Crain's Cleveland Business by Crain's Cleveland Business

FOCUS: Pay equity is the right thing to do, and it can aid in a firm’s success. PAGE 10

AIMING FOR MORE As Metroparks’ golf business booms, new director enters. PAGE 2

CRAINSCLEVELAND.COM I MAY 24, 2021

LIGHTS, CAMERA, CAREERS Cinema City project marries film studios with a social mission

`BY MICHELLE JARBOE

arquette Williams will tell you that he’s not a real estate developer. But as an artist, the 48-year-old filmmaker sees potential in places that other people pass by. Along East 79th Street in Cleveland, across the railroad tracks from Gordon Park, there’s a field of dirt where factory workers once built trucks. From that barren landscape, Williams aims to birth sound stages for film and television production. On adjacent land, he imagines restaurants, housing, an e-sports studio and, perhaps, a hotel.

Filmmaker Marquette Williams has a bold vision for his Cinema City project in Cleveland. | TIM HARRISON

See CINEMA on Page 21

Ohio economy looks for a jolt as COVID restrictions expire Road to recovery in some sectors likely will be a long one BY JEREMY NOBILE

For restaurateurs like Doug Petkovic, their best business tends to be on nights and weekends, so a Wednesday morning is rarely viewed with great expectations. But June 2 will not be a typical Wednesday: That’s when the state’s COVID-19 restrictions will be lifted. For Petkovic, owner of Flannery’s Pub in downtown Cleveland and a partner in Michael Symon Restau-

rants, it will be the first time his properties will have full-capacity seating since spring 2020, when pandemic restrictions were imposed on businesses. “June 2 is a very significant date for me because for a year and a half now, people have not been able to gather in large numbers, and restaurants could not do full capacity,” Petkovic said. “That is the date when I get back to normal. That is a huge thing.” Business already has been picking

up this year as vaccines become available and the pandemic slowly comes under control. With the return to “normal” on June 2, Petkovic is optimistic about the future after one of the toughest periods of his career. The reality, though, is that many businesses — not just restaurants — have a long road ahead before truly rebounding from the economic gut punch of the pandemic that See OUTLOOK on Page 22

Bartender Amy Panik serves guests at Flannery’s Pub on May 20. | CONTRIBUTED PHOTO

NEWSPAPER

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SPORTS BUSINESS

Metroparks’ new golf director starts as business is booming Damian Cosby lands his ‘dream job’ running eight courses that posted record numbers in 2020 BY KEVIN KLEPS

Damian Cosby is really passionate about public golf. He likes that municipal courses make the sport more accessible and affordable, and can introduce more people to the game. It’s why he views leading the Cleveland Metroparks’ golf operations as his “dream job,” and why he’s making the move to Northeast Ohio — an area about which he admits he isn’t all that familiar. The Metroparks announced Cosby, who had been the chief of golf operations and park maintenance for Anne Arundel County in Maryland, as its new director of golf operations on May 13. The PGA Class A professional is the first Black person to be in charge of the Metroparks’ golf operations, which Cosby includes eight courses in Cuyahoga County. Cosby replaces Sean McHugh, who retired in January after WKYC questioned the qualifications the longtime Metroparks employee had on his resume. Cosby comes aboard after back-toback years in which the Metroparks set records for rounds played and golf revenue. Last year, with more people working from home and golf viewed as safe way to socialize outdoors, was the best in decades for many operators. Nine-hole rounds at the Metroparks’ courses soared 33% to 399,607, and golf revenue jumped 19% to $8,522,313. And those gains followed a 2019 in which the Metroparks established marks for ninehole rounds (300,385) and golf revenue ($7,138,649). “It’s just nice to see young people picking up the game,” Cleveland Metroparks CEO Brian Zimmerman said. “People dusted their clubs off when they hadn’t played in a period of time, and we did some things very strategically.” Tee times were spread out to allow for social distancing, and the Metroparks “worked really hard at keeping people on pace and moving them through the courses,” Zimmerman said. At Seneca Golf Course in Broadview Heights, where a nine-hole renovation was completed last year, rounds played increased 54%. The Metroparks’ increases are similar to what many regional golf operators have reported. Golf Datatech, a Florida firm that tracks the industry, said rounds played at Northeast Ohio golf courses were up 19.4% in July, 23.8% in August, 22.1% in September and 14.7% in October last year. During an uncharacteristically warm November, the gains were massive: 336.3%. In Maryland, where Cosby oversaw the Compass Pointe Golf Courses and Eisenhower Golf Course, “it was just gangbusters pretty much all year.” The Metroparks’ new director of golf added that “with a lot of people working from home, they found

Seneca Golf Course, where another series of renovations were recently completed, had a 54% spike in rounds played in 2020. | KYLE LANZER/CLEVELAND METROPARKS

Pandemic drives big increases A look at the gains in the Cleveland Metroparks’ golf business in 2020: Category Nine-hole rounds played Golf revenue Golf expenses Golf surplus

2020 399,607 $8,522,313 $6,241,750 $2,280,563

2019 300,385 $7,138,649

% change 33.0% 19.4%

$6,490,766

-3.8%

$647,883

252%

NOTE: GOLF EXPENSES AND GOLF SURPLUSES DON’T INCLUDE CAPITAL EXPENSES. SOURCE: CLEVELAND METROPARKS’ 2021 BUDGET

some time to actually play and maybe fell in love with the game again.”

said the local courses are off to their “best start ever.” The Metroparks also is optimistic, though somewhat cautious. ‘Tried and true’ The Metroparks’ 2021 budget As COVID-19 restrictions are lifted shows that the organization has set a and a new sense of normalcy is estab- goal of 400,000 nine-hole rounds lished, maintaining those gains could played this year. That would be about even with the record-breaking total be a challenge. “The golf industry ebbs and flows from 2020 and 100,000 ahead of the like every other industry,” Cosby said. tally for 2019. Golf revenue for 2021 is projected “I don’t know how long this bump is going to last, but at some point we’re to drop 12% to $7,534,332. The figure, while representing a dip of almost $1 million from 2020, “WE WANT TO MAKE LIVES BETTER, would be the secAND I THINK WE CAN DO THAT ond-best in the organization's history THROUGH GOLF.” and 5.5% above the — Metroparks director of golf operations Damian Cosby solid total for 2019. The Metroparks not necessarily going to come back to manages its eight golf courses to be reality, but some of these rounds and self-sufficient, and the operations the revenue days will certainly even last two years have gone well beyond that, with reported surpluses of themselves out.” Favorable spring weather, however, $2,280,563 in 2020 and $647,883 in has meant continued success for a lot ’19. “It’s been a tried and true opportuof courses. Bally Sports golf personality Jimmy Hanlin, who is part of the nity here,” Zimmerman said of a busioperating teams at Little Mountain ness that dates to the 1924 debut of Country Club in Concord and Stone- Little Met Golf Course in Cleveland. The revenue gains are assisting in Water Golf Club in Highland Heights,

additional facility investments. The Metroparks is projecting that golf expenses will increase by more than $3 million to $9.77 million in 2021. The biggest increase, at a combined $2 million, stems from additional capital projects and equipment — some of which had been included in pre-pandemic budgets. The 81-year-old Seneca Golf Course has undergone renovations to 27 holes in recent years. In the coming years, nine additional holes will be renovated, making for a reworked 36 holes, and a driving range will be built, Zimmerman said. The Metroparks CEO added that the organization is “constantly trying to continue to refresh what our courses look like” and said recent trends are to “return the courses back to what they may have been originally — more open.” Cosby is familiar with that concept. At Eisenhower Golf Course, which is 23 miles south of downtown Baltimore, the bunkers were removed as part of an extensive renovation that

debuted last month. Course conditions are important, the Maryland native stressed, but the “overall golfer experience” is key to maintaining, or adding to, the recent boom. That, Cosby said, includes the ease of making tee times, the check-in process, customer service and the condition of the golf carts. At Anne Arundel County, he had multiple municipal golf courses under his watch. His duties also included management of 140 county parks, which wasn’t “necessarily my cup of tea,” Cosby said. In Cleveland, he’s found his ideal combination: multiple courses and municipal golf. “What Cleveland Metroparks does and their mission kind of fits into how I feel golf can affect people,” Cosby said. “We want to make lives better, and I think we can do that through golf.” Kevin Kleps: kkleps@crain.com, (216) 771-5256, @KevinKleps

2 | CRAIN’S CLEVELAND BUSINESS | MAY 24, 2021

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EMPLOYMENT

Women bear the brunt of pandemic workforce woes But the COVID-19 crisis is only exacerbating inequities that already existed, a new Team NEO report shows BY KIM PALMER

Since the onset of the pandemic, the stories have been rolling in that remote learning and other child-care disruptions led millions of women to leave the workforce during the health crisis. A Team NEO report, “Lost Opportunities: The Pandemic’s Impact on Northeast Ohio’s Working Women,” released Wednesday, May 19, looks at how COVID-19 affected the labor markets and had a disparate impact on working women. But the pandemic also revealed that for women in the region, an unequal playing field already existed. “When the pandemic hit, we saw a steep decline, with estimates between 3% and 4% of all women leaving the labor force, and leaving very quickly,” said Jacob Duritsky, vice president, strategy and research at Team NEO, the region’s economic development organization. In 2020, women were four times more likely to leave the workforce overall, regardless of their status as single or married, he added. The report — which used a combination of data from the U.S. Census, the Federal Reserve, and labor market and economic modeling tools from Moody’s Analytics and EMSI — looked at labor participation dating back to 1948. Those findings showed that both nationally and regionally, women made strides in the workforce, educational attainment and business ownership. However, even before the pandemic, that progress continuously has been under threat of systemic issues such as unequal

pay, rigid or nonexistent maternity policies, and hiring biases. Nationally, labor force participation among women has increased since 1948, peaking in 2000. There also have been gradual wage improvements for women over that same period, but those gains, relative to men’s, show a significant gender wage gap in Northeast Ohio. In 2019, women accounted for more than 45% of all hours worked in the region, while earning an estimated 23% less than men. “Men on average got about $52,500 in 2019. That number for women was $40,500,” Duritsky said.

Job cuts hit home Then came the COVID-19 pandemic, which had a disproportionately negative effect on female caregivers as schools closed and there were more job losses in more female-represented industries. Some of the largest employment sectors for women in Northeast Ohio were hit the hardest. “If you look at the top five sectors — health care, education, finance, accommodation, food and other services — the employment losses in those five sectors alone saw more than 70,000 jobs gone in 2020,” said Duritsky. Three of the top five employment sectors in the region with high rates of female employment — accommodations and food services; education; and health care — saw the most significant COVID-19 related employment attrition. Women, who make up only 16% of

A snapshot of the wage gap for women in the region Even with gains in female participation in the labor market, the regional gender wage gap is clear. Northeast Ohio women spent an average of 36 million hours working in 2019 — more than 45% of all hours worked in the region. However, they earned an estimated 23% less than working men, regardless of educational attainment. FOR NORTHEAST OHIO IN 2019: Median annual earnings

Working population below the poverty level

$60,000 $52,583 $40,000

39% Men

$40,589

$20,000

61% Women

Men

Women

Median earnings by education Men Women $100,000 $80,000 $60,000 $40,000 $20,000 0

Less than high school graduate

High school graduate

Some college or associate’s degree

SOURCE: 2019 AMERICAN COMMUNITY FIVE-YEAR ESTIMATE

Bachelor’s degree

Graduate or professional degree

CRAIN’S CLEVELAND BUSINESS GRAPHIC

all of the region’s business owners, also disproportionately ran businesses in sectors that saw the steepest declines in employment. About half of all women-owned businesses, including beauty salons, day care centers, animal care facilities, home health care services, law firms and bookkeeping firms, were in sectors shut down during stay-at-home orders. Another bleak finding of the report revealed that in addition to gender wage gaps, there were significant disparities when it comes to educational attainment and pay for Northeast Ohio women. In 2019, Northeast Ohio women completed more than 28,000 educational degrees or certificates, with 30% of those in programs in high-demand jobs, but higher education has not translated into higher wages, the report found. A woman with a professional degree earns $21,128 less than a man with a professional degree, and a man with some college or an associate’s degree essentially earns as much as a woman with a bachelor’s degree in Northeast Ohio. “Unfortunately, in Northeast Ohio and in many parts of the country, the more education a woman has, the wider that gap actually grows. Depending on whether you have a high school diploma or a professional or graduate degree, that gap can range anywhere from $11,000 to more than $21,000,” Duritsky said. Based on the most recent projections, the best estimate is that the regional economy in 2021 will see about 2% of total jobs return, he said. That translates into 25,000 to 30,000 jobs coming back relative to more than 150,000 lost overall, Duritsky said. “We can’t grow our talent and increase the number of opportunities for women if they’re not able to consistently work, build the new experiences, build the networks, build the relationships and build the experiences in order to make it happen,” said Kimberly Riley, president of Hylant-Cleveland, a personal and business insurance agency. In a virtual presentation on May 19, Riley spoke with Team NEO CEO Bill Koehler before a panel discussion with female business leaders in the region about the report’s findings and ideas on how employers need to address the glaring gender disparities. The access to a strong workforce and talent base, she said, is becoming the No. 1 consideration when companies make location and investment decisions. “As employers, we need to step up, and right now,” Riley said. “Our current HR policies are going to need to be flexible. We have got to listen to what our employees need and want, and we have to be able to adjust so that our talent will come back to work.” The concern about flexibility from employers had even high-level

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EDUCATION

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And in the 2021-2022 academic year, it will provide support services When the state started to shut to an additional 26 schools, including down in March 2020, Say Yes Cleve- three charter schools. This new coland made a commitment to “contin- hort includes the first charter high school: Horizon Science ue and expand” its work, said Academy. executive director Diane The new cohort will Downing. At that time, there bring the total number of were family support specialschools served by Say Yes ists in 16 Cleveland MetropolCleveland to 68, nearly itan School District schools. 65% of all eligible district Those specialists started and charter schools, a working remotely, turning news release stated. The their attention to helping remaining schools will befamilies meet technology gin receiving support serneeds, making sure they had vices in the 2022-2023 access to food and more. Downing school year. Say Yes Cleveland is a local Sunbeam was one of the district’s chapter of the national Say Yes to Education network. Communities in the PK-8 schools to receive a family supnetwork provide students with schol- port specialist in the challenging arships for post-secondary educa- 2020-2021 academic year. “She really leapt in from minute tion, but they also provide a strong system of supports throughout the one,” principal Jessica Humphrey K-12 process. The goal is to give stu- said. The specialist helped at the school’s dents and their families the wraparound services they need — from drive-thru technology distribution health services to legal clinics — to event, meeting families at their vehicles and handing out resources. From overcome a variety of challenges. there, Sunbeam set up an electronic

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In January 2019, when Cleveland was officially named a Say Yes to Education chapter, the aim was to have family and student supports in all district schools within four years, starting with the 2019-2020 school year. The organization is still on track to meet that, despite the pandemic. Say Yes Cleveland had to adjust to remote work, but changing the timeline was never in question. “For me and for our administrative team, it was always, this is what we promised and we need to stay on course, and it’s more important now than ever for what everyone was going through,” Downing said. Say Yes Cleveland grew its support network by 26 CMSD and partner charter schools in the 2020-2021 school year, with family support specialists starting remotely.

Added schools The following Cleveland Metropolitan School District and partnering charter schools will begin receiving Say Yes Cleveland support services in the 2021-2022 academic year:

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referral system so teachers could more easily help the specialist and families connect on specific needs. This past year, those needs often included home access to internet services or connections to Academic Learning Pods in the district. The Academic Learning Pods gave students facing challenges to remote learning at home a safe place to attend virtual lessons. Say Yes Cleveland was part of the team that helped establish Cleveland’s Academic Learning Pods, Downing said. The Say Yes family support specialists served as a “connector” to the pods, letting students and their families know about the option, Downing said. Humphrey said the work Sunbeam’s specialist did of finding open pods and talking to families about transportation or other needs was “essential.” “Absolutely something that I think the rest of my admin team did not have time for, to be able to do all of that legwork. And that is absolutely See SAY YES on Page 21 Patrick Henry Riverside Robinson G. Jones Scranton Tremont Montessori Walton Whitney M. Young

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4 | CRAIN’S CLEVELAND BUSINESS | MAY 24, 2021

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GOVERNMENT

Cuyahoga County considers creating public utility to manage grid If project is approved, suburban microgrid would be housed at Department of Public Works BY KIM PALMER

When the concept of a microgrid was introduced to Cuyahoga County Council members in November 2019, the city of Cleveland and the Cleveland Foundation were collaborating to create a $100 million project downtown using Cleveland Public Power infrastructure. The more than 3-square-mile area in the city’s central business district would have been the first of its kind: a redundant electrical grid providing a backup in the event of an outage. With leadership changes at Cleveland Public Power and the utility entangled in multiple lawsuits, Cuyahoga County Executive Armond Budish’s administration in February proposed the creation of a public county utility that would establish and operate localized suburban microgrids. Cuyahoga County Council is considering an ordinance authorizing the creation of a utility that would be housed in the county’s Department of Public Works. It has heard testimony from the Budish administration and local businesses interested in the program. “We have interest from commercial districts in different parts of the county where we could combine local customer base access to the transmission grid, where we get wholesale power and local generation of electricity through large landfill solar projects,” said Mike Foley, director of the county’s Department of Sustainability. “We have all the raw material here to make this stuff work.” The new public utility would at first be tasked with issuing requests for proposals from developers and investors to build out the microgrids once a sufficient customer base in a specific area is identified. Foley said relying on an existing utility would mean that microgrid customers would be subject to legacy costs and fees, which he said can make up nearly 30% of a FirstEnergy bill. Existing utilities also would be subject to Public Utilities Commission of Ohio approval of a microgrid project — a process that can take years. “It gives us price flexibility, regulatory flexibility,” he said. He added, “We can do this with select geographic areas within the county based on local customers who

NEO

From Page 3

executives weighing whether to leave their careers. Panel member Rachel Sampson, a senior vice president and national director of Key4Women at KeyBank, questioned how she would handle working and parenting during the pandemic. “When I found out my children were going to be virtual, I seriously thought, ‘How in the world am I going to make this happen, and will I need to leave my role?’ ” Sampson said. Fortunately, her company worked with her so not only was she able to continue working, but flourish in her career, she said. Clearly, many women were not so lucky, including the two-thirds of Northeast Ohio’s labor force the re-

want to use the power.” However, the question of whether Cuyahoga County’s charter permits the creation of a utility remains a sticking point for some council members. Council president Pernel Jones Jr. on May 11 tabled a vote pending a request for review of the matter by Ohio Attorney General Dave Yost’s office that originated from councilman Michael Gallagher. That review is redundant, according to county councilwoman Sunny Simon, who said the county’s legal department and the Ohio Legislative Service Commission already have signed off on the issue. “We keep going over and over again what it means to be a charter county in the state that we have been through this so many times since our inception 10 years ago,” Simon said. “I’m confident of our ability to do this.” Simon, who represents Euclid, South Euclid and parts of Beachwood, said the microgrid developer would solely be responsible for providing the service. “There is always different perspectives, but it is not a question of cost for the county,” Simon said. “The way we will move forward on contracting, we can shift the liability to the developer so there is not a liability question.”

Hanslik said Nestle also is interested in the sustainable aspects of the suburban microgrid, which would harness localized renewable energy. Nestle has set a goal to use 100% renewal energy by 2025, she said. Anthony Catanese, production service engineer for Mechanical Dynamics and Analysis Turbines, said the 5-year old company in Euclid faces steep losses and fines when power outages affect the facility. “It is obviously critical to us,” Catanese told council at a recent meeting. He said the company faced a $100,000 fine from a customer for a one-day delay after an electrical outage stopped production. “We lose thousands and thousands of dollars every time we have an outage with the loss of products on our machines, the loss of our employees’ time ... and then losses associated with the delay,” he said. During multiple days of power outages, PPG Corp., which has an industrial coatings plant in Euclid, was unable to ship any products because the shipping depot doors use electricity

to open, according to plant manager Scott Rinehart. “That power outage started in the evening and went through the next afternoon,” Rinehart said. “We operate a 6 a.m.-to-6:30 p.m. schedule. And those two days we had no production.” That facility averages about 80 shipments per day, he said, “so we had to reschedule our shipments with those customers and disappoint customers. It has become a reliability

issue with our customers.” A vote on the ordinance awaits word from the state attorney general’s office. If the microgrid project receives the all-clear, and county council votes for the public utility, Foley said the next step is to hire a consultant or consultants to help the county put together the request for proposal for a developer. Kim Palmer: kpalmer@crain.com, (216) 771-5384, @kimfouroffive

Seeing the benefits Both Simon and Foley acknowledge that the concept of a microgrid can be technical and confusing, but they maintain the economic development benefits of such a system are worth it. Foley said microgrids provide an in-demand, resilient service to a commercial customer base that is willing to pay for the service. A Cleveland State University study, he noted, found microgrid costs are comparable to current commercial kilowatt-hour prices. Rose Hanslik, who heads up procurement for all U.S. Nestle factories, told council members that after experiencing 30 hours of downtime last year at the company’s Solon facility, reliable power is one of the top priorities for the company. “Our performance is measured on our ability to deliver on the orders that we receive. (Outages) can affect our top-line growth. It can affect our revenues overall,” Hanslik said. port says is made up of working women living in poverty. Panelist Sarah Nash, the CEO and president of manufacturing company Novagard, said concerns with gender equality revealed during the pandemic made her reevaluate pay disparities. “It made us really look at the groupings of our employees,” said Nash, who is also the company’s majority owner and chairman. “(The pandemic) caused me to relook at the pay grades and make sure that everybody was grouped appropriately. We gave a number of women, and some men, significant increases. I feel that it is our absolute responsibility to make sure that we close that gap ourselves. We’re the only ones who can do that.” Kim Palmer: kpalmer@crain.com, (216) 771-5384, @kimfouroffive MAY 24, 2021 | CRAIN’S CLEVELAND BUSINESS | 5

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FINANCE

Corporate giant keeps low profile, despite strong ties Berkshire Hathaway is one of Northeast Ohio’s largest employers BY JAY MILLER

In 2019, a massive fire in a storage facility at a large plant in Rouen, France, owned by Lubrizol Corp., the Wickliffe-based maker of lubricants and oil additives, caused severe damage. In his 2020 annual letter to shareholders of Berkshire Hathaway Inc. — the public company that bought Lubrizol in 2011 — its chairman, Warren Buffett, noted that the fire caused “significant property damage and a major disruption in Lubrizol’s business,” though without any fatalities or serious injuries. But, he wrote, the financial impact of the loss was mitigated by a substantial insurance recovery. One of Lubrizol’s insurers, Buffett would only later find out, was the FM Global Group — another Berkshire Hathaway business. That he would be unaware of the business relationship of two business units under his purview, Buffett explained, highlighted a management philosophy that has been key to Berkshire Hathaway’s rise to be one of the world’s largest and most successful businesses. Buffett, one of the wealthiest men in the world, built the business on a management philosophy that said that so long as its business units operate profitably, he and the small Berkshire Hathaway corporate staff in Omaha, Neb., would keep

their hands off the businesses, getting involved only when major capital expenditures are sought. “Let not the left hand know what the right hand doeth,” he told shareholders, citing a passage from the New Testament book of Matthew.

‘Very hands off ’ That approach makes sense for a business that ranks third among the world’s largest public businesses and employs more than 400,000 people. So it perhaps should come as no surprise that it goes largely unnoticed that Berkshire Hathaway is one of Northeast Ohio’s biggest businesses and largest employers, using numbers from Crain’s most recent list of the region’s largest employers. In addition to Lubrizol, which employs 2,162 at four operations in the region, Berkshire Hathaway owns or franchises real estate brokerages across the country under the umbrella name of Berkshire Hathaway HomeServices. In Northeast Ohio, that includes Stouffer Realty, Professional Realty, Lucien Realty and Kathy Reid Realty. Together, there are 29 offices and they employ more than 500 agents. It also owns Scott Fetzer Co., which it acquired in 1986. That business employs 1,354 in Northeast Ohio. Among Scott Fetzer’s 22 business

units are the makers of Kirby vacuum cleaners, Ginsu knives, truck bodies and World Book encyclopedias. Combining all of those businesses, which employ a little more than 4,000 people, would put Berkshire Hathaway among the region’s 10 largest corporate employers, a larger employer than Ford Motor Co., which employs 3,517 people, and Lincoln Electric Holdings, which employs 2,872. Buffett — because of his success at building Berkshire Hathaway into one of the largest businesses in the world after he purchased a failing textile firm in the 1960s, and because he is one of the wealthiest people in the world — has a high public profile. But the company has little desire to be identified as the corporate owner of its operating units and keeps them at arm’s length in many respects. So, each Berkshire business operates independently, with little meddling. For example, signs identifying the company at Lubrizol’s headquarters in Wickliffe make no mention of Berkshire. “What you read and hear about Berkshire Hathaway, and our experience, has been very true — they are very hands off and the businesses are free to manage their business,” said Eric Schnur, Lubrizol's chairman and CEO. “Warren (Buffett) routinely says

Warren Buffett’s Berkshire Hathaway is a major employer in the region. | GETTY IMAGES

publicly that he and Charlie (Berkshire Hathaway vice chairman Charles Munger) are capital allocators. We view our role as to perform well enough to justify significant future investment. There's a certain threshold below which I can make the investment decisions, and above that threshold, Berkshire approves larger investments.” Schnur said that allows business managers like him to focus on longand short-term performance. “It's a really unique situation,” he said. That approach has put Berkshire Hathaway into the No. 3 position on Forbes magazine’s Global 2000, a list of the world’s largest public companies, with sales of $245.5 billion and profit of $42.5 billion. The holding

company owns a diverse range of businesses including 70 insurance companies, led by GEICO; NetJets Inc., a fractional jet ownership business; BNSF, the rail giant; and businesses in retailing, home furnishings and manufacturing. The annual report does not break down financial information for Scott Fetzer or the real estate operations. Looked at financially, Lubrizol’s revenues were $5.95 billion in 2020, down 8% from 2019, according to the Berkshire Hathaway annual report, in part due to the disruption in operations caused by the Rouen fire. Lubrizol’s pre-tax earnings in 2020 were about $1 billion, unchanged from 2019. See BERKSHIRE on Page 7

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6 | CRAIN’S CLEVELAND BUSINESS | MAY 24, 2021

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EDUCATION

University of Mount Union restructures curriculum

Alliance campus will eliminate seven majors, seven minors and an area of concentration BY AMY MORONA

The University of Mount Union is revamping its curriculum. Officials announced earlier this month that it would sunset seven majors, seven minors, and a concentration. The university will add schools in education and business. Several departments in individual colleges will be reorganized as well. The Alliance campus saw a reported 4% drop in full-time enrollment last fall, bringing the number down to about 1,900. But university officials said this revamp is coming from a position of strength. No full-time educators at Mount Union are losing their jobs. The estimated savings of about $309,000 in the first year will come, in part, from efforts to streamline. This includes adjusting the amount of adjuncts and redistributing how faculty are staffed to teach courses. Officials hope having faculty teach more first-year students in introductory classes can help with retention rates. They also are making tweaks so the curriculum offers clearer pathways for transfer students. Ultimately, though, these moves center on becoming more efficient. “There was no joy in doing this work over the past year,” said Jeffrey Breese, Mount Union’s provost and vice president for academic affairs. “But it was something that needed to be done. We were very transparent.” More than 100 faculty and staff were involved in the process known as an academic program analysis. Officials said they analyzed data and weighed many factors in their decisions, including market data and course demands. A concentration in astrology will be discontinued. New students will not be able to major in financial mathematics, geology and health, though no discipline will be totally wiped from the university’s offerings as a whole. Some of the changes include shifting a few majors to minors, as is the case for communication studies, philosophy, religious studies and writing. Others will get folded into general education offerings. It’s not the first revamp the campus has taken on in recent years. There was a restructuring of its colleges in 2019. Plus, Breese said programs have

BERKSHIRE

From Page 6

Tom Hosack, president and CEO of Berkshire Hathaway HomeServices Stouffer Realty, which has eight offices in Northeast Ohio, said he and the real estate franchisees in the region have little connection to the corporate parent. “I mean, they have some technology offerings, some marketing and they have an intranet where our agents can get a lot of flyers and e-cards and that kind of stuff,” he said. “I can’t imagine how Berkshire Hathaway keeps track of everything they own.” A phone call to Scott Fetzer president and CEO Robert McBride was not returned. Instead, an email from outside communications counsel Merrie Spaeth, president of Dal-

come and gone over the university’s 175-year history. There are now more programs in engineering and nursing. A data science minor will launch this fall. “We have been pretty good at responding to what society needs, what students are interested in,” he said. He debriefed students about the changes earlier this spring. They asked what would happen to those currently enrolled in a program set to be eliminated. The university is creating “teach out” programs for them. But overall, the majority of current students didn’t seem overly concerned, said former student senate president Michelle Kissane. “That was because there really weren’t that many students in there in the first place,” she said. Kissane is right. Breese said some of the eliminated majors and minors didn’t have any participating students, but those related courses still had to be offered and could be filled with other non-major students. Mount Union plans to continue using annual program analyses to examine its programs’ strengths and weaknesses. That includes a campuswide focus to assess the operational effectiveness of other departments.

Mount Union’s faculty and staff were involved in the curriculum changes. | CONTRIBUTED

tion on all sides to make what we have the best possible curriculum for our students,” he said. Other colleges are leaning into a continual review of programs, too. A spokeswoman from Baldwin Wallace University, one of Mount Union’s peers in the Ohio Athletic Conference, told Crain’s that officials there review offerings on an ongoing basis. She said there are no pandemic or budget-driv-

en programmatic changes under consideration. A year-long analysis at Ohio Wesleyan University resulted in the elimination of 18 majors and consolidation of some departments in late 2020. The Columbus Dispatch reported one current faculty member was expected to be let go, though others were going to retire early. The cuts were estimated to save about $4 million.

For many institutions in Ohio and nationwide, the pandemic accelerated challenges colleges may have already been facing. Institutions were doing some soul searching before the past year, according to Sabrina Manville, the co-founder of college advising company Edmit. There’s also been a shift when it comes to the mindsets of students and families as they look at options. They’re interested in programs’ return on investments. This means institutions have to consider some big questions. “Are they meeting the demands of what students are looking for?” she said. “Are they going to position students for great outcomes after graduation? Are they teaching students the skills and content that they need to succeed in the world long term?” It’s leading a lot of colleges and universities, she said, to tackle this work more proactively. Amy Morona: amy.morona@crain. com, (216) 771-5229, @AmyMorona

‘Fair governance’ When it comes to potential course revamps, though, faculty senate chair Bruce Pietz said looking critically at each offering will be a culture change. To be blunt, he said, they haven’t always been efficient on this front in the past. But program reviews require them to be frank. “It’s not to sunset programs. That’s not the initiative,” he said. “It’s ‘how can we make our programs better?’ ” The faculty senate was in agreement with 15 of the recommended 18 program modifications. Those were what the board of trustees approved. The other three programs will be put on an action plan by the end of the year. There’s always anxiety when this type of process rolls out, Pietz said. But he thinks it’s been handled as well as possible. That’s not always the case at other campuses. “With this being truly faculty led in collaboration with the deans and the provost, to me, that epitomizes fair governance where there’s collabora-

Proven Experience that’s Always Looking Ahead. At First American Title National Commercial Services in Cleveland, it’s easy to boast about our many professionals with decades of experience: locally and nationally. But our evolving

las-based Spaeth Communications, provided a brief response: “Scott Fetzer companies have a policy of communicating directly with their key stakeholders, and therefore we must pass on this opportunity to communicate through the media.” The low profile doesn’t surprise Lawrence Cunningham, a George Washington University law professor who focuses on corporate governance and has written several books on Buffett and Berkshire Hathaway. “They’re important in their regions and localities, and they know that they have a sense of responsibility and so on, but they virtually all stay completely out of the limelight,” Cunningham said in a telephone interview. “It’s a theme, I think, across all (its) companies.” Jay Miller: jmiller@crain.com, (216) 771-5362, @millerjh

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MAY 24, 2021 | CRAIN’S CLEVELAND BUSINESS | 7

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PERSONAL VIEW

The Colonial cyberattack should scare you

RICH WILLIAMS FOR CRAIN’S CLEVELAND BUSINESS

BY KEVIN BENACCI

EDITORIAL

Thinking big I

n the spirit of architect and city planner Daniel Burnham’s most famous quote — “Make no little plans; they have no magic to stir men’s blood and probably themselves will not be realized” — Cleveland now has bold projects on the agenda for two of its major assets that generally have been neglected. For Cleveland’s perpetually underused lakefront, the city and the Cleveland Browns have floated a plan to build an elevated park over the Route 2 Shoreway to connect downtown to some of the city’s biggest attractions: the Rock & Roll Hall of Fame, the Great Lakes Science Center and FirstEnergy Stadium. The proposal, featuring a $229 million land bridge, includes 30 acres of green space around the stadium, and possibly a hotel, residential, retail and office spaces. City officials last week also unveiled a $2 billion plan to remake Cleveland Hopkins International Airport, featuring new concourses, an expanded terminal and parking, better access via public transit and a new exit off Interstate 71. The new vision for the old airport stems from a years-long master planning process, and it THE LAKEFRONT PLAN IS will require the approval of the Federal Aviation AdSTRIKING IN ITS ministration, which will take some time. Assuming CONCEPTION AND the FAA signs off on the TANTALIZING IN ITS plan — and we hope the agency does, as Hopkins is POSSIBILITIES. in serious need of this update — the city and airport officials face an even bigger challenge: figuring out how to pay for it, through some combination of airport revenue, bonds and federal grants. The airport’s a long-term play, likely done in three phases, the first of which would begin in 2026. Airport director Robert Kennedy made clear the need for upgrades when he noted, “The core part of our facilities were designed and built when propeller aircraft was the dominant aircraft in the air, and things have changed significantly since.” (To say the least.) Kennedy and the airport team, though, have a big challenge ahead of them in financing the plan. In a statement to Cleve-

land.com, Spirit Airlines, a major carrier at Hopkins, noted, “We believe it’s important to further examine the potential price tag of the project with respect to the long-term impact on keeping CLE competitive and preserving access to affordable, high-value travel options for residents.” Fair enough. There’s time to work out details. But this airport upgrade has to happen. The lakefront plan, similarly, is striking in its conception and tantalizing in its possibilities. Spend any time in downtown Cleveland and, lovely as you may find it, you’ll likely wonder, “Why is it so hard to get to the water?” This is a significant response to that simple question. Cleveland, though, has a history of big plans that don’t materialize. Anybody remember the North Mall project, which was to be anchored by a 60-story corporate headquarters for Progressive that would be surrounded by a hotel, a library and an art gallery? The point here isn’t to run Cleveland down. These big projects are hard to pull off. Every city has its share of plans that don’t pan out, because officials couldn’t figure out how to pay for them, or the conception was a little off. Process in these projects matters. We’re optimistic about this lakefront plan. It’s done at the scope that Cleveland needs to generate more activity and development along Lake Erie. But if execution of its vision is to follow, it will need to be accompanied by community involvement in the planning. On that front, we got a depressingly familiar sign when, as Cleveland.com pointed out, “The Cleveland City Planning Commission held a last-minute meeting on (Monday, May 17) and did not make the same notifications they customarily do to let the public know it would take place.” The commission “did not put an agenda on the section of its website where it customarily posts them in advance of meetings. Nor did it send a meeting notice to reporters. Instead, it placed a public notice on an area of its homepage where it does not regularly post such items.” Honest oversights, perhaps. If this project is going to happen, though, the process must be transparent. The public and the business community need to have early, frequent input to make sure the plan serves everyone.

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

Unless you’ve been living under a rock, you know the news has been dominated the past couple weeks by a major ransomware attack that crippled a critical fuel pipeline across a large swath of the United States. Though operations are now largely restored, the Colonial cyberattack triggered a glaring spotlight from our highest levels of government and millions of people affected by mar- Benacci leads the ket fluctuations and long gas lines. cybersecurity Wherever you work, if you serve in a practice at leadership role, this was not a wakeup Targeted Victory. call. This was a jolting you out of bed to The native find your hot water heater has explod- Clevelander ed, your power is out, and your cell- previously served phone has no service type of call. This as the chief was a crisis that could affect you — and external affairs closer to home than you may think. officer at the U.S. So what does it all mean? A lot, if you Cybersecurity open your eyes. Cybersecurity has gone and from a nice-to-have to a need-to-have. Infrastructure Executives at companies, governments, Security Agency hospitals, schools and entities of all at the shapes and sizes should immediately Department of convene their teams to understand their Homeland cybersecurity posture. Ransomware at- Security. tacks happen when hackers get into your systems, lock them up, steal your data and ultimately hold your company hostage — demanding you pay them if you want your company back. What would you do if hackers demanded $300,000 in cryptocurrency (or $5 million, in Colonial’s case), with absolutely zero guarantee they’ll honor their end of the deal? If that situation scares you, it should. Here are a few things every executive, at every company, in every industry, should be asking themselves — today. Do you know your cybersecurity posture? If you don’t, your team better. But are they confident that your networks are secure? Do you mandate that your employees practice good AS THE COLONIAL cyber hygiene? If not, it may be time to get some training on the HACK HAS LAID books. The digital transformaBARE, THERE MAY tion during COVID-19 has increased endpoints (phones, BE SIGNIFICANT, tablets, laptops) exponentially, which, in turn, increases their UNFORESEEN vulnerability to hackers. Unfor- EFFECTS OF YOUR tunately, it could just take one employee — working remote, DECISIONS juggling Zoom fatigue and their DOWNSTREAM. beautiful, screaming toddler — clicking one wrong link to infect your systems. Take honest stock of your current cybersecurity posture and make changes if you don’t like what you find. Do you have an incident response or business continuity plan? If you don’t, get one now. If you do, when was the last time you exercised it? Plans are great to have — but they don’t matter if you don’t know how to execute them in a cyber crisis. Make sure the pieces are in place so you can continue operations. As the Colonial hack has laid bare, there may be significant, unforeseen effects of your decisions downstream. See CYBERSECURITY , on Page 9

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

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

8 | CRAIN’S CLEVELAND BUSINESS | MAY 24, 2021

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PROPERTIES SOLD

OPINION

Construction

◆

Facility & Property Management

PERSONAL VIEW

It’s not a labor shortage — it’s a good jobs shortage BY GRACE HEFFERNAN AND MAUREEN CONWAY

NORTHEAST OHIO WORKER CENTER

this past year. But what about all of these workers on unemployment This time last year, delivery drivers were vital, grocery benefits? Multiple reports have looked at the impact of store workers were courageous, and restaurant workers the $600 unemployment benefit and found extremely were on their way to sainthood. It felt like we had come limited labor-supply effects. It seems even less likely to an agreement that these occupations and the workers then that the current $300 benefit would have that effect when $600 a week wasn’t keeping who filled them were the lifeblood of workers from taking jobs. our society. Without them, we would To put it bluntly: We are not in a not survive the pandemic. labor shortage. We are in a wage Fast forward 12 months and we’re shortage. We are not in a labor shortsinging a different tune. At the first age. We are in a good jobs shortage whisper from business that they are — jobs where workers can expect livhaving difficulties filling jobs, we fall able wages, affordable benefits, paid back into familiar tropes. We demontime off and predictable scheduling. ize individual workers — they are If you care about workers, if you greedy, they are lazy, they are selfish made a commitment last year to ra— instead of making good on our ear- Heffernan, who lives in Cleveland, cial justice, now is your moment to ly pandemic promises to never again is a member of the Northeast Ohio stand up for what you believe. Do not take them for granted. In the several Worker Center. Conway is vice succumb to the temptation to perweeks, 13 states, including Ohio, have president and executive director of petuate the labor shortage narrative. decided to eliminate worker access to the economic opportunities Do not use individual workers as expanded federal unemployment program at the Aspen Institute. scapegoats for an economic system benefits. that will stutter to a halt without a The industry currently making headlines for so-called labor shortages is the service in- constant supply of cheap and disposable labor. Support the continued expansion of federal unemdustry, but firms in other industries across Northeast Ohio industries also face challenges attracting workers ployment benefits that have been and remain a lifeline for open positions. And many of these jobs are charac- for workers and their families in the midst of an unterized by issues similar to service sector jobs — low pay, precedented economic and public health crisis. The few benefits and management that demonstrates little solution for our economic recovery cannot be to make empathy for the challenges their workers are facing now people feel so poor and desperate that they are willing to accept any job regardless of its quality. That has been or concern for their workers’ well-being. Labor shortages are marked by increases in wages. the policy approach for far too long and we should not That’s Economics 101 — supply and demand. Business- go back to it. Requiring poor people to find employes are compelled to increase pay as they fight for a limit- ment in order to qualify for public safety net programs ed supply of talent. In our current climate, however, wag- — from SNAP benefits to the earned income tax credit to child care subsidies — built a system in which miles have not meaningfully risen in the service industry. lions of working people remain poor and reliant on public benefits to get by. We need to build a system in which people who are working for a living are more likely to find that their work, in fact, provides a living. This past year, we learned that the well-being of essential workers is critical for business survival. Now is the time for employers to reimagine their business models and make the choice to design high-quality jobs that allow workers to sustain a living. By doing so, they can also reap the benefits of increased employee engagement and productivity, improve their brands, and drive better results. For example, an initiative in Chicago helped dozens of small- to medium-sized manufacturing companies save money and grow by implementing approaches that ofIn Ohio, the median wage paid to a waiter or waitress fered workers greater stability, improved pay, quality is just $19,940 per year. That’s equal to 93% of the feder- benefits, training and career advancement. By using this moment to demand better job quality for ally designated poverty line for a family of three. During the pandemic, tipped workers have actually reported a front-line and essential occupations, we can begin to pay decline in tips. Meanwhile, conditions for back of house back our debt to the workers who sacrificed so much to restaurant staff such as cooks and dishwashers have ensure that the rest of us made it safely through the panbeen just as precarious. Those workers have experienced demic. If you’d like to learn more about what makes a good some of the highest risks of contracting and dying from COVID-19. These conditions are even more egregious job for workers in Northeast Ohio, please visit the Northwhen considering that women and people of color are east Ohio Worker Center website, where you can view disproportionately working in the service industry. Wag- and endorse the Northeast Ohio Worker Bill of Rights, a es are only now reaching pre-pandemic levels despite document that was drafted for workers, by workers in the restaurant work having been more dangerous than ever spring of 2021.

CYBERSECURITY

From Page 8

Lastly, and maybe most importantly, how will you manage the crisis? In the immediate aftermath of an attack, you need an external communications strategy focused on transparency, accuracy and speed. It is critical that you communicate rapidly and regularly with your stakeholders, employees, investors, partners and the

media. You can’t do that if you haven’t prepped. Get your senior leaders together for a tabletop crisis communications simulation to go through the specifics and make a plan for how you’ll communicate, who needs to be at the table, and how you’ll provide steady leadership through the crisis. These actions will take time and investment, but you can start them — today. You don’t want to be the next Colonial. But when ransomware hits your networks, your preparation, and investment in it, will pay off. Probably big time.

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crainscleveland.com/nominate MAY 24, 2021 | CRAIN’S CLEVELAND BUSINESS | 9

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WHERE WE STAND Brookings experts look at our region’s inclusive economic performance

DIVERSITY AND INCLUSION

CRAIN’S ILLUSTRATION / GETTY IMAGES

PAGE 14

BUILDING A BETTER BOTTOM LINE Pay equity isn’t just the right thing to do; it also can help lead to a company’s success BY DOUGLAS J. GUTH

Pay discrimination is not a new phenomenon — it’s been over a half-century since the practice became illegal in the U.S. — but the ongoing pandemic has underlined a problem still impacting millions of people. According to a report released earlier this year by Oxfam International, women lost $800 billion in income in 2020, more than the combined gross domestic products of 98 countries. Women are disproportionately represented in sectors offering low wages and little security, the study stated, while large-scale failures in gender policy have left women on their own to cope with the crisis. The workplace wage gap has an insidious trickle-down effect on minorities, said Augie Napoli, president and CEO of United Way of Greater Cleveland. The nonprofit conducted a three-year community needs assessment on inequities, including gender and race wage disparities in Cuyahoga County, determining that women earn less on average than their male counterparts. As just one example, Latina women working full-time for the full year earned about half ($30,600) of what their white male counterparts did ($60,000). Considering living wage in the county is roughly $56,000, only households headed by white men can support a family with one wage earner. See PAY EQUITY on Page 12

“IF I’M A WOMAN OF COLOR WITH A LOWER SALARY GOING IN FOR AN INTERVIEW AND AM ASKED ABOUT MY HISTORY, I’M ALREADY BEHIND THE EIGHT BALL. THAT COMPOUNDS OVER THE COURSE OF THEIR CAREER.” Gina Cheverine, Greater Cleveland Partnership

Cuyahoga County’s wage gap Cuyahoga County has both gender and race wage gaps for full-time, full-year employees. According to the United Way of Greater Cleveland, a living wage in the county is $56,000. So, based on figures below, only households headed by white men can support a family with one wage earner. Salary Latina women Black women Black men Latino men White women

$30,600 $34,300 $37,200 $39,700 $49,600

White men non-Hispanic

$60,000

SOURCE: UNITED WAY OF GREATER CLEVELAND, COMPILED FROM U.S. CENSUS BUREAU, 2018 AMERICAN COMMUNITY SURVEY

10 | CRAIN’S CLEVELAND BUSINESS | MAY 24, 2021

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front, part of a larger diversity and inclusion push that it ramped up in 2018 while developing a new strateFrom Page 10 gic plan. Though the nonprofit has “Lack of training and ability to get always embraced diverse ideas and those jobs is big, but you have to perspectives, staff believed more back up further,” Napoli said. “There could be done to strengthen those are also issues in inhibiting this pop- fronts. The food bank created a 25-memulation from going after higher-paying positions — a single parent with ber diversity, equity and inclusion two kids working multiple jobs council comprised of individuals doesn’t have time to go for a liv- from all levels of the organization. Part of the deep dive into diversity ing-wage job.” For businesses, implementing was a pay equity analysis helmed equal pay among race and gender by director of human resources Lisa isn’t just about adhering to the law, DiCapua. After comparing salary ranges according to regional observers interviewed by Crain’s. Outside of the among male and female staff in moral ideal that pay equity is the similar roles — an examination that right thing to do, it can also provide included how minority staffers are paid for the same work — the nonprofit determined “IT’S ABOUT MAKING SURE YOUR it met pay equity standards. FRONT-LINE MANAGERS ARE Diverse staffing and othCOMFORTABLE HIRING SOMEONE er long-term inclusivity measures helped the food DIFFERENT FROM THE NORM.” bank achieve its compenJan Conrad, executive director of the sation outcomes as well, Women’s Network of Northeast Ohio said president and CEO Kristin Warzocha, who has benefits to an organization’s suc- been with the organization since cess, whether fostering employee 2000. “We’ve always worked hard to do morale, improving retention or attracting a more talented pool of job the right thing, and be thoughtful about where positions fall within candidates. “Our community’s business lead- salary grades,” Warzocha said. ership is having this conversation “When we bring someone in, around corporate social responsibil- they’re going to be paid consistent ity,” Napoli said. “That doesn’t mean with their peers.” Inclusive history aside, the audit just giving big money to causes, but understanding how valuable work- was an opportunity to scrutinize all force nurturing is going to be for salary levels collectively — something the nonprofit had never done their bottom-line success.” before. In 2016, the food bank did increase compensation for distriA culture of pay equity bution center workers from $12 an The Greater Cleveland Food hour to $14, raising that figure to Bank puts pay equity at the fore- $15 last year.

Napoli

Warzocha

“Each time we make a hire, we look at their incumbents in that grade to make sure we’re being consistent (with pay),” DiCapua said. “Promotions are followed likewise, so we weren’t surprised by what we found in the audit.”

‘The right thing to do’ In 2019, Ohio women in full-time wage and salary positions had median weekly earnings of $825, or 81.4% of the $1,014 men earned in similar jobs over the same time frame, per figures from the U.S. Bureau of Labor Statistics. Gina Cheverine, managing vice president of inclusion and strategic partnerships at Greater Cleveland Partnership, said women of color are doubly impacted by pay gap issues. Foundational challenges of conscious and unconscious bias within organizations put vulnerable populations in even greater straits. “If I’m a woman of color with a lower salary going in for an interview and am asked about my history, I’m already behind the eight ball,” Cheverine said. “That compounds over the course of their career.” For companies serious about changing this dynamic, Cheverine recommends a data-based equity strategy that drills down into everything from job descriptions to how talent is recruited.

DiCapua

Cheverine

“What’s the culture of your organization, and what’s been the experience of women of color?” Cheverine said. “If I’m interested in a midlevel managerial role and not comfortable to stay, will I even want to consider that role? Like you’d hold a leader to other goals, you need to hold them to equity and inclusion as well.” An organizational culture that keeps pay equity top of mind should be the target of any long-term D&I strategy, said Jan Conrad, executive director of the Women’s Network of Northeast Ohio. Salesforce, a national software company, made a commitment to equal pay in 2015 upon addressing larger gaps among gender and race. In a 2020 assessment of 50,000 employees, the company found that 7% of workers required equal pay adjustments based on differences across gender, race and ethnicity. Iterating on equity-based processes, tools and practices comes top down from leadership, said Conrad, whose organization recently merged its operations into the Greater Akron Chamber. “It’s about making sure your frontline managers are comfortable hiring someone different from the norm,” Conrad said. “Awareness of the issue is a big deal, and talking about it is huge.” There are good business reasons

for enterprises to seek pay equity within their employee ranks, Conrad added. For starters, organizations that pay employees equally based on comparable work and skill level are creating an environment that produces engagement and retention. When workers feel valued, they’re usually more committed to the organization in its day-to-day operations and beyond. “Pay equity is a job-retention issue,” Conrad said. “When people feel respected, heard and seen, who’s going to leave that? But if I’m working with a colleague and being paid 20% less, that’s demoralizing.” The food bank has an 86% employee retention rate, a figure officials attribute in part to an organization-wide D&I focus. In particular, equitable pay has boosted participation of women and people of color within the workforce, building a positive image of the nonprofit in the community. “In addition to low turnover, we have high employee engagement rates,” said president and CEO Warzocha. “When someone has a question about pay, they can go to HR and get transparent information about where their position is rated. This makes people feel supported and appreciated.” While Warzocha knows there is always more to be done from a D&I perspective, championing fair wages has built a strong foundation for future improvements. “We have a passionate council working hard to help us progress every day — no doubt their plans have paid off,” Warzocha said. “It’s exciting work and the right thing to do.” Contact Douglas J. Guth: clbfreelancer@crain.com

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12 | CRAIN’S CLEVELAND BUSINESS | MAY 24, 2021

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FOCUS | DIVERSITY & INCLUSION | ADVISER

The challenges of identifying and measuring organizational unconscious bias BY SHELDON B. WRICE

As humans, we each have our individual biases and preferences. There is nothing unnatural about it because we adopt these biases as part of our survival mechanisms. We are quite open about them and, indeed, conscious about the outcomes they can produce when we decide to activate them. However, we also have other inherent biases, those to which we are very much oblivious to their existence and outcomes. This is what is described as implicit or unconscious bias. Implicit or unconscious bias can impact organizational performance in several ways. It can derail the efforts of an organization to recruit and retain a diverse workforce. For instance, an organization may fulfill all of the appropriate legal requirements that help to prevent biases, yet only a few members of the underrepresented population are successfully recruited. It may organize diversity training to promote a more equal and friendlier workplace, yet the retention rate for the underrepresented population is not encouraging. Similarly, an organization may intend to offer equal products and services to all members of society regardless of race, gender and sexuality, but in the long run that may not be the case because of certain operational biases that the organization may not be conscious about.

process and practices that may have implicitly made it much more difficult for segments of the population to be interviewed and hired. For example, the organization can establish an effective orientation for members of its search committee or interview panel on how to avoid certain informal considerations when dealing with candidates of different backgrounds. Additionally, to suppress the impact of implicit bias in an organization with members of different backgrounds, companies can utilize

measures such as cultural competency training, counter-stereotype imaging, habit-replacement training, mindfulness training and partnership building to reduce bias.

Underlying factor To this end, it is imperative to recognize that the country continues to be plagued with racial divisions, racism, injustices, discrimination and bigotry that often affect the minority population disproportionately. Such

way, organizations are quick to point out their captivating mission statements on diversity and equality to assert their non-culpability when it comes to issues of bias. developments are also a It is about time we recogcommon occurrence in our nize that by merely refuting institutions and organizations. The underlying factor Wrice is the vice our bias tendencies and esis the deeply ingrained bias- president for in- pousing good intentions, we es that each one of us holds clusion and eq- do not adequately address yet are unconscious about uity and chief the issues of inequality, inthem and their ramifica- diversity officer equity, injustices and distions. The phrase “I am not for the Universi- criminations of all forms in our institutions and organia racist” has become a pre- ty of Akron. zations. The way forward is text or caveat for those to be relentless in our efforts whose infractions are often attributed to their racist and prejudi- to identify and address such traits for cial tendencies. In much the same the benefits of the larger society.

Finding solutions The questions then are: How do we identify and measure implicit or unconscious biases in organizations? What solutions can we proffer to mitigate such tendencies? Clearly, implicit bias is complex and thus lacks the elements that can be delineated and measured with accuracy. That notwithstanding, scholars have attempted to measure it from different perspectives. Among others, the Harvard Implicit Association Test comes across as the most sophisticated and widely utilized approach. This approach evaluates the extent to which individuals or organizational actors approve or disapprove of concepts, images, words and the like. Generally, it elicits preferences that the individual holds but might not be acknowledged explicitly. Organizations can administer this type of test among its rank and file to evaluate if the existing culture unconsciously stifles diversity, egalitarianism, equity and equal opportunity. Even if diversity is not a problem in the organization, the extent to which employees of different backgrounds participate in the major organizational decision-making can attest the existence or nonexistence of unconscious discrimination or bias. Moreover, the same process can be utilized to assess whether the organization’s products or services are available to every citizen in the same quantity and quality. The critical challenge is the means or approach by which organizations can address implicit or unconscious biases after they have been able to identify such traits. However, there are a few helpful recommendations that can at least mitigate their impact. On diverse workforce, the organization can focus on its recruitment MAY 24, 2021 | CRAIN’S CLEVELAND BUSINESS | 13

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FOCUS | DIVERSITY & INCLUSION

Where does Cleveland stand on economic inclusiveness?

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Brookings experts look at region’s performance and how businesses can advance racial equity Greater Cleveland Partnership’s Equity & Inclusion division on May 4 used its “But What Does It Mean?” webinar series to take a broader look at the region’s inclusive economic performance and the business community’s role in advancing racial equity. Presenters from the Brookings Institution — Alan Berube, senior fellow and deputy director, Metropolitan Policy Program; and Reniya Dinkins, senior research assistant, Metropolitan Policy Program — presented information from two reports: the Metro Monitor and the “From Commitments to Actions: How CEOs Can Advance Racial Equity in Their Regional Economies.” Gina Cheverine, GCP’s managing vice president for inclusion and strategic partnerships, moderated. The following are excerpts, edited for length and clarity, from the webinar. A full recording of the event can be found at tinyurl.com/ a87jzn83. GCP runs its webinar series throughout the year. Check the events tab on GCP’s website for upcoming webinars. — Sue Walton

Metro Monitor The Metro Monitor is Brookings’ annual assessment of the state of economic growth, prosperity and inclusion in the nation’s metropolitan areas. It examines each metro area’s progress on these goals and how they compare to one another. The data in the Monitor helps define economic success in a way that recognizes the importance of economic growth for expanding opportunities for workers and businesses, but it also recognizes that growth is a means rather than an end. This edition of the Metro Monitor spans a 10year period that goes from 2009 — so essentially during the depth of the Great Recession— to 2019, really the peak of the pre-pandemic economy.

Economic inclusiveness Turning to Cleveland’s story over the 2010s, it was mixed. The region remains among the slowest-growing big regions of the country, and it ranks similarly, in that respect, to regions such as Pittsburgh, Buffalo, Chicago, Milwaukee and other parts of the Midwest. But the regional economy actually increased more significantly in its average value, suggesting that, at least on net, the jobs that the Cleveland region gained in the 2010s were higher productivity and higher wage than the jobs it shed. This is also the pattern in other manufacturing regions, like Buffalo and Detroit, and in other dynamic markets around the country, like Denver and Minneapolis. The region’s performance on racial inclusion wasn’t as strong relative to its peers. So, what’s behind the lower ranking for Cleveland on racial inclusion in the 2010s? The first thing that I want to point out is that, relative to their position in 2009, workers of color in the Cleveland area, and about 70% of those workers are Black, made progress over the 2010s. So, the share of adults of color in jobs increased the employment rate, their median earnings increased, and their relative poverty rate — that’s the share

earning less than half of the typical regional wage — dropped. So they are all positive outcomes there. However, the region’s white population also made progress on each of those indicators. So, the significant disparities that separate white workers and workers of color in the Cleveland area remain large by the end of the decade. And in the case of earnings, that disparity actually widened. While median inflation adjusted earnings for workers of color increased by about $3,500 over the decade from $24,200 to $27,900, those for white workers increased by about $5,500 from $34,700 to $40,100. By 2019, the typical white worker in the Cleveland area earned $12,000 more per year than the typical worker of color. There are, of course many factors that contribute to these racial economic disparities, and each of those is rooted in long-standing, systemic and systematic patterns of racial exclusion. One particularly important factor for Cleveland, though, is what labor economists call occupational segregation. In the Cleveland region, workers are not distributed evenly by race across different types of jobs. There are disparities in educational attainment, racial discrimination in hiring, unequal geographic access to jobs and social networks, and how they operate mean that workers of color are overrepresented in some fields and are underrepresented in others. Workers of color are twice as likely to work in health care support jobs, like home health aides, as the population overall. And they’re less than half as likely to work in legal occupations as the population. Another dimension of inequality is wages. So if all occupational fields paid the same, the regional median wage would be about $21 an hour. But they don’t. The median wage in management field is $50 an hour. In preparation and serving occupations it’s less than $11 an hour.

Pattern emerges Between these two dimensions of inequality, there’s a very clear pattern here. The fields where workers of

BLOOMBERG

ALAN BERUBE

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color are overrepresented are largely the fields that pay low wages. Moreover, these are fields that employ a lot of workers of color: food service, health care support, transportation, office administration support, even production jobs, which in the Cleveland area pay median wages of only about $18 an hour. By contrast, you’ve got higher paying white-collar fields, like computer and mathematical jobs, architecture, engineering, business, financial, sciences, education, even construction. They all employ relatively lower shares of workers of color. I want to stress again that this isn’t the only factor that produces racial inequalities in the Cleveland area, but I think it’s a really important one that has implications for how local leaders create better pathways into the region’s higher-paying growth sectors to ensure a more diverse, more equitable pool of talent. ` CHEVERINE: Do you have a sense of how these data sets my change as the result of a pandemic? I think the story for the Cleveland area is that it has been affected worse than some places and not as bad as others. It’s sort of in the middle of the pack in terms of the decline in the number of jobs from its pre-pandemic baseline, its unemployment rate, what’s going on with travel into the area, activity in the commercial real estate market and the homebuyer market. I think there’s not a reason to think that you all have been more or less affected than the kind of national average as the pandemic goes. But we know from a lot of national and state-

based data sets that the most vulnerable will have been the most affected in the pandemic. The industries most affected by the pandemic have been many consumer-facing industries that pandemic-related restrictions have had very deleterious effects on — all industries that proportionally have lower-wage workers, workers of color, workers who faced more economic challenges to begin with. For our part, it’s a real reminder to think first and foremost about equity considerations as you plan for the recovery and you measure the recovery.

RENIYA DINKINS: “From

Commitments to Actions: How CEOs Can Advance Racial Equity in Their Regional Economies”

Following the tragic death of George Floyd and several transformational protests around the country, I recalled feeling extremely overwhelmed with mixed emotions as yet again we were faced with the question of how to best resolve the detrimental ways in which racism persists. And we know that the private sector can play a major role here, which is why it was good to see corporate leaders asking themselves what they can do. But several of their statements condemning racism were met with scrutiny as the public demanded more from companies

that had the power to do more. JUST Capital conducted a survey last June that found while three in four Americans wanted corporate leaders to condemn racism, nearly two-thirds found corporate commitments hollow without meaningful actions to back them up. But what is meaningful action? A McKinsey & Co. report found that while a portion of top U.S. companies made statements in support of racial justice, a smaller portion actually took action with commitments such as donations and strategic investments. An even smaller portion took action with internal commitments, such as requiring diverse candidate pools or increasing spending with Black suppliers. While external commitments can mean a lot, if companies aren’t looking at themselves, at their own business practices, at their products and services, at racial disparities in pay or leadership among their employees, even at the impact of their physical location in cities and communities — if they’re not questioning if they are failing to actively work against systemic racism as it may exist within themselves — the truth is that is complicity with the status quo. And it is clear by the numbers that the necessary internal work is not being done. That may be because for a long time addressing racism in the private sector was more of a social cause. When in fact, internal shifts in business that promote racial equity can strengthen company bottom lines. When thinking about talent attraction and retention, 67% of job seekers consider diversity important when deciding where to

14 | CRAIN’S CLEVELAND BUSINESS | MAY 24, 2021

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FOCUS | DIVERSITY & INCLUSION

work. Also, 43% of companies are more likely to experience higher profits when boards are culturally diverse. Forty percent of companies are more likely to make it safe to risk proposing novel ideas when they have diverse leadership, which makes them more likely to introduce new product innovations that appeal to wider and more diverse audiences. And 33% of companies are more likely to outperform their peers when executive teams have high cultural diversity.

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Framework for action We have three parts for action: individual corporate action, collective goals for communities of CEOs, and leadership from economic developmental organizations and CEO-driven organizations. Two out of three of these call for group action, which can be really powerful when corporate leaders are looking to make their home regions more racially equitable. For individual action, companies should undertake an internal audit of greater diversity, equity and inclusion performance to ensure any public commitments to a just economy start from within. I wanted to share one example of a small car insurance company based in Columbus that took meaningful individual action after evaluating the way they do business may be perpetuating systems of inequality. Root Insurance recognizes that relying on credit score causes certain groups of people to have to pay more for car insurance, including historically underresourced communities. As a result, Root eliminated its credit scores from its pricing model to offer better rates to drivers who have experienced financial hardships. Instead, Root is basing rates primarily on driving behavior. Next is an example of a coalition of regional CEOs working together to advance racial equity. In Birmingham, Ala., Black businesses are significantly underrepresented. While the region is 28% Black, only 3% of business owners are Black. This is the largest racial disparity in business ownership among metro areas with more than 1 million people. Birmingham’s mayor and several local CEOs recognized the importance of strengthening and expanding minority, women and other disadvantaged business enterprises in the region, so they launched an effort to increase annual corporate spending with those types of business enterprises. Starting this year, the CEOs are publishing an annual performance report on their spending with these businesses. Lastly, there are actions that corporate leaders can take from local organizations. In Indianapolis, for example, the local Chamber of Commerce is partnering with a regional corporate partnership to create a committee committed to expanding hiring, promotion and leadership opportunities for the region’s Black population and other people of color, expanding minority-owned business enterprises and procurement opportunities.

Key metrics So what should the private sector in Cleveland focus on when it comes to advancing racial equity? My advice, and something that I know that the Greater Cleveland Partnership does a great job with, is to use data

the power to strengthen them by investing in their assets. Considering that struggling neighborhoods are often disproportionately, overwhelmingly people of color, one proxy for progress is closing the income gap between the most advantaged and disadvantaged neighborhoods in a metro area through actions like private investment, product development and corporate philanthropy. In Cleveland, the median income household gap at the top and bottom neighborhood tracks has increased by 2% over the past decade, which is not great. But the private sector can help to close this gap by taking actions that invest in community wealth-building opportunities ensuring that there are more vibrant, thriving neighborhoods of color.

If the region’s employer businesses port Black-owned businesses in the and key metrics to inform priorities and set goals. When it comes to better reflected the Black population, region, we can start with metrics like strengthening the regional economy it would undoubtedly make Cleve- these in order to set goals. Lastly, we know that private sector with actions that advance racial eq- land’s economy stronger, especially if uity, our report encourages us to at they were well represented in high- actors have systematically undervalued majority Black least start with looking neighborhoods with at how the region is performing in proportional IF THE REGION’S EMPLOYER BUSINESSES BETTER clear market assets and incomes. And and racial representa- REFLECTED THE BLACK POPULATION, IT WOULD this is seen with home tion in key occupations and business evaluaand talent, in supplier UNDOUBTEDLY MAKE CLEVELAND’S ECONOMY tion in Black neighdiversity, and in neigh- STRONGER, ESPECIALLY IF THEY WERE WELL borhoods as well as borhood wealth gaps. with conventional reOne of our scholars at REPRESENTED IN HIGH-GROWTH INDUSTRIES. tail establishments Brookings did an analysis of Black-owned employer business- growth industries. And it would ex- underserving majority Black neighes in metro areas around the country, pand the wealth opportunities for borhoods, even Black neighborhoods and his data shows that while 21.6% of Black business owners and their em- with high household incomes, which hurts market attractiveness. Cleveland metro population is Black, ployees. Just as they have the power to hurt So when we’re thinking about suponly 2% of employer businesses are plier diversity and how we can sup- Black neighbhorhoods, they also have Black-owned.

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rom the very beginning, George Sample knew he wanted to attend a college where he could play football and run track. At John Carroll, he found a place where he could do both, plus obtain a great education.

“I DIDN’T HAVE A WHOLE LOT OF SUPPORT COMING OUT OF HIGH SCHOOL ON HOW TO THINK ABOUT CHOOSING COLLEGES. THE ABILITY TO PLAY BOTH SPORTS WAS REALLY A CLINCHING FACTOR FOR ME.” At JCU, Sample dove into new experiences all over campus. He studied computer science, joined the Black Student Union, played in the Jazz Band and deejayed on JCU radio—all while competing as a two-sport athlete.

“I WAS DOING A LOT OF NETWORKING BEFORE I KNEW WHAT BUILDING A NETWORK WAS.” After graduating from JCU, Sample continued to seek out new opportunities and experiences, creating a resume for himself that couldn’t be conformed to a single page. Throughout his career Sample heard professional development discussions, learning firsthand how candidates were considered

for high-level roles. In 2010, he decided to return to JCU for his master’s.

“I SAID LET ME MAKE SURE THAT I GET THE CREDENTIALS, LET ME MAKE SURE THAT I HAVE THE RIGHT EXPERIENCES — SO THAT WHEN THIS CONVERSATION IS BEING HAD ABOUT ME IN A ROOM THAT I’M NOT IN, MY CREDENTIALS CAN SPEAK FOR THEMSELVES.” Now, Sample serves as the Assistant Vice President at Federal Reserve Bank of Cleveland, leading the internal Diversity, Equity, Inclusion and Opportunity team. He served as the president of the board of directors for the United Black Fund of Greater Cleveland, sits on the board of directors for the United Way of Greater Cleveland, and is president-elect of the Cleveland Society of Human Resource Management. Sample also serves on John Carroll’s board of directors, is one of the founding members of the Diverse Alumni Network, and is an executive committee member for the Blue Gold Athletic Booster Club.

“A KEY LEARNING FOR ME THAT I’VE BEEN ABLE TO CARRY FORWARD IS HOW IMPORTANT IT IS TO BUILD STRONG, MEANINGFUL RELATIONSHIPS WITH PEOPLE. CARING FOR THEIR CAREER, CARING FOR THEM IN A PROJECT, OR COACHING THEM ALONG WHEN THEY’RE STRUGGLING. THAT SENSE OF CARING WAS A KEY POINT AT JOHN CARROLL, AND SOMETHING I CARRY WITH ME TO THIS DAY.” To find George Sample’s story and others, visit

jcu.edu/humanimpact

BRAVE YOUR QUEST

MAY 24, 2021 | CRAIN’S CLEVELAND BUSINESS | 15

HEALTH CARE

Long-haul COVID symptoms afflicting more children UH Rainbow Babies & Children’s Hospital launches clinic for young people struggling with virus’ effects BLOOMBERG

Even as U.S. cases decline overall, researchers are investigating whether COVID-19 is becoming more severe for children now that variants are causing localized flare-ups. In early April, the case rate in young children and early teens began surpassing that of those 65 and older, according to the Centers for Disease Control and Prevention. And hospitalizations for children with COVID aren’t falling as much as for those 18 and older. “The pediatric piece of this is pretty neglected,” said Dr. Amy Edwards, associate medical director of pediatric infection control at University Hospitals. “Kids with long haul have brain fog, chronic fatigue, fevers on and off, weird rashes. Long-haulers don’t go to the hospital. They suffer at home.”

typical COVID symptoms like fever, cough or shortOne of the few statistical comforts ness of breath. Almost 19% of the otherwise nightmarish reported fever, malaise, COVID-19 pandemic — that it largely muscle or joint pain, and spares young people — is fading: The disturbances of smell or long-haul symptoms that have stricktaste. More than 16% had en many U.S. adults are now hitting respiratory symptoms, 14% those under 20. had gastrointestinal probA relatively small but increasing lems, and a few required percentage of children are struggling critical care. for months with extreme fatigue, rapMichigan’s chief mediid heart rate, memory loss, deprescal official, Joneigh Khalsion and other symptoms. In one sign dun, has said parents of their growing numbers, UH Rainshould remain vigilant bow Babies & Children’s Hospital is about protecting children opening a Long Haul Clinic just for from the virus — and seek young people, the first of its kind in medical treatment if they the country. experience symptoms — Families whose children are afflicteven though overall infeced are plunged into a terrifying maze tions and deaths are edgof symptoms that come and go, and ing downward in the state. have no knowable end point. Katie The need for vigilance Some children “have Dr. Amy Edwards, associate medical director of pediatric infection control at University Hospitals, runs Krol, 42, got the virus from a co-workwound up in the intensive UH Rainbow Babies & Children’s Hospital’s Long Haul Clinic for young people who are recovering from er at a Michigan engine plant in The decision by federal authorities care unit, and some have COVID-19. | DANIEL LOZADA/BLOOMBERG March 2020 and brought it home to last week to let 12- to 15-year-olds get lost their lives,” Khalduan her two youngest children. All three the COVID inoculation heartens phy- said at a news conference with Michioverburdened hospitals and state Rochelle Rankin. continue to suffer. By day 14, the headaches were sicians who have seen vaccinations gan Gov. Gretchen Whitmer. “I’m health departments — unnerving “This has turned their lives inside allow some patients to overcome asking every primary-care provider to news for parents of unvaccinated gone but Kathryn was too fatigued to out,” Krol said. “Doctors are saying in long-haul symptoms. But it doesn’t enroll as a vaccine provider. The most children under 12. Most MIS-C cases get out of bed. Repeated trips to the six months or in 12 months they will help everyone, and many others still important thing we can do is to make have occurred in children ages 5 to emergency room and doctors have be better. The fallacy that kids don’t see no reason to get the jab. yielded few answers. Kathryn is slowvaccines available.” 14, according to the CDC. get this is so frustrating.” Since new variants of the virus “I get a lot of, ‘Well, I’m young and For young long-haulers, the lack of ly improving, but her grades have Even the family of one of the Biden healthy, so I don’t need to get vacci- have raced through younger populainitial symptoms can give a false suffered and she gave up on swimadministration’s top COVID advisers, nated,” said Dr. Rena Daiza, a family tions, cases of long-haul COVID sense of security. After Krol brought ming for the year because of fatigue. Andrew Slavitt, is dealing with the medicine specialist at Henry Ford among them have jumped, along COVID home, her 10-year-old daugh- More than 80 days after testing posisame issue. At a White House brief- Health Systems in Michigan. “But with multisystem inflammatory synter, Emma, seemed to shrug off the tive, she has to wear compression ing Tuesday, he revealed that one of people don’t realize that these drome, or MIS-C, a condition that can virus and had almost no symptoms. socks at all times to avoid leg pain. his “young and fit” sons was infected symptoms that persist are very de- inflame the heart, lungs, brain and “I'm seeing improvement in her Her son, Rhys, 14, slowly developed by the virus six months ago but still bilitating.” slowly,” Rochelle Rankin said. “But as other organs. The CDC says 3,742 them. experiences shortness of breath and A study published recently by Sci- children in the U.S. have been diagEight weeks later, the real night- a teenager, three to six months is a lot frequent flu-like symptoms. Slavitt entific Reports that looked at data nosed with the syndrome, but that mare began. Rhys and Emma com- of time.” said the family has no idea how long from more than 12,000 child patients number is likely low because the data plained of fatigue, headaches and an it will last. found that the majority don’t show relies on voluntary reporting from occasional racing heart rate that New clinic could exceed 100 beats a minute and surge over 160, Krol said. Her daughEdwards, who is running the new ter was losing her sense of taste and University Hospitals clinic, estimates complained that meat tasted metal- about 1% of children who have lic. She still hasn’t fully regained her COVID come down with long-term ability to taste and doesn’t feel like illness, though good data are scarce. eating, Krol said. She estimates there are more than Both children struggle with memo- 100 in Ohio. ry issues — “brain fog,” doctors call it Given the many unanswered ques— that make school difficult. They tions, Edwards created the clinic with have trouble focusing in virtual, on- a multidisciplinary team of experts line classes. Emma, once an A stu- within the University Hospitals sysdent, is now getting Cs. tem. The clinic will include about a I’m really tired all the time, and I’m dozen specialists to cover the wide forgetting things,” Emma said. range of MIS-C and long-haul probRhys has had it worse with fatigue. lems. Patients can go to any location Krol once found him asleep on the and have their case reviewed by pulkitchen floor. He couldn’t recall how monologists, cardiologists, dieticians he got there. If he’s standing for more or whomever else is needed. than an hour, his feet swell and turn “I’m hoping that by establishing a red. Struggling to stay awake during more systematic approach, we can virtual school sessions, he’d forget to provide more support and get them turn in assignments after he complet- better,” Edwards said. ed them. High-dose steroids have helped The boy had to transfer from Hen- some patients, she said, and doctors We are seeking General Counsels who ry Ford High School in the Detroit have discovered that vaccinations demonstrate the versatility needed to be suburb of Sterling Heights to the dis- have helped others shake off longa jack of all legal trades, from handling litigation trict’s Alternative Learning Center to haul symptoms faster. But “it doesn’t to contracts and employee compensation. get caught up. Even so, Rhys, who lost appear to work for everybody.” his train of thought at times during Anxiety and depression often an interview, said he may be unable haunt long-haulers, said Daiza, the Winning candidates will be featured in the Aug. 16 to finish all of the requirements and family medicine specialist at Henry print and online issue of Crain’s Cleveland Business. will do virtual summer classes. “Be- Ford Health Systems. She said she cause of the amount of credits I need, has prescribed more medication for I might have to do ninth grade again,” both conditions while treating he said. COVID patients than she has in her Even for children who don’t strug- entire career. NOMINATION gle as long as the Krols, COVID can Emma Krol has developed severe CrainsCleveland.com/Nominate DEADLINE: still be a travail. Kathryn Rankin, a anxiety, with nightmares and panic 15-year-old high school sophomore attacks. She’s terrified of getting the in Las Vegas, tested positive Feb. 23. virus again. The entire family is in Two days later, she had migraines lockdown until they’re all vaccinated. and light sensitivity so severe she “Given what it did to us,” her mothcouldn't look at her computer screen er said, “I don’t know what would for remote learning, said her mother, happen if we caught it a second time.”

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EATON/ETN 1000 Eaton Blvd., Beachwood 44122 440-523-5000/eaton.com

$56,938.1 73.4%

$1,410.0 -36.2%

$17,858.0 -16.5%

Manufacturer of electrical, aerospace, hydraulic and vehicle products

Craig Arnold, chairman, CEO

PARKER HANNIFIN CORP./PH 6035 Parkland Blvd., Mayfield Heights 44124 216-896-3000/parker.com

$40,507.0 106.1%

$1,206.3 -20.2%

$13,695.5 -4.4%

Provider of fluid power systems and electromechanical controls

Thomas L. Williams, chairman, CEO

TRANSDIGM GROUP INC./TDG 1301 E. 9th St., Suite 3000, Cleveland 44114 216-706-2960/transdigm.com

$33,564.8 78.9%

$699.0 -21.5%

$5,103.0 -2.3%

Designer and producer of highly engineered aircraft components

Kevin M. Stein, president, CEO

KEYCORP/KEY 127 Public Square, Cleveland 44114 216-689-6300/key.com

$21,118.5 2 85.8%

$1,343.0 -21.8%

$5,665.0 -6.5%

Banking and financial services company

Christopher M. Gorman, chairman, president, CEO

FIRSTENERGY CORP./FE 76 S. Main St., Akron 44308 800-736-3402/firstenergycorp.com

$20,624.7 -6.8%

$1,079.0 18.3%

$10,607.0 -2.2%

Electric utility holding company

Steven E. Strah, president, CEO

STERIS/STE 5960 Heisley Road, Mentor 44060 440-354-2600/steris.com

$18,011.1 50.2%

$407.6 34.1%

$3,030.9 8.9%

Provider of sterilization and procedural products/services to the health care industry

Walter M. Rosebrough Jr., president, CEO

THE J.M. SMUCKER CO./SJM One Strawberry Lane, Orrville 44667 330-682-3000/jmsmucker.com

$14,187.6 7.7%

$779.5 51.5%

$7,801.0 -0.5%

Packaged food, coffee and pet food manufacturer

Mark T. Smucker, president, CEO

10 10

NORDSON CORP./NDSN 28601 Clemens Road, Westlake 44145 440-892-1580/nordson.com

$12,284.9 34.5%

$249.5 -26%

$2,121.1 -3.3%

Industrial precision technology manufacturer

Sundaram Nagarajan, president, CEO

11 11

RPM INTERNATIONAL INC./RPM 2628 Pearl Road, Medina 44258 330-273-5090/rpminc.com

$12,282.9 48%

$304.4 14.2%

$5,507.0 -1%

Provider of specialty coatings, sealants and building materials

Frank C. Sullivan, chairman, president, CEO

12 18

CLEVELAND-CLIFFS INC./CLF 200 Public Square, Suite 3300, Cleveland 44114 216-694-5700/clevelandcliffs.com

$8,919.3 435.3%

($122.0) —

$5,354.0 169%

Iron ore mining company

C. Lourenco Goncalves, chairman, president, CEO

13 12

LINCOLN ELECTRIC HOLDINGS/LECO 22801 St. Clair Ave., Euclid 44117 216-481-8100/lincolnelectric.com

$7,623.8 67%

$206.1 -29.7%

$2,655.4 -11.6%

Manufacturer of arc welding, cutting and robotic products

Christopher L. Mapes, chairman, president, CEO

14 NA

SOTERA HEALTH CO./SHC 9100 South Hills Blvd., Suite 300, Broadview Heights 44147 440-262-1410/soterahealth.com

$7,286.9 —

($38.6) —

$818.2 5.1%

Health care sterilization services and lab testing provider

Michael B. Petras Jr., chairman, CEO

15 14

THE TIMKEN CO./TKR 4500 Mount Pleasant St. N.W., North Canton 44720 234-262-3000/timken.com

$6,372.7 136.3%

$284.5 -21.4%

$3,513.2 -7.3%

Manufacturer of engineered bearings and power transmission products

Richard G. Kyle, president, CEO

16 13

TFS FINANCIAL CORP./TFSL 7007 Broadway Ave., Cleveland 44105 800-844-7333/thirdfederal.com

$5,411.6 37.6%

$83.3 3.8%

$292.5 -1.1%

Banking and financial services company

Marc A. Stefanski, chairman, president, CEO

17 16

AVIENT CORP./AVNT 33587 Walker Road, Avon Lake 44012 440-930-1000/avient.com

$4,635.2 127.8%

$131.6 -77.6%

$3,242.1 13.3%

Provider of specialized and sustainable material solutions

Robert M. Patterson, chairman, president, CEO

18 20

GOODYEAR TIRE & RUBBER CO./GT 200 Innovation Way, Akron 44316 330-796-2121/goodyear.com

$4,044.0 162.1%

($1,254.0) —

$12,321.0 -16.4%

Tire manufacturer

Richard J. Kramer, chairman, president, CEO

19 17

APPLIED INDUSTRIAL TECHNOLOGIES INC./AIT 1 Applied Plaza, Cleveland 44115 216-426-4000/applied.com

$3,707.8 86.2%

$24.0 -83.3%

$3,245.7 -6.5%

Industrial distributor and technical solutions provider

Neil A. Schrimsher, president, CEO

20 15

GRAFTECH INTERNATIONAL LTD./EAF 982 Keynote Circle, Brooklyn Heights 44131 216-676-2000/graftech.com

$3,399.2 59.6%

$434.4 -41.7%

$1,224.4 -31.6%

Manufacturer of graphite electrodes and cathodes

David J. Rintoul, president, CEO

21 22

SITE CENTERS CORP./SITC 3300 Enterprise Parkway, Beachwood 44122 216-755-5500/sitecenters.com

$3,112.7 183%

$35.7 -64.5%

$461.4 -10.9%

Real estate investment trust

David R. Lukes, president, CEO

22 19

CEDAR FAIR LP/FUN One Cedar Point Drive, Sandusky 44870 419-626-0830/cedarfair.com

$2,804.5 78.7%

($590.2) —

$181.6 -87.7%

Operator of amusement and water parks

Richard A. Zimmerman, president, CEO

23 21

CBIZ INC./CBZ 6050 Oak Tree Blvd., Suite 500, Independence 44131 216-447-9000/cbiz.com

$1,769.3 44.1%

$78.3 10.7%

$963.9 1.6%

Financial, benefits and insurance services provider

Jerome P. Grisko Jr., president, CEO

24 NA

LORDSTOWN MOTORS CORP./RIDE 2300 Hallock Young Road, Lordstown 44481 248-522-9100/lordstownmotors.com

$1,749.9 —

($100.6) —

$0.0 0%

Electric vehicle manufacturer

Stephen S. Burns, chairman, CEO

25 26

RANPAK HOLDINGS CORP./PACK 7990 Auburn Road, Concord Township 44077 440-354-4445/ranpak.com

$1,458.7 168.4%

($23.4) —

$298.2 10.6%

Manufacturer of in-the-box paper protective packaging systems and products

Omar M. Asali, chairman, CEO

Source: S&P Global Market Intelligence (spglobal.com/marketintelligence); additional research by Crain's (researcher@crainscleveland.com) | Net income is income attributable to ordinary shareholders. Bank revenue

= Net Interest Income – Provision for Credit Losses + Non-Interest Income. NOTES: 1. Market capitalization date is approximate in some cases. 2. From the company.

Get all 64 companies and historical data in Excel format. Become a Data Member: CrainsCleveland.com/data 18 | CRAIN’S CLEVELAND BUSINESS | MAY 24, 2021

P018_CL_20210524.indd 18

5/21/2021 9:15:25 AM

DATA SCOOP

Local stocks soared over the past year BY CHUCK SODER

Yes, it’s a little unfair to use May 1, 2020, as the starting point, given that Stock prices went way, way up for the stock market was still recovering local public companies over the past from a short, but deep, drop in prices 12 months, despite the havoc that that started in February of that year. COVID-19 wreaked on them during For instance, the 54 local companies for which we have three years of conthat time. Local public companies saw their sistent data saw prices drop 9.3% combined market value climb 57.4% during the 12-month period ending during the 12 months ending April May 1, 2020. 30, according to data from the full ExBut they sure did climb out of that cel version of our Northeast Ohio hole. This year’s 57.4% increase even Public Companies list, which in- beats the 48.6% growth figure posted cludes 64 companies and is built by companies on the broader Russell 3000 Index, which includes the 3,000 largest U.S.-tradTHIS YEAR’S 57.4% INCREASE EVEN ed stocks. Granted, net income for BEATS THE 48.6% GROWTH FIGURE those same companies fell 13.2% in 2020, and revenue POSTED BY COMPANIES ON THE was down 3.1%, but invesBROADER RUSSELL 3000 INDEX. tors clearly aren’t too worried about their future. from data compiled by S&P Global And the present looks good as well. A Market Intelligence. That percentage record 87% of companies on the S&P excludes eight companies for which 500 beat first-quarter earnings exwe don’t have consistent year-over- pectations as of late March, according to media reports citing data from year data.

THE WEEK FLIGHT PLAN: The proposed $2 billion master plan to overhaul Cleveland International Hopkins Airport would create a larger terminal, four new concourses, more public parking and a direct connection from Interstate 71 into the facility. The new plan takes into account the major changes in air travel over the past few decades, according to Robert Kennedy, director of port control at the Cleveland Airport System. “The core part of our facilities were designed and built when propeller aircraft was the dominant aircraft in the air, and things have changed significantly since,” he said. “The dominant aircraft size at this airport was a 76-seater. Our average size today is 112 seats, with some carriers running exclusively 220-passenger aircraft.” Kennedy unveiled the Cleveland Airport Master Plan update to members of Cleveland City Council’s Transportation Committee on Wednesday, May 19. The airport master plan next requires approval from the Federal Aviation Administration. It’s a process that can take up to six months, Kennedy said. The city then would have to figure out a strategy to finance the improvements.

SMART MOVE: The Cleveland Scholar House, the first development of its kind in Northeast Ohio, gained traction thanks to a critical tax credit award. The 40-unit apartment complex, which will provide low-cost housing, free child care and wraparound services to college students with young children, was one of nine local projects to secure low-income housing tax credits on Wednesday, May 19. The Ohio Housing Finance Agency allocated the federal credits, which pay out over a decade, to 36 properties across the state. The competitive credits are the primary way that developers fund construction, purchases and renovations of affordable housing. Construction on the Scholar House, which will rise on vacant land just north of Cuyahoga Community College’s Metropolitan Campus, will start in spring or summer of 2022 and wrap up in mid2023. BETTER TIMES AHEAD: After referring to the pandemic era as an “indescribably awful year for so many,” Cuyahoga County Executive Armond Budish during his State of the County speech announced the launch of Neighborhood Surge, an economic development program aimed at helping the neediest indi-

Cuyahoga County Executive Armond Budish | CONTRIBUTED PHOTO

Refinitiv. The companies near the top of the list did their part to drive that increase in market value, also known as market capitalization. For instance, The Sherwin-Williams Co. saw its market cap grow 51.8% over the 12 months ending April 30, good enough to get it back into the top spot on the list. Progressive Corp. is back to No. 2 after three years at the top of the list, despite the fact that its market cap is up 31.7% year-over-year. Companies large and small saw big gains. The biggest increase belongs to the company in the No. 32 spot, Babcock & Wilcox Enterprises, which posted a 1,690.5% market cap gain. Although the Akron company lost more than $10 million in 2020, it had lost nearly $122 million in 2019 and nearly filed for bankruptcy that year. Losses in prior years were even worse for the company, which provides engineering, manufacturing and construction services for the energy industry. The list also includes a few new en-

ISTOCK

Combined market value of public companies in Northeast Ohio jumped 57.4% in period ending April 30

trants, including two in the top 25. At No. 14 is Broadview Heights-based Sotera Health, a health care sterilization services and lab testing company, and at No. 24 is Lordstown Motors Corp., which in March unveiled the

first two electric pickup trucks slated to be manufactured at the old General Motors factory in Lordstown. Chuck Soder: csoder@crain.com, (216) 771-5374, @ChuckSoder

viduals. The pilot program, slated to run for one year, will concentrate resources in one neighborhood: the Central neighborhood of Cleveland. If the pilot goes well, the program will expand to other communities. “It’s designed to truly transform some of our poorest, most in-need communities,” Budish said during a speech hosted virtually by the City Club of Cleveland on Thursday, May 20. In the Central neighborhood, Cuyahoga County employees will work with other partners focusing on job creation and training; support for small businesses; enhanced community A rendering of the planned “pump track” at the Ohio & Erie Canal Reservation. | CLEVELAND METROPARKS programs; and help in bridging the digital divide. Budish looped track designed for BMX and to administrative structures. The said the county is partnering with mountain bike riders that features donation is the largest single gift OhioMeansJobs; Burten, Bell, Carr small hills and banked turns, allow- ever secured by the Cleveland ZooDevelopment Inc.; and the Cleve- ing riders to maximize their mo- logical Society. land Metropolitan Housing Author- mentum along the track with miniity to train Central residents for mal pedaling — at Ohio & Erie FULL HOUSE: The Cleveland Indians in-demand jobs. The county also Canal Reservation. Additionally, and Akron RubberDucks soon will will dedicate a portion of its sum- Metroparks said, it is partnering be operating at full capacity. The mer job positions for youth in Cen- with the Student Conservation As- RubberDucks, a Class AA affiliate of sociation to work on an expansion the Tribe, announced on Tuesday, tral, he said. of the existing mountain bike trail May 18, that games at Canal Park RETIREMENT IN SIGHT: The Federal at Ohio & Erie Canal Reservation will be played with no attendance Reserve Bank of Cleveland is in the through “hands-on conservation restrictions in place, starting on market for a new chief operating of- and natural resource management June 2. The timeline coincides with ficer. The Cleveland Fed on Thurs- training for urban youth.” The Met- the date on which Ohio Gov. Mike day, May 20, announced that Greg- roparks said the pump track and DeWine has said the state will lift its ory L. Stefani, its first vice president the enhanced mountain bike trail health orders. Minutes after the and COO, will retire from the bank network at Ohio & Erie Canal Res- RubberDucks’ announcement, the on Jan. 31, 2022. Dwight Smith, ervation will be just north of Indians followed suit and said chair of the Cleveland Fed’s board Canalway Center, connecting to the games at Progressive Field would of directors, will lead a committee nearby Towpath Trail that runs return to full capacity on June 2, of eligible directors to search for through the reservation and pro- when the club concludes a fourStefani’s successor, the bank said. vides trail access directly to and game series against the Chicago Stefani, 60, who was appointed to from downtown Cleveland. It was White Sox with a 1:10 p.m. contest. his current position in 2011, is the busy week for Metroparks, which Tickets for all remaining home second-ranking official of the on Tuesday, May 18, announced games at Progressive Field will go Cleveland Fed. that the Cleveland Metroparks Zoo on sale to the general public at 10 had received a $3 million donation a.m. on Wednesday, May 26. The GET PUMPED: Cleveland Metroparks from the Mandel Foundation that Indians have been hosting games on Wednesday, May 19, announced will be used to construct a new au- with a maximum attendance of that it will add a “pump track” — a ditorium and to make renovations about 10,500. MAY 24, 2021 | CRAIN’S CLEVELAND BUSINESS | 19

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AKRON

Akron’s housing market is hotter than most The city ranks high on national sales lists as a mix of investors and out-of-area buyers compete for a limited inventory BY DAN SHINGLER

Akron is having a moment. In fact, some are already describing it as a once-in-a-lifetime event. And it isn’t showing signs of slowing down, let alone going away. The city’s housing market is on fire. And before you say, “Well, so is everyone else’s” — which is true — consider that even against that bright backdrop, Akron’s market is shining through. The city was ranked 20th in the nation on Realtor.com’s March list of the hottest housing markets. While it fell out of the top 20 in April, the market is still hot. At the end of last month, when the Wall Street Journal and Realtor.com put out their Emerging Housing Markets Index for April, Akron finished 12th in the nation. The only other Ohio city to make both lists was Springfield, a small 60,000-person (at last count) city between Columbus and Dayton that finished third on both of those recent rankings. Realtor.com’s hottest markets list looked at two factors using data from its own website: market demand, as measured by unique viewers per property; and the pace of the market as measured by the number of days a listing remains active. But the emerging markets list looked at more factors, examining the nation’s 300 largest metros for eight indicators in two categories: their real estate markets, and their economic health and quality of life. Akron ranked even higher on the second list when more factors were considered. This isn’t supposed to happen in old, legacy industrial cities that spent the past several decades as disposed emblems of the Rust Belt, and certainly not in Akron, which had been losing population since the 1960s. Or, at least, it never happened before. What gives? Several factors are at play, said Realtor.com chief economist Danielle Hale. The pandemic has made workfrom-home policies not just a temporary reality, but something people want long term that at least some employers are willing to offer. That means more people can now live outside of larger cities and have more flexibility about where they go, she said. “It’s certainly not the only driver. Even before the pandemic people were looking for affordability, especially millennials,” who put off home-buying because of the last recession, Hale said. She added that cities in the Midwest, like Akron, are known for the value they provide when it comes to housing. “Then, on top of that pre-existing trend, the pandemic gave people more flexibility” by allowing them to work from home, wherever home might be, she added. Akron checks a lot of boxes. Its housing is inexpensive, for one. According to the most recent data from the city, the median price of a home in Akron in 2020 was $101,000. That compares with a median price of more than $320,000 for the nation as a whole last year, according to data from the Federal Reserve Bank of St. Louis. Plus, the city is currently offering a 15-year, 100% tax abatement on the value of both new houses and home

James Hardy, Akron’s deputy mayor for integrated development, says the city is working to bolster its “middle neighborhoods,” where some homes still face challenges. | PHOTOS BY DAN SHINGLER

Many homes in Akron, such as this one in Ellet, have been well kept over the years and are now in demand.

Homes that have been maintained in Akron’s “middle neighborhoods,” like this one in the Middlebury neighborhood, are about to see their neighborhoods get a boost from the city under a new initiative.

improvements. It’s also a place a lot of people know or are even from, thanks to its decades of population loss. As result, it’s getting attention from outside buyers as well as local shoppers, Hale said her data shows. “If we look at where people who are shopping in Akron are coming from, just under half, about 47%, are coming from within Akron itself,” Hale said. “Roughly a third are coming from elsewhere in Ohio, and about one in five are coming from outside of Ohio.” Most of Akron’s out-of-town homebuyers are from Northeast Ohio. In terms of out-of-state purchasers, most are coming from Detroit, followed by Chicago, Hale said. Some are moving here and some are buying property as an investment. Ryan Young knows that investment category well. Young is co-founder and chief strategy officer for Cleveland-based FlashHouse, which will make a cash offer on a seller’s home in 24 hours online. He’s also CEO of The Young Team, a Keller Williams Realty office in Pepper Pike. Young said he’s seeing an increasing number of investors among his clients and estimates they now account for about 20% of the purchases in and around Akron. “They feel very, very confident in the

stability of Midwestern markets,” Young said. “The Midwest is a great place for them to park their money at very low interest rates. I think, with the lowpriced stuff, you’re seeing a ton of institutional buyers come in. They’re buying it and fixing it up. You’re seeing a lot of that in the sub-$100,000 market.” That could be a boon for Akron, which has a lot of older homes that need renovation. But Young noted that the outside interest comes at a cost to local buyers. He and other real estate agents said that when buyers come in from more expensive markets, especially on the coasts, they come with more money than most local clients can borrow and spend. “The challenge is (that) it’s also creating a struggle in terms of entry points for some buyers. It might be pricing out some buyers out who might otherwise find affordable housing in the Akron market,” Young said. Catherine Haller, CEO of the Catherine Haller Team in Cuyahoga Falls, a Berkshire Hathaway HomeServices office, said she’s seeing an increasing number of potential buyers from other places in Akron, too. “There are a lot of outside buyers. I’d say a third of the bidders on this last property I sold were from out of the area or even out of state,” Haller said. But while outside buyers are part

of the picture, the real story is that the entire market has just gone nuts, said Haller, Young and others. The last sale Haller referred to was for a home in Fairlawn. Like nearly every house coming on the market now, it sold in its first weekend, she said, and with a huge amount of interest. There were 84 showings in that single weekend, Haller said. “We ended up with more than 20 offers,” she said. “And every offer was different. There were no two offers alike.” Haller and Young both said the market in Akron is now so tight in terms of inventory and so flush with would-be buyers that shoppers have to look every morning for new listings and be ready to see them at a moment’s notice before bidding quickly and aggressively. “If there’s new inventory on the market, we have to go see it immediately. Otherwise, it’s gone,” Young said.

Challenges remain Not that it’s all good news and fast sales. Parts of Akron also are among the worst-performing in terms of underwater mortgages. ATTOM Data Solutions, a real estate data firm in Irvine, Calif., recently found that the 44314 and 44306 ZIP codes in the city — which correspond with the Ken-

more and East Akron neighborhoods, respectively — each had about 30% of their mortgages seriously underwater with loans totaling at least 25% more than the home backing them was likely worth. Those neighborhoods ranked 24th and 25th for having the highest percentage of underwater mortgages in the country. But even there Akron did better than Cleveland — which had three of the worst five ZIP codes for underwater mortgages. Akron, though, says it’s got a plan and is working to improve its struggling neighborhoods. On May 12, the city launched its Planning to Grow Akron 2.0 plan, a follow-up to an earlier effort that included the current residential rebate program. It’s aimed at improving the city’s “middle neighborhoods” and specifically targets Kenmore and parts of East Akron, said James Hardy, Akron deputy mayor for integrated development. “Those are areas of focus for us,” he said. “East Akron doesn’t have a middle neighborhood designation specifically, but there are portions of East Akron we’ll focus on intensively with that strategy.” While all of Kenmore is slated to get some assistance from the city in terms of improving its housing stock and quality of life, East Akron is less homogenous and includes both challenged areas and the city’s wellheeled East End neighborhood, a redevelopment of Goodyear’s former headquarters. For those areas of the city that need help, Hardy said, Akron is working to provide grants to help people renovate and improve their homes, using money the federal government is sending to cities to help them recover from the pandemic and invest in their people and infrastructure. “We’re looking to help bridge that underwater situation in order to help homeowners reinvest in their house,” Hardy said. “The goal right now would be a $30,000 grant to the homeowner to upgrade the house.” The city wants to stabilize neighborhoods that are challenged before it’s too late, Hardy said. “That’s what we really want to do is keep these neighborhoods from declining and get them back into the position where first-time homebuyers will really want them. … We want to help take fixer-uppers and make them move-in ready,” Hardy said. “And there are also a lot of Akronites who want to stay in place.” If the city is successful, more Akron neighborhoods will see not only their home values increase, but also see more vibrant communities. The current housing boom is already making that happen, as buyers invest in their new homes, Haller said. She’s already seen some supposed underwater homes sell for more than their mortgages in the current frenzy, she said. “Buyers are willing to invest that elbow grease and put that money into it,” she said. “All of a sudden, the street is looking pretty good. … You can actually see it happen. A house that was nondescript now has flowers and a fresh coat of paint. It’s pretty cool.” Dan Shingler: dshingler@crain.com, (216) 771-5290, @DanShingler

20 | CRAIN’S CLEVELAND BUSINESS | MAY 24, 2021

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5/21/2021 1:57:27 PM

CINEMA

From Page 1

Through sale and long-term lease negotiations, he quietly has gained control of 25 acres for the project, which he’s calling Cinema City. Working with a team of advisers, he has secured preliminary funding commitments for the bulk of the $45 million sound stage development, though he still needs an investor-partner with a strong balance sheet to back the deal. The Cinema City concept is twotiered, blending a for-profit business with a social mission. The 150,000-square-foot studio, with four sound stages, would cater to voracious demand for all sorts of video production, enabling Cleveland to better compete against cities including Pittsburgh and Atlanta. A related workforce development program would train people for jobs in the industry, offering a pathway to high-paying careers in lighting, sound, makeup and building and breaking down sets. “Our studio is a conduit for the bigger things that will come eventually,” said Williams, alluding to the growth potential of the film industry in the region. “But someone’s got to build the labor force for people who can’t afford to go to college, don’t have time to go to college.” Williams, born in the Detroit area, moved to Cleveland at age 3 and grew up in the Mount Pleasant neighborhood. His mother, a teacher, stressed the value of education. His stepfather, a journalist, showed him that words can be a powerful tool. After attending high school in Twinsburg and earning a football scholarship, Williams dropped out of college to pursue an NFL career. An injury prompted him to follow his passion for filmmaking to the West Coast. Williams spent more than two decades in California as a writer, director and producer, but he came back to Cleveland periodically to make films, including an examination of fatherhood and a documentary about racial integration in Shaker Heights. In early 2019, driven by Ohio’s motion picture tax credit and the designation of large stretches of the city as tax-favored Opportunity Zones, Williams and business partner Joseph McKelheer began scouting the East Side for sound-stage sites. “People are consuming, globally, content at a rate we’ve never seen,” said McKelheer, a Los Angeles-based film producer. “But there’s not the labor and the facilities and the equipment to serve the growth.” As the pair’s plans for Cinema City gained focus, Williams came home. A year ago, he and his wife and their

SAY YES

From Page 4

where she’s been critical for us in getting kids connected to those opportunities,” Humphrey said. There were challenges and opportunities on the post-high school readiness side, too. There are about 1,130 students enrolled in a post-secondary program from the classes of 2019 and 2020, Downing said, and Say Yes Cleveland has paid out more than $3 million in scholarships. The scholarship program is growing, but the pandemic may have slowed progress. For example, there were 187 students who told Say Yes Cleveland that they planned to enroll in college in the fall of 2020 who ultimately did not, Downing said.

From left to right, financial consultant Radhika Reddy, director Marquette Williams and Lloyd Hemphill, Cinema City’s interim president, gather on a former industrial site on Cleveland’s East Side where they’re planning a film and television studio. | TIM HARRISON

four children made the cross-country move to Shaker Heights. He’s already begun training workers on small projects, including promotional videos for a workout clothing brand, a horror film called “Wormwood Falling” and a tribute video that was part of Cleveland Mayor Frank Jackson’s recent announcement that he won’t seek a fifth term. “I see the opportunity for infrastructure, which means market share,” said Williams of building up — and broadening — the industry in Cleveland. “If you’re a person of color, a woman, you’re in a great position here to have market share. Because it’s still fledgling. It’s not formed.” After pursuing sites in Slavic Village and Kinsman, Williams and McKelheer landed in Glenville. Last year, they entered an agreement to buy 12.5 acres at Shoreway Commerce Park, the redeveloped White Motor Corp. manufacturing property just west of the Cleveland Cultural Gardens. Early this year, they laid the groundwork for a long-term lease on neighboring land.

Filling a need Hollywood movies and production companies including Netflix already rent short-term warehouse space at Shoreway Commerce Park, said Eliot Kijewski, a senior vice president with Cushman & Wakefield-Cresco Real Estate. Kijewski handles leasing at the property and also is responsible for land assembly for Cinema City. Just off the freeway, the site is a 20-minute drive from Cleveland Hopkins International Airport and a The district has had to find ways to adapt its support programs for students preparing to graduate, such as working with Say Yes Cleveland and College Now to take its college fair virtual, said Anthony Battaglia, director of career and college readiness at the CMSD. While the virtual college fair got mixed reviews from students, there have been some benefits to a remote environment, Battaglia said. For example, it’s been easier to cross-promote FAFSA nights across schools, letting students attend an event at a different high school if it worked better for their schedules. And offering support services on social media has made it easier to provide services later in the day, without adding on costs to keep buildings open. Ultimately, it’s about meeting students where they are.

a good thing. At the same time, the pandemic has slowed the process of us getting this thing up and running significantly. We’ve lost almost a year, I would say.” Hemphill, who describes himself as “semi-retired,” was drawn in by Williams’ vision of investing in impoverished city neighborhoods — and in the people who live there. “It’s putting economic impact in a place that has tremendous social impact,” he said. In Los Angeles, McKelheer is searching for independent productions that trainees in Cleveland can work on, so that apprentices can amass the skills and on-set hours to work union jobs. He’s also talking to major industry players about leasing space at the sound stage for TV shows and other productions. Ohio’s refundable tax credit, equal to 30% of wages and other in-state spending and capped at $40 million a year, is a key part of those conversations. “That’s what will bring Netflix and Amazon and all the studios and networks,” he said of the incentives, which have been around since 2009. “Ohio’s already done it. But they’re only doing films. It’s probably one of the only states with this long of support for the credits … that doesn’t have an industry-standard film stage or television studio.” Williams has kept a low profile He’s Swhile E P T Eplanning M B E R 3 - Cinema 9 , 2 018 City. | PA G E ac29 customed to being behind the camera. He stepped into the spotlight in mid-May, though, when he talked about the project during a webinar on diversity in development and construction put on by NAIOP Northern Ohio, a real estate industry group. “It’s about pathways,” he told the audience, describing how his desire to use art to break down barriers and create wealth in long-suffering communities blossomed into a real estate deal. “This is Marquette’s vision,” said McKelheer, who has watched his friend and colleague work informally in career training for years. “Marquette is the majority owner. Marquette is the on-the-ground guy. We’re partners that support each other — but it’s his show.”

short hop from downtown. From the year but backed away from new inwarehouse rooftops, where seagulls vestments in the United States as the circle overhead, Lake Erie is visible a pandemic deepened. half-mile in the distance. “There are some studios out of town Nearby, vacant houses and empty looking at this, and some other groups, storefronts are reminders of the blight but we are hoping to tap into local and poverty that mar much of the sources,” Reddy said. “There couldn’t East Side. But the buildings, some of be a more catalytic project than this, them a century old, also are reflective with the job creation in low-income of the historic character that lures communities in Cleveland.” some filmmakers to the city. CRAIN’S CLEVELAND BUSINESS | “That area is particularly good, ar- Pandemic slows progress chitecturally,” said Bill Garvey, a location manager who has worked on The Cinema City team expects the films in the Cleveland area for more project to generate more than 1,000 than a decade. jobs in the next five years, between the Garvey, who isn’t involved with sound stage, apprenticeships and anCinema City, said there’s an obvious cillary development. need for a sound stage in the region. Lloyd Hemphill, a 76-year-old for“It’s essential to getting more pro- mer executive and workforce develduction,” he said. “Right now, we kind opment consultant, is charting out the of make do. It’s a poor man’s solution. training program and serving as CineWe get vacant warehouse space.” ma City’s interim president. He’s putWilliams hopes to firm up financ- ting together a partnership that is likeing for his project by the end of the ly to apply for a U.S. Department of year. Building the sound stage is like- Labor grant this summer. ly to take 12 months, he said. That grant would be the bulwark for Radhika Reddy, a financial consul- a fully fledged career academy, buildtant on the project, said a bank is willing on adult apprenticeships and ing to provide a loan and Opportunity youth training that Hemphill expects Zone equity, through a fund created to to roll out over the next two years. invest in economically distressed “The demand for visual content has communities. She’s pursuing federal increased significantly as a result of Michelle Jarboe: michelle.jarboe@ New Markets Tax Credits, meant to the pandemic,” Hemphill said. “That’s crain.com, (216) 771-5437, @mjarboe bring private money to low-income areas, and is talking to civic lenders and local economic development organizations. Advertising Section Landing a guarantor — an investor willing to be responsible for the debt if the deal flops — is the biggest hurdle, said Reddy, a partner with Cleveland-based Ariel Ventures LLC. An investor group with ties to China was in line to play that role last

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“So this allowed us to break down some of those barriers a lot easier, and I think it’s given us an infrastructure to do so moving forward that doesn’t feel like the daunting lift that it did beforehand. Because we’ve done it,” Battaglia said. Say Yes Cleveland has been working with its family support specialists, the district’s guidance counselors and College Now to connect with 2020 graduates, as well as with the seniors who will graduate this year. Qualifying students typically have up to a year to access a Say Yes Cleveland scholarship, but that has been extended to two years for students graduating during the pandemic, Downing said. Rachel Abbey McCafferty: (216) 771-5379, rmccafferty@crain.com

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OUTLOOK

and Mabel’s BBQ is about 65% and 75%, respectively, of where it should be. This requires using staff in efficient ways and, in the case of Mabel’s, operating five days instead of seven. “I want to be open these extra two days because business has come back,” Petkovic said. “But I haven’t been able to because we can’t find the staff. It’s the same at Flannery’s. We want to expand our hours but can’t do so because of hiring challenges.”

From Page 1

sapped cash flow and slashed jobs in many industries. For the restaurant sector, the global health crisis has resulted in some 110,000 temporary or permanent business closures, 2.5 million lost jobs and $240 billion in lost sales just in 2020, according to the National Restaurant Association. “It’s definitely not an instant recovery,” Petkovic said. “Will that be three months, six months, one year, two years away? I don’t know. No one really knows. But we are moving in the right direction. And as we’re sitting here and talking today, I’m feeling pretty positive.”

Lodging will languish

Spark to the economy June 2 will mark the start of a jolt to the Ohio economy, said Bill Adams, senior economist with PNC Financial Services. He said he forecasts “very strong growth” in the state the rest of the year following a pandemic that has been the most severe drop in economic output and employment seen in modern U.S. history. “We have very strong consumer spending power fueled by fiscal stimulus and very low interest rates,” he said. “Businesses see that consumers are willing to spend with vaccinations progressing and limitations on activity lifting. Businesses are looking to reopen and hire, and build capacity to serve customers as the economy recovers.” While a lifting of COVID restrictions feels like a return to normal, it will take time for various sectors to truly feel restored. In Northeast Ohio, total employment fell about 8% in 2020, and those jobs aren’t expected to be recovered until 2025 — compared with 2022 for the country overall — according to a Team NEO report in April. Vice president of strategy and research Jacob Duritsky indicated the agency will consider updating those projections this summer.

A bartender manages a station at the Hilton Cleveland Downtown during a demonstration showing how the hotel would accommodate events amid COVID-19 safety protocols. | MICHELLE JARBOE

“We are making progress, and the outlook is bright,” Adams said. “But it’s going to be messy getting from where we are back to a more normal economy. It’s not as simple as flipping a light switch.” The rebound will be toughest for some of the sectors hit hardest by this recession, including hospitality.

“IT’S GOING TO BE MESSY GETTING FROM WHERE WE ARE BACK TO A MORE NORMAL ECONOMY. IT’S NOT AS SIMPLE AS FLIPPING A LIGHT SWITCH.”

Restaurants recovering

— Economist Bill Adams

Though restaurants can soon operate at full capacity, and a mix of cabin fever with warmer weather has many people ready to go out, it’s to be seen whether guests will return at pre-pandemic levels, said John Barker, president and CEO of the Ohio Restaurant Association. He points to surveys indicating that some people will be reluctant to be out in crowds again. This comes as fast-casual restaurants — more so than fine dining establishments — started seeing business improve in the first quarter. Many have reported double-digit in-

creases in sales over the prior period. Sales at Wendy’s were up 13% in Q1, surprising analysts. However, restaurants are grappling with higher food costs brought on by supply chain issues, labor shortages and a surge in demand. Chicken breast costs, for example, have doubled since the beginning of the year, while bone-in chicken wings are reaching all-time highs, as documented by market research firm Urner Barry. Meanwhile, labor issues are muting opportunities to capitalize on some business, Barber said. Petkovic said staffing at Flannery’s

PEOPLE ON THE MOVE

According to the American Hotel & Lodging Association, that industry’s most optimistic projection for a rebound to pre-pandemic levels is 2023 or 2024 due to the lag that will play out in leisure travel, business travel and events. “While things are improving slowly, recovery for hotel and lodging businesses will be a longer process because of the nature of our business,” said Joe Savarise, executive director of the Ohio Hotel & Lodging Association. “When an event or meeting is canceled, it can be far off in the future before it is rebooked, sometimes even years away.” In a good year, hotel occupancy in the Cleveland market averages between 60% and 65%, Savarise said. In 2020, that average occupancy plunged to 37%. Those rates are about on par with the statewide numbers. He added that between March and December 2020, business from group bookings and hotel meetings or events sank 70% across the state. This all led to a 70% loss in jobs in Ohio’s hotel industry, or about 15,000 positions. Possibly one-third of those may be restored this year. “So while we are bringing people back and clawing our way back to 2019 levels, we are not there yet,” Savarise said. “We forecast there will still be about 10,000 jobs lost at the end of this year.”

As for manufacturing ... Manufacturing has been a bright

spot in the economy, Adams said, and it’s one of the sectors playing to Ohio’s advantage when it comes to an economic recovery. But even that industry continues to grapple with supply chain issues that are hindering production and increasing costs, said Chad Moutray, chief economist with the National Association of Manufacturers. The top issue facing manufacturers today, he said, are rising costs of raw materials. “There are definitely supply chain bottlenecks we are seeing,” Duritsky said. “The other issue is workforce,” Moutray said. “We were struggling before the pandemic with a skills gap issue, and that has not really gone away. And we’ve seen the labor force shrink a bit during the recession. So as we try to ramp up production again, how do we get those workers back?” Team NEO estimates manufacturing GDP will increase about 4% this year in this region, with jobs increasing nearly 2%. In Ohio’s manufacturing sector, one of the largest areas for job growth is not just in big, durable goods, but the pharmaceutical and medical space, Moutray said. “With record job openings in the sector nationally and with capital spending at a record high, you get the sense the economy is primed to rebound strongly,” the National Association of Manufacturers’ chief economist said. “I think Ohio is certainly in a position to take advantage of that. And I think Cleveland is in a unique position to take advantage of strength in the global economy in terms of reopening trade and fiscal spending.” Of course, the economic rebound for all industries will be contingent on the pandemic continuing to come under control. “The possibility that the pandemic plays ‘Die Hard’ villain and just doesn’t die is still the main downside risk for the rest of the year,” Adams said. Jeremy Nobile: jnobile@crain.com, (216) 771-5362, @JeremyNobile

Advertising Section To place your listing, visit www.crainscleveland.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

CONSTRUCTION

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Life Safety Systems, LLC

Karpinski Engineering

Schauer Group

Taft Law

Alec Chapman has joined Life Safety Systems as an Associate Designer. His role at the company will be to assist in the development of Fire Alarm plans and expand his knowledge on the business. Alec received his Bachelors of Science in Mechanical Engineering from the University of Akron. In addition, he gained technical work experience through the university’s co-op program, focused in process design and project management. LSS is excited to bring his expertise to the field of fire safety.

Shannon Thorsen has joined Karpinski as Director of Business Development. She will focus on new client development in the firm’s key markets. Thorsen transitioned to business development after many years as an architectural designer. Now for nearly a decade, she has cultivated new client opportunities and delivered sustainable revenue. Thorsen is a board member for the NAIOP Northern Ohio Chapter and Vice Chair of the chapter’s Women’s Leadership Network. Learn more at www.karpinskieng.com.

First American Title National Commercial Services

Jason Guyer has joined Schauer Group’s Cleveland office as client executive. He brings strong business acumen and vast connections from prior roles with Greater Cleveland Partnership and COSE to the risk management, business insurance and human capital services firm. He’s active in the community, having served or serving with YMCA of Greater Cleveland, West Side Catholic Center, Cleveland State University Athletics Visiting Committee, United Way Young Leaders Cabinet, and Western Reserve Racing.

Javier V. Lopez has joined Taft as an associate in the Finance practice group. He advises national and local lenders and corporate borrowers in a variety of financing transactions. Prior to joining Taft, Javier was an associate at a Columbus-based law firm and a legal fellow for a privately held Columbus-based company. Javier earned his J.D. from The Ohio State University Moritz College of Law and his B.A. from Kansas State University.

First American Title National Commercial Services announces the promotion of Dyan Tirbaso to our Cleveland Area Manager. A cum laude graduate of Cleveland State University, Dyan has worked in a variety of roles in title insurance during her 17-year career, including operations, management, and escrow. She’s licensed with the Ohio Department of Insurance and brings local market expertise. Dyan is a member of CREW Cleveland, Engage Cleveland & The Women of Business Network of Lorain County.

22 | CRAIN’S CLEVELAND BUSINESS | MAY 24, 2021

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