Crain's Cleveland Business, July 1, 2024

Surviving drive-in theaters grapple with tight margins, changing times

By Jeremy Nobile

Nestled along the Kent and Ravenna border and surrounded by lush green trees is the Midway Twin Drive-In eater, a fading slice of Americana that helps give John Knepp purpose.

“It’s just a business, but it’s a fam-

ily business,” said Knepp, a lifelong cinephile who has run this theater for decades. “And it’s without a doubt a fun business.”

Knepp considers himself semiretired, but a passion for what he does means he isn’t sitting still for long. If he’s not working at

Cooperative eatres, his movie booking and buying company, there’s a good chance he’s at one of his two Northeast Ohio drivein theaters reviewing the books, performing maintenance or helping with concessions.

“Every year we go into, we’re wondering, can we make it this year?”

Of ce sublease market is coming back down

After pandemic swell, amount of available space has stabilized

By Stan Bullard

e big run-up in the volume of Cleveland-Akron o ce space o ered for sublease during the pandemic has dropped back to pre-pandemic levels.

“A year ago, the amount of sublease space in Northeast Ohio hit a million square feet,” said Steve Ross, a CBRE Cleveland vice president and o ce specialist. “It’s 500,000 square feet now. at’s pretty impactful. And it is good news for the o ce market.”

Since subleases are a typical xture of the o ce market, Ross said in a phone interview, it’s meaningful to note that the sublease gure was just 400,000 square feet at the end of April 2020. at was before COVID-19 began rewriting the fundamentals of the o ce market, temporarily for most — but permanently for some.

Subleases swelled as a potential pandemic panacea. Company managers suddenly found themselves looking at vast amounts of empty or unused costly o ce space. e popularity of working from home posed a potential long-term challenge to their continued use. Subleasing excess or unneeded space at a discount of 30% to 50% below the company’s rent o ered a meaningful way to rapidly reduce costs rather than wait years for existing leases to expire.

Four years later, the market is starting to revert back to its pre-pandemic state. Several factors are cited for the decline in sublease listings, but the most common cited by Ross and others is the passage of time.

Generally, companies want at least two years — and typically four years — of

City Hall ransomware attack serves as lesson

By Kim Palmer

City Hall was set to begin a slow return on June 20 when o ces re-opened midday after a “cyber incident” crippled the city’s nonessential functions for almost two weeks.

Cleveland isn’t alone. In May, both Wichita, Kansas, and Hamilton, Ontario, Canada, experienced similar attacks. And last spring, the city of Dallas, Texas, was also attacked — and wound up paying the ransom.

As the city spins back up to full speed, there are still a lot of questions that remain. But there’s also plenty we can learn.

Why Cleveland?

e short answer is, most likely, because it’s there. Cleveland is part of a trend of public sector organizations hit

SMALL BUSINESS

Ohio’s lack of affordable child care hurts small businesses, surveys

with a ransomware attack, like Wichita and Hamilton. e Cybersecurity and Infrastructure Security Agency, in partnership with the Federal Bureau of Investigation, even issued an advisory about these dangers at the beginning of the year.

Fortunately for Cleveland, city public safety and public utility services were able to function for the most part while data-driven city o ces and departments were forced to close. But if the goal was not to cripple the city and create chaos for personal or political reasons, then why were the city’s systems attacked in the rst place?

“Obviously, there’s a lot going on in the world right now and there is always some activism-type hacking going on and when it’s not about that, often

Marvelous $2.6 million property in Shaker Heights holds a piece of Cleveland history.

Tim Sherman, president and third-generation owner of the Aut-O-Rama Twin Drive-In located in North Ridgeville (pictured)

Survey: Costly child care hurting small businesses

By Kim Palmer

A large majority of the state’s small business owners — 85% — say they support a federal program that would help working parents nd quality a ordable child care, according to a survey from Goldman Sachs’ small business advocacy group.

e rm’s 10,000 Small Businesses Voices survey data highlights the negative e ects that the absence of quality child care options has on Ohio employers working to hire and retain workers.

Additionally, slightly more than 40% of respondents went as far as blaming the lack of child care for making it harder to operate and grow their business.

ose sentiments match recent ndings of a survey of Ohio parents by the early childhood policy and advocacy organization Groundwork Ohio. e preview data found that more than half of parent respondents who did not have children enrolled in child care cited the expense as the reason.

e survey also showed that 60% of parents felt their child care was not a ordable. e full RAPID-Ohio Survey was set to be released on Tuesday, June 25.

“ e childcare crisis facing Ohio isn’t just negatively a ect-

ing families and children, but is also hindering business growth,” said Groundwork Ohio CEO Shannon Jones in a statement.

“As this survey con rms, small businesses in Ohio are continuing to face workforce challenges, which are being made worse by the lack of quality, a ordable childcare.”

Two manufacturers to add more than 150 jobs after landing state tax credits

Scott Suttell

Two Northeast Ohio companies that just received support for expansion projects from the Ohio Tax Credit Authority plan to add more than 150 jobs in the region. e tax credit authority on Monday, June 24, approved an eightyear, 1.311% Job Creation Tax Credit for A.R.E. Accessories LLC in Massillon, and an eight-year, 1.515% credit for Millennium Control Systems LLC in Beachwood.

ey were among nine projects in Ohio approved for tax credits on projects that will create 707 jobs and retain 1,614 jobs statewide, according to information provided by the state. e projects are expected to result in more than $44 million in new payroll and spur more than $217 million in investments across Ohio, the tax credit authority said.

A.R.E. Accessories is a brand of parent company RealTruck, which manufactures berglass truck caps, hard tonneau covers and accessories for a network of authorized dealers across the U.S. and Canada, expects to create 111 full-

time positions, generating more than $5.6 million in new annual payroll, as a result of the company’s expansion project in Massillon and Navarre. e project will retain about $52.5 million in payroll, according to the tax credit authority.

e state said the A.R.E. Accessories/RealTruck project “will allow for increased production of the company’s current product portfolio as well as the introduction of a new product line to meet rising market demand.”

As part of the tax credit agreement, the state requires the company to maintain operations at the project locations for at least 11 years. Ohio has been in competition with Illinois, Missouri and Texas for the project, according to the state.

Team NEO, the regional economic development organization, said the A.R.E. Accessories/RealTruck project includes the establishment of a Massillon campus within a mile of the company’s existing operations. e addition of the 111 jobs will bring the facilities to nearly 900 employees. Team NEO said the company’s campus,

e di culty parents have nding child care has a ripple effect.

As Ohioans continue to say retaining quali ed employees is the most signi cant problem currently facing small businesses, a majority point to the di culty working parents have paying for those child care programs.

Around one-third (34%) of those surveyed said they had employees forced to cut work hours or forgo work entirely due to the cost and/ or availability of child care.

e vast majority of small businesses (68%) agreed that sta ng would be easier if employees could access a child care bene t and/or there was a federal child

a combined 500,000-plus square feet, will accommodate customberglass mold operations and aluminum truck caps manufacturing, as well as transportation and shipping streamlining operations and e ciencies in Stark County.

“The expansion of our operations to the Massillon campus afford RealTruck the opportunity to not only deliver excellence in manufacturing but expand output to meet the growing demand for our industry-leading products,” said Greg Kerr, vice presi -

care tax credit for parents making up to $500,000 from the current $150,000 for households.

Ohio lawmakers seem to be aware of the general problem, as there are a handful of bills moving through the statehouse dealing with the subject.

e possible legislation deals with issues from state tax credits for businesses to create or expand child care facilities to measures aimed at subsidizing child care costs for households.

e newest legislation, Ohio House Bill 610, would provide state grants for care at licensed facilities paid equally by the state Department of Children and Youth, employees and employers.

e bill’s sponsor, Rep. Mark Johnson, R-Chillicothe, said the program is similar to the state’s Tech Cred program o ering businesses subsidies for providing training for employees.

“Under this program, the costs of child care would be shared equally by participating employees, employers and the department,” Johnson said during a ursday, June 20, committee hearing. “ e bill allocates $10 million to the program, which will be distributed on a rst-come, rst-served basis, and all child care providers o ering services must be appropriately licensed or certi ed under Ohio law.”

ence in the automotive industry, and Northeast Ohio’s robust automotive talent and education o erings, it is an ideal location for RealTruck to grow their business.”

In control

Millennium Control Systems, which provides engineered control systems and software solutions for glass, metal, rubber, paper and other industries, expects to create 40 full-time positions, generating $4 million in new annual payroll (and retaining $5.7 million in payroll), as a result of the company’s new location in Beachwood.

dent of plant operations at RealTruck, in a statement.

He added, “With this move, we are retaining current employees and aggressively hiring new employees at our Massillon campus.”

Massillon Mayor Jamie Slutz said RealTruck “has been a big part of our city’s economic success for almost 30 years. We are thankful that they chose to expand in Massillon and we will continue to work with them anyway we can.”

Bill Koehler, CEO of Team NEO, added, “Given Ohio’s strong pres-

The project includes leasing a space that allows the company to expand its industrial automation line to support the electric vehicle industry, the tax credit authority said. Millennium Control Systems is “primarily engaged in developing or modifying computer software and packaging or bundling the software with purchased computer hardware to create and market an integrated system for specific applications,” according to the state. It is “involved in all phases of systems development from design through installation.” As with the A.R.E. Accessories/ RealTruck project, Millennium Control Systems will be required to maintain operations at the project location for at least 11 years. Ohio has been competing with Georgia and Pennsylvania for the project, according to the state. Millennium Control Systems didn’t immediately respond to a request for comment.

GENESIS

Erie Pickleball Club opens in Mentor with indoor courts

By Joe Scalzo

On the rst day of summer, Chris O’Donnell was o ering Cleveland’s pickleball players the chance to stay as cool as a cucumber.

e city’s newest indoor facility, Erie Pickleball Club, opened at 7 a.m. on June 20, at 8020 Tyler Blvd. o Route 2, about a mile from the Route 615 exit.

e club boasts six indoor courts — they’re separated by netting, so you won’t have to chase after errant shots — as well as a community room, a lobby, a seating area, men’s and women’s restrooms and a few private changing rooms.

One thing it doesn’t have? Temperatures in the 90s.

ages and skill levels and o ers memberships for individuals ($319) and couples ($509). e facility will be open from 7 a.m. to 10 p.m. Monday through Friday; 8 a.m. to 9 p.m. on Saturday; and 9 a.m. to 7 p.m. on Sunday.

O’Donnell was hoping to open the club a few months earlier, but ran into construction delays. But he still made his spring deadline by a few hours; Cleveland’s summer solstice didn’t ofcially begin until 4:51 p.m. on June 20.

“I’m not an astronomer, but I think we beat it,” he said, laughing. “We’ve still got a couple odds and ends to nish — things most people wouldn’t notice — but the court surfaces and the court lines are down.”

“We’ve got our air conditioning running, which players appreciate — especially this month,” said O’Donnell, who is leasing about 15,000 square feet of the multitenant building with his wife, Kay. “It’s a little bit overwhelming (to open it) but also a little bit nerve-wracking. You’re wondering, ‘How are people going to take it?’ I hope people like it and really want to come.”

Erie Pickleball is open to all

Erie Pickleball Club already has between 60 and 70 members, and O’Donnell is hoping eventually to get at least 200. e courts are also open to non-members for a higher fee.

“When people actually come in here and play a little bit, I think they’ll spread the word to their friends,” he said. “I think they’ll say, ‘Don’t go to this court and sweat and dehydrate yourself. Come in here. e lines are so

crisp. e conditions are so good.’ We don’t expect a big splash right o the bat, but hopefully it ramps up quickly.”

At least two other indoor pickleball facilities are slated to open in Greater Cleveland in 2024. ◗ e Cleveland Premier Pickleball Club is eyeing a September opening on Pin Oak Parkway in Avon Lake. at facility will be locally owned by Chris Haas, the president and CEO of All Pro Freight Systems Inc. of Westlake. ◗ Atlanta-based Ace Pickleball Club plans to open a 40,000-square foot facility sometime this fall at the former Bed, Bath and Beyond in the Uptown Solon shopping center located at 6025 Kruse Drive, just o U.S. 422 and SOM Center Road.

“Some people only want to play outside in the summer, but we do have a lot of nasty weather,” O’Donnell said. “A fair number of people like to play in air conditioning because the conditions are stable. ere’s no wind, there’s no sun in your eyes. Some people just prefer to play indoors.”

If you’re one of those people? “Come on out and play pickleball,” O’Donnell said.

Parma warehouse sells for $10.3M

By Stan Bullard

A 1979-vintage building at 12420 Plaza Drive in Parma looks to be gaining value despite continued aging, in part thanks to the run-up of industrial building values the past few years.

ProEquity Asset Management LLC, an El Dorado, California-based asset manager and real estate company, has owned the property through its corporate name since 2017. But on

June 13, Cuyahoga County land records show it was sold for $10.3 million to an investment trust led by Sheldon C. Tyler, managing partner of ProEquity Asset, and eight other individuals or trusts.

ProEquity paid $4 million for it in 2017, according to land records. Throughout this period, the property was leased by Bearing Technologies Ltd., an Avon Lake-based bearings producer and developer.

e county assigns the warehouse a market value of $4.5 million for property tax purposes, according to online county records.

e deed was signed by Je Hrehocik, Bearings’ chief nancial o cer, indicating the rm’s continued interest in the building. Hrehocik did not return a message by noon on Monday, June 24.

ProEquity Asset does not disclose the size of its holdings on its website.

Erie Pickleball in Mentor held a members-only event on Wednesday, June 19, ahead of its grand opening on June 20. | DAN GOODELL

Delta brings back popular Cleveland to Salt Lake City route

By Crain’s Staff

Delta Airlines is bringing back a route connecting Cleveland Hopkins International Airport with Salt Lake City, the airline and Hopkins o cials announced on Monday, June 24.

e route, discontinued in January 2022, will consist of one daily departure (7:45 a.m. Cleveland time) and one arrival (10:57 p.m. Cleveland time) daily. It will start service on Sunday, Nov. 24, and tickets are already on sale.

In a response to Crain’s request for comment, a representative from Delta said via email, “We’re excited to help build a schedule based on demand and serve the places our customers most want to y.” at spokesperson also conrmed “su cient demand” was one reason the route was brought back.

Bryant Francis, Cleveland’s director of port control, said via a press release, “We are thrilled our partner at Delta Air Lines will be resuming this service to one of our top underserved markets. is addition not only o ers Clevelanders nonstop service to Salt Lake City, but also provides dozens of additional connecting points beyond.”

In that release, Hopkins o -

cials don’t give speci cs with regard to those “points beyond” other than vague regional travel like, “the Mountain West, U.S. West Coast, Western Canada and Hawaii.”

e return of the Salt Lake City route is just the latest in a number of ight changes for Hopkins travelers. Frontier Airlines is investing in the city by establishing a new crew hub at the airport and adding 10 new routes this year.

And though Hopkins lost a short-lived route to Jamaica, it also added a Sun Country Airlines route to Minneapolis.

And the airport’s increase in travelers in 2023 has steamrolled into 2024. rough the end of April 2024, passenger tra c through Hopkins was up over 8% over the rst four months of 2023 and even up 3% over the rst four months in 2019, the last year before the COVID-19 pandemic brought travel to a halt for a time.

e full timetable for the new Cleveland-to-Salt Lake City route is:

Outbound: Departure from Cleveland: 7:45 a.m. local time; arrival in Salt Lake City: 10:18 a.m. local time.

Inbound: Departure from Salt Lake City: 5:20 p.m. local time; arrival in Cleveland at 10:57 p.m. local time.

Jim Tressel joining Baldwin Wallace board of trustees

By Joe Scalzo

Nearly 18 months after stepping down as Youngstown State University’s president, Jim Tressel has a new role in higher education.

He believes his parents would approve.

Tressel is joining Baldwin Wallace University’s board of trustees, marking a return to his alma mater and the school where his father, Lee, became a college football coaching legend.

“Due to the exceptional preparation at BW, I was blessed to enjoy a 47-year career in higher education,” Tressel said in a news release. “As I accept the honor of serving on the BW Board, I am certain that my mom and dad would be proud that I seek to serve their beloved Yellow Jackets.”

Tressel, of course, is best known for his own college football coaching career, having coached Ohio State from 2001-10, earning six Big Ten titles and a national championship. Tressel also won four I-AA national championships at YSU (1986-2000), then spent nearly a decade as the university’s president before stepping down in January 2023. Before that, he spent more than two years as VP of strategic engagement at the University of Akron.

At Youngstown State, he is credited with improving graduation

“We’re

grateful for the wealth of experience Jim brings to his alma mater as we begin to write the next chapter in BW’s 179-year history”

Lee Thomas, BW board chair

rates by 15%, quadrupling the size of the honors college, raising $150 million in support, building strong business ties and transforming campus housing.

Tressel joins the university

during a challenging time for higher education. BW announced a plan in February to cut 23 positions and make program cuts to close a budget de cit. BW has had a hiring freeze since September 2023, something that will continue through December 2024.

Baldwin Wallace is also searching for its next president, with Dr. Robert C. Helmer set to retire on June 30 after 12 years in the position.

“We are proud and happy to welcome the wise counsel of one of BW’s most accomplished alumni,” BW board chair Lee omas said. “We’re grateful for the wealth of experience Jim brings to his alma mater as we begin to write the next chapter in BW’s 179-year history. BW has a diverse and talented board. But Jim represents a rare opportunity to add the voice of an experienced university president, which is especially valuable as we navigate a challenging environment for all of higher education.”

Tressel played quarterback for his father before graduating from BW with a degree in education in 1975, then began his coaching career as a graduate assistant at Akron, where he earned a master’s degree. Tressel was inducted into the College Football Hall of Fame in 2015 — 19 years after his father received the same honor. ey are the only father-son members ever inducted into the Hall.

Jim Tressel | CONTRIBUTED

E-motorcycle maker LAND revs up for future expansion

By Dan Shingler

There’s more to EVs than cars and trucks. There are also electric motorcycles, and the Cleveland company LAND is trying to raise more than $50 million to make more of them, along with batteries that can power the bikes and be sold to other manufacturers.

“We’ve been doing electric since 2020,” said founder and CEO Scott Colosimo. “We’re releasing a new product in the fourth quarter, and we’ll be shipping them next year.”

Colosimo’s company currently has two main products, called the District Scrambler and the District Street. As the names imply, the first is designed to be used on and off-road, while the latter is designed for pavement and more civilized environments.

Colosimo’s not talking about his new products yet; those are under wraps for a big unveil later. But he’s more than happy to talk about his efforts to expand LAND in both size and breadth.

On the motorcycle side of things, the company needs to ramp up production, he said. It currently produces a few more than the 30 bikes a month it was making about a year ago, each of which cost a hair less than $7,000.

Colosimo said an equity round in which he’s working to raise $15 million will go toward expanding his company so it can increase production in 2025.

“We’ll push over 100 units a month with the expansion,” Colosimo said.

The expansion might involve a new location, but Colosimo said he hasn’t decided on that part yet. The company likely would maintain its presence on West 65th and Herman streets and might be able to expand there as needed. But it’s also considering a second location.

“We do have a location picked out that’s more toward Midtown that will allow us to expand quicker,” Colosimo said. “But we need to make sure we have the capital first. ... We would stay here, but we would add more space.”

The company is doing well, he said, and demand for its motorcycles went up soon after the company was founded in 2020 and has remained high.

The research firm Global Market Insights says the market for electric motorcycles is already large. It puts 2023 sales of the bikes at $11.3 billion. The industry is growing, the firm reports, as climate change and other factors cause consumers to want cleaner vehicles.

It cites LAND as an example of its current growth — though it also notes that big companies such as BMW currently dominate the market.

LAND sells electric motorcycles that are quick, with a far higher power-to-weight ratio than most bikes with internal

combustion engines, Colosimo said. But, because they’re electric, they can operate in different modes, from full-on motorcycle power, to far less power like a moped might have, down to the power level of an e-bike at about 1% of full power.

Speed is capped at 72 mph, he said, but with 23 hp and weighing less than 300 pounds — far less, depending on the battery chosen — the bikes get their quick.

“It is a legal motorcycle,” Colosimo said. “For the size, it’s got a tremendous amount of power, when it’s unlocked.”

This is not his first motorcycle race, so Colosimo isn’t just riding by the seat of his pants.

He previously formed Cleveland Cyclewerks, another local company, making traditional motorcycles that ran on gasoline. He sold that company and left it in 2022 to focus on LAND.

Now he has his eyes on something bigger.

Colosimo, who makes most of the parts that go into his motorcycles, wants to begin making batteries too. He plans to make them for his own company’s use, but also to offer them for sale to other manufacturers looking to power devices and also connect

them to the internet.

LAND is developing battery systems that will also function as connectivity points between the web and the devices they power — batteries for the internet of things, he said.

For that, Colosimo said he’s

working on another round of equity financing, this one for $35 million. If he can raise it, it will mean a much bigger expansion than what he has planned for motorcycle production.

The company currently employs 22 people and, with automation and smart manufacturing, that’s probably enough to ramp up motorcycle production.

But getting into battery production will require at least doubling his headcount.

“To get the batteries up and running we’ll need considerably more people,” Colosimo said. “It’s looking like 20 to 30 to get it started and then eventually we’ll probably need 50.”

It will likely all depend on whether LAND can raise the money it needs, which Colosimo thinks it can do and said he’s working on now.

He’s more than confident he can sell both batteries and bikes with the funding.

“We have customers in the pipeline,” he said of his plans for battery sales.

He’s also hoping to leverage the equity he raises with some debt and hopefully some state or federal support. But that might be the toughest part. Banks are reluctant to lend to startups, he said, even though he has a track record.

With $15 million in capital he predicts he’ll only be able to borrow about $4 million.

And the government grants seem to go to larger companies, though he hopes to change that.

“There are a lot of politicians talking about supporting manufacturing and energy and everything else, but we can’t seem to get any assistance,” Colosimo said. “The support seems like it’s going to Chinese or Taiwanese manufacturers … they’re all interested in big, big job numbers. But most innovation in mobility today is coming from startups.”

LAND founder and CEO Scott Colosimo poses with one of the company’s electric motorcycles outside its W. 65th Street headquarters and factory.

| PHOTOS BY GRACE MCCONNELL

Fast-track reforms to prevent more East Palestine incidents

There was some closure, but little sense of relief, after the National Transportation Safety Board revealed the ndings of its investigation into the Feb. 3, 2023, Norfolk Southern train derailment in East Palestine, Ohio.

e NTSB said Tuesday, June 25, that a rail car’s defective wheel bearing overheated and caused the derailment and subsequent hazardous material release in the southern Ohio town. Making things worse, the NTSB said, “...the decision by the local incident commander three days (after the derailment) to conduct a vent and burn of the contents of the tank cars carrying vinyl chloride monomer was based on incomplete and misleading information provided by Norfolk Southern o cials and contractors.”

It concluded the vent and burn “was not necessary to prevent a tank car failure” and that the vent and burn procedure should be a last resort, used when a tank car is about to fail.” Instead, investigators found, “Norfolk Southern rejected three other removal methods and began planning for a vent and burn shortly after the derailment.”

In short, this terrible accident could have been prevented with stronger equipment regulations and better oversight, along with stronger corporate decision-making.

It’s not possible to go back in time and prevent the environmental tragedy and psychological trauma that was visited upon the residents of East Palestine. But it clearly is within the realm of possibility to establish better standards that signi cantly reduce the chance of another derailment of this magnitude.

One part of the answer is to follow through on some sensible recommendations the NTSB made last week, in conjunction with its report.

Another is for Congress, nally, to pass rail safety legislation introduced by Ohio’s two U.S. senators, Democrat Sherrod Brown and Republican JD Vance.

As a result of its investigation, the NTSB made important new safety recommendations to the U.S. Secretary of Transportation, the state of Ohio, Norfolk Southern and several other parties whose job is to make sure the nation’s railways are safe.

NTSB said its recommendations address safety issues including “failure of wayside monitoring systems to diagnose a hot wheel bearing in time for mitiga-

tion to prevent a derailment;” the “inadequate emergency response training” for volunteer rst responders; hazardous materials placards “that burned away, preventing emergency responders from immediately identifying hazards;” a “lack of accurate, timely and comprehensive information passed to local incident commanders and state o cials;” and “continued use of DOT-111 tank cars in hazmat service.”

e DOT-111 tank car issue is crucial. During the derailment, NTSB found, three DOT-111 cars “were mechanically breached, releasing ammable and combustible liquids that ignited.” at re then spread and “exposed other tank cars to heat, leading to a decision to con-

duct vent-and-burn action on ve tank cars carrying vinyl chloride.” It noted that the DOT-111 tank car “is being phased out of ammable liquids service because of its long record of inadequate mechanical and thermal crashworthiness and propensity to release lading in a derailment.”

At the very least, an accelerated phaseout of the DOT-111 cars is critical.

e other safety recommendations are eminently doable — and should be done imminently.

It’s beyond shameful that Brown and Vance’s Railway Safety Act of 2023 remains stuck in the gears of congressional inertia. As Brown noted last week, the NTSB “made crystal clear what we

have been saying for over a year — stronger rail safety regulations are needed immediately.”

e Brown-Vance bill is straightforward in taking steps that include establishing requirements for wayside defect detectors, requiring railroads to operate with at least two-person crews and increasing nes for rail carriers, among other measures. Brown said he will continue to pressure the Senate to bring the bill to the oor for a vote, and it surely deserves that. Get the opponents of these sensible steps on record.

Vance, in addition to pushing for a vote on the rail-safety bill and improving regulations, called attention to “a series of errors made by Norfolk Southern and its contractors.” He also criticized the U.S. Department of Justice’s “premature settlement” with Norfolk Southern, in which the railroad agreed to pay more than $310 million, most of which went to cover past and future environmental cleanup costs. It does, in light of the damage done and carelessness displayed, seem to be a pretty light penalty. (Norfolk Southern also made a $600 million settlement of a class-action suit brought by residents and businesses from East Palestine and the surrounding area.)

Back in 2023, NTSB board chair Jennifer Homendy called the East Palestine derailment “100 percent preventable.” Rail carriers and the government have to take the steps clearly laid out for them to prevent this from happening again.

Wreckage at the site of the Norfolk Southern train derailment in East Palestine, Ohio, in February 2023. | BLOOMBERG PHOTOS

U.S. Sens. Sherrod Brown (left) and JD Vance

Cleveland Hopkins Airport is a glass half full

By Hrishue Mahalaha

What is an airport?

A seamless ow for passengers, a welcoming community front door. An airport o ers a sense of a community’s past, its cultural vibe, and perhaps a glimpse into its future. Undoubtedly, it is a place of human emotion, where families and friends say long goodbyes and reunite.

In this perspective what should we, in Northeast Ohio, expect from Cleveland Hopkins International Airport? What would be on your must-have list? A more spacious and inspiring terminal? Modern restrooms? Increased queueing and counters for airline check-in? More e ective and ecient TSA processing? Additional nonstop domestic and international ights? Extended curbside areas for arrivals and departures?

Expanded short- and long-term parking options? On-site car rental? What else?

Besides the passenger experience, what could and should be the economic opportunity of the airport? In the last four months, we have had an opportunity to interview most businesses that operate out of the airport (commercial airlines and corporate aviation, and the service companies who support them.

Based on our informal assess-

LETTER

ment, it is clear that there is a MASSIVE untapped economic potential for aviation at and around Hopkins.

To support this hypothesis, I would like to present the following critical data points:

If we look at the combined GDP of the 15 Northeast Ohio counties, that number in 2022 was approximately $225 billion. To contextualize this number, if these 15 counties were a state in the union, we would be the 32nd largest state.

Cuyahoga County alone at $104 billion would be the 41st largest state, ahead of Hawaii. If the 15 counties were a country, we would be the 53rd largest country, just behind Qatar and ahead of Greece.

What type of aviation connection does a region of this magnitude support?

e good news is there’s a large and diverse team of community and economic leaders who are working to capture this economic opportunity. Here is some of what is going on:

Land use planning: Over the last six months, a large team of approximately 150 community, public, and private leaders have been convening to understand our regional land assets and determine how our various municipalities and private sector can best support the vision of the airport.

◗ Availability of critical assets: We have been working closely with

Students have visions of what’s best for Burke

e recent Crain’s Cleveland Business editorial “Prepare to be bold on Burke Lakefront Airport” would not be complete without informing the community of recently completed studies and proposals for Burke undertaken by Cleveland-area high school students through the ACE (Architects, Contractors and Engineers) Mentors Program RFP (request for proposal) competition.

e ACE Mentors program’s objective is to expose students to associated career elds and to provide scholarships for students to pursue their future academics.

e program annually charges the students to address an RFP to address a signi cant local challenge through a year-long study. is year’s project focused on the repurposing of Burke Lakefront Airport. Students from High Tech Academy, James F. Rhodes, East Tech, John Marshall, Garrett Morgan, John Hay (two programs), Max Hayes,

the leadership team at NASA Glenn Research Center to understand how we can support the creation of long-term partnerships to better leverage their assets (e.g. the NASA hangar) in support of regional aviation aspirations.

Terminal modernization development program: Revisioning a more inviting and modern version of the customer experience, from the time that a person arrives curbside, to the time they embark a plane.

Private investment: After years of economic lull, in the last 12 months we have seen two major, multimillion-dollar private-sector investments at the airport that will help expand corporate aviation and cargo capacity.

◗ Expanded aviation support services: e airport leadership team is working to design a commercial campus

on the south side of Hopkins that will result in brand-new facilities to house our fueling, ground support equipment, and deicing operations. Most critically, the team is evaluating strategies to create new aircraft hangar space to house various aviation support services such as an MRO (maintenance, repair and overhaul) facility. As we look to add more nonstop ights out of Hopkins, having this capability will be an instrumental game changer.

One nal critical point: I began working with the Aerozone Alliance three-and-a-half years ago, and I have personally seen the dramatic evolution of one key factor that enthuses me far beyond the series of recent tactical wins. is X-factor is our local leadership.

Unlike in the past, now we have key leaders from the Cleveland City

Council, the Cleveland mayor’s ofce and administration, and Cleveland Hopkins working together like never before. Across all these entities, we are seeing sparks of enthusiasm, creativity, and strategic reection, which we believe will be the secret sauce that helps us capture our economic potential. I especially want to note our Airport Director Bryant L. Francis who took over the airport amid the COVID chaos and is working judiciously behind the scenes on our behalf.

Hrishue Mahalaha is executive director of the Aerozone Alliance, a nonpro t focused on driving the growth of space and aviation-related supply chains around 50 square miles around Cleveland Hopkins International Airport and the NASA Glenn Research Center

MC2 STEM, New Tech West, Ted Ginn Academy, Warrensville Heights, Shaker Heights and Lincoln West high schools proposed a variety of designs that included everything from demolishing the airport to reusing and re-imagining it.

e novelty and creativity demonstrated by the students was presented to reactor panels, which determined the nalist teams that presented to a panel of judges at the ACE Celebration Banquet in early May. e solutions and insights gained through the students’ work is worth sharing with those who are pursuing this question on behalf of the city and county.

As an architect, I was the team leader for the program at High Tech Academy. e students were unconstrained by challenges that may have limited the consultants engaged by the city.

Judson

A. Kline is president of CIVITAD Services LLC and the mayor of Orange Village

$2.6M Shaker Heights property holds a piece of history

By Alexandra Golden

Situated with Green Lake in the front yard and both English and Japanese gardens in the back, a 9,141-square-foot Tudor/Jacobethan property on 1.14 acres of land in Shaker Heights is on the market for $2.6 million.

e property at 16700 Parkland Drive has some Cleveland history dating back to its rst owner: Samuel Horvitz, the publisher of the Mans eld News Journal and the Lorain Journal, and president and founder of the Highway Construction Co. and the Horvitz Co.  Horvitz commissioned architect Reynolds H. Hinsdale to build the home in 1929. After being in the Horvitz family for 60 years, they sold the property to Stephen and Farah Walters, the former president and CEO of University Hospitals Health Systems of Cleveland.

e current owners — only the third owners of the home — have lived on the property for 15 years after purchasing from the Walters and last did renovations to the home in 2009.

“ e present owners lovingly refer to this as the Horvitz home,” Debbie Garson, of Keller Williams Greater Metropolitan, told Crain’s. “ ey also refer to themselves as great stewards of this home.”

Put on the market June 13, this four-story home o ers ve bedrooms, four full bathrooms and two half bathrooms.

Garson is the listing agent and has added partner Jenn Wrubel to the listing.

e owners hope that the new owners may want some of the furniture as they are “right-sizing” and moving to a smaller home since they reside somewhere else for half the year, Garson said.

While the home has been renovated from top to bottom, the current owners kept the original integrity of the home, Garson said.

e birdcage room, which is a morning room or sunroom, is one of the owner’s favorite rooms, with windows on three of the sides where they can sit and look out to the lake, Garson said. e foyer leads to the front staircase that goes upstairs and also to the basement.

e kitchen was too small for the original owners, so they gutted it. A chimney was removed and replaced with a double wolf oven. A sub-zero refrigerator and freezer were also added.

O the kitchen is what some right refer to as a mud room, but the current owner made it her workspace and installed an espresso co ee maker. ere is access to the back staircase, the garden and the three-car garage from there.

e main oor includes the family room with a wet bar, a living room, a den, the workspace, the kitchen, a dining room, a powder room and the birdcage room.

On the second oor, there are four bedrooms and four bathrooms. One of the bedrooms was turned into a

for the

band. An open space at the top of the stairs was converted into an o ce space. e laundry room also found a place on the second oor.

e owners were advised to never get rid of the tile in the original main bathroom because it is “priceless” and the marble is “so heavy” it could never be lifted, Garson said.

e original main bedroom in the west end of the home on the second oor is now a guest bedroom. e new main bedroom is located on the east end of the home, also on the second oor. ere are now his and her closets along with a bathroom.

e third oor is mainly for storage, but the owners’ daughter made part of it her own personal

suite, with it being the fth bedroom.

In the basement, there is a family room and exercise room with a converted wine cellar. e owners turned the original stage in the basement into a wine cellar after their son, who was a musician, left home.

In the backyard, once you walk through the English garden, there

is a hidden Japanese garden. Hattie Horvitz, wife of Samuel, traveled to Tokyo after Samuel’s death and brought back lanterns and sculptures. ose lanterns and sculptures can still be found in the backyard.

“As my owners said, you just fall in love with this home. It is in your soul,” Garson said. “She said this home will be in my soul forever.”

closet

hus-

The home at 16700 Parkland Drive in Shaker Heights was put on the market June 13 for $2.6 million. | CLE3D PHOTOS

The birdcage room, which is a morning room or sunroom, has views of Green Lake.

The hallway overlooks the living room and connects the ends of the home.

In the renovated kitchen, the space where the oven is was renovated from a chimney.

The owners were told to never get rid of the tile or marble in the original main bathroom.

In the backyard, once you walk through the English garden (left), there is a hidden Japanese garden (right) which has lanterns and sculptures from Tokyo.

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College Now Greater Cleveland names new CEO

Joe Scalzo

When Michele Scott Taylor rst interviewed with College Now Greater Cleveland CEO Lee Friedman in 2010, she was interested in two jobs.

One was for the nonpro t organization’s chief program o cer. (She got that one.)

e other was Friedman’s position.

“When I interviewed with Lee, I said I would come if she would help mentor me to become CEO one day,” said Taylor, who was Friedman’s rst hire after becoming CEO in 2010. “I knew I would love to one day lead this organization. I took a bet that this would be something I could really nd purpose in, which I have, and it’s been a wonderful ride, a wonderful journey.”

On ursday, June 20, that journey took the next logical step, with College Now announcing that Taylor will replace Friedman as CEO on Jan. 1, 2025.

Friedman will stay on through the end of 2024, as previously announced.

“It was abundantly clear to us that Michele was the ideal choice to lead College Now into the future, building on our accomplishments and continuing our impactful work,” Northern Trust president Michael Cogan, who chairs College Now’s board of directors, said in a news release. “She has played a crucial role in the organization’s growth over the past decade and is also highly respected and admired

Michele Scott Taylor | CONTRIBUTED

by the College Now team. We are excited to have Michele as our next CEO of College Now and believe her e ectiveness as a leader will continue to advance our organization.”

Taylor was promoted to College Now president in 2023 after 13 years as chief program o cer for the organization, which serves nearly 33,000 people annually through career and postsecondary education. College Now Greater Cleveland is the largest comprehensive postsecondary access organization in the country, awarding more than $7 million in scholarships last year.

Since 2010, Taylor has helped

CSU, Cleveland Leadership Center want students to grow careers in NEO

By Paige Bennett

Cleveland Leadership Center and Cleveland State University want to inspire college students to grow their careers in Northeast Ohio.

e organizations announced Tuesday, June 18, that they have established a partnership that will provide CSU students with opportunities to connect with leaders across the region.

It marks CLC’s rst partnership with a higher education institution. e nonpro t is a member of the Cleveland Talent Alliance, a group of public, private and nonpro t entities dedicated to advancing the region.

“It really gives (students) a lot of visibility within the Cleveland civic and business community,” CLC President and CEO Marianne Crosley said in a phone interview. “ e ultimate goal is to have them choose to stay in Cleveland for their futures. We want them to secure jobs here and to make this their permanent home.”   e partnership, coordinated

College Now expand its advising services to Akron, Barberton, Lake County and Mans eld, while increasing program revenues vefold: from $2.1 million in 2010 to more than $12 million in 2023.

“It’s my personal mission to do this kind of work,” she said. “Every year, there’s always something different. I never get bored because there’s always new things for me to do, for the organization and the community.”

As president, Taylor worked to shape and re ne a new strategic plan, which is expected to bolster College Now’s impact on the community and further position the organization as a thought leader in and an advocate for education — locally, regionally and nationally, the organization said.

“Michele has dedicated her career to helping students get the education they need to achieve their career goals,” Friedman said in a news release. “She has made invaluable contributions to College Now and provided critical support and advice to me over the past 14 years. I am con dent she will lead College Now to serve the community in the best ways possible.”

During Friedman’s tenure, College Now’s budget expanded from $4 million to more than $35 million, enabling the organization to annually assist over 33,000 individuals across six Northeast Ohio counties. College Now’s sta expanded from 40 to 175 over that stretch, making it the largest comprehensive postsecondary access

organization in the country.

Taylor said she’ll take the same approach Friedman did in the job — speci cally, when it comes to hiring good people and getting out of their way.

“I was able to do all I did because she stepped aside and let me do my thing,” Taylor said of Friedman. “ at’s something I’ve tried to do with my sta . I’ve always had an entrepreneurial spirit, so luckily I was aligned with a person who also believed in ‘intrapreneurial’ pursuits. I’m not like a typical entrepreneur. I call myself an intrapreneur because within an

of the Black Professionals Association Charitable Foundation; cochair of the LEAD committee of Delta Sigma eta Sorority, Inc.; as well as a board member of Cuyahoga Arts and Culture; Euclid Schools Foundation and the ACE Mentor Program.

She has received numerous recognitions, including being honored as a 2024 Woman of Note by Crain’s Cleveland Business; Team NEO’s 2024 Inaugural Emerging Leader; Cleveland Magazine’s “One to Watch;” YWCA’s Woman of Professional Excellence and Kaleidoscope’s 40/40. She has three children: Paris, Peighton and Douglas.

“It’s my personal mission to do this kind of work.”

organization, I like doing innovative, risky things to get better and have a great impact.”

Taylor is a rst-generation postsecondary student, earning two bachelor’s degrees from the University of Akron, as well as a master’s degree in higher education from Kent State and a doctorate in higher education from the University of Pittsburgh.

“College did so much for my life that I can’t even imagine people not going,” she said. “I feel like it’s something they’ve got to do. To be able to do that full-time and help people gure that out is a dream come true because I know how life-changing it was for me.”

Taylor also serves as board chair

Taylor said she’ll spend the next six months nishing up some projects in her department, while also taking the traditional “listening tour” with internal sta and key stakeholders “to make sure we are positioned to serve our community of students and adults.”

Does she expect someone to tell her, “I want your job someday”? “No, but the wonderful thing I love about being in this work — and I think it’s part of why a lot of us do this work — is we’re always looking for ‘who has next,’” she said. “Even if no one comes to me, I will always be looking to have a develop-and-grow sta , and create networks for people externally. at’s part of my natural personality. I suspect that, before long, we’ll have a good pool of folks who can step in and continue to do great work.”

through CSU’s O ce of Career Development and Exploration, will allow the university’s students to take advantage of CLC’s Campus Cleveland program and Spark: Grit to Great leadership conference. Campus Cleveland is designed to immerse college-age students across the region in the local professional and civic areas via the organization’s professional networks.

In addition, the university will be invited to participate in CLC’s Civic Leadership Institute, a program that o ers insight into the happenings of the local civic community, as well as the Accelerate pitch competition.

On the CSU side, Brittany Wampler, the university’s director of career development and exploration and an alumna of CLC’s Advanced Leadership Institute, has played a key role in developing the program.

“We are thrilled to join forces with the Cleveland Leadership Center,” Wampler said in a statement. “ is partnership is a significant step toward enriching our students’ academic and profes-

sional journeys by exposing them to the vibrant community and diverse opportunities that Cleveland has to o er.”

Crosley said the idea for the partnership was hatched in November 2023, when the nonpro t hosted its annual Spark leadership conference at CSU. e following month, CLC held an event and job fair for college students at the university. ese experiences allowed CSU students, sta and faculty to

network and learn more about civic leadership in the city, Crosley said.

While many CSU students hail from Northeast Ohio, they may be tempted to look elsewhere to begin their careers. e hope with the partnership, Crosley said, is that they will be exposed to the opportunities for young people in the region. She said CLC would be interested in exploring similar partnerships with other higher ed-

ucation institutions in Northeast Ohio.

Crosley said CLC is working to connect college students with the Greater Cleveland community “in a way that they might not seek.” Students at times may feel conned by their university’s campus or the college environment. What CLC seeks to do is encourage them to explore the neighborhoods and interact with Cleveland leaders, Crosley said.

Michele Scott Taylor

Kent State, CSU presidents decry Ohio’s cuts to higher education

By Joe Scalzo

ere’s an old Groucho Marx joke that goes, “I never forget a face, but in your case I’ll be glad to make an exception.”

In a similar vein, Kent State University President Todd Diacon tries never to publicly complain about state funding for higher education but Ohio’s track record is ugly enough for him to make an exception.

“I don’t want to be one of those people that’s seen as a complainer and a whiner ... but look at the numbers,” said Diacon, who joined Cleveland State President Laura Bloomberg and Walsh University President Tim Collins at a panel discussion called “Leaders in Education” on Wednesday, June 19, at the law o ces of McDonald Hopkins.

“State funding of Ohio public university students has declined by 32.1% since 2001. at’s per student,” he said. “And the percentage of the state’s budget devoted to higher education has gone from 15% to 6% in roughly that same time frame. I think it’s time to think about what the state wants from higher education and from public higher education.”

In 2022, Ohio spent $5,775 on higher education for a full-time equivalent (FTE), according to the annual State Higher Education Finance report produced by the Association of State Higher Education Executive O cers (SHEEO). at was well below the national average of $8,820, and was higher than just six other states in the country.

Meanwhile, there are 2.5 million fewer students in higher education than 13 years ago, Diacon said, with most of Northeast Ohio’s colleges and universities (public and private) seeing signi cant enrollment declines over that period. While CSU is currently looking to close a $40 million budget gap, Kent State started making annual cuts to its budgets in 2017 and will have slashed its overall budget

from $700 million to $600 million by 2027, “but we are at a point now where we basically have no more bandwidth for adding value,” he said.

Case in point: Diacon just spent two days at an A.I. conference on Nvidia’s campus with 30 other university presidents. While there, he discovered that Florida’s state legislature just funded 120 new tenure track positions for Florida universities for hires related to A.I. e University of Michigan, meanwhile, is hiring 80 new faculty members in all elds.

ose investments eventually will pay dividends in their respective states via a more educated workforce, Diaon said.

kins’ Dave Kall, the panel’s moderator. “And if those businesses do not stay in Northeast Ohio or they don’t locate in Northeast Ohio, guess what? We’re a service company. And because of that, we don’t have additional work. So from our perspective, it’s imperative to make sure we do everything we can in order to help the education system across Northeast Ohio.”

Ohio’s state legislature doesn’t share that philosophy, and Diacon believes it’s because higher education has become a “political wedge issue.” Elite universities such as Harvard, MIT, Penn and Northwestern collectively enroll less than 1% of all college students in America, “yet they drive the public perceptions of and understandings of what higher education is.”

“If you think about businesses thinking about locating and/or staying in Northeast Ohio, what’s most important? It’s an educated workforce.”

Dave Kall, managing member of the Cleveland of ce at McDonald Hopkins

“(Diacon’s) point about state funding is one of the most shocking things I had to come to terms with in moving to Ohio from a state that I didn’t think funded education to the level it should,” said Bloomberg, who came to CSU from the University of Minnesota, a state that spent $9,114 per student in 2022. “We need to decide as a people, is this a public good? Does higher education accrue value to the public?”

McDonald Hopkins believes so, which is why it sponsors organizations like College Now Greater Cleveland and Say Yes Cleveland, which provide support ( nancial and otherwise) to students pursuing two- and four-year degrees.

“If you think about businesses thinking about locating and/or staying in Northeast Ohio, what’s most important? It’s an educated workforce,” said McDonald Hop-

Study: Pediatricians need to talk about racism with patients

Jon Asplund, Crain’s Chicago Business

e pediatrician’s o ce may be able to play a big role in improving outcomes and lessening the negative e ects of racism during childhood, if clinicians know how to have the conversation, according to a study by a Lurie Children’s Hospital researcher.

Research already shows a link between exposure to racism during childhood and adolescence and increased risks of depression and metabolic health issues, such as obesity, diabetes and heart disease, Lurie said in a press release. And behaviors and practices that teach children about race and ethnic identity, known as racial socialization, can mitigate negative e ects.

A study that provides expert consensus guidance on how to have these discussions has been published in the journal Pediatrics.

“Over the years, numerous calls to action have been made to address racism in medicine. However, there’s been little guidance on how to have these conversations within clinical settings,” senior author Dr. Nia Heard-Garris said in the release. “Pediatric clinicians, in particular, have a unique opportunity to incorporate crucial conversations about race and racism into clinical visits, as these interactions occur during key developmental stages of a child’s life.”

Meanwhile, some news outlets conduct a “micro scrutiny of items to be outraged about,” Diacon said, like when a president at another Ohio public university recently got an earful from a state o cial because their grandson got a condom in his freshman swag bag. Or when Diacon’s conservative brother grew outraged about a “trigger warning on a syllabus at the University of Toronto.”

“I was like, ‘What? A trigger warning in a syllabus? How do you even know about this?’” Diacon said. “He was like, ‘Well, we heard about it on Rush Limbaugh.’

“So it is an incessant search for examples to be outraged about in this polarized environment.”

at outrage can make it easier for Ohio’s legislators to cut funding for higher education, a classic example of cutting o your nose to spite your face.

Or, as Groucho once put it, “Politics is the art of looking for trouble, nding it everywhere, diagnosing it incorrectly and applying the wrong remedies.”

e consensus was that pediatric clinicians must have a thorough understanding of the systemic nature of racism and the importance of both learning from patients and addressing intersectionality during these conversations, the release said.

Lacking that understanding and adequate training, panelists agreed, can lead to negative consequences.

Among the recommendations in the guidance, the study emphasizes active listening and open-ended questioning.

“As the conversation is occurring, pediatric clinicians need to be active listeners, in addition to con rming that they hear and understand what patients and families are communicating,” the study states. “Using open-ended questions was also recommended to engage patients and families and allow them to fully express themselves. As pediatric clinicians actively listen, they must also strive to use the conversation as a learning opportunity.”

“Racism is a strong determinant of health and longevity of life so talking about it, feeling afrmed and perhaps even receiving support will go a long way to social, mental, and emotional wellbeing of patients and care providers too,” according to one panelist quoted in the study.

A panel of pediatric clinicians and psychologists with expertise in racism and child health, along with parents and adolescents with lived experience of racism, identi ed themes to consider before, during and after discussions with patients, the release said. ey also looked at barriers that clinicians may encounter in having those discussions.

“As research in this eld continues to evolve, it is imperative to maintain ongoing dialogue about the key principles guiding conversations about race and racism, and to equip clinicians with the necessary tools to provide care that fully considers the impact of race on the patient population,” Dr. Heard-Garris said in the release.

Heard-Garris is a researcher and pediatrician at Lurie and assistant professor of pediatrics at Northwestern University Feinberg School of Medicine.

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THEATERS

Knepp owns the Midway in Ravenna and the May eld Road Drive-In eatre in Chardon. A unique but diminishing breed of small business, the pair is among an estimated 23 drive-in movie theaters left in Ohio and some 280 remaining in the U.S.

Behind only New York and Pennsylvania, Ohio is the thirdlargest market for drive-ins in the country by number of theaters, according to the United DriveIn eater Owners Association (UDITOA).

A manager of indoor theaters in the 1970s, Knepp has had the Midway and May eld theaters in his possession for roughly 30 years.

During a busy opening weekend for the lm “Inside Out 2” in midJune, Knepp was happily working a late shift at Midway, a nearly 70-year-old theater, making popcorn and slinging pizzas. It’s a crucial job with concessions providing a core revenue stream for independently owned theaters, which must pass along most — and, in some cases, nearly all — of their box o ce sales to lm studios.

e new Pixar lm helped buoy the best weekend yet for Knepp’s theaters this year, a welcomed development in what’s been a slow season so far in an already di cult and shrinking industry.

“Before the pandemic, drive-ins were doing really well. But the last four years have been challenging, especially for the smaller drive-ins across the country,” Knepp said. “ e smaller the town, the harder it is to make a pro t.”

Ups and downs

Summers will always be the make-or-break season for drive-in theaters. And operating under tight margins means an entire year’s outlook can vary starkly from one week to the next, even during the typically busy months.

“Every year we go into, we’re wondering, can we make it this year?” said Tim Sherman president, co-owner and thirdgeneration operator of the AutO-Rama Twin Drive-In in North Ridgeville. “We are always worried if this is the year things are going to be over because people are not coming to theaters anymore. It is easier for them to stay home and not come out.”

Drive-in operators have become accustomed to the up-and-down nature of this business. Knepp said the 2023 season started strong but ended slow. is year began with a slow start, but business is looking up.

“We are starting to catch up. For 2024, we had a rough spring. Indoors have been the same way. But the movies are much better than they were,” Knepp said. “Everyone wants to be entertained and to get out of the house, but they need a good product to see. As long as people are coming to the theater, I think we’re going to be OK.”

But customer tra c is never guaranteed. It can be quite unpre-

dictable and reliant on good weather and good lms — factors that theaters can’t control.  is reality, coupled with other mounting challenges, has been pushing some drive-in operators to close or sell their properties, winnowing their once-signi cant presence.

During their heyday in the 1950s and 1960s, it was estimated that there had been more than 4,100 drive-in theaters in America. Some 93% of those have evaporated since. Scores have closed over the decades due to buyouts from real estate developers that have gobbled up their land for commercial properties.

With approximately 39,000 total movie screens open in the U.S. in 2022, according to e Cinema Foundation’s 2023 State of the Cinema Industry report, drive-ins represent around just 1% of all screens in operation across the country.

Does this mean drive-in theaters are barreling toward extinction?

“ ey’ve been saying that since the ’80s, that drive-ins are dinosaurs. And they possibly are,” Knepp said. “It’s de nitely a business that is shrinking. But I think drive-ins, some drive-ins, will always remain.”

COVID boost comes and goes

During the height of the COVID pandemic and social distancing, drive-ins enjoyed a brief resurgence as the public rediscovered the open spaces and (relatively) cheap entertainment.

With studios e ectively closed at the time, drive-ins screened retro movies like “ e Goonies” and “Raiders of the Lost Ark” for low costs (compared to terms on current releases) and hosted events like concerts and graduation parties.

“During the pandemic, driveins did very well playing retro movies because it was the only

UDITOA is aware of around 20 drive-ins currently up for sale, the most that have been on the market at one time in anyone’s recent memory.  Some buyers go for the business. But, often, the land is worth more, especially if it’s of use to real estate developers.

“It’s almost like COVID happens, and then this list of other issues happens, and I think a lot of owners are saying, ‘I’m done. I caught the last wave, and now it’s time to get out of this business,” Wright said. “ ere are more drive-ins at out closing or up for sale,” she added. “Many are holding out for buyers who will continue to operate them as a drive-in. ey feel like it’s an important thing that they are providing to the families in their communities.”

“It’s bad,” Vogel said, noting that he’s speaking on his business, not for any others. “What happens if it turns out I cannot pay bills, what do I do then? We’ve been sweating that for a few years.”

‘At the mercy of the studios’

To get a new movie, theaters are typically required to show the lm for around two to three weeks.

entertainment that people had,” Knepp said. “Casinos were closed. Indoor theaters were closed. Drive-ins had a short time when they really exploded.”

A pop in business in 2020 enabled some theaters to invest in needed repairs and new equipment. Sherman, for example, invested $300,000 that year in rebuilding his Aut-O-Rama screens.

But since then, tra c has been trending at to down.

“As things started opening back up, the drive-in fell lower on the list of things for people to do,” said April Wright, a Los Angeles-based lmmaker who has produced two documentaries about drive-ins: “Going Attractions: e De nitive Story of the American Drive-in Movie” (2013); and “Back to the Drive-In” (2022).

At the same time, drive-ins are grappling with the same economic challenges hitting so many other businesses, including rising costs of food and labor. Across the board, expenses are up but sales are down. And with value being a draw of the drive-in experience, operators are reluctant to increase prices as much as they might like.  eaters owners chalk up lagging sales in large part to a recent stretch of stalled or underperforming lms the last few years, something they ascribe to the recent writers’ and actors’ strikes. When the lm product is bad — or in the case of COVID, simply nonexistent — theaters su er, and drive-ins are no exception.

“Without product, I will not exist,” said D. Edward Vogel, owner of Bengies Drive-In eatre in Middle River, Maryland, and vice president of UDITOA.

Couple all this with di cult terms imposed by lm studios and some evolving consumer habits shaped by shortened theatrical windows and ubiquitous access to movies and television, and the picture of why so many remaining drive-ins are struggling, selling or closing becomes clearer.

simply not have new releases.

“I am paying the same thing that I always have in a new world of exhibition,” Vogel said. “I don’t think it’s fair. But I’m doing it because it’s what I have to do to survive.” eater operators do not openly discuss these terms because their contracts prevent them from doing so. Anyone breaking the terms of their contract — including by discussing con dential terms — could be cut o and blacklisted from a studio entirely.

“No one is making a lot of money,” Vogel said. “And the important thing for independent exhibitors is we are paying the same in the way of terms as we did when we were grossing much higher gures.”

‘Rooting for drive-ins to survive’

A common thread among drivein owners is an almost unyielding passion for what they do.  ey love their customers, even when they’re di cult. ey’re nostalgic for the drive-ins they enjoyed growing up. And they all share a sense of joy when families come in droves and enjoy the experience.

But with new releases becoming available for streaming sooner than ever, Vogel said that potential moviegoers are increasingly opting to skip the theater and catch lms at home.

ere are also cases where theaters are under contract to continue showing a movie that’s already available on-demand, which does theaters no favors for drawing guests.  at happened with “ e Fall Guy,” which was available to stream 17 days after it was theatrically released in May. If a theater is showing it for three weeks, the lm’s potential draw is severely undermined. A theater can’t bail out and pull an underperforming movie if their contract requires them to continue showing it.

“ e studios wanted that longer run. And we found out later that (“ e Fall Guy”) did not do very well. e public didn’t come out for it,” Sherman said. “It doesn’t bene t either partner kicking that movie around if it doesn’t do any business.”

A further concern, he said, is how that trains guests to simply wait until a lm is available to stream from home rather than head to a theater.

“We are at the mercy of the studios all the time. We always have been,” said Brian DeCiancio, owner of the Skyway Twin Drive-In eatre in Warren and Boardman Movies 8, an indie indoor theater in Youngstown. “We were angry when windows (from theatrical release to home video) were six months. en three months. And now it is like nothing. It is really super hard.”

Despite shortened theatrical windows and decreases at the box o ces, Vogel said studios are not budging on terms with lm exhibitors. Operators like him would love to negotiate shorter run times or reduce the studio’s take on ticket sales. But they have little leverage and must agree to terms with the major studios or

“Nobody is going to get rich running the drive-in, unless maybe you’re in a major city with a big, big population,” Knepp said. “It’s about the love of the drive-in more than the pro ts to be made. And that’s what keeps them going.”

“You’re either in or out in this business. You either love it or hate it. And I love it so much,” DeCiancio said. “I love this business. I love the customers. I can’t tell you the last time I was like, ugh, I’ve got to go to work tonight. I just love being here.”

Sherman’s drive is fueled partly by a mission to carry on the legacy of his father and grandfather, who ran the theater before him. But he also described a satisfaction that comes from running the theater that can be hard to put into words.    “ ere is just something about a really busy night, playing a comedy or something, standing outside and hearing an entire audience laugh at a joke, or a scary movie when you hear everyone gasp,” he said.

“ is is about what we’re able to bring people. e joy, the laughter, the emotions,” he explained. “Movies are an escape that get you out of the realm of reality and take you to another place. It makes you feel good when people have reactions to it and have a great time. We get to be a part of the magic that happens.”

Despite headwinds, drive-in operators are generally optimistic about the future. Many are feeling good about the slate of movies coming out this year and hopeful that the public will continue to recognize and appreciate the unique experience and value of drive-in movies.

“I hope that most people are rooting for drive-ins to survive. But they need help from the community and the studios,” said Wright, an honorary UDITOA member. “We are all in this together. We need to support our local drive-ins and keep these special places around.”

Moviegoers wait for the lm “Inside Out 2” to begin during the lm’s opening weekend at the Midway Twin Drive-In Theatre in Ravenna. | JESSIE HERZFELD PHOTOS

people think of a guy in a basement wearing a hoodie,” says Alex Hamerstone, advisory solution director with TrustedSec.

“In reality, the amount of money these people and groups make from doing this is the motivation. It’s been reported one group alone made $300 million in the ransomware market,” he adds. “It is really about the money.”

For what it’s worth, o cials haven’t revealed the price demanded from Cleveland — but they have said they won’t pay it.

In the end, the “why” is secondary to the fact that systems are compromised and operations are disrupted. And no organization is o limits.

Lisa Plaggemier, executive director of the National Cybersecurity Alliance, adds that there is no low anymore.

“I remember 10 years ago when there was the rst ransomware attack on a church and everybody asked how low will would they stoop? And then there were ransom attacks on hospitals,” she said.

Getting in the (online) door

ere are any number of ways into a network, particularly for an institution like the city of Cleveland with day-to-day operations.

“Everything is now online. In my house, the thermostat, washing machine, refrigerator and even the car get updates over the internet. It makes for a big attack surface,” Hamerstone said.

Bad actors looking for login information target people who have network access. But, in

ten, a message will pop up on the screen right away that says you’re encrypted or the attackers will reach out to IT. Other times, the hack will be more public and shared on a hacker forum or the net.”

ere are a few ways to pull o a ransomware attack. e ransomware — also known as malware — can infect a network and install a program that encrypts that system, making it inaccessible to the original users. In order to get access to the data, it must be decrypted — that’s why there’s a ransom, for the victim to buy a decryption key from the person or group responsible for the attack.

Other types of attacks can involve the theft of important or sensitive data from a system where an attacker then threatens to publicly release it or the data is sold to a third party. ere also are attacks where the o enders merely threaten to tell clients or customers their data is compromised as a ransom threat.

Plaggemier talks about malware intrusions from places such as China that sit on a network, accessing intellectual property (IP), as a worst-case scenario.

“That IP is used to spin up a competing company with all of the stolen intellectual property,” she says. “They can then go to the original company’s customers and offer that product at half the price because there are no R&D costs,” she said.

When Cleveland Mayor Justin Bibb’s administration first announced the “cyber incident,” there were few details offered to the public.

Hamerstone said it can take time to unravel the speci cs of a cyberattack. “It can take a while

“We know there has been ransomware money that’s fueled the North Korean missile program so you have Americans paying for North Korean missiles.”

Lisa Plaggemier, executive director of the National Cybersecurity Alliance

some cases, it’s as easy as nding an old or unsecured router.

“We know that the Russians can use people’s home routers to launch malware attacks,” Plaggemier said. “ e Chinese have used old routers to get into our power grid.”

Once that access information is obtained, the hackers then make it part of a well-organized cyberattack supply chain.

“ e initial access brokers — the ones guring out how to get your username and password or how to break into the systems — they will get the information and sell that access to a ransomware group who will then use that access to get in and spread their malware,” Plaggemier adds.

How ransomware attacks unfold

Malware can sit in your system undetected for months.

“Once it is in your system, the attackers can see what is encrypted,” Hamerstone points out. “Of-

stone said. “What we have seen is the threat actors, or hackers, will actually nd the corresponding insurance policy and see that you have $5 million worth of cyber insurance so they will ask for $5 million.”

e negotiator’s job will then often extend to facilitating any agreed-upon payment using the attacker’s favorite and only acceptable payment, usually cryptocurrency. “A small or mediumsized company probably does not even know how to buy Bitcoin and that is why they hire a company that does so for these things,” he added.

For public companies, there’s an added headache of having to report attacks to the regulatory agencies, a practice Plaggemier said should be normalized for everyone.

“I advocate for more disclosure about who’s paying ransoms and how much they’re paying, because it puts it out there and lets the market respond,” she said.

Another reason for disclosure: insurance companies are tightening up and refusing to pay ransoms. To them, business executives should stop relying on those payments and take more precautions to safeguard data.

Who are the attackers?

It’s clear that cyberattackers are equal opportunity o enders and will just go after whatever and whoever they can but they are just a part of a large global criminal organization distribution networks and many employees.

“ ese bad guys, have things like a Help Desk to help you set up a Bitcoin account to pay the ransom or to help if the decryption keys don’t work. You can get somebody on the phone to help you gure it out. It is a big business and they’re very organized,” Plaggemier said.

MARKET

From Page 1

terms on a sublease to consider making a move. at gives them time to assess the space and their needs before the lease expires and they have to deal with the landlord and more expensive market rents.

“A lot of the subleases are burning o now,” said Robert Roe, a JLL Inc. managing director and o ce expert.

e largest single factor was that American Greetings Corp. dropped an e ort late last year to market a whopping 250,000 square feet of its sprawling headquarters and creative studios in Westlake, which insiders saw as “putting a toe in the water” to see what interest it might garner.

On the ip side, American Greetings subleased a second building at its headquarters at the south end of Crocker Park.

a Cresco vice president.

Another factor behind the decline in subleases is that landlords may use them to help land tenants for the building for the long haul. e only negative for the market, in general, is whether subleases drive up direct vacancy in the buildings, which CBRE’s Ross said has not happened so far.

And subleases allow tenants to make short-term deals in new buildings as they experiment to see what sort of footprint they want as a company’s view of its needs and the o ce market evolves, Roe said.

What’s not clear, Ross and others say, is how much space formerly o ered for sublease may go back into the building owner’s possession as existing leases expire.

to gure everything out and, often, any initial speculation — if something comes out right away — turns out to have been wrong later,” he said.

The response — and fallout

Knowing is only half the battle. Following the discovery of the attack, companies have to consider how to clean up the mess and who can help. e city of Cleveland brought in the FBI to conduct an investigation, but there are other approaches to a response, too.

In the case of a ransomware attack, a cybersecurity rm such as Hamerstone’s is charged with trying to remedy the problem and remove the o ending malware but, in some cases, the victimized company or organization will instead turn to a rm of ransomware negotiators.

“ e ransomware operators will ask for some amount of money and negotiators will try to negotiate it down,” Hamer-

ese bad actors are most often foreign and do their work in a country that has no extradition treaty with the U.S. And sometimes the lines between corporate cybersecurity, individual cybersecurity and national security are “blurred.”

“We know there has been ransomware money that’s fueled the North Korean missile program so you have Americans paying for North Korean missiles,” Plaggemier said. “Companies should have to disclose if they pay the ransom or not because those payments are a moral issue and people tend to forget when they pay they are paying real foreign criminals.”

As these attacks continue, Plaggemier said the more transparency there is, the less victimshaming will occur.

“We have got to get away from victim-shaming and have to get to the fact this is a business risk, and we have to be ready for it,” she said. “If your competitor has been ransomed across town, you’re next and disclosing information helps the entire industry understand and prepare for what they need to deal with.”

Dubbed Tech West, that structure was originally designed for the personal expressions maker’s technology unit. Two-thirds of the 78,000-square-foot Tech West Building was subleased by American Greetings and Cushman & Wakefield Cresco during the pandemic, likely the most striking sublease activity in the region. One tenant that originally subleased space, Palmer Holland, has since expanded onto the building’s first floor in what was originally planned as retail space, according to Jim Krivanek,

Allen Wiant, a long-term Cleveland o ce expert who operates AK Wiant LLC of Pepper Pike, said existing space that wasn’t subleased coming back to market could be a two-edged sword for o ce landlords.

“While the tenant was paying for the space, it wasn’t on the landlord’s radar. ey have other challenges,” Wiant said. “But as the leases expire for empty space, it will get their attention in leasing meetings. ey could use it as a way to attract new tenants because o ce buildout costs are so high. But if the space has to be redone for a new tenant, it will add to the weight of problems facing landlords.”

American Greetings’ Crocker Park location | COSTAR

PEOPLE ON THE MOVE

BANKING

Fifth Third Bank

BANKING

Fifth Third Bank

CONSTRUCTION

Shook Construction

INSURANCE

Gallagher Bene t Services

INSURANCE

Gallagher Bene t Services

Fifth Third Bank has named Suzanne Ferrara as Senior Vice President and Treasury Management Area Sales Manager. She is responsible for leading the treasury management sales team and driving the Bank’s growth in that space within Northern Ohio. Suzanne has more than 20 years of banking experience in various leadership roles. She received a bachelor’s degree in business management from John Carroll University. She also holds the designation of Certi ed Treasury Professional.

BANKING

Fifth Third Bank

Fifth Third Bank has named Alexandria Powers as Vice President, Treasury Management Of cer. In this role, she is responsible for business development and client experience in the payments space. Alexandria has nine years of experience in commercial payment roles. She earned a bachelor’s degree in economics from Case Western Reserve University.

BANKING

Fifth Third Private Bank

Fifth Third Bank has named Kevin McGarry as Vice President, Commercial Relationship Manager. In this role, he is responsible for driving the Bank’s growth in the commercial middle market space within Northeast Ohio. Kevin has 13 years of banking experience in corporate and commercial banking roles. He earned a bachelor’s degree in accounting from Notre Dame College.

BANKING

Fifth Third Bank

Fifth Third Private Bank named Geoff Snyder as Vice President and Wealth Management Advisor. He works closely with individual, business and institutional investors to help them build their wealth and achieve their nancial goals. Geoff brings more than 20 years of nancial services experience to Fifth Third Private Bank. He earned a bachelor’s degree in marketing from Ohio University and an MBA from Lake Erie College. He holds his Series 7, 63, 65, life and health and NMLS licenses.

BANKING

The PNC Financial Services Group

Fifth Third Bank has promoted Anne Sawyer to Treasury Management Of cer. In this role, she is responsible for business development and client experience in the payments space. Anne has 20 years of banking experience. She earned a bachelor’s degree in business administration from Baldwin Wallace University.

Patrick O’Brien joins PNC Bank as Wealth Director. In his role, Patrick oversees a team of PNC Private Bank professionals, striving to achieve the highest level of client satisfaction. He and his team work to ensure the client bene ts from a full complement of investment, trust, nancial planning and private banking services to help them achieve their nancial goals. Patrick earned his MBA at the University of Cincinnati and holds the Certi ed Exit Planning Advisor designation.

Nora Loftus joined Shook as Vice President & General Counsel where she will lead legal affairs, providing critical legal guidance and innovative solutions that drive the company forward. She was previously a partner of a law rm where she specialized in construction representing general contractors, owners, designers, suppliers, subcontractors, and sureties from front-end document review through litigation. Nora also served as an arbitrator with the American Arbitration Association Construction Panel.

HEALTH CARE

Western Reserve Hospital

Gastroenterologist, Jason Abdallah, MD has joined Western Reserve Hospital Physicians, Inc. Dr. Abdallah completed his internal medicine residency and gastroenterology fellowship at MetroHealth Medical Center at Case Western Reserve University. He previously served patients at University Hospitals in Northeast Ohio as well as AdventHealth Medical Group. He now serves patients at Western Reserve Health Center in Hudson, OH.

Ethan Hendrickx has been promoted to Executive Vice President, Ohio Employee Bene ts and HR Consulting at Gallagher. Ethan will be responsible for driving Gallagher’s growth in the Ohio market, while leading a team of experts to provide specialized services and industry-leading expertise to employers of all sizes and industries. With over 20 years of bene ts consulting experience, Ethan will also serve as the executive sponsor for key client relationships.

INSURANCE

Gallagher Bene t Services

Alan Greenberg has been promoted to Market Leader, OH.  Alan will lead a team of bene t consultants & have the responsibility of building & maintaining client relationships, driving growth and developing a high-performing team. With over 25 years’ experience, Alan helps to design comprehensive insurance programs for all types of businesses. He delivers personalized, strategic & creative bene t solutions that increase shareholder value, mitigate risk and attract and retain employees.

Chris Herbruck has been promoted to Market Leader, OH.  Chris will lead a team of bene t consultants with a focus on employers in the mid-market.  Areas of expertise include non-pro t, long-term care facilities, manufacturing and privately held employers. Chris has over 30 years’ experience in the bene ts industry. He is a key strategist in claims analytics, employee retention, increasing shareholder value and a focus on the bottom line within a sustainable framework.

INSURANCE

Gallagher Bene t Services

Brian Kempton’s promotion to Market Leader, OH, comes with the responsibility of leading a team of bene t consultants and overseeing client relationships in the OH commercial and public markets. With his extensive experience, Brian helps to design comprehensive bene t programs for businesses of all types. He delivers personalized, strategic & creative bene t solutions that increase shareholder value, and attract and retain employees.

INSURANCE

Gallagher Bene t Services

Joe Roberts has been promoted to Market Leader, Northeast, Ohio. In his new role, Joe will lead a team of bene ts consultant and have primary responsibilities over the continued growth of the mid-market commercial business.  Joe specializes in driving strategy around culture, total rewards and cost savings initiatives for mid & large employers. Joe joined Gallagher in 2014 and has over 16 years of experience in the employee bene ts industry.

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Kaylie Moran, Ed Sivillo, Melissa Streicher People on the Move manager Debora Stein (917) 226-5470, dstein@crain.com

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I was working full time at the time I was pursuing my MBA, so I was able to easily balance my work and school schedule by taking online classes. This was a huge benefit because I could apply learnings from my courses to my position in realtime.

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