Crain's Cleveland Business, February 12, 2024 by Crain's Cleveland Business

CRAINSCLEVELAND.COM I FEBRUARY 12, 2024

BALL IS MONEY

Business is booming for the surging Cavaliers | By Joe Scalzo There’s a French saying that goes, “Après la pluie, le beau temps,” which translates to, “After the rain, good weather.” It’s a good description of the Cleveland Cavaliers’ arc since LeBron James left, one that included plenty of rain and now includes some of the sunniest skies this side of Boston (at least metaphorically). Despite losing guard Darius Garland and forward Evan Mobley for six weeks, the Cavaliers have won 15 of their last 16 games and are 15-2 since 2024 began, including a 111-102 win over the Brooklyn Nets in frigid Paris on Jan. 11. On Feb. 8, they were second in the Eastern Conference standings with a 33-16 record.

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See CAVALIERS on Page 16

Lawsuit accuses Marcum of gender discrimination

Team NEO targets more shovel-ready sites in 2024

Former director sues, also alleging shareholder oppression

State, city hope $1B in funding can boost manufacturing

By Jeremy Nobile

By Kim Palmer

A former managing director with Marcum Wealth, who is not currently working for the firm but is allegedly stuck with equity interests she cannot divest, is suing the company over claims of shareholder oppression and gender discrimination. These claims and some other circumstances at play have allegedly impacted

the former employee’s earnings and prevented her from working for Marcum or another company in her field. The lawsuit, filed Jan. 13 in Cuyahoga County Common Pleas Court, is brought by plaintiff Wendy Eldridge, an Avon resident who worked for Marcum between 2014 and 2023, according to LinkedIn. See MARCUM on Page 16

In 2024, between state and city of Cleveland programs, there will be about $1 billion in site development funding available to combat the region’s dearth of commercially viable space for businesses to build on. “The onshoring and reshoring of opportunities are real,” said Bill Koehler, CEO of Team NEO.

There is a national priority when it comes to manufacturing in critical industries — like semiconductors, electric vehicles and other emerging technologies — and the region is poised to take advantage of it, he added. Not having what the market considers “shovel-ready” property has posed a See TEAM NEO on Page 17

MANUFACTURING Many Northeast Ohio manufacturers are hoping private equity will provide them with a succession plan, but some say that can be a false hope. PAGE 15

City Council hits brakes on TIF district plan Delay for Bibb-backed legislation unexpected By Kim Palmer

In an unexpected move by Cleveland City Council President Blaine Griffin, the proposed Tax Increment Finance (TIF) overlay district legislation that Mayor Justin Bibb’s administration was hoping to move toward quick passage is now on hold and will possibly be tweaked as budget hearings take precedence. The ordinance, which would use an estimated $3.5 billion to $7.5 billion in new tax revenue over the next 42 years for infrastructure improvements,

is the centerpiece of the city’s “Shore-to-Core-to-Shore” redevelopment strategy. In a statement released after a Monday, Feb. 5, Council Committee Chair meeting, Griffin said the TIF legislation could be a game-changer for the city, but added that he is committed to ensuring every neighborhood in Cleveland reaps the benefits of the transformational revenue. “As the body responsible for spending oversight, council will take proactive measures to revise the legislation, guaranteeing that Cleveland reaches the full potential of the TIF overlay district and that every neighborhood benefits both immediately and continuously,” Griffin’s statement read.

The statement comes after a member of the Bibb administration was not able to ensure funds from the TIF would immediately be spent on the neighborhoods outside of the downtown and/or the river and lakefront areas during the committee chair meeting. Griffin’s statement said council will seek to revise the TIF legislation, recommending that “every neighborhood, with special emphasis on our middle, edge and distressed neighborhoods, receive at least 50% of the proceeds,” from the TIF. A spokeswoman for Mayor Justin Bibb told Crain's on Feb. 5 that "the administration looks forward to continuing the TIF district discussion once city

council hears the legislation." The bill, introduced to council Jan. 8, involves the simultaneous development of both the river and lakefront funded, in part, by tax revenue generated from increases in property values within the proposed TIF district. The legislation is not dead but will not get a committee hearing before council finishes up meeting on the city’s annual budget, pushing any passage until late February at best. Any amendment to the TIF legislation will first be heard in the city council’s development, planning and sustainability committee, chaired by Councilman Anthony Hairston (Ward 10). Any individual TIF spending would need to be vetted by coun-

cil. Much of the initial funding would help with the city’s “catalytic projects” including the proposed land bridge, the North Coast Master plan, and the infrastructure needed to enable the Bedrock riverfront projects. Jeff Epstein, Cleveland's chief of integrated development, made a presentation to the Cuyahoga County Council Jan. 29, about the TIF legislation that will divert tax revenue from the county general fund. The council president in his statement added that council and his office will “proactively share updates and encourage community participation as we work towards TIF overlay district legislation that benefits all of Cleveland.”

Sale of 200 Public Square afoot to Namdar Realty Group By Stan Bullard

Namdar Realty Group, a realty empire built on buying distressed malls, looks to be the next owner of the 45-floor 200 Public Square skyscraper. Cleveland office experts are openly talking about a purchase by Namdar — widely known as a bottom-fisher, a cash buyer that snaps up assets at big discounts — of the 23% vacant 1.27 millionsquare-foot building. If it closes, the deal will be the first such case for a huge, prominent tower downtown in this period. However, it's the type of opportunity that vulture investors are starting to feast on nationally after office buildings, particularly in downtowns, have been roiled by diminishing post-pandemic office demand and scarce replacement loan availability as older loans come due at the highest interest rates in two decades. The excitement in the brokerage community for a new player joining the lineup downtown is palpable after clouds have obscured the outlook for office properties since the advent of the pandemic and the continuing popularity of working from home saps office demand. Namdar executives made the rounds of big brokerages the last week of January, according to two sources who asked not to be identified. However, experts who are not directly involved in the transaction are discussing the looming Namdar era by name. Chandler Converse, a CBRE managing director, said he has discussed the property with a Namdar exec he declined to identify and is convinced the big realty firm will land the property and has the money to “do the right thing” by investing in

it to attract tenants. “They’re opportunistic, a valuebased buyer,” Converse said. “They’re the kind of buyer who buys with cash and is well capitalized. They won’t buy if it’s not at a discount. But that’s what will give them the ability to attract tenants (with competitive rents) and do things the building needs.” Brokers say that despite the building’s yawning 23% vacancy rate, its tenant roster retains institutional quality. That is the benefit of the likes of big law firms, from Hahn Loeser to Frantz Ward and Vorys, parked there alongside companies such as Huntington Bank and Cleveland-Cliffs. At the same time, the Benesch firm recently vacated six floors for new offices at Key Tower nearby and retail spaces languish in its huge atrium. Rico Pietro, a principal of the Cushman & Wakefield Cresco brokerage in Independence, has long said the building’s strengths in terms of its rent roll, location and quality as a corporate headquarters converted to multitenant office building makes it a valued asset regardless of current market conditions. “They’re a value-based buyer, yes,” Pietro said. “But they have to be in this market. It’s going to be a heavy lift.” Pietro estimates the structure will trade for somewhere around $60 a square foot to make things work, indicating a price of about $76 million. The tower and the attached parking garage were sold to the current owner, G&I IX 200 Public Square, in 2018 for about $120 million for the building and $60 million for the attached parking garage in 2018, according to insiders familiar with that sale (county records do not disclose a sale price.)

Namdar Realty Group has surfaced as the potential buyer of the landmark 200 Public Square skyscraper in downtown Cleveland. | COSTAR

The county now assigns the office tower a market value for tax purposes of $137 million, according to online records. The garage is being marketed separately and no information on the buyer is available. Pietro and others expect that lender Bank of America of Charlotte, North Carolina, will do a short sale in order to preserve as much capital as possible from the $130 million loan it provided to buy the skyscraper and garage in 2018. “Namdar is going to have to do what every other office owner has to do now to win or keep tenants,” Pietro added. That list — easier recited than funded — includes installing a tech-rich conference center, revitalizing the food court (and former BP Cafeteria) and spending on retail space to attract new stores and eateries to the building. Namdar receptionists refused to

forward calls to CEO Igar Namdar or other executives and said the company only replies to emails from the media. Blake Namdar, an acquisition specialist at the family-owned concern, did pick up a phone call but declined comment. G&I IX 200 Public Square, the current owner, was formed by DRA Advisors of New York City, better known as the former Dreyfus financial concern, and late Cleveland developer Scott Wolstein. DRA did not reply by 7:45 a.m. Thursday, Feb. 8, to requests for comment. Namdar owns a portfolio of 60 million square feet of commercial property ranging throughout the continental U.S., according to its website, not only enclosed malls but more than a dozen apartment buildings and even multiple movie theaters. However, it also owns multiple small office buildings in the New York City area that have long been in its portfolio.

Among its holdings is 529 Fifth Ave., a 200,000-square-foot building in Manhattan it bought in a joint venture with Empire Capital Holdings of New York City for $108 million last September. Articles abound with stories of complaints from local public officials about Namdar, but it was buying a troubled asset when others weren’t in the last decade’s retail bloodletting. “Where do you put money if you are someone like this now,” asked Alex Jelepis, a longtime downtown office broker with NAI Pleasant Valley Corp. of Independence. “The stock market, where you’re subject to everything else? The building has a lot of value, but it may take years to realize it. You also can’t be a hands-off out-oftown owner in the Cleveland market like you can in some others. You’ll have to be doing the block and tackling to make it work — and to earn the trust of tenants.”

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Cleveland Soccer Group wants to build $150M stadium downtown By Joe Scalzo

There are a million reasons to believe Cleveland can bring a women’s professional soccer team to the city. The Ohio House made sure of it. The Cleveland Soccer Group (CSG) got a nice boost in its bid to land a National Women's Soccer League (NWSL) on Wednesday, Feb. 7, when the Ohio House approved House Bill 2, which includes $1 million in state funding for a proposed downtown soccer stadium. The proposed stadium would seat between 12,000 and 13,000 people and cost around $150 million, funded by a combination of ownership investment and state and local funding, according to Michael Murphy, the co-founder and CEO of the CSG. Murphy believes the Feb. 7 vote was the first time public dollars have been allocated for a stadium primarily used for professional women’s sports. “It’s a historic day and a tangible step forward,” Murphy said. The 15-team NWSL plans to select its 16th team sometime this year, with the new team beginning play in 2026 along with an expansion team from Boston. If Cleveland is selected, the proposed stadium could be completed in time for the 2026 season, Murphy said. The outdoor stadium would also serve as the home of the city's MLS Next Pro team, which will begin play in 2025. Murphy said his group is considering several downtown locations, but declined to give specific sites. According to Cleveland. com, first to report on the stadium, one site under consideration is near Progressive Field and the Western Reserve Fire Museum and Education Center. “We would be the only top 20 market in the country where women’s professional soccer is the primary soccer brand,” Murphy told Crain's. “Yes, we have a Next Pro team, but that’s clearly a lower division for soccer. NWSL is the pinnacle for professional women’s soccer and I would argue it’s the best women’s professional sports league in the world. “There are lots of reasons for Cleveland and Northeast Ohio to go all-in on this.” Murphy said he expects to

present his expansion proposal to the NWSL in late spring. NWSL commissioner Jessica Berman said in January that she expects the selection process to take between six and nine months. Boston Unity Soccer Partners reportedly paid a $53 million expansion fee, which was roughly the same that Bay Area FC paid to join the league in 2024. RAJ Sports recently paid $63 million for the Portland Thorns, who have been in the league since 2012. Cleveland was one of four groups that presented at the league's owners' meetings in November of 2022 in hopes of joining the NWSL as an expansion team in 2024. But Cleveland was the first group eliminated, with the league citing concerns over its stadium situation, Murphy said. Berman expects more than a dozen investment groups to bid for that 16th team, mentioning both Denver and Cleveland specifically during a press conference in November. “We are squarely there,” Murphy said. “We feel like it’s ours to get.” Murphy also said he’s gotten good feedback from city and county officials about the bid, saying, “The current political leaders in this region want to do big things.” In October, the CSG and teamed up with the Dan Gilbertowned Rock Entertainment Group (REG) on a “Back the Bid” campaign. For $26, supporters got a “Back the Bid” T-shirt, a digital kit badge for social media, the right to secure priority tickets when they go on sale and updates from CSG’s founders. Murphy said the campaign got “multiple, multiple thousands” of commitments. “The type of things that happened today make this feel very real to people,” he said. “You have to remember — we’re in a competitive situation. When we got to present our bid, we want to show the league that there is real demand for professional soccer in Cleveland.” As for HB2, which includes allocations for dozens of other state-wide projects including a proposed pedestrian bridge leading to Cleveland's lakefront and the Rock and Roll Hall of Fame's expansion, it now heads to the state senate for consideration.

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An electronics manufacturer in Akron has been given new life and is setting out to chase the medical device market, thanks to some work and investment by its new owners and an important new ISO certification. The company, ANZER, was purchased in 2022 by Dipti Mendpara and some of her family members. She and her brotherin-law, ANZER CEO Jay Mendpara, have since been investing in the company and reconfiguring it to serve more markets. What’s now known as ANZER was formed in 1991 by former Rockwell engineers as Western Reserve Controls. The Mendparas rebranded the company as ANZER in late 2023, brought in a slew of new equipment, reconfigured their staffing and worked to secure an ISO 13485 medical manufacturing certification, which ANZER announced on Jan. 3 it had achieved. You’re not likely to see ANZER’s products. The company makes electronic components that go into products made by others. But its embedded controls, circuit boards, modules and components are used by a host of companies to manufacture hightech parts for aerospace, automation and other industries. The company was not profitable when the Mendparas took it over, Jay Mendpara said. But, thanks to about $1 million in investment that included some new automated production equipment that works alongside the company’s skilled soldering technicians and assemblers, ANZER is in the black and has sales of between $3 million and $5 million a year, he said. It’s also growing, he said. Its

biggest market is still automation, which is where Western Reserve Control had its roots Rockwell Automation is still a customer — followed by aerospace, thanks to its previous ISO certifications for that market. But it hopes to target medical devices for much of its future growth, Jay Mendpara said. That’s one reason why Dipti Mendpara said she purchased the company. Its location in Northeast Ohio puts it in a spot where there is ample medical device development going on, along with the development of more industrial devices that the company still serves. The company employs 14 people. That’s down four people from when it was purchased, Jay Mendpara said. The reduction included engineering staff, which Mendpara decided he didn’t need when he took over as chief engineer, and some other administrative jobs. But he said he has added several people on the production floor. Sales were not his biggest concern; production was, Mendpara said, and he needed to improve that and get the company caught up on its orders while also improving its quality. “We made a lot of improvements, including a lot of new machines,” he said. “The machines here were pretty old, and they were down all the time. There was so much backlog.” So far, he said, it’s working well. “We hired the right talent. I hired two new soldering people and we cleared all the backlog and made process improvements,” he said. ANZER also has improved its quality control substantially, thanks to investments in new optical inspection and X-ray equip-

ment that can closely examine circuits and connections, even if they are under a chip and can’t be seen. “As soon as we acquired this company, I got an IPC training certificate so I can train my employees,” Jay Mendpara said. “That’s when I realized this company needed a huge improvement in quality.” The Mendparas also moved the company into new space, which they said will accommodate more growth. At its old location on Exeter Road in Akron, the company had about 11,000 square feet of space and was fairly cramped. Now, at a site ANZER purchased in spring 2023 on Sweitzer Avenue, the company has 19,000 square feet. With most of that space used for production, ANZER has much more room for its equipment and can accommodate more as well. Some of the new equipment that recently has been installed would not have fit in the company’s old space, said ANZER sales and marketing director Gary Rothstein. Now, it needs to capture some of the medical device industry to capitalize on its latest ISO certification and make gains in the medical device market. Jay Mendpara said he’s already hearing from prospective clients that they want to establish domestic supply lines, away from China, and the prospects of shortages like those experienced when U.S. ports backed up during the pandemic. “We’re finding that companies want to manufacture more locally, more back in the United States, and not rely as much on offshore manufacturing, which is exciting, especially with all of the things happening in Ohio now,” he said.

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By Paige Bennett

Hospice of the Western Reserve, a provider of palliative and end-of-life care, caregiver support and bereavement services and one of Cleveland’s largest nonprofits, intends to merge with the Hospice of North Central Ohio. The nonprofit “will begin a due diligence process with (Hospice of North Central Ohio) in preparation for the full transition in the coming months,” the agencies announced in a news release issued Tuesday, Feb. 6. Following a successful due diligence phase, the organizations anticipate a summer merger, a spokesperson for Hospice of the Western Reserve confirmed. The Hospice of North Central Ohio’s board of directors approved a letter of intent on Jan. 30 to enter into a management services agreement with Hospice of Western Reserve for 90 days, the news release states. A merger could potentially follow. The move is a result of increased competition in the Hospice of North Central Ohio’s service area, economic challenges and a need to stabilize and grow the organization, according to the news release. A spokesperson for Hospice of the Western Reserve said in an email that the organizations will make a collaborative decision during the due diligence phase about the name of the merged organization. The merger will strengthen the organizations’ commitment “to provide exceptional care and support across Northern Ohio and uphold the highest standards of compassion, excellence, and innovation in end-of-life care,” the news release states. It will expand Hospice of the Western Reserve’s service area through the Hospice of North Central Ohio to include Ashland, Crawford, Huron, Knox, Morrow, Richland and Wayne counties. Joan Hanson, director of palliative care at Hospice of the Western Reserve, will become the interim executive director of Hospice of North Central Ohio. Hanson has almost 30 years of experience in palliative and hospice care. She previously served as executive director at New Life Hospice in Lorain, where she oversaw a $11 million hospice program with more than 80 full-time staff members. “This is an extraordinary opportunity to lead an organization committed to compassionate care and support,” Hanson said in a statement. “I look forward to working alongside the dedicated team at

Hospice of North Central Ohio and further building on their longstanding legacy in the community.” Hospice of North Central Ohio has the equivalent of 52 full-time employees, and Hospice of the Western Reserve has 800, a spokesperson said. Over the next several months, the organizations will “look for efficiencies across both organizations and determine the optimal service levels to ensure all patients

have access to the highest levels of care,” the spokesperson said. The merger will not affect any upcoming or ongoing construction work at Hospice of the Western Reserve’s campus, the spokesperson confirmed. In a statement, Bill Finn, president and CEO of Hospice of the Western Reserve, said: “This union strengthens both organizations’ commitment to provide exceptional care and support across Northern Ohio and uphold the

HOSPICE OF THE WESTERN RESERVE

Hospice of Western Reserve to merge with North Central Ohio

ceptional end-of-life care. Together, we embark on a journey of continued support, ensuring that every individual and their loved ones continue to receive the highest caliber of care.”

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EDITORIAL

City council is right on TIF timeout E

Smooth sailing? T

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ven before the Browns threw significant uncertainty into what downtown Cleveland might look like in the future, City Council was on the right track in putting up a "slow down" sign on Mayor Justin Bibb’s proposed downtown tax district. The proposed Tax Increment Finance (TIF) overlay district legislation that the administration advocates is on hold. The measure, which would use an estimated $3.5 billion to $7.5 billion in new tax revenue over 42 years for infrastructure improvements, is the driver of what the administration calls a “Shore-toCore-to-Shore” redevelopment strategy. And it is, generally, an exciting vision. Council President Blaine Griffin, who on Monday, Feb. 5, tapped the brakes on the plan, still sees the TIF legislation as a potential "game-changer" for the city, but he wants to make sure those changes are felt everywhere, and not just downtown. As Griffin sees it, money generated from the TIF should be split 50/50 between downtown and city neighborhoods. Bibb also wants to make sure TIF funding is spread outside downtown, though the mayor hasn't yet identified what he sees as an ideal mix. We certainly don't have a number, either, but a venture of this size — the TIF would redirect to the city property-tax value increases in much of downtown and some of the near West Side — can work only if it's negotiated collaboratively and in good faith by all parties. Events of the past week underscore the complexity of structuring the TIF district for maximum impact. On Wednesday, Feb. 7, the Ohio House of Representatives passed House Bill 2, which appropriates $2 billion for economic devel-

opment and community investments throughout the state. (The bill still has to go to the state Senate.) Cuyahoga County would receive more than $42 million of those funds, with $20 million allocated for the North Coast Connector, a land bridge that's the centerpiece of the proposed North Coast Master Plan. All lakefront planning could change drastically, though, if the Browns aren't playing in a downtown stadium. The team on Thursday, Feb. 8, confirmed that it's studying potential stadium options in Northeast Ohio at various sites beyond downtown as part of "comprehensive planning efforts.” One possibility: a 176-acre parcel in Brook Park near Cleveland Hopkins International Airport, a site where team owners Jimmy and Dee Haslam have reached a purchase agreement, according to reports. Planning with respect to the Browns will be on a fast track, as the team's 30-year lease at the city-owned lakefront stadium

expires at the end of 2028. The Browns had previously indicated that they were only considering renovations to the current stadium, but the Brook Park option clearly indicates a new stadium is on their mind. The city issued a statement indicating that "keeping the Browns at home on the downtown Cleveland lakefront is a priority for Mayor Bibb and city leadership," but the Browns now are expanding their options. Downtown, in our view, remains the best place for the Browns. But there's certainly a scenario in which a Brook Park stadium location could drive development near the airport and free up downtown lakefront space for different uses. Great cities have great lakefronts, but they're rarely that way because of the presence of a stadium. Much is in flux, now, with respect to the shape of downtown. Council and the administration have a chance to be creative with the TIF district while reimagining what Cleveland will look like in the future.

here was a time, somewhat weirdly, when there were fights over funding levels for a small federal program that provides a big return, both economically and environmentally: the Great Lakes Restoration Initiative, or GLRI. At various points in both the Trump and Obama administrations, budget proposals included major cuts to the program, or even its elimination. We're past that point, thankfully, at least for now. It's also a good sign for the GLRI's future that a bipartisan group of Ohio legislators, including Sens. Sherrod Brown and JD Vance, as well as members of the U.S. House of Representatives, have introduced a measure that would both extend the GLRI's life (through 2031) and raise its authorized annual funding level to $500 million from $475 million. The GLRI was launched in 2010 and over the past decade-and-a-half has helped preserve the environmental well-being of the Great Lakes through efforts reducing pollution, combating algal blooms, fending off invasive species, restoring coastlines, and other measures. Those environmental benefits are critical in their own right. But this also is an economic issue. As Rep. Dave Joyce, a Geauga County Republican who co-chairs the House Great Lakes Task Force, noted, the five Great Lakes provide more than 1.5 million jobs, supply 90% of U.S. fresh surface water and are responsible for generating more than $62 billion in annual wages. Ohio's delegation should work hard to pass the Great Lakes Restoration Initiative Act of 2024. At a cost of around half a billion dollars a year, the GLRI is about as strong a return on investment as government provides.

PERSONAL VIEW

A fair labor deal can make downtown work for all By Ruth Young

his February, Black History Month, we honor the contributions of African American leaders who have made an impact fighting for racial and economic equality in the labor movement. Labor champion and activist Dr. Martin Luther King, Jr., once said, "The labor movement did not diminish the strength of the nation but enlarged it." His work shed light on the economic disparities working people face. Now, decades later, we, as Black Clevelanders, are still facing this inequality. I am a lifelong Clevelander and have worked as a janitor since 1999. Until 2020, I spent more than 20 years cleaning the Sherwin-Williams headquarters. Working in the heart of the city — an economic engine for every community in Cleveland — I have seen and lived the wave of a falling and rising downtown own through all its prosperity, vacancy, inclusivity and segregation to this moment in time of revitalization.

To continue Dr. King’s teachings and strive for true racial and economic justice, we must reimagine a downtown that works for all of us. In the early days of 2020, SherwinWilliams — one of the largest corporations headquartered in Cleveland — made the decision to take the janitorial work at their headquarters non-union, kicking all their union janitors with combined decades of experience to the curb just before the world was hit with a pandemic. They did this while demanding millions of dollars of incentives from the city, county and state. I was one of those janitors, having dedicated over 20 years of my life to cleaning that building, including the offices of then-CEO John Morikis himself. It was a slap in the face to me and my coworkers at the time, all of whom are Black and Latino. We went from good, family-sustaining, fulltime cleaning jobs to scrambling for whatever work we could find. In my new role as a union janitor at the Cuyahoga County administration building,

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my coworkers and I take immense pride in the work we do. Just this year, County Executive Chris Ronayne worked with janitors to implement a Green Janitor Education Program — a LEED-certified, transformative program that implements clean, safe and sustainable cleaning practices that promote energy efficiency and help our environment. Using union labor goes beyond better wages and benefits; we are working for the benefit of our families, our communities, the city, and the planet. Our pride and ability to do this work come from having a voice at the table and strong union benefits. When working people have good union jobs with fair wages, health care and benefits, workers can take care of family and loved ones with a true sense of purpose. Under its new CEO, Heidi Petz, SherwinWilliams has an opportunity to take a new course and do what’s right by Cleveland. By using union janitors, Sherwin-Williams can make good on its commitments to Cleve-

land’s working families and taxpayers. The company can have skilled workers, ready to provide the best services to ensure that their employees enjoy a clean, safe, and environmentally conscious environment in its new headquarters. This spring, hundreds of janitors throughout downtown Cleveland will fight for a strong new union contract. It will be challenging, but we know that the heart of Cleveland is behind us. My coworkers and I are calling on politicians, allies and community members to stand alongside us in the fight for working families. Dr. King said it best: "Those who today attack labor forget these simple truths, but history remembers them." We are the foundation of this community. Clevelanders have an opportunity to build a city that works for all of us. Ruth Young is a longtime janitor who has worked in the city of Cleveland. She is a member of SEIU Local 1.

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.

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PERSONAL VIEW

By Heidi Gartland and Kim Shelnick

etting talented, motivated people to join your organization — even if it wasn’t in their original plans to contribute to your field — is job one in workforce development. At University Hospitals, we have an incredible job readiness program called Step Up to UH that does just that. Through engaged neighborhood outreach, we hire members of local and largely under-resourced communities into important entry-level caregiver roles in our health care system. What we and our new local hires are finding is that this is not just a job-filling program, but rather an opportunity for our caregivers to have a long career in health care, through a designed, intentional career path. After they’re hired into that first entry-level job, our newly hired local caregivers pair up with career coaches from human resources, who provide reassurance that we are an invested partner in their career development journey. Together, they set a plan to access an array of different career development pathways and programs to “skill up.” Flexibility and meeting caregiver-specific needs are key. Life investments like working to complete their high school education, brushing up on math and reading skills before enrolling in college and completing “Earn-andLearn” programs for in-demand health care fields are just a few examples. This is a win-win for us and for them. The upshot of all of it is a larger, more diverse and more robust workforce, filling important in-demand roles to help us improve health and wellness for our patients and our community. And it does take a multifaceted approach with many moving parts. Clevelander Mytrice Thomas is an illustrative example. She joined UH in 2017 through Step Up to UH and took such an important role as an environmental services caregiver. She enjoyed her job at UH Seidman Cancer Center, creating a safe and sterile environment for our patients and clinicians by cleaning the second-floor pharmacy. However, after working with our clinical professionals in pharmacy and career coaches, we learned

that she felt drawn to complete her pharmacy technician certification, begun years before. Her vision for her future had always included a career in pharmacy. The next step was to partner with her to chart a life-changing strategy for her career path. “I knew that pharmacy was a career for me,” she says. “This is always what I wanted to do.” Her career coach helped her navigate opportunities to “skill up.” The first time Thomas applied to UH’s new and demanding 16week “Earn-and-Learn” Pharmacy Tech Training Program, it was full. But that didn’t stop her. Her second application was successful, setting the stage for a new job at UH as a pharmacy tech — and a literal string of three quick promotions. In just over two years, with the help of coaching and mentoring, she’s progressed from Pharmacy Tech 1 all the way to Peer Educator in the training program, teaching new students who were in her shoes just a few short years ago. A new year brings an important new job with considerable and increased responsibilities — something Thomas says she relishes. Her career coach and mentors credit her tenacity and willingness to learn and use the resources available to her — even when things were challenging. Maybe especially then. Her story is the epitome of our workforce development philosophy and strategy. Individuals from the community “skill up” into other career paths, for everyone’s benefit. Of course, Thomas is responsible for her own success. No one else put in the work but her. But at UH, we’re convinced that one of our responsibilities as a member of the Northeast Ohio community is to provide the infrastructure so that success stories like Thomas' are possible — and can happen every day. We’re committed to that vision. When personal determination finds an outlet that makes career progress possible, amazing things can happen. Heidi Gartland is chief government and community relations officer at University Hospitals. Kim Shelnick is UH's vice president of talent acquisition.

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Technology troubles afflict nonprofits For underfunded and understaffed organizations, keeping essential tech up to date is a challenge

STEP FORWARD

The underutilization of technology was a persistent problem when Leon Wilson worked in the nonprofit landscape in Michigan roughly a decade ago. Nonprofits — especially small and midsize ones — were underfunded and heavily reliant on donated equipment and technology support from volunteers or board members. Wilson, who now serves as chief of technology and platform solutions at the Cleveland Foundation, still sees many of these same patterns today. “It’s not that nonprofits don’t want to use technology,” he said. “That’s the furthest from the truth. (Nonprofits) are cash-strapped, and capability-strapped. Technology is constantly changing. It’s not something like you buy a refrigerator, and you’re good for 20 years. ... It’s every three to five years. You’re constantly adapting.” Funding, staffing and time constraints make it difficult for nonprofits to stay up to date on the latest technological advancements, but experts say leveraging technology is critical to a nonprofit’s ability to fulfill its mission and protect its clients, donors and employees from security risks. It’s a common misconception that because nonprofits are mission-driven, they don’t have the same technological needs as for-profits, Wilson said. The reality is, they need continuous funding and support for technology, which isn’t always available to them. “It varies (by nonprofit) but I would say most organizations do not have the staff capacity for IT,” said Melanie Meyer, director of nonprofit technology solutions for Tech Impact, a nonprofit that provides technology services and training to other nonprofits. “It can be overwhelming.” Meyer, who has more than two decades of experience in the nonprofit landscape, calls herself an “accidental techie.” It’s a term used to describe the person on an organization’s staff with the best understanding of technology who others turn to when they have tech problems. Many nonprofits rely on an accidental techie to fulfill their tech support needs, Meyer said. With staffing limitations come time constraints, said Sara Smith Lom, director of marketing and development for Cleveland’s Business Volunteers Unlimited. Understaffed nonprofits don’t necessarily have the capacity to research new technology or determine what works best for their organization. “Technology and equipment are not something often covered by philanthropic grants that a lot of nonprofits rely on,” said Emily Campbell, president and CEO of The Center for Community Solutions, a think tank that operates in Ohio’s health and human services

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By Paige Bennett

Funding, staffing and time constraints make it difficult for nonprofits to stay up to date on the latest technological advancements, but experts say leveraging technology is critical to a nonprofit’s ability to fulfill its mission.

space. “It’s considered overhead. It’s not something that donors are usually interested in supporting and funding, and so nonprofits have to cobble together their budgets on (technology) on their own.” Fred Cash, director of IT for Step Forward, a Cleveland-based nonprofit that operates early childhood education and adult skills programs, said many grants have specific requirements that must be fulfilled within a certain amount of time, which requires nonprofits to be creative about the ways they use that funding. “With certain grants, if you don’t have the physical hardware in by a certain time, that becomes an issue,” Cash said. Another challenge is that technology is not always uniform across an entire organization,

Cash said. It’s difficult from a support perspective when some departments use Apple products while others rely on Microsoft. Step Forward is working to implement an organization-wide technology standard to ensure software is consistent across different departments. There’s also a scarcity mindset in the nonprofit landscape that makes many nonprofits reluctant to invest dollars in technology, especially Andrews when those funds could be used to further the organization’s mission instead, Campbell said. “It’s hard when you’re lining up hiring an additional case worker that can see dozens of clients versus purchasing a laptop or up-

grading your internet service,” she said. “It’s really difficult for people who are in the work because they are mission-driven to be able to make the investment.” Still, technology remains key to nonprofits like The Center for Community Solutions, which does a lot of data and statistical analysis, Campbell said. The organization has a partnership with Tech Impact, which helps The Center stay current on trends and makes recommendations on what technology might be a worthwhile investment. Campbell said the value of investing in nonprofits’ back-end support and services can sometimes be as important as investing in a physical building or a staff posi-

tion. Cynthia Andrews, president and CEO of the Community Foundation of Lorain County, agreed that many small nonprofits would prefer to hire an extra person to serve in a donor-intended role if they had the capacity rather than add tech support, but that technology is vital to the function of nonprofits. Before taking the helm at the Community Foundation of Lorain County, Andrews led a nonprofit with a staff of six. The challenge for small nonprofits, she said, is finding ways to stay abreast of new trends in tech and building them into their operating plans. While technology may not be the biggest priority for many nonprofits, it’s often crucial to their ability to deliver on the missions they were created for. “Often times the technology is essential to implement programs,” said Elizabeth Voudouris, president and CEO at Business Volunteers Unlimited, which works to connect and engage the business and nonprofit communities. “For an organization that’s running a mentoring (program) or matching mentors or volunteers. It’s not a nice-to-have. It’s essential to delivering many programs.” Investing in tech is also vital for nonprofits to protect themselves from cybersecurity threats, Meyer said. These organizations maintain a lot of sensitive information about their clients and donors, which puts them at risk for cybersecurity attacks. Twenty-seven percent of nonprofits have experienced a cyberattack, according to the 2023 Nonprofit Tech for Good Report, a biennial survey that seeks to understand how nonprofits leverage digital marketing and fundraising. Meyer said it’s important for nonprofits to have a strong security footprint and use cloud systems such as Microsoft or Google. They also need to have strong policy procedures in place and ensure they’re budgeting for IT services. The pandemic, Andrews said, gave nonprofits an opportunity to use technology to serve their clients in unique ways. Depending on the service model, some of these virtual formats may be more effective than in-person models, she said. Now is a good time for organizations to evaluate virtual options they developed out of the pandemic to determine which ones are worth keeping, Andrews said. Voudouris said technology is a necessity for nonprofits to engage with donors, clients and volunteers. Advancements in tech make it easy to facilitate remote interactions, she said, which can be useful for clients who can’t make it to in-person programs, but face-toface interaction is still vital. “(In-person interactions) are an important aspect to nonprofits, especially with the board,” she said.

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2/8/24 10:45 AM

App lets you check vitals with a selfie

Platform can read a patient’s heart rate, blood pressure and respiratory rate via cellphone camera By Paige Bennett

For patients, undergoing remote monitoring often means putting on different medical devices, but a new platform is designed to measure vital signs with a cellphone camera. A Westlake-based digital health tech company has launched a remote patient monitoring platform that measures heart rate, heart rate variability, blood pressure and respiratory rate vital signs. Blue Spark Technologies Inc.’s new VitalTraq platform uses a contactless technology called remote photoplethysmography (rPPG) that allows users to collect digital measurements through a 30-to-60-second facial scan. It captures blood flow pat-

terns, translating them into vital sign measurements, according to the company. John Gannon, president and CEO of Blue Spark Technologies, told Crain’s Cleveland that the technology pairs well with the company’s flagship product, TempTraq, a disposable body temperature wearable, which was cleared as a Class II remote monitoring medical device by the U.S. Food and Drug Administration. Blue Spark started developing the VitalTraq platform roughly 18 months ago, following requests from customers who wanted to see if the technology could measure other vitals. “The elegance of the VitalTraq platform is intelligent — for patients and providers,”

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said Dr. MaryAnne Rizk, Blue Spark advisory board member and executive member of the Forbes Tech Council. “The decentralized care journey has been conveniently modernized with VitalTraq across the continuous care journey, triggering value across the ecosystem of clinical and consumer collaborators with access to real-world data of objective endpoints for evidence generation strategies. “Patients can seamlessly manage their vital signs on demand, and healthcare providers/ sponsors can access new digital endpoints, unlocking deeper insights into treatment responses. Critical insights can provide early intervention for patients’ safety and potentially achieve faster clinical trials with fewer participants.”

Requiring patients to use multiple wearables to track their vital signs puts a burden on patients and can lead to compliance issues, Gannon said. Blue Spark’s goal is to reduce the number of devices a patient needs. It’s well-suited for remote patient monitoring in clinical trials and post-surgical monitoring for conditions like sepsis, according to the company. The rPPG sensing is currently available on the platform under investigational use only. It consists of iOS and Android patient applications, the HIPAA-compliant VitalTraq Connect cloud service hosted on the Google Cloud Platform, a web-based clinical remote monitoring dashboard, the company says. Response to the technology has been positive so far, Gannon said. It comes at a time where remote monitoring and hospital at home programs have been gaining momentum. Since the pandemic, remote monitoring has become a more central point of management for patients, Gannon said, and the company’s new tech offers a software-based solution.

CWRU spinout AlensiaXR raises $3M in Series A funding AlensiaXR, a medical education startup spun out from the socalled HoloAnatomy technology developed at Case Western Reserve University, has closed a $3 million Series A fundraise that will help accelerate the development and delivery of the company’s increasingly popular learning platform. “This milestone marks a significant step forward in the transformation of medical education,” said AlensiaXR CEO Mark Day in a statement. “Our investors understand the HoloAnatomy impact: delivering improved learning outcomes anywhere in the world.” Founded in January 2023 as Ilumis Inc., AlensiaXR was launched in an effort to commercialize CWRU’s HoloAnatomy learning platform developed at the school’s Interactive Commons. The startup is the exclusive licensee of HoloAnatomy. That platform enables virtual exploration of the human anatomy through extended reality—an umbrella term that refers to augmented reality, virtual reality and mixed reality—which ultimately reduces the need for cadaver labs by exploring the body through interactive holograms. This, in turn, can help universities save the time and money associated with obtaining cadavers for study. Ilumis changed its name to AlensiaXR to better reflect its identity in the medical education market. “‘Alensia’ evokes ‘all dimensions’ and ‘lens’ — HoloAnatomy is a 3D lens into the human body — and ‘XR’ stands for extended reality, the most inclusive term to describe our immersive experience,” Day, who previously led Mi-

ALENSIAXR

By Jeremy Nobile

“As we frequently hear from a growing list of global partners, it is the 3D holographic nature of HoloAnatomy that differentiates us.” — Mark Day, AlensiaXR CEO crosoft’s global HoloLens business, explained to Crain’s. “As we frequently hear from a growing list of global partners, it is the 3D holographic nature of HoloAnatomy that differentiates us. Students can walk around and through the virtual body, providing insight and detail that was once only available in resource-intensive cadaver labs or 2D illustrations.” The latest fundraise provided an “excellent opportunity to transition to a more powerful, unique name, one that better reflects the evolution of our company, our board of directors and our shared vision for the future,” Day added. “It empowers us to pursue a

broader repertoire — beyond medical education — opening new possibilities for transforming the medical and clinical landscapes,” he said. The Series A fundraise brings AlensiaXR’s total funding to $3.2 million. “The size of this round reflects that we’re not pre-money, like a lot of startups,” Day said. “We chose to not take on more capital than we thought we truly needed to scale and further develop the HoloAnatomy learning platform.” The round was led by Sopris Capital, a venture investment firm based in Aspen, Colorado, which focuses on technology-enabled health care services.

“We believe in the potential of HoloAnatomy software to evolve medical education, and we’re excited to support and witness the rapid growth of AlensiaXR in service of this mission,” said Sopris partner Abinav Sankar, who has joined the company’s board, in a statement. Other participants in the fundraise include the Healthcare Collaboration Fund, which is co-managed by JumpStart Ventures and University Hospitals Ventures, and the JobsOhio Growth Capital Fund. The company describes itself as “highly virtualized” with remote workers across the country, though it has offices in Cleveland and Pittsburgh. The software is currently in use by more than 20 institutions worldwide, according to the company, including Northwestern University and Finger Lakes Community College. With this new capital, Day said the startup is looking to hire be-

tween 30 to 40 employees as it works on expanding its learning suite to serve even more applications. “The Series A funding will be used to enhance HoloAnatomy capabilities and advance development efforts to include any field that requires a fundamental understanding of human anatomy, such as dentistry, physiology and pathology,” Day said. “We are actively engaging our growing customer base to guide the evolution of this pioneering learning platform and will seek to expand into additional applications and global markets.” Those could include opportunities outside of traditional institutions of higher education. “With the rapid growth in the academic market, we’ve started to see interest in government and commercial markets,” Day said. “We see no limit to the upside of the potential of this extraordinary, immersive learning platform.

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2/8/24 10:44 AM

DeWine, NCAA urge Ohio to eliminate collegiate prop bets By Joe Scalzo

To Gov. Mike DeWine, one way to get rid of bad bettors is to eliminate some of Ohio’s worst bets. DeWine and NCAA president Charlie Baker are pushing for Ohio to eliminate collegiate prop bets, a move that would make it illegal for gamblers to bet on things like individual player achievements, in-game statistics and in-game achievements for collegiate sporting contests. The move comes more than a year after University of Dayton men’s basketball coach Anthony Grant spoke out against gamblers who attacked his players on social media. Ohio has since seen numerous other reports of social media threats to collegiate athletes. Bettors would still be able to bet on the overall outcomes and final scores of collegiate sports contests, including outright winners, over/under total team points bets and bets against the spread. Professional sports would not be affected by the changes. The NCAA sent a letter on Wednesday, Jan. 31, to the Ohio Casino Control Commission (OCCC) expressing its request and position on the issue. “One year into sports gambling in Ohio, we have seen a marketplace develop where a number of bad actors have engaged in unacceptable behavior by making threats against student-athletes in Ohio and across the country,” DeWine said in a statement. “By amending rules to focus bets on the team and away from individual athletes, I believe we can improve the marketplace in Ohio and better protect student-athletes from

unnecessary and potentially harmful threats.” Recently, the OCCC received approval from the Ohio Controlling Board for a $150,000 contract with Kindbridge Research Institute to provide services for a sports wagering harassment protection program. “The data is clear that studentathletes are getting harassed by bettors,” Baker said. “Sports betting without appropriate controls poses real risks to the well-being of student-athletes and to the integrity of collegiate competition — risks which are heightened by individual prop bets. On behalf of the thousands of student-athletes, administrators and game officials in Ohio, I thank Gov. DeWine for acting quickly to protect student-athletes and game integrity while responsibly regulating the growing sports betting industry in Ohio.” The request from the NCAA opens a public comment period for operators to comment on rule changes prior to any formal rule changes. Dayton athletic director Neil Sullivan praised the proposed changes, saying he and Grant have “long advocated” for the elimination of college prop bets. “We support any action that aims to protect students and their families from inexcusable abuse and threats,” he said. “We applaud Gov. Mike DeWine and President Charlie Baker for engaging in this important conversation.” The changes were also supported by Ohio State AD Gene Smith, who is retiring in July. “Collegiate athletes should not be faced with harmful threats, and changing the wagering rules in Ohio can help put an end to this,” Smith said.

Gov. Mike DeWine | BLOOMBERG

Kansas City Chiefs tight end Travis Kelce hugs Taylor Swift after the Kansas City Chiefs defeated the Baltimore Ravens in the AFC Championship game on Jan. 28. Kelce is from Cleveland Heights. | GETTY IMAGES

Swift-Kelce love story hasn’t boosted Cleveland Heights High By Joe Scalzo

If you tuned into the Grammys on Feb. 4, you probably caught Taylor Swift in a Schiaparelli gown, holding up a gilded gramophone after winning Album of the Year. If Krissy Dietrich Gallagher has her way, it won’t be the last time you see Swift sporting white, black and gold. The Cleveland Heights booster club president is selling replica jerseys of Tigers alums Jason and Travis Kelce as part of a fundraiser for student-athletes in the Cleveland Heights-University Heights school district. Gallagher even sent Swift one of Travis’ jerseys in hopes that — maybe, possibly, in her, ahem, wildest dreams — the world’s most popular entertainer would wear it in public, thus boosting the ongoing fundraiser the same way Mentos boost Diet Coke. Gallagher also sent jerseys to Travis and Jason, as well as their parents and Jason’s wife, Kylie. “We all know that Taylor Swift is her own economy — she’s a whole nation’s economy — so if she did actually wear one, it would be a game-changer for us.” Gallagher’s organization had sold 409 Kelce jerseys at $55 apiece, with the booster club receiving $15 from each purchase. While $6,000 isn’t anything to sneeze at, it does speak to the fact that while dating Swift has done wonders for Travis Kelce’s profile, it doesn't really change a whole lot at his former high school. “Obviously, people are well aware of that (Swift-Kelce) stuff," Cleveland Heights athletic director Joe D’Amato said. "But the

biggest thing I’ve gotten is people asking me, ‘Is she gonna come when Travis visits?’ or ‘Do you think she’ll do a concert at the high school stadium?’ or ‘Does this mean we’ll at least get a concert date at Cleveland Stadium now?’ “I just kind of laugh. The Kelce thing in itself has been a whirlwind for the last six or seven years, but obviously Taylor Swift has made things a little more crazy around here.” While Swifties aren’t clamoring to buy Travis’ high school jersey, they are clamoring to be photographed next to it. If you walk into the Heights’ gym, you’ll see a trophy case on one side and, on the other, jerseys of all the Tigers who have gone on to play professionally. Guess which one is most popular? “We opened up our building about seven years ago and, for the last six years, you’d see some of the dads of the visiting teams taking pictures with them,” D’Amato said. “But it’s funny because when volleyball season hit this year, you’d see all the girls from the opposing team stop and take a picture and put it on social media. The girls are now, obviously, a lot more aware of where Travis graduated from.” There are even a few people who, when they see the jersey, they want to take more than a picture. “No disrespect to the other graduates, but the two Kelce brothers (jerseys) — we had to bolt them up a little differently,” D’Amato said. “Security did catch someone trying to finesse the jerseys out of their casing not long ago.”

While Jason (Class of 2006) and Travis (2008) haven't lived fulltime in the Heights for years, they still speak fondly and frequently about their hometown, both in the media and on their “New Heights” podcast. And they’ve done various things in the community, D’Amato said, from donating to the transportation department a few years back to working with the school’s trades program to even donating to the school’s hockey program, of which Jason is an alumnus. “We’ve had some conversations about doing something fairly big and sizable on our football stadium footprint, but that’s in the preliminary stages right now,” D’Amato said. “So there’s a big ‘ask’ coming. Nothing official right now, but the conversation has been positive.” In case you’re wondering, no, that “big ask” doesn’t include Swift doing a concert at the stadium. But D’Amato’s wife — and her friends — have made it clear that if Swift ever does step foot on campus, they are to be alerted immediately. (D’Amato also has four daughters aged 8 and under, but fortunately, they’re a little too young to be hitting him up for Swift-related requests, even if the oldest just came home with her water bottle decorated with Swift stickers.) “We were out with some friends during the holidays and they were like, ‘So we’re getting invited to the wedding, right?’” D’Amato said, laughing. “I’m like, ‘Yeah, I don’t think that’s happening.’ “I can’t imagine what that wedding invitation (list) would look like. I just know I wouldn’t be on it.”

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Power of attorney as an estate planning tool Understanding the role and impact within the legal landscape The roles

LAWRENCE HATCH Lawrence Hatch is a Senior Relationship Strategist in Glenmede’s Cleveland Office.

power of attorney (POA) is a legal authorization that allows another person or persons to act on your behalf. It is a powerful tool in your estate planning toolbox that can impact your finances, property and medical care.

The principal (the person signing the POA) may opt for a durable POA, meaning the authority would continue in the event the principal becomes incapacitated. If a person becomes incapacitated and does not have a durable POA, the court must appoint a legal guardian or conservator. Further, you must sign a POA when you are still mentally competent for it to be valid. The agent has the power to act on the principal’s behalf in all legal matters permitted by law or the document, which can narrow the scope of authority. A limited POA permits the agent to act on behalf of the principal in specific matters or events.

checks, filing tax returns, managing investment accounts, buying and selling stocks, selling real property and entering into contracts. A medical POA gives the agent the authority to request and receive medical information and make most healthcare decisions. Generally, the grant of authority is split into 1) the power to deal with medical information, which is effective immediately, and 2) the ability to make medical decisions on your behalf, which is effective upon your incapacity. Selecting an agent

You may consider both a financial and a medical POA:

An agent should be trustworthy: This includes not just honesty but also reliability in performing tasks that need regular attention and diligence in acting according to your wishes. The person selected should have the skills, perspective, judgment, integrity and time to perform a wide range of duties.

A financial POA allows for an agent to oversee your finances, such as signing

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Powers of attorney for specific needs

close friend as their agent for a POA. You could also name someone outside the family, perhaps a trusted advisor, or multiple agents either with authority to act separately or jointly. Timeline of duties When the agent’s authority begins depends on the state in which the POA is drafted and on its wording. In some states, the principal may create a “springing” power, which dictates that the agent’s authority does not become effective until a specific event occurs (e.g., incapacity of the principal). In other states, the agent will have the authority to act immediately at the time the POA is executed. An agent’s responsibilities typically end when the principal dies. However, authority could end if: • The principal is no longer incapacitated. • The principal revokes the authority. • The court appoints another individual to act as guardian or conservator for the principal.

To learn more about powers of attorney, please contact Lawrence Hatch at 216-514-7884 or at Lawrence.Hatch@Glenmede.com. This article is provided solely for informational purposes and is not intended to provide financial, investment, tax, legal or other advice. It contains information and opinions which may change after the date of publication. The author takes sole responsibility for the views expressed herein and these views do not necessarily reflect the views of the author’s employer or any other organization, group or individual. Information obtained from third-party sources is assumed to be reliable but may not be independently verified, and the accuracy thereof is not guaranteed. No outcome, including performance or tax consequences, is guaranteed, due to various risks and uncertainties. Readers should consult with their own financial, tax, legal or other advisors to seek advice on their individual circumstances.

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2/1/24 11:26 AM

By Scott Suttell

Power management giant Eaton Corp. plc (NYSE: ETN) just announced record fourth-quarter results, with sales for the first time hitting $6 billion — up 11% from the fourth quarter of 2022. For all of 2023, sales set another record, $23.2 billion, up 12% from the prior year. It’s also about to launch a $375 million, multiyear restructuring program marked by what the company characterized as an “increase in shared services across divisions, greater digitization” and Arnold the elimination of redundancies. CEO Craig Arnold said the company is “confident with these proactive steps — growing the company while also reducing costs — we’ll be able to generate strong shareholder returns for years to come.” The timing might seem counterintuitive for a restructuring, as one analyst pointed out in a call with

company executives on Thursday, Feb. 1. Arnold acknowledged as much, pointing out that the company’s cash reserves continue to grow and saying, “We spent a lot of time figuring out if it (restructuring) made sense.” “We haven’t done many mergers over the past couple of years,” Arnold said. “So, we have more bandwidth today to take on these projects. . . .There is no better time for these projects.” Thomas Okray, in his final meeting with analysts as Eaton’s chief financial officer — Friday, Feb. 2, was his last day in the job — added, “It is riskier if we didn’t do it. We can lean forward at a time of strength.” Eaton had a specific number on the cost of the restructuring — $375 million — and the timeline (through 2026) but not a lot of detail. One traditional element of restructurings — job reductions — wasn’t mentioned at all in Ea-

BUSINESS WIRE

Eaton launching restructuring after record earnings

ton’s earnings release or during the call with analysts. Asked in an email about the possibility of job cuts, an Eaton spokesperson wrote that “details on specific activities are not available at this time.” Eaton reported that net income rose 31% to $946 million, or $2.35 per share, in the fourth quarter from earnings of $721 million, or $1.80 a share, a year earlier.

A major source of the company’s improved performance was its Electrical Americas segment, where sales hit a record $2.7 billion, up 16% from the fourth quarter of 2022. A much smaller unit, eMobility, also saw strong growth in the fourth quarter, with sales rising to $165 million, up 19% from $139 million in Q4 2022. The company now estimates ad-

justed earnings per share of $9.95 and $10.35 for 2024. Analyst Scott Davis, founding partner of Melius Research, said in a research note on Feb. 1 that Eaton “is hardly a hidden gem, arguably the opposite (we love it, but now everyone else does too), but growth and revisions continue to differentiate not only vs. industrial peers but also a wider set of [comparisons].”

Avon manufacturer eyes next expansion, acquisitions By Dan Shingler

Advanced Polymer Coatings in Avon doesn’t think its current expansion, which is already the largest in its history, is going to be enough. The company, which makes special coatings that protect ship tankers and other vessels from being damaged by the chemicals and other materials they hold, started on a 42,000-square-foot expansion in January. That’s going to cost at least $10 million, the company has said, and will double Advanced Polymer’s factory size and capacity. But, given the company’s recent growth, it’s already planning its next project, said CEO David Keehan. He said he’s planning future construction on the company’s roughly 30 acres on Jaycox Road, about two-and-a-half miles south of Lake Erie. Business is good and revenues are up, he said. “Greater than $30 million, and growing,” Keehan said of his revenues. “We’ve been growing double digits, somewhere between 15% and 20% a year, for about the last three years.” Most of that growth has come from the company’s principal marine market, which serves the global shipping industry. But it also has seen growth for its terrestrial products, which are used to line rail cars and other tanks used to ship or handle materials. The company’s products are the results of years of invention and

Advanced Polymer Coatings CEO David Keehan stands near construction of the company’s 42,000-square-foot expansion. | DAN SHINGLER

storage tanks. The tough, impermeable coatings protect the tanks from often corrosive materials and enable them to last longer and perform more safely. Keehan thinks many of the customers in his end markets have only recently discovered that Advanced Polymer’s products can compete with or be even more cost-effective than the offerings of much larger competitors, and that’s causing the growth, Kee— David Keehan, Advanced Polymer Coatings CEO han said. “Our biggest competiKeehan’s father used his knowl- tors in the marine market are placedge to develop special coatings es like PPG and Akzo-Nobel,” he that adhere to steel and other ma- said. Increased demand for its coatterials used to make chemical testing at the company, much of it done by Keehan’s father, Donald. He was a tough Marine who taught himself chemistry before going on to get a formal education in it, and used a laboratory for a man cave, Keehan said.

“We’ve been growing double digits, somewhere between 15% and 20% a year, for about the last three years.”

ings has created the company’s need to expand. Keehan said that after the current factory expansion is done, he’ll start work on another. The next round will add warehouse and R&D space, and possibly more, by the time it’s built in two or three years, Keehan predicted, and it will be nearly as large as the current expansion. “If it’s just warehouse and R&D, I’d say it’ll be probably 30,000 square feet,” he said. The company also has more people to make room for, and possibly more on the way. Advanced Polymer added eight people last year, including some in production and some in administration, Keehan said. That brought

its payroll to 55 people, including 40 in Avon and the rest at remote locations or working overseas with clients. If continued growth doesn’t add more people, Keehan figures other activities will. “One of the things we’re doing now that we’ve never done in the past is M&A,” Keehan said. “We’re talking to a couple of companies now.” How those talks and potential deals unfold will likely determine how much more space the company needs in Avon. It could end up buying a company and moving some operations to Avon, or it could buy a company with additional facilities Advanced Polymer will use, Keehan said. It’s too soon to tell. There also are some big trends that might drive further growth. As the world’s energy sources change, that means oil and other commodities are shipped on different routes and sometimes by different shippers. On top of that, the chemical industry generally follows the energy industry, which is why there is so much of it on the U.S. Gulf Coast and why ethane crackers have recently been built in Ohio and Pennsylvania. That all represents materials being moved that, often, require tanks that will need to be coated, Keehan figures, so it’s a chance for Advanced Polymer to capture yet more market share. Keehan said he plans to be ready for more new business.

12 | CRAIN’S CLEVELAND BUSINESS | FEBRUARY 12, 2024

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OVER 6 IN 10 READERS BELIEVE CRAIN’S GIVES THEM A COMPETITIVE EDGE

CRAIN’S LIST LARGEST MINORITY-OWNED BUSINESSES Ranked by local full-time employees

Minority ownership group/ Minority-owned certification(s)

Majority owner(s)

Top local executive(s)

Medical practice specializing in medical, surgical and aesthetic dermatology

100% Hispanic/Latino None

Jorge Garcia-Zuazaga, president, CEO

200

Commercial laundry primarily serving the health care industry

75% Black/African American; 1% Hispanic/Latino None

Tanisha Jordan, HR manager

John McMicken, CEO

128

Technology solutions provider

100% Black/African American None

John Stubbs, chairman, CEO, chief marketing officer

123

Electrical subcontractor providing services to general contractors and owners

51% Asian City of Cleveland

Suzanne Ullman, president

Ron Ullman, COO

105

Tooling and metal stamping company

100% Hispanic/Latino NMSDC

Liliana Chahda, vice president, CFO

Juan Chahda, president, CEO

3PL provider offering warehousing, bulk transloading and branded merchandise

100% Black/African American NMSDC

Andre Thornton, owner, CEO

General contractor and construction manager with a specialty in carpentry

100% Black/African American City of Cleveland, CMHA, Cuyahoga County

Shakorie Davis, president

Asphalt paving, underground utilities, concrete installation, cable placement

100% Black/African American City of Cleveland, NMSDC

Linda Fletcher, president, CEO

Builders of structural, ornamental and architectural metals and steel

100% Native American City of Cleveland, state of Ohio

Chester Mull Jr., president William Mull, vice president

Chester Mull Jr., president

Financial services company

100% Hispanic/Latino None

Jeffrey Concepcion, founder, CEO

Construction management, commercial waterproofing and general contracting company

100% Black/African American City of Cleveland, Cuyahoga County, Greater Cleveland RTA, NEORSD, state of Ohio

Ariane Kirkpatrick, president, CEO

58 CHOICE LLC 12 SAFE 11811 Shaker Blvd., Suite 415, Cleveland 44120

Provider of security systems, personnel, safety training and investigations

100% Black/African American City of Cleveland, Cuyahoga County, NEORSD, state of Ohio

Anita Spencer, president

Anita Spencer, president Anthony Spencer Jr., senior vice president

General contractor, construction management, design/builder, owners' rep

100% Black/African American City of Cleveland, Cuyahoga County, state of Ohio

Dominic Ozanne, president, CEO

Immigration, deportation and immigration criminal law firm

100% Asian None

Margaret Wong, president, managing partner

Commercial roofing, sheet metal and rough carpentry

51% Hispanic State of Ohio

Delilah Volpe, CFO

Anthony Volpe, vice president, CEO Delilah Volpe, CFO

Business intelligence software and managed services

100% Asian NMSDC

Sudhir Achar, CEO Harsha Chatruvedi, chief operating officer

Concrete ready mix and aggregate materials supplier, hauler of construction materials and equipment

100% Black/African American City of Cleveland, Cuyahoga County, NEORSD, state of Ohio

Keith Rogers, owner

Intellectual property law firm

52% Asian NMSDC

Himanshu Amin, managing partner

Local and long-haul trucking and 51% Black/African American NMSDC transportation-related services provider

Richard Wall, CEO

Provider of online education, apps and productivity tools for manufacturers

Senthil Kumar, founder

Rank

Company Zip

Local fulltime staff as of Jan. 1, 2024 Description

285 DERMATOLOGY 1 APEX 29111 Cedar Road, Suite 100, Mayfield Heights 44124; 833-279-7546/apexskin.com COOPERATIVE LAUNDRY INC. 2 EVERGREEN 15300 S. Waterloo Road, Cleveland 44110 216-486-1947/evgoh.com PRODUCTIONS INC. 3 MAC 13115 Puritas Ave., Suite 3, Cleveland 44135 833-742-5622/macproductions.net ELECTRIC & TECHNOLOGIES CO. 4 ULLMAN 3901 Chester Ave., Suite B, Cleveland 44114 216-432-5777/ullmanelectric.com DIE & MANUFACTURING CO. 5 CLEVELAND 20303 First Ave., Middleburg Heights 44130 440-243-3404/cdmcle.com GLOBAL LLC 6 ASW 3375 Gilchrist Road, Mogadore 44260 888-363-8492/aswglobal.com GENERATION CONSTRUCTION 6 NEXT 4317 Chester Ave., Cleveland 44103 440-228-3856/nxtgc.com PAVING AND CONSTRUCTION 8 COOK CO. INC. 4545 Spring Road, Suite 1, Brooklyn Heights 44131; 216-267-7705/cookpaving.com INC. (MULL IRON) 8 RITTMAN 10 Mull Drive, Rittman 44270 330-927-6855/www.mulliron.net WEALTH PARTNERS 10 STRATOS 3750 Park East Drive, Beachwood 44122 866-553-9882/stratoswealthpartners.com AKA TEAM 11 THE 1306 E. 55th St., Cleveland 44103 216-751-2000/akateam.com

216-231-7233/safechoicellc.com CONSTRUCTION CO. 13 OZANNE 1635 E. 25th St., Cleveland 44114 216-696-2876/ozanne.com W. WONG & ASSOCIATES LLC 14 MARGARET 3150 Chester Ave., Cleveland 44114 216-566-9908/imwong.com HOMES INC. (FOX ENTERPRISE 15 ROCK SERVICES) 7630 Freedom Ave. NW, North Canton 44720 330-497-5200/foxenterpriseservices.com VANTAGE 16 EOX 1422 Euclid Ave., Suite 830, Cleveland 44115 216-452-0324/eoxvantage.com CONTRACTING CO. INC. 17 RAR 4545 Spring Road, Suite 2, Brooklyn Heights 44131 440-735-1946 TUROCY & WATSON LLP 18 AMIN, 200 Park Ave., Suite 300, Beachwood 44122 216-696-8730/thepatentattorneys.com DELIVERY INC. 18 RW 12487 Plaza Drive, Cleveland 44130 216-267-2000/rwdelivery.com LLC 20 THORS 5054 Paramount Blvd., Medina 44256 330-576-4448/thors.com

100% Asian NMSDC

Information is provided by the companies. Companies must be at least 51% minority owned and headquartered in Northeast Ohio. Crain's does not require that companies be certified as minority-owned businesses; companies that submitted certification information were not required to provided documentation. If your organization requires documentation, please request it before doing business with a listed company. NMSDC stands for National Minority Supplier Development Council. NEORSD stands for Northeast Ohio Regional Sewer District.

Get more than 50 minority-owned companies in Excel format. Become a Data Member: CrainsCleveland.com/data 14 | CRAIN’S CLEVELAND BUSINESS | FEBRUARY 12, 2024

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Succession planning not as clear as it once was Some Northeast Ohio manufacturers are hoping private equity will provide them with a plan, others say it’s a false hope By Dan Shingler

Northeast Ohio might be becoming a buyer’s market when it comes to manufacturing companies. The region has a lot of them — more than 7,700 according to a group of entities tracking them that includes TeamNEO, JobsOhio and MAGNET in Cleveland. And the area arguably has more manufacturing companies than it has owners who want to keep them. That can be — and often is — a problem for existing owners, especially those who haven’t kept up with their business in terms of investment and good management, didn’t plan well for leadership succession at their companies, and now might not get what they’d hoped for in a sale. It could also be a long-term problem for a region that still relies on manufacturing to support many professional services and other sectors of the economy. “Succession and what to do with all these businesses is a very large issue that’s going to affect the future of manufacturing here,” said Ethan Karp, CEO of MAGNET, a Cleveland nonprofit and partner of the state’s Manufacturing Extension Partnership that advocates for and works with area manufacturers. Karp said his organization’s recent polling of manufacturers shows how an aging ownership group and insufficient succession planning are challenging manufacturers and forcing many to consider selling businesses that have sometimes been in their families for generations. “Our survey says that 33% of manufacturers — this is Northeast Ohio data — considered selling their company last year. And 20% were either acquired or were part of an acquisition,” Karp said. That’s a high number, he said,

but not necessarily a surprising one, given what he knows of area manufacturers. “That jibes with so many so many owners being of retirement age and it jibes with what we hear from business owners considering what is the next step in their journey,” Karp said. When those companies are sold, they often end up being bought by private equity firms that plan to resell them later, or by individuals who want to own and run their own manufacturing company and don’t want to start from scratch. Karp, among others, likes to see businesses taken over by people who will be fully committed to them. He just wishes more of those people were younger than the ones he sees usually buying companies, who often are in their 50s or 60s. He says the presence of private equity is not necessarily a solution for all manufacturers and sometimes can give owners false hope and enable them to put off the succession planning they need to do. Owners hear of big prices being paid for other companies and sometimes assume they’ll be able to sell when they want at similar multiples. That can be a path to disappointment, though. “They haven’t put in all the investments and done all the things they need to do to really maximize the value of their business,” Karp said. “You now have a bunch of people who want to sell but maybe think twice because they aren’t getting the numbers they expected.” That can lead to a spiral of decline, in which owners rely on their business for the money they need to live, and in doing so chip away at the value of the business, their legacy and possibly even their long-term retirement funding, say Karp and others.

For many, the process used to be easier. Children were often the succession plans for previous generations of manufacturers. Parents counted on passing their businesses along to their kids, and their kids counted on those businesses for their future careers. As a result, parents and their children often ran family businesses together long before it was time for the kids to take the reins. The kids got intensive on-the-job training to become CEOs and the businesses got the ongoing attention and investments they needed to thrive. Succession took place naturally. That’s not as often the case today. Unlike their parents or grandparents, many young or even middle-aged children of manufacturers don’t have the desire to take over the family business the way their fathers and grandfathers often did. (And, yes, local manufacturers are still owned mostly by men.) Nor do parents want to pressure their kids into a lifestyle and set of heavy responsibilities they don’t want.

‘I want to see it continue’ Jeff Walters is such an owner. He’s the third generation of his family to own and run Master Products, which has long been a successful stamping company near Cleveland’s Slavic Village neighborhood. Walters’ son Ben is a great plant manager at the company, Walters said, and may well play a role in running the business going forward. But he doesn’t want to own it or be the CEO, with all of the responsibilities for employees’ health care, personal guarantees of loans and everything else being an owner entails. And Walters doesn’t want

that either, especially if ownership is not his son’s calling. “My son joined us five or six years ago. He loves working here. He’s worked in the office; he’s worked in the plant; and now he’s the plant manager. He’s got an accounting degree, but he loves working on the floor,” Walters said. “But he doesn’t want to be an owner. And I get that.” Walters pursued some other avenues, including talking to a competitor that supposedly wanted to buy his company, as well as to some private equity buyers. He said he turned them down, though, because it didn’t seem like the best move for his company. Walters said he has another plan in the works that will enable existing people to take over the company that he’s working on. “My intention wasn’t just to get a check,” Walters said. “I want to see it continue. And I do think manufacturing is in a good place right now. Since the supply chains were challenged by COVID people respect manufacturing more.”

Facts of modern life Walters is typical of many manufacturing owners, say advocates and those who work with them on succession and ownership transition. Fewer kids wanting to be involved in old-line businesses is just a fact of modern life, and not anyone’s fault or a problem for parents to solve. “There is nothing you can do in raising them that can make that happen. It’s either they want to or they don’t,” said Marcia Ciryak, director of the Ownership Transition Program at Manufacturing Works, an advocacy and support group that also works with Cleveland-area manufacturers. It’s a big issue for Manufacturing Works, which set up the Tran-

sition Program in 2020 to help manufacturers plan for succession and possibly prepare their company for a sale. Often, owners can get a lot more for their companies if they do a little work on its first, she said. That’s what private equity owners generally plan to do with the businesses they buy, so why not have the existing owner get some of that gravy first, she figures. The Transition Program is intense, she said, entailing 24 sessions — one every week for four months, followed by one every month for eight months after that — at a cost of $100 per session. In it, manufacturers share experiences and explore their options in a confidential setting. (“It’s kind of like AA,” Ciryak said.) “They might not sell at all. They might find out it’s not what they want to do,” she said. “Or, maybe they want to sell their company to their employees.” The program has been popular, she said, running several cohorts a year, with four to six manufacturing owners in each. Ciryak said she has seen three cohorts get going or be completed since she took over the program in the fall of 2023. “I don’t know anyone that dropped out,” she said. MAGNET also works with its members on succession planning. Karp said he’s not as concerned with where his members get help on the issue, he just wants to see more of them address the issue of succession proactively. About one-third of the companies MAGNET has surveyed say they have a succession plan, Karp said. That’s better than what it used to be, but the need for a plan is greater than ever and it’s not enough, he said. Ciryak concurred, noting, “I see unpreparedness with the majority of companies.”

Cleveland’s Master Products was formed in a different era by the grandfather of the company’s current owner, Jeff Walters. | CONTRIBUTED

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CAVALIERS

matter experts in everything we do, but a lot of this doesn’t come to fruition without the team performing on the court,” Kaiser said. “That has amplified a lot of those numbers.”

From Page 1

Translation? “Pendant la neige, bon basket.” During the snow, good basketball. “This is truly a historic run for the team,” said Chris Kaiser, the Cavaliers’ chief marketing officer. “They’re having a lot of fun on the court and we’re seeing a major impact on our business.” Here are five areas where the Cavaliers’ basketball success is boosting business:

Ticket and suite revenue The recent success hasn’t affected overall attendance since the Cavaliers have sold out their last 80 home games, a streak that dates back to the last 11 games of the 2021-22 season. But the team does expect to finish the year with franchise records in ticket and suite revenue. “We’re in the top three (in the NBA) when you look at our ticketing revenue in partial (season ticket plans) and renewals, and we’re in the top three in membership revenue growth in the NBA,” said Shelly Cayette, the Cavs’ executive vice president and chief commercial officer. “So we’re really seeing it projecting to the business, which is awesome.”

TV ratings The Cavs’ viewership on Bally Sports Ohio is up 6% since the

MARCUM From Page 1

“The critical issue here is (Eldridge) is technically still a member (of Marcum Wealth),” Richard Haber, managing partner of Haber LLP, who is representing Eldridge in the lawsuit, told Crain’s. “They refuse to buy her out, and as a result, she is subject to a noncompete that is indefinite.” “She is not working. She is not being compensated. And she cannot be employed,” Haber added. “Under the status quo, she can never work in the industry she was worked in without a resolution to this dispute.” Marcum Wealth—a Clevelandheadquartered subsidiary of New York-based accounting firm Marcum LLP—reported 34 employees and approximately $2.3 billion in regulatory assets under management as of a public filing dated Jan. 3. Marcum expanded to Cleveland with the acquisition of Skoda Minotti in 2019. Marcum Wealth was established the following year via the merger of Marcum Financial Services, Marcum Wealth Management and Aurum Wealth. Besides Marcum Wealth and Marcum LLP, named defendants in Eldridge’s suit include Skoda Minotti Holdings, Marcum Wealth CEO Eric Wulff and Marcum Wealth managing directors Christopher Bart and Steven Brett. Court documents do not yet list an attorney for the defendants.

Partnerships

Center Court is the Cavs team shop in Rocket Mortgage FieldHouse. | SEAN DAVIDSON/CAVALIERS

start of 2024, with those 15 games averaging 51,300 household (HH) impressions. (The season average is 48,500.) Viewership for the last seven games is even higher, averaging 65,000 HH impressions (26% higher). Five of the last seven games rank in the top 10 for the season, including the Monday, Feb. 5, game against the Kings. That game had 73,400 impressions, the second-highest of the season behind the Nov. 25 game against James and the Lakers (79,000).

fire in Cleveland. When that many people are willingly watching the Pistons play basketball, you know something big is happening.

Social media engagement

Social media engagement has “skyrocketed” during the recent streak, Kaiser said, with engagements up 101% over the same point last month. Cleveland is up 12% year over year in gross engagements across all of its platforms, which is significant since those numbers were way up last year thanks to the arrival of Donovan Mitchell. TikTok has been an especially hot platform for the Cavs, — Chris Kaiser, Cavaliers’ chief marketing officer with month-overmonth engageThe Wednesday, Jan. 31, game ment up more than 500% and yearagainst the Pistons is third with over-year engagement up more 71,150, which might be the biggest than 600%. “We consider ourselves subjectsign that the Cavs are catching

“This is truly a historic run for the team. They’re having a lot of fun on the court and we’re seeing a major impact on our business.”

Tim Wells, director of content and communications for Marcum, did not respond to repeat inquiries by Crain’s seeking comments on the case.

Lawsuit allegations In her role, Eldridge was responsible for “all aspects” of the retirement plan practice at her firm, according to court documents. She was admitted as a Class B shareholder in October 2017. According to the complaint, at times in 2022 and 2023, Wulff refused to provide Eldridge with certain financial information that she had requested, including details about how her profit and loss statements were calculated. This allegedly occurred while comparable information was being provided to a third-party purchaser, which was conducting due diligence related to a possible acquisition of Marcum Wealth that was being explored by Hightower Advisors. That deal never happened. Among the issues here, according to the lawsuit, is that as the company was preparing and presenting financial information for the Hightower purchase, Wulff removed “substantial revenue from (Eldridge’s) P&L and allocated thousands of dollars in expenses for the purpose of artificially enhancing the remaining Marcum Wealth P&L before presenting it to the potential purchaser.” According to the complaint,

Wulff manipulated financial statements to assess an additional $100,000 in expenses to Eldridge’s business unit. Wulff also allegedly told Eldridge that 80% of the 2022 retirement plan revenue from Marcum Wealth’s Philadelphia practice would be put on her P&L since she was responsible for servicing that practice. However, Wulff changed course “that same day,” according to the lawsuit, telling Eldridge that she would be receiving just 20% of that revenue, though she was responsible for all of the expenses. When Eldridge questioned Wulff about how these actions were justified, he allegedly told her “I determined that it was fair.” “When (Eldridge) asked to discuss this further because it was not fair or equitable, and it impacted (Eldridge) negatively from a compensation standpoint, Wulff responded, ‘it’s done,’” according to the complaint.

Compensation Eldridge claims to have been stonewalled when requesting information on the business financials of new members joining the firm as well as details about how ownership percentages were calculated. Wulff reportedly created an internal finance committee “weeks before financials had to be closed out in 2023,” according to the complaint. Despite being a partner and

The Cavs added 10 new partners this year, including Coca-Cola, and rank in the top five in the NBA when it comes to partnership digital revenue, Cayette said. “We have some of the most supportive partners in any market, and those partners are changing our customer experience positively,” she said. “Our partners are using our platform because they know how successful our platforms are.” The Cavaliers are also having international success in this area, adding two partners thanks to their long-term initiative to grow basketball in Brazil, which they launched last April. “There are just a lot of positive things happening,” Cayette said.

Retail sales The Cavaliers’ retail sales are essentially flat year-over-year, which is much better than it sounds since the team launched new jerseys last year and saw the arrival of Mitchell. “You’re not comparing apples to apples,” Kaiser said. “Everything last year was totally fresh, so it’s actually a nice story that we’re able to keep things flat year over year.” The team did add a Lululemon

apparel shop in the Atrium at Rocket Mortgage FieldHouse, as well as an Adidas shop. (Mitchell has a shoe deal with Adidas.) The Cavs also do a lot of collaborations with local artists and vendors throughout the year, including a T-shirt/hoodie collaboration with the Kelce brothers and Columbus-based Homage ahead of the Kelces’ bobblehead night on March 5. They also had Paris-specific gear, which is 97% sold out. Normally, those types of products remain on shelves for at least three or four months, Kaiser said. “We’re just trying to keep the newness in the store at a high level and keep fresh product going through,” he said. “We want people to represent us in the community and be individual brand ambassadors on a day-to-day basis.” While the Cavaliers’ success is welcome any time of the year, it’s never a bad thing to start peaking in January and February when the Browns (sort of ) fade from the headlines and the Guardians are months from Opening Day. For now, the city’s attention has turned to basketball, and the Cavaliers are proving worthy of the extra eyeballs. “We always say marketing is timing and luck — and we’re always ‘big-wave’ ready,” Kaiser said. “I don’t want to use too many buzzwords, but we’re always executing at a high level and ready to capitalize on moments like this when things do go really well. And I think we find a way to manufacture results if they’re going the other way.”

From

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Marcum Wealth’s Cleveland headquarters | COSTAR

member of the firm, Eldridge claims that she was never permitted to be a part of that group and that she was told that there was nothing she could do about it. “(Eldridge) would ask for other partners’ revenue reports in 2021 and 2022, and Wulff would refuse to provide these reports because they would reveal the disparate treatment that (Eldridge) has received,” according to the lawsuit. “Plaintiff was historically and systemically compensated less than similarly situated, less profitable male members of Marcum Wealth.” Eldridge’s compensation was reportedly reduced “substantially” in 2022. Wulff allegedly told Eldridge that all partners took a pay cut that year, but according to the complaint, this “was not true.” Eldridge sought to increase her equity share in the company but was never given an opportunity to do so, which was contrary to what her male counterparts were of-

fered, according to the complaint. “ ... Wulff’s conduct was directed at (Eldridge) to limit her ability to increase her equity as she had the lowest percentage of ownership other than a single member who was gifted his ownership shares,” the lawsuit claims. While allegedly receiving no help from Wulff about how to increase her stake in the business, Eldridge approached other company officials for information. This includes Gregory Skoda, a principal with SM Holdings, the largest stakeholder in Marcum Wealth, according to court documents. The lawsuit asserts that SM Holdings has a fiduciary duty to provide the information that Eldridge was seeking and to ensure minority shareholders are not treated inequitably. In March 2023, Eldridge emailed Skoda detailing the issues that she was facing, according to the complaint. She described the situation

16 | CRAIN’S CLEVELAND BUSINESS | FEBRUARY 12, 2024

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TEAM NEO From Page 1

significant barrier to expanding and attracting new business, particularly in legacy areas that also require significant environmental remediation. “Last year was pivotal for Team NEO and the region. Despite challenges, our region did attract new companies and help some grow here. This year we are very focused on strengthening our region’s overall competitiveness through major strategic initiatives related to proactive site development,” Koehler said. In 2023, Team NEO helped bring five projects for $13.5 million in fixed asset investment to the region, according to the organization’s annual Performance and Impact report, published Monday, Feb. 5. And despite some economic challenges — including the fears of economic slowdown, a tight labor market, high interest rates and commercial land availability — Koehler said the region saw business growth, albeit at a slower pace than in the last few years. Last year, Team NEO helped bring 96 business investments and 2,114 new jobs, representing $123 million in annual payroll and $570 million in capital investment, to the 18-county Northeast Ohio region, according to the report. It was a decline from 2022 when the economic development organization was responsible for capital investment of about $2 billion from 88 business expansions or relocations representing 5,673 new jobs and $304 million in annual payroll. she was allegedly facing with her P&L statements and requested clarification on how profit interests are calculated. “Skoda acknowledged receipt but never provided the information requested by (Eldridge),” according to the lawsuit.

‘Misogynistic harassment’

In 2024, there will be about $1 billion in site development funding available between state and city of Cleveland programs. | KIM PALMER

The lower capital investment comes in part because 52 of the 2023 projects involved inclusion grants for smaller and midsize businesses. During and after the pandemic, the economic development organization was charged with re-evaluating what it could do to strengthen the region’s business ecosystem. “We were questioned about Where is there a need? Where are there new opportunities for us to make a difference?” Koehler said. “There was a recognition that smaller companies, many of them women-owned, disabled, were having a feeling a disproportionately negative impact in the pandemic.” It was a new strategy and a new market where Team NEO did not have a lot of relations. “Not all of these companies will ever become Sherwin-Williams, but

some of them will grow to be much more significant in size,” he said. Koehler believes that to see more robust business growth there needs to be more readily marketable sites across the region. Last year, Team NEO launched its Developing Opportunities report which laid out the physical, locational, operational and utility site needs for four emerging industries with the hopes of bringing developers up to speed on what the market demands. There is real demand for commercial property, but the market needs have also become very demanding, Koehler said. “When we started talking about this issue of sites, people would say, ‘That’s crazy. All you have to do is drive down X Street, and there’s all kinds of vacant property,” he said. “Today the business community expects a high degree of preparedness.

chief of human resources, Molly Crane, but there were allegedly no ramifications for these purported behaviors. “(Eldridge) felt so bullied she specifically had conversations with other partners saying she felt threatened and felt like she had to quit,” according to the complaint.

her resignation but that Marcum did not honor this. Eldridge’s portfolio and clients were given to other Marcum staff. And on Aug. 1, 2023, Wulff told Marcum employees that Eldridge was no longer an employee of the company, according to the suit. Haber said Eldridge is now in a position where she is technically still a member of Marcum Wealth—and therefore subject to a non-compete agreement—yet effectively unemployed. She has reportedly not received any compensation or distributions from Marcum since Aug. 1. “Defendants have refused to release (Eldridge) from her noncompete, they have refused to acquire her membership interests, and they have refused to return her to her position with the organization and allow her to make a living,” according to the complaint. “From a practical standpoint, they have crippled (Eldridge) financially under the terms of an indefinite non-compete.” “We believe she is entitled to compensation because we believe she was treated unequally as a shareholder of the company. She certainly has been completely out of work since August,” Haber said. “Even though we attempted to resolve the disputes, they have been largely unresponsive,” Haber added. “So she is looking to get the court to force (Marcum) to buy her out, release her from her non-compete and allow her to go about her life.”

Wants court action CLASSIFIED SERVICES The lawsuit further claims that Eldridge was the “victim of misogynistic harassment by other members.” Eldridge alleges that she was bullied and “verbally attacked” by managing directors Steven Brett and Christopher Bart at various times, including in emails that included other staff, Zoom meetings with other employees and at least once in-person at a partner retreat—where Bart allegedly “got in her face.”

Per the lawsuit, Eldridge gave notice of her intent to resign, and in doing so, “made it clear that her expectation was that Marcum Wealth would work in good faith to acquire her units.” Amid all this, it is stated that while Eldridge delivered her resignation in April 2023, she actually continued working for a few months more in anticipation of the Hightower deal being completed, which would enable her to divest her shares. On June 28, 2023, a proposal shared with Eldridge through legal counsel allegedly set forth terms for Marcum to acquire Eldridge’s shares in the business contingent on the closure of the Hightower deal. But when that transaction fell through, the agreement was not honored by the company, according to the complaint. Unable to sell her shares, it is claimed that Eldridge rescinded

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“We believe she is entitled to compensation because we believe she was treated unequally as a shareholder of the company.” — Richard Haber, managing partner of Haber LLP, who is representing Wendy Eldridge

Eldridge reportedly approached Wulff about these issues. With respect to the incident at the partner retreat, Wulff allegedly responded, “What can I do about it?” It is claimed that Wulff deferred Eldridge’s complaints to Marcum’s

It’s got to be clean. It’s got to have contiguous ownership, a certain size, all the right utilities.” To truly compete with peer regions, site selectors — professionals who drive the business expansion process — like to see multiple sites in an area that fit their criteria. Team NEO, Koehler said, is working to help support a portfolio of properties as well as a pipeline of replacement properties of various sizes across the region. Site selectors have also become more efficient and more sophisticated as an industry, Koehler said. With so much information available over the internet, most are already doing the work that groups like Team NEO used to do. “We are no longer telling them the base-level information about a site. What we’re telling them is: what is it about their information that is misleading?” Koehler said.

Decisions that used to be made over months are now truncated to days and Team NEO is partnering with private developers and cities such as Cleveland to catalog commercial properties so the staff are ready to respond when site selectors come calling. “The plan is to have a list of sites ready and instead of spending five days looking for something, we can spend four days thinking about how we’re going to sell the site,” Koehler said. State programs such as the All Ohio Future Fund’s historic $750 million investment targeted for site-readiness and preparation and $350 million in Brownfield and Remediation funding, coupled with a massive $50 million set aside for sites by the city of Cleveland, demonstrates a commitment to providing these shovel-ready properties to the market, explains Bethia Burke, president of the Fund for Our Economic Future. “The state and the city of Cleveland have put a stake in the ground that says site redevelopment matters and made these really important investments,” she said. Burke said that along with the transformational investments, places such as Cleveland also can look to bring jobs to where workers are and revitalize old industrial areas. “I’m hoping to see a prioritization of sites that fit a definition of competitive which includes job access and prioritizing the reuse of existing infrastructure, building in places that have previously supported industry and there are therefore, built to support industry in some way,” she added.

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Redevelopment RFQ released for former school in Slavic Village By Kim Palmer

Another former Cleveland Metropolitan School District (CMSD) school site is available for redevelopment. The city of Cleveland issued a request for qualifications (RFQ) to redevelop the former Fullerton Elementary School property. The two-story, nearly 40,000-

square-foot former elementary school in the Broadway-Slavic Village neighborhood building was recently demolished, making the 2.6-acre lot one block south of Fleet Avenue open for “professional project teams to respond” with private development ideas for the property in Cleveland’s only designation EcoDistrict. “Our hope with this RFQ is to

build upon Slavic Village’s existing assets to attract development projects that support the enduring neighborhood while expanding opportunities for more individuals to live, work and play in Slavic Village,” said Alyssa Hernandez, the city’s director of community development, in a statement. The Fullerton property, at 5811

PEOPLE ON THE MOVE

Fullerton Ave., is one of a handful of former CMSD surplus sites where the city and school district are collaborating to create neighborhood-friendly redevelopment. According to the RFQ, the vacant land value is $167,500 now that the school, built in 1973, has been razed. The school has been vacant for about a decade after it was desig-

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The Firm welcomed associate Jeradon Mura to its Labor and Employment Practice. Mura counsels clients on employment matters, drafts employment agreements and policies, and conducts training. Her experience includes insurance defense and civil litigation. Mure recently served as a Litigation Consultant, advising on strategic defense of various high exposure and high sensitivity civil litigation. She earned a J.D. from Case Western Reserve School of Law, and a double-B.A. from Grand Valley State.

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Weinberg Capital Group Weinberg Capital Group, a Clevelandbased private equity firm focused on well-positioned lower middle market businesses, welcomes Vice President Sam Heredos, CPA to their family office team. Sam, a former Senior Manager of BDO USA has a background in providing M&A transaction advisory services to an array of industries. He has a BA from Walsh University and was on the NCAA D-II Golf Team.

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Frantz Ward LLP Frantz Ward is pleased to share that Beau D. Hollowell has joined the firm. With over 18 years of experience, Beau is a well-versed litigator having practiced in many states. His practice includes complex commercial-litigation matters as well as representing large businesses and insurance companies in high-value cases in various practice areas. Beau received his J.D. from Case Western Reserve University School of Law.

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nated as an “investment school” as part of the district’s educational reform strategy, called the Cleveland Plan. Students from Fullerton School were transferred to a building on East 74th Street, once the site of the old Albert Bushnell Hart School. Fullerton joins the former Watterson-Lake school in Detroit Shoreway and the former John F. Kennedy High School and Recreation Center site in the Lee-Harvard neighborhood as part of an ongoing collaboration that began in 2019 between the city and the school district. That collaboration is aimed at redeveloping 12 closed school buildings across the city that include seven pieces of vacant property totaling 61 acres and 967,000 square feet of building space.

The property is one of a handful of former CMSD surplus sites where the city and school district are collaborating to create neighborhood-friendly redevelopment. The two-acre WattersonLake School site in Detroit Shoreway will be developed by Pittsburgh-based Bridging the Gap, a minorityowned firm with experience in rehab and new construction for single- and multifamily housing, mixed-use, commercial and industrial properties. The Slavic Village Development CDC held a community-visioning open house at the Polish-American Cultural Center in November and December after a survey was sent to nearby residents in October. The neighborhood is one of nine certified EcoDistricts worldwide committed to fostering development dedicated to equity, resilience and climate protection protocols. The land is in an area eligible for 100% residential tax abatement, $75,000 construction gap financing and loans and grants as part of the housing trust fund. “This opportunity continues to expand the list of public-private partnerships created by the city and CMSD to place former school sites and buildings back into productive use,” said Michele Pomerantz, the city’s chief of education, in a statement. Applications from developers will be accepted through March 25. According to the RFQ, a development team will be selected no later than April 26.

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