KEYNOTE 925 Keynote Circle Brooklyn Heights, 44131

Office

$22,450,000

61,384

$365.73

July 26, 2021

Easterly Government Properties Inc.

Omni LLC

22

BATTERY PARK LOFTS 1250 W. 75th St. Cleveland, 44102

Multifamily

$21,700,000

105,632

$205.43

Sept. 20, 2021

SWR BP LLC

Realife Real Estate Group

23

GREENLEAF 15335 Madison Road Middlefield, 44062

Flex

$20,000,000

70,000

$285.71

Nov. 4, 2021

Acreage Holdings Inc.

Greenleaf Land Co. LLC

24

CRITTENDEN COURT 955 W. Saint Clair Ave. Cleveland, 44113

Multifamily

$19,750,000

196,794

$100.36

Sept. 21, 2021

Snavely Properties

Crittenden Court Apartment Associates

25

14450 FOLTZ PKY 14450 Foltz Parkway Strongsville, 44149

Industrial

$19,500,000

179,577

$108.59

June 10, 2021

STAG Industrial Inc.

Scannell Properties

Source: CoStar and NAI Pleasant Valley; additional research by Chuck Soder (csoder@crain.com) | Crain's does not independently verify all information, and there is no guarantee these listings are complete or accurate. Prices not footnoted as Crain's estimates were confirmed by CoStar, NAI Pleasant Valley, county records, media outlets or other sources. Some prices may include business value in addition to real estate. NOTES: e. Crain's estimate.

Want the Excel version of this list — and every Crain's list? Become a Data Member: CrainsCleveland.com/data 18 | CRAIN’S CLEVELAND BUSINESS | FEBRUARY 7, 2022

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DATA SCOOP

Shopping centers make strong showing on commercial property sales list

BY CHUCK SODER

Alec Pacella knew 2021 was going to be a bad year for office property sales.

But he didn’t expect retail sales to fill the gap.

Big shopping centers account for four of the top 10 deals on the Crain’s list of the largest local commercial property sales of 2021. The list is built with data collected from real estate data provider CoStar, Medina-based real estate brokerage NAI Pleasant Valley, county records, media reports and other sources.

The sector still has life in it, despite the decline of indoor malls and challenges from online retail-

ers, said Pacella, president of NAI Pleasant Valley. He cited large deals on the list and smaller deals he tracks.

“The idea that the internet is going to completely replace in-person shopping — the sentiment is that’s not going to happen,” he said.

The No. 1 deal on the list was the purchase of Westgate Shopping Center in Fairview Park. R.H. Johnson Co. of Kansas City, Missouri, acquired the open-air shopping center in July 2021. Crain’s estimates the purchase price to be in the range of $88.7 million. (The exact price hasn’t been disclosed.)

Granted, some retail properties, especially indoor malls, aren’t worth what they used to be, as illustrated by

the No. 5 deal on the list: Kize Capital and Spinoso Real Estate Group paid $57.7 million for SouthPark Mall in Strongsville in April 2021. That equates to just over $36 per square foot. By comparison, a decade ago, the Cuyahoga County Fiscal Office valued the mall at more than $260 million.

Retail deals accounted for 30.2% of the total value of the 25 deals on the list, just behind the industrial category, which accounted for 33.6%. The biggest deal in that category is at No. 2: Arhaus’ headquarters and distribution center was sold for $75.7 million in November, when Premier Development Partners of Cleveland sold 12 properties to Morning Calm of Boca Raton,

Florida. That portfolio sale also included the sale of two buildings on Emerald Valley Parkway in Glenwillow, a deal that shows up at No. 13 on the list.

Though a few buildings on the list include office space, the only pure office facility is the Omni Keynote building in Brooklyn Heights, at No. 21.

Nationally, 2021 was the best year ever for commercial real estate sales due to low interest rates and growing demand for apartments and logistics facilities. Northeast Ohio also had a strong year. Pacella’s data, which includes smaller deals but only focuses on the Cleveland and Akron areas, suggests it was the biggest year — in terms of number of deals and dollar

volume — since he started collecting data in 2007.

But the 25 deals on our list didn’t set a record. The properties sold for a total of $967 million, which is the lowest figure in the past few years, but that’s largely due to the lack of any blockbuster deals north of $100 million. For instance, though the top 25 deals of 2021 are technically worth 27.8% less the top 25 from 2020, the 2021 total more than doubles the 2020 figure if you exclude a single 2020 transaction: the $843 million sale of both JACK Casino Cleveland and JACK Thistledown Racino.

Chuck Soder: csoder@crain.com, (216) 771-5374, @ChuckSoder

M&A MARKET

From Page 1

the strong market itself led to more deals, too, as companies decided to sell while valuations were high.

The outlook for 2022 is still strong, but more “complex,” Ritchie said.

Fundamentals are strong, and there’s still a lot of capital at play, she said, but companies are also watching factors like inflation, potentially rising interest rates, regulatory pressure and an upcoming election. She doesn’t see those factors necessarily changing whether a company wants to buy or sell, but they could impact the valuation of a deal.

Regardless, manufacturers are adjusting to what Ritchie called a “changed consumer,” one more virtually focused. That means companies are deciding if there are assets they want to move away from, as well as some they want to add to their portfolio.

And the tight labor market is playing a role here, too. Some companies are looking for ways to digitize parts of the business, so they might not be as reliant on labor, while others are opting to acquire companies for the workforce.

Ritchie said that 10, 20 years ago, there might have been a person or two a company wanted at a competitor, and it would have tried to recruit them. But in the middle of last year, the challenges of hiring and training enough employees became acute enough that companies started opting to acquire entire workplaces, she said.

The PwC report noted a few areas it expected to drive M&A activity in the first half of 2022, including deals that help companies improve their technology, strengthen supply chains or bring on talented employees.

Manufacturing companies are examining their portfolios, looking at how to bring more technology into their products, said Andy Wilson, M&A leader of the industrial products and construction business at professional services firm Deloitte.

It’s “buy or build,” he said, but buy can be a simpler option right now because of the different core competencies needed. It’s not just about buying a technology, but about having the team who can bring that competency to the company going forward.

Ken Patsey, president and executive director at Manufacturing Works in Cleveland, pointed to labor market needs and a wealth of private equity

Tim Nelson sold the assets of his business, Component Systems Inc., last year. The company made pre-engineered rooms. | TIM NELSON

funding as big factors on the strong M&A demand side.

On the supply side, he pointed to demographics. Owners are reaching retirement age. And, for family-owned businesses, it becomes less likely that the company will stay in the family with each passing generation, Patsey said, noting that Cleveland has a lot of longstanding manufacturing companies. COVID served as a “last push out the door” for a lot of owners already thinking about succession planning, Patsey said.

Manufacturing Works serves a lot of small to midsize manufacturers in the area, many of whom needed help connecting with the necessary professionals for that kind of planning.

So the organization created the Growth and Transition program, which it launched about a year-anda-half ago. It also offers a program for potential buyers.

The Growth and Transition program aims to prepare member companies for the financial and technical aspects of selling a business, but also

the emotional side, said Ron Clough, vice president of manufacturing services at Manufacturing Works. It works with small cohorts of business owners, connecting them with each other and with subject-matter experts like wealth managers, family counselors and attorneys on a weekly basis.

That includes law firm Wickens Herzer Panza. Cooke said he found the Manufacturing Works program valuable because, often, company owners aren’t actually ready to sell.

The program helps owners, with their peers, work through the process of preparing for a sale and making that decision.

One of those owners was Tim Nelson.

In late 2019, Nelson was looking to sell his business, Component Systems Inc. Component Systems, which was founded in 1978, was a maker of pre-engineered rooms, ranging from offices to cleanrooms, for spaces like factories or warehouses.

Nelson received two strong offers

from out-of-state companies. The companies said they planned to leave the business in Northeast Ohio, but Nelson was concerned. His employees had been with him for a long time.

“People didn’t just come and go.

We were a small manufacturing company, approximately 20 employees, and we had very, very, very little

Warwick Products in Cleveland, represented by Wickens Herzer Panza.

Nelson declined to share the terms of the deal, but noted that the asset sale was completed last March. Today, Nelson owns and runs REDIBILT LLC in Medina, serving as a local dealer for his former company’s products, as well as others.

Far too often, small businesses “FROM AN ECONOMIC DEVELOPMENT the ones in STANDPOINT, WE WANTED TO MAKE SURE like the Growth and Transition proTHAT THESE BUSINESSES STAYED IN gram just close CLEVELAND AND STAYED IN BUSINESS.” down, Patsey said. Manufactur— Ken Patsey, president and executive director at Manufacturing Works ing Works is trying to avoid that turnover,” Nelson said. “So, I wanted outcome. to protect them.”

“From an economic development In the summer of 2020, he joined standpoint, we wanted to make sure the first cohort of the Growth and that these businesses stayed in Transition program, walking away Cleveland and stayed in business,” from the two earlier offers. Through Patsey said. the program, Nelson met a lot of potential buyers, including the one he Rachel Abbey McCafferty: (216) ultimately ended up working with: 771-5379, rmccafferty@crain.com FEBRUARY 7, 2022 | CRAIN’S CLEVELAND BUSINESS | 19

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DRAGON SEATS

From Page 1

“How many companies — whether it’s a national manufacturer or a small family company in Cleveland — can turn on the TV from Aug. 1 to Feb. 13 and see their product in an amazingly complex space (like an NFL sideline)?” Frank asked.

“I’ll tell you how many,” said his son, Franklin. “Gatorade, Bose, Microsoft, Allstate, Nike …”

Frank nodded.

“We’re competing in that space,” he said. “That’s fun.”

For most of his adult life, Frank Floyd owned a company called Reliable Construction Heaters Inc., which (as the name implies) made large, portable heaters. In 1986, a year after it was founded, Frank visited the Cleveland Browns at their Berea headquarters and secured a supply contract with them essentially by saying, “I’ve got heaters that can heat a whole building. I bet I can heat a bunch of guys with them.”

“Bring it down,” the Browns said.

After the old Browns moved to Baltimore in 1995, the new Browns hired Bobby Monica as their equipment manager for the 1999 season. He told Frank, “I like your space heaters, but I want my guys to sit on something.”

So Frank took out a piece of paper and drew a picture of what would soon become the most popular sideline bench in the NFL. “It literally just came to me as I was sitting in front of this guy,” he said.

“Now we’re on all the sidelines north of the Mason-Dixon line.”

And that’s just for starters.

“We plan to double our business this year,” Frank said. “The opportunity is unlimited.”

How it works A typical Dragon Seats bench looks like a 12-foot fiberglass rectangle with eight slots in the front and a large opening in the back where a portable, 120-volt heater connects.

The bench also has nine “Hot Hats” along the top, which warm the bladders on the inside of the helmets “so it feels like you’re putting marshmallows back on your head instead of a brick,” Franklin said. Everything is American-made, from the benches to the heaters to the accessories.

The benches aren’t just for comfort, though. They’re ergonomically designed so the players’ knees are slightly raised, allowing the bench’s heat to be absorbed by the body more evenly, especially in parts susceptible to cold-weather injuries like the hamstrings, calves and back.

“We’ve talked to former NFL players who played in the league for 10 or 15 years and they’ve told us our technology allowed them to play in the NFL for an additional three to five years,” Franklin said.

Last year, Dragon Seats added a cooling element to each bench, something that had eluded the company for years. Previously, the only usable AC units were the size of a boardroom table, which blocked fans’ view of the players (which the NFL didn’t want) and required 480V 3 Phase power (which teams didn’t have). Then, in November, the company came across units the size of a water cooler that fire on 110 power (i.e. house power), something Frank called “a game-changer.” All Frank had to do was add two openings in the back of the bench and, suddenly, warm-weather cities were in play, both in the NFL and at the college level.

An Ohio State Dragon Seats bench at Ohio Stadium. | DRAGON SEATS

“I’m insatiably curious, OK?” Frank said. “I’m always looking for a better idea, a better mousetrap. If it’s broken, how do you fix it? If it’s not broken, how do you improve it?

That’s just the way I work.”

Dragon Seats went on a road show last fall, visiting NFL cities such as Dallas, Houston, Los Angeles and Las Vegas to pitch the new technology, which includes a cooling mist from the Hot Hats. (The Dallas introduction proved particularly important, as you’ll soon see.)

As for heat, Dragon Seats prefers to tap into each stadium’s natural gas line — the same one used by concessionaires to cook hot dogs and hamburgers — but it can also bring in 100-pound propane cylinders, which isn’t ideal since it adds to the labor costs and clutters the already-limited sideline space. Once connected, the only place heat can escape is through the slots, so when NFL players stand next to it, “it blows them up like a pup tent,” Frank said.

“I call that the ‘Marilyn Monroe’ effect,” he said. “It blows up their skirts and they’re happy.”

Trouble in Washington There are typically six benches on each NFL sideline — three for the offense, three for the defense — but NFL teams have used as many as eight during the COVID-19 pandemic to help with social distancing. In 2017, Dragon Seats moved to a leasing model, and the company inspects, services and stores the benches each offseason.

But even well-serviced benches only have a lifespan of about five to six years. Part of that is because 300-pound men do a lot of damage to fiberglass benches, and part is because Frank is always tinkering and innovating, looking to improve everything from the heaters to the wheels.

“What’s frustrating is some teams have kept them too long,” Frank said.

“It frustrates me when I see less than the best on the football field of maybe a six-time world champion.”

Or, say, a three-time Super Bowl champion like the Washington Football Team, whose sideline benches last fall were more than 10 years old.

After getting a heads-up about their condition from the Seahawks, the Cowboys in December contacted Dragon Seats, which supplied Dallas with new benches (complete with

Dragon Seats founder Frank Floyd stands behind a bench with his daughter, Molly, and son, Franklin, inside the company’s Beachwood office. | JOE SCALZO/CRAIN’S CLEVELAND BUSINESS

the Cowboys’ logo) for their Dec. 12 game at FedEx Field in Landover, Md. The Cowboys won 27-20 and the story made the USA Today.

Dragon Seats’ executives step lightly around the controversy — Washington recently hired some new executives and Dragon Seats is confident the newly named Commanders’ benches won’t be an issue moving forward — but it illustrates an important point about the NFL. While the league is viewed as a collective unit, it’s actually 32 individual businesses run by 32 individuals. They don’t work in lockstep.

“The Washington Football Team’s franchise enterprise value is $4.5 billion, so you think, ‘Why wouldn’t they spend six figures to upgrade something that’s pretty important for the performance of the highly paid athletes who generate that $4.5 billion?’” asked Clark Jones, a former IMG executive who is now a strategic adviser for Dragon Seats. “Maybe there’s frustration on our end, but when Dragon Seats humanizes the people running the company rather

than just focusing on temperature-controlled benches, success usually follows.”

Expanding opportunities When Frank sold Reliable Construction Heaters, he did so with an eye on working with his kids.

Franklin, the chief operating officer, had been doing lucrative (but repetitive) work for companies such as Citigroup and Barclays in New York and Boston. He started working parttime for Dragon Seats in 2017 while getting his master’s from Columbia Business School, then headed back to Cleveland full-time in 2019. Franklin focuses primarily on business development across the NFL, the NCAA and the ski resort and lifestyle markets.

Frank’s daughter, Molly Floyd, came over from RCH in 2018 to serve as Dragon Seats’ director of operations, “which means I do whatever they tell me to do,” she said, laughing.

She handles everything from proposals to invoices to accounts receiv-

ables to transportation inventory to graphic design, which allows Dragon Seats to put team logos and advertising on the benches.

“Which has been a total game-changer, by the way,” Franklin said.

To unlock the company’s full sponsorship potential, Frank turned to Jones, a longtime family friend who was hired in 2019 and focuses on both marketing and corporate relationships. Jones’ job is to help sell what the company calls “beachfront real estate” on the plain white benches.

In summer 2021, Dragon Seats finalized a deal with sports marketing giant Learfield, which represents more than 200 colleges and universities. That led to a major contract with DeWalt tools. Problem was, the DeWalt deal came so late, Dragon Seats had to build and deliver 100 benches in 60 days to ensure they were on the sidelines for college football’s opening weekend.

“We lost a lot of sleep,” Frank said.

“It was monumental.”

In 2020, the company added a fulltime service team to manage all the equipment during games and to service the equipment in the offseason and to help with delivery, installation and onboarding of all equipment.

The company also invested in trucks and trailers to bring as much shipping in-house as possible. Around the same time, it added a ski resort/ lifestyle team, building relationships with companies such as L.L. Bean and sites including Jackson Hole Mountain Resort in Wyoming.

The pandemic actually boosted Dragon Seats’ ski business, since resorts were looking for ways to draw customers at a time when people are wary of spending too much time indoors with strangers.

“What ski resorts are selling is an outdoor experience,” Frank said.

“Your choices were to get in a car or stay in a bar. Now you can plop down on one of those things and enjoy socializing. The ski resorts have to tell people to go home at night, that’s how comfortable they are. There’s no reason to leave. You can put a server there, or a bar, and it’s revenue generating.”

Many ski resorts have tightened their budgets due to COVID-19, spending most of their cash on snow-making or snow-moving machines. But once they can again focus on the customer experience, they’ll turn to Dragon Seats.

“It’s just a matter of time,” Frank said. “When the first one goes, the rest of them are going to fall. And that will happen in my lifetime.”

As for what’s next, well, some of that depends on customer demand.

Frank’s business works like “Field of Dreams” in reverse: If you come, I will build it. You want a 12-foot bench? Fine. A 6-foot bench? Fine. A bench that looks like a zebra? Fine.

“I go back to Bobby Monica,” Frank said. “I say, ‘Tell me what you want,’ and he says, ‘I want a heating system players can sit on.’ A year later, I say, ‘Bobby, tell me what you want.’ He says, ‘I want a device to hang helmets on, so the bladders don’t freeze.’ I say, ‘OK, tell me what you want’ and he says, ‘How about not only a heated bench, but an air conditioned bench?’

“The underlying foundation of this business is: Tell us what you want and we will build it. That’s the fun part. You don’t have to go through a hierarchy with us. We’ll get it done.”

Joe Scalzo: joe.scalzo@crain.com, (216) 771-5256, @JoeScalzo01

20 | CRAIN’S CLEVELAND BUSINESS | FEBRUARY 7, 2022

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DEVELOPERS

From Page 1

“This has been an ongoing conversation in the real estate profession here locally,” said Sheila Wright, an emerging developer who participated in a market assessment conducted last year by Capital Impact Partners for Cleveland Development Advisors and Village Capital.

Wright and Angela Thi Bennett are the co-founders of Frontline Development Group LLC, a company behind an ambitious plan to build more than 240 homes in Hough, on the city’s East Side. The longtime friends, both 52, are rare Black women in a largely white, male industry.

For the last two years, Bennett and Wright have been trying to get their first six homes out of the ground.

They’ve encountered bureaucratic snarls, political complications, appraisal shortfalls and design challenges. But their loyal buyers have stuck around, with high hopes for being part of a mixed-income, mixed-use neighborhood off East 66th Street, near historic League Park.

“It’s a tough industry to get into, regardless, unless you are coming with a considerable amount of resources,” said Wright, who formed Frontline with Bennett in late 2018.

Capital Impact Partners saw the difficulties firsthand in Detroit a few years ago.

In 2017, the federally certified Community Development Financial Institution examined its track record in the predominantly Black city. Most of its loans went to projects, including housing, that filled a need in lowand middle-income communities, said Nicholas Pohl, who heads up business development in the Great Lakes Region.

But 90% of that money was flowing to financially comfortable white developers.

“It obviously did not sit well with us,” Pohl said.

The nonprofit worked with investment bank JPMorgan Chase & Co. to build a two-year program specifically for minority developers living in, and aspiring to shape, Detroit’s neighborhoods. The initiative expanded to the nation’s capital in 2019 and recently popped up in San Francisco.

Classes dig into budgeting, real estate finance, project management, legal issues and community engagement. Mentors and alumni say the program has evolved, shifting from a theoretical final project to a real-world one, for example, and helping graduates gain access to low-cost financing and sites owned by local governments and community groups.

“There are opportunities for real outcomes,” said Cliff Brown, a Detroit real estate developer who has served as a mentor and adviser since the program’s inception. “This program, like any other program, is not perfect.

But I think there’s a strong group of people that are working to truly help people and to listen and to create opportunities.”

Brown, a Toledo native who is looking for development projects in Ohio, expects to be involved with the Cleveland program if it moves forward.

Cleveland Development Advisors asked Capital Impact Partners to look at the city last year.

Local organizations including Village Capital and the Cleveland NAACP also were talking about how to foster a more diverse crop of developers. Other training programs in Cleveland focused on the basic principles of development or commercial real estate professions, but there was

A conceptual rendering shows how pedestrian paths could break up broad blocks in Cleveland’s Hough neighborhood, where new houses in a project called the Allen Estates will mingle with existing homes near League Park. The mixed-income project is the brainchild of Sheila Wright and Angela Thi Bennett, two Black, female developers. | RDL ARCHITECTS

There are buyers lined up for the first six houses at the Allen Estates, a multi-phase project that ultimately will span more than 240 homes. | UBIQUITOUS DESIGN

a gap in support for practitioners who had development experience but still were struggling to grow.

An affiliate of the Greater Cleveland Partnership, Cleveland Development Advisors provides mezzanine, or secondary, debt and allocates federal New Markets Tax Credits to projects in low-income areas. Village Capital is the lending arm of Cleveland Neighborhood Progress, a nonprofit focused on neighborhood revitalization.

In 2019, Village Capital rolled out Contractors on the Rise, an effort to help minority contractors build up their businesses and renovate homes in the city. That pilot program was largely successful and will be replicated, said Dione Alexander, Village Capital’s president. But it quickly became apparent that Cleveland needed a sis- Alexander ter program for developers, she said.. Village Capital encountered business owners who, even with years of experience, lacked guidance, a deep understanding of finances or the resources to hire staff.

To avoid duplicating work, Village Capital and Cleveland Development Advisors Ittu teamed up. They asked Capital Impact Partners to talk to 50-plus people, including developers, lenders, attorneys and real estate agents, to get a better sense of the landscape.

The partners said they aren’t ready to release the resulting market study.

They want to sit down first with other civic leaders and public officials, including Mayor Justin Bibb’s adminis-

space to attract private equity to, especially when you’re working in not what are seen as the hot neighborhoods.”

Lack of equity is a huge hurdle for rising developers, particularly for people without family wealth to draw on. Rosen, who had zero real estate experience in 2002 when he teamed up with friends Naomi Sabel and Ben Ezinga to tackle a mixed-use project in Oberlin, participated in the Capital Impact Partners survey last year and is open to serving as a mentor for the Cleveland program.

“We’ve done over $100 million of work, but we still need mentors,” he said. “It’s critical that you’re able to pick up the phone and call people who have done these sorts of things before.”

Cecily King was part of the Equitable Development Initiative’s first cohort in Detroit. The program helped her transition from consulting for other developers to pursuing her own projects.

She honed her business strategy, met new people and found fresh ways to collaborate with existing contacts.

“It’s really important for there to be minority developers that look like the communities that projects are happening in, because I think there is often this tension between the community

and developer that doesn’t need to exist,” said King, a Black New Jersey native who moved to Detroit in 2015 to work in the city’s housing and revitalization department.

“Representation is incredibly important,” she added, “because real estate is, frankly, one of the most ubiquitous things in society. It’s where you live. It’s where you shop.

It’s where you go to school.”

When Thomas Houston first heard about the initiative, he was skeptical.

As a community development practitioner in Washington, D.C., he’d seen plenty of programs that purported to help Black people — but that came to little more than platitudes.

He’s now a champion of the Equitable Development Initiative and an active alumnus, partnering on deals with a fellow graduate and a mentor and tapping financing from Capital Impact Partners.

“This course is designed to teach you all of the stuff that white men kept to themselves for years. … It almost pulls the veil off what we’re not supposed to know about the basics of development,” said Houston, the executive director of a community development corporation called Medici Road. His organization is starting to look for projects in Cleveland. Houston’s wife is a Cleveland native, and his partner on a housing-preservation project in Washington, D.C., is Gina Merritt, a Baltimore County developer who is leading the charge to revive a long-vacant apartment tower in Hough.

Training and mentorship changed the path of Houston’s career, prompting him to look beyond for-sale housing to mixed-income rental projects and mixed-use developments.

Wright believes there are plenty of resources in Cleveland. The challenge is marshaling that talent and money, in a coordinated way, to help entrepreneurs gain purchase in a tough business.

“It shouldn’t be insane for two women to be doing this. Or two women of color to be doing this,” she said of building homes on the city’s East Side.

“I hope to see more of it. And I think we will.”

tration, to talk about the findings and ways to nurture businesses and generational wealth across the city.

It’s still unclear exactly how the new training program, and ancillary services, will be funded.

“We’re being very thoughtful about how we put this together,” Yvette Ittu, Michelle Jarboe: michelle.jarboe@ president and CEO of Cleveland Decrain.com, (216) 771-5437, @mjarboe velopment Advisors, said of what she C R A I N ’ S C L E V E L A N D B U S I N E S S | S E P T E M B E R 3 - 9 , 2 018 | PA G E 2 9 characterized as a nascent collaboration.

Pohl and Jeff Mosley, the initiaAdvertising Section tive’s national leader, said that developers in Cleveland told them about how hard it is to fund land acquisition and, without ample cash on hand, to make it through a predevelopment period that can take years. To place your listing in Crain’s Cleveland Classifieds, Developers struggled to navigate what they decontact Ainsley Burgess at 313-446-0455 scribed as byzantine local processes, from attempting to acquire lots through the or email ainsley.burgess@crain.com city’s land bank to dealing with multiple departments and agencies.

“As one person put it,” Mosley said, “there are many doors to go through and different keys to each door. They don’t know how to proceed.”

Cleveland has a strong BUSINESS OPPORTUNITY track record for creative lending, including civic programs that allow for higher loan-to-value ratios than traWe at Griffin Moor are seeking a business in the Corrugated Box ditional banks offer, said Josh Rosen industry to acquire of Sustainable Community Associwithin the Midwest. ates, a Tremont-based developer that Please contact us has worked with Cleveland Developand reference ment Advisors and Village Capital. mandate AD344 But, he said, “it’s a very difficult

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BUSINESS SHOWCASE

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ACCOUNTING

ACCOUNTING

ARCHITECTURE

Cohen & Company

Sikich LLP

Hasenstab Architects

Cohen & Company proudly welcomes Chrissy Walters, CPA, CISA, MBA, as a director in the firm’s CFO Solutions Group.

With over 20 years of experience, she will serve as co-leader of the CFO solutions team, taking an active role in strategy, team development and assisting with key system implementations. Chrissy will also help build out the firm’s risk assurance and internal audit services. She received her M.B.A. from John Carroll University and B.S.B.A. from Miami University.

Lesley Keller, CPA, MT, AEP, has been promoted to Director at Sikich LLP, a global professional services firm specializing in accounting, advisory, technology and managed services. Lesley has extensive experience providing tax consulting and compliance service to clients in a variety of industries. Lesley advises individuals, trusts, estates and closely held businesses with U.S. and state taxation and reporting with a focus on international transactions, assets and investments.

Hasenstab Architects is proud to welcome Todd Dunaway, EDAC, ACHA, NCARB. Todd brings 31+ years of experience in healthcare architecture including business development, project management, master planning and design for clients in the Pittsburgh area, as well as national clients. His experience and relationships will play an integral role as our firm continues to expand our reach beyond NE Ohio. Todd will reside in the Pittsburgh area as we solidify plans for a future Pittsburgh office.

ACCOUNTING

LAW

Signet Capital Advisors

Walter | Haverfield

Brian McMillen has been elevated to Director at Signet Capital Advisors, with direct responsibility that spans from M&A deal execution to client McMillen and prospect management.

McMillen has been with the Company for seven years and has spent the previous 12 years providing financial advisory, M&A, capital raising and other corporate finance services to performing middle market Smyers companies. Signet Capital Advisors also welcomes Scott Smyers as an Investment Banking Senior Associate in their Cleveland, OH office. Scott brings over six years of experience in investment banking and investment-related roles, which he will use to provide support to the Signet team to help position the company to continue their track record of success and expansion.

Simon Demian brings more than three decades of experience to the Walter | Haverfield Business Services Group. He represents domestic and foreign business clients in transactions involving purchases and sales of existing businesses and the formation of new business entities. Simon’s practice also focuses on the negotiation of commercial contracts involving the sale and purchase of goods, licensing agreements, commercial real estate sales and commercial real estate leasing.

Sikich LLP

ACCOUNTING

Corrigan Krause Corrigan Krause is pleased to announce two well-earned promotions to start 2022. First, Aaron Apathy, CPA, has Apathy been promoted to Equity Director. He works with business owners and individuals providing a wide variety of solutions including accounting, consulting, and tax planning services. Aaron helps lead our Dental specialty group and focuses on clients within the service industry. Next, Tommy Sustar Sustar, CPA, MAcc, has been promoted to Director. He leads both our Assurance Services department and our manufacturing specialty group. Tommy focuses on audits, review and compilation engagements and everything related to PPP and the Employee Retention Credit. Both Aaron and Tommy are deeply appreciated by everyone at Corrigan Krause.

Dow Wolfe, CPA, has been promoted to Partner at Sikich LLP, a global professional services firm specializing in accounting, advisory, technology and managed services. Dow has extensive experience serving a variety of industries, including manufacturing and distribution, private equity, family offices, real estate and professional services.

Dow assists businesses with consulting, tax planning and tax compliance services, with specialized knowledge in transaction advisory services.

ARCHITECTURE

DLZ Ohio, Inc. DLZ is pleased to announce that the firm has named Tom Hessler, P.E., P.S., Vice President of Northern Ohio Operations. In this role, Mr. Hessler will develop strategies to expand the firm’s regional market share. DLZ’s Northern Ohio operations include offices in the historic turn-of-the-century Kies-Murfey Mansion in Midtown Cleveland, and at Canal Square Plaza in the heart of downtown Akron.

LAW

Mazanec Raskin & Ryder Co., L.P.A.

BANKING

Westfield Bank Westfield Bank is pleased to welcome Angelina Grujic as a Private banking officer at our Brecksville branch. Angelina’s banking experience spans more than 16 years, and she has over 10 years of experience as a certified interpreter in Serbian, Croatian, and Bosnian languages. She holds a bachelor’s in business management, international relations, marketing as well as a master’s in business management from Indiana Wesleyan University.

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David Sipusic joins MRR as a Partner in the Cleveland office where he defends clients in matters of insurance coverage & bad faith, public sector law, school law and general liability.

He has represented public entities, government officials and administrative officers before federal courts, state courts and state agencies relative to civil rights and employment claims, and provided legal counsel to Ohio public schools and universities. He earned his J.D. from Cleveland Marshall College of Law.

LAW

McMahon DeGulis LLP McMahon DeGulis is pleased to announce that Wendlene M. Lavey has been named Managing Partner of the boutique environmental law firm.

In addition to guiding the firm’s business strategy and operations, Wendy will continue her legal practice focusing on environmental compliance, enforcement defense, permitting, redevelopment and transactional support. Wendy joined MD in 2017.

REAL ESTATE

IRG Realty Advisors Evan Vlaeminck has joined IRG Realty Advisors as Vice President, Asset Development Manager. He will focus on various projects requiring asset development or repositioning. Prior to coming to IRGRA, Vlaeminck held key roles at GCI Residential, Inc., Lowe’s Companies, Westfield LLC, and DDR Corporation. He has more than two decades of experience in real estate development, land acquisition, and corporate leadership.

STAFFING & SERVICES

Direct Recruiters, Inc. Direct Recruiters, Inc is pleased to announce the promotion of Mitchell Herman to Managing Partner. As an Executive Recruiter on DRI’s Digital Health team, Mitchell works with many of the industry’s fastest growing companies to recruit, secure, and retain human capital. Mitchell has led the company in billings and established many new clients in his short tenure. In 2021, he closed the largest deal in DRI’s 39-year history.

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