Crain's Cleveland Business by Crain's Cleveland Business

SPORTS: Haslams look to grow events business. PAGE 3

CYBERSECURITY Small businesses are a tasty target for ransomware. PAGE 10

CRAINSCLEVELAND.COM I JULY 26, 2021

As offices reopen, employers experiment with schedules and vow to remain flexible WHITE-COLLAR WORKERS ARE TRICKLING BACK TO OFFICES across the region, after nearly a year-anda-half spent in spare bedrooms or basements. But employers aren’t taking a one-size-fitsall approach to reopening. In a competitive labor market, where flexi-

bility has become more of an expectation than a perk, some companies are going fully remote. Others are experimenting with hybrid schedules. A few are reimagining office layouts to reflect new ways of working. The transition is still underway — and on

MICHELLE JARBOE

CHANGING LANDSCAPE

| BY MICHELLE JARBOE AND STAN BULLARD

uncertain footing, as coronavirus variants spread and people and corporations alike try to sort through the lessons of the last year. “Whatever we decide probably won’t be the same thing that we do a year from now — because the culture is changing,” said Gary

VanderLind, senior vice president and chief human resources officer for the Goodyear Tire & Rubber Co., during a recent virtual event. See OFFICES on Page 21

Case students, neighbors finally getting acquainted Group is trying to build better connections with community BY AMY MORONA

Stanley Miller grew up about 10 minutes away from Case Western Reserve University. But the college was far from a fixture of his childhood. “You knew when you were growing up, you weren't welcome on this

campus,” the now 73-year-old said. Miller is a Glenville High School grad. The neighborhood of the same name is next to the campus, along with Hough and the city of East Cleveland. Black residents predominantly live in each of those three areas. Forty-four percent of Case’s

11,465 total students last fall were white. Six percent were Black. Case’s campus sits in Cleveland’s University Circle. A 2020 ProPublica report found the vast majority of charges issued in the area by private police forces operated by its nearby peer institutions, including the

Cleveland Clinic and University Hospitals, involved Black people. Miller said he knows the university’s main goal isn’t to grow the neighborhoods. It's to enroll and educate students. But those are connected. There hasn't been a comprehensive neighborhood engagement plan from Case, Miller noted. Case officials say they’re working to make it a more inviting campus. There are currently

several institution-led initiatives underway, including hosting neighborhood dinners a few times a year and leading a cohort of local stakeholders who meet regularly for nine months to strategize community building. But as university leadership comes and goes over the years, residents remain. Take Miller’s sister, for example. See NEIGHBORS on Page 20

NEWSPAPER

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SPORTS BUSINESS

Haslam Sports Group works to bulk up events business BY KEVIN KLEPS

As the general manager of Capital One Arena in Washington, D.C., Michele Powell oversaw a facility that hosted 225 significant events per year. Her new job, as the vice president of event development for Haslam Sports Group, is quite different. Now, Powell is attempting to book events at a massive stadium that can seat more than 67,000. She’s also in charge of two soccer facilities in Columbus, and will look to host events at the Cleveland Browns’ training facility in Berea. She’s gone from courts and rinks to grass, turf and soccer pitches. But for a longtime sports business professor who enjoys learning new things, making the jump to Northeast Ohio made a ton of sense. “Any time you’re given the chance to build something, it’s just a great opportunity,” Powell said. When Powell’s hiring was announced in mid-April, Haslam Sports Group chief operating officer David Jenkins said the former Monumental Sports and Entertainment executive would “significantly enhance our opportunities to attract marquee events to Northeast Ohio and Columbus.” That’s a key focus for a company that is involved in significant projects in three cities. The Browns have been a driving force in a city of Cleveland proposal that would reimagine the lakefront and result in the construction of a pedestrian bridge that would run from the roof of the Huntington Convention Center to North Coast Harbor. The team also is exploring a major renovation of FirstEnergy Stadium and is planning to expand its training facility and administrative complex in Berea. In Columbus, the Haslam-operated Columbus Crew are playing at Lower.com Field, a $313.9 million, 20,000-seat stadium that opened earlier this month. There’s also Historic Crew Stadium, which has a new training facility for the reigning Major League Soccer champs and could at some point be accompanied by a community sports park. Powell views the differences — in the cities and the facilities — as an advantage as she works to bulk up the events calendars at the three major venues. “You can target different things when you’re talking to promoters,” she said.

‘Continuing to build out’ Before a 10-year run at Monumental Sports, whose properties include the Washington Wizards, Washington Capitals and Washington Mystics, Powell worked on the promoters’ side of the events business. For more than four years, she directed booking for Feld Entertainment, which owned the now-defunct Ringling Bros. and Barnum & Bailey Circus. In the last 16-plus months, she’s seen friends lose their jobs or be furloughed, and has heard of concerts being rescheduled “three, four, five, six times.” With many of the big stadium tours pushed to 2022, Powell has been working to secure events well into the future. “The real focus is on ’22, ’23 and

FirstEnergy Stadium has hosted several soccer matches featuring the U.S. men’s and women’s national teams. The last was the U.S. men’s 6-0 win over Trinidad & Tobago in the Gold Cup quarterfinals on June 22, 2019. | MATTHEW ASHTON/GETTY IMAGES

Lower.com Field, the $313.9 million home of the Columbus Crew, opened on July 3. | COLIN PETERMAN

continuing to build out,” the Haslam Sports VP said. In a 13-month span in the summers of 2017 and ’18, FirstEnergy Stadium hosted concerts featuring U2, Taylor Swift, plus Beyoncé and Jay-Z’s On the Run II tour. Next summer, Def Leppard, Mötley Crüe, Poison and Joan Jett & the Blackhearts will perform at the stadium — two years later than originally anticipated. But Powell and the Browns envision a calendar of events at the 22-year-old stadium that is much more diverse than NFL games and major musical acts. The organization would like to attract more high school and college sports — Powell mentioned the possibility of hosting lacrosse and other NCAA championship events — and

will explore motocross and monster truck competitions. The Haslams’ focus on education and community impact, Powell said, could also mean the addition of graduations, as well as an increased focus on youth camps and youth tournaments. There could be career fairs on the stadium concourse, corporate team-building events in the hospitality spaces, and beer and wine festivals. Another biggie — soccer — is something with which Haslam Sports Group is quite familiar. Five matches featuring the U.S. men’s and women’s national soccer teams were held at FirstEnergy Stadium from 2013 to 2019. Included were a pair of Gold Cup victories by the U.S. men that drew a combined tally of al-

most 52,000 in 2017 and ’19. At one point in 2017, FirstEnergy Stadium was one of 49 North American venues under consideration to host matches in the 2026 World Cup. David Gilbert, the president and CEO of the Greater Cleveland Sports Commission and Destination Cleveland, said that “there’s lots of opportunity” at FES. But the stadium, because of its sheer size, has some obvious limits. “When you open the doors, there’s more costs than in a smaller facility. So it has to be the right event,” Gilbert said. The lack of a roof and the proximity to Lake Erie during a Northeast Ohio winter can also be a little challenging. “My guess is no one’s going to want

to rent our field out in the middle of February, but you never know,” Powell said. Gilbert is intrigued by the potential of the two soccer-specific facilities in Columbus — an option he doesn’t have at his disposal in Cleveland. “These soccer-only stadiums really open up great possibilities, because they seat only 20,000, 25,000, which is a big number of fans for some really big events, but the cost isn’t the same as it is for an NFL type of facility,” the sports commission and Destination Cleveland CEO said. The length of the MLS regular season, which stretches from April to early November, combined with the need to “protect the pitch,” limits some of the possibilities at Lower. com Field, Powell said. That’s not the case at Historic Crew Stadium, where the surface is being changed from grass to turf and the calendar is no longer occupied by MLS matches. The venue recently landed an Aug. 17 stop on the Hella Mega Tour — showcasing the likes of Green Day, Fall Out Boy and Weezer — that was rescheduled because of COVID-19 restrictions in Canada. Believing there are cross-promotional opportunities between the company’s football and soccer fans, Haslam Sports Group offers early purchasing windows to season-ticket members of the Browns and Crew, with each getting first priority for events in their home city. Powell, who spends a lot of time on Interstate 71, admits that she still has a lot to learn about the two markets, but she’s intrigued by factors that go beyond the box office. “My role is, long term, how do we not only host the big events, but also how do we become the home of Ohio high school sports?” she said. “How do we make a difference every day in the community of Columbus and Cleveland? That’s great for me, because it wasn’t something that I really had the opportunity to do in my old role.” Kevin Kleps: kkleps@crain.com, (216) 771-5256, @KevinKleps JULY 26, 2021 | CRAIN’S CLEVELAND BUSINESS | 3

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About an hour outside Cleveland along rural Ashtabula County’s Lake Erie coastline, stakeholders are fretting about the future of a lodge that has been a linchpin of Northeast Ohio’s burgeoning wine country for the last 17 years. Opened in 2004, the multimillion-dollar Lodge at Geneva-onthe-Lake has been owned and subsidized by the county since its inception. However, for better or worse, that will change at the end of this year. That’s when the state is set to take control of the property and pay off its remaining debt. Making this happen is a last-minute provision inserted into the state budget that was passed at the end of June. The transition will turn the facility over to the Ohio Department of Natural Resources. There, it’s expected to be operated like other lodges in the ODNR portfolio, which are managed by Regency Hotel Management of South Dakota. The Lodge at Geneva-on-theLake is technically already part of the state park system but is operated independently from it. This transition of ownership to the state is largely what worries the area’s wine industry and tourism officials. They suggest the luster of the resort could be lost under its new state owners, possibly diminishing its greater economic benefit in the future. “Will the lodge, will its amenities, immediately degrade? Of course not. But will there be a gradual decline in what the lodge can offer? And will all of us suffer? That’s what we’re concerned about,” said Donniella Winchell, executive director of the Ohio Wine Producers Association, the state’s trade group for the wine industry, which is based in Geneva. “We’re respectful of ODNR and the representatives. But what we’re trying to do is work out opportunities to keep this resort character here.” Having undergone various renovations and additions through the years, the lodge features a four-star hotel that includes 109 rooms — which can go for as much as $350 a night during the busiest summer months — and 25 lakeside cottages. It also has pools, a conference center, a zipline course and, at peak periods, six shuttles shuffling guests to the bevvy of wineries in Northeast Ohio’s version of Napa Valley. “That facility is really working. They are bringing a really nice clientele out here,” said Nick Ferrante, the third-generation owner of Ferrante Winery and Ristorante in Ge-

The Lodge at Geneva-on-the-Lake has grown into a tourist destination in Northeast Ohio’s wine country since opening in 2004. | THE LODGE AT GENEVA-ON-THE-LAKE

“WILL THE LODGE, WILL ITS AMENITIES, IMMEDIATELY DEGRADE? OF COURSE NOT. BUT WILL THERE BE A GRADUAL DECLINE IN WHAT THE LODGE CAN OFFER? AND WILL ALL OF US SUFFER? THAT’S WHAT WE’RE CONCERNED ABOUT.” — Donniella Winchell, executive director of the Ohio Wine Producers Association

neva. “Not only do people stay at the lodge, but they use the shuttle to visit the wineries, and that’s been huge for us.” The lodge is also a prominent buyer of local wines. Ferrante said he sells between seven and 10 cases of wine there a week. The facility, managed through a contract with the county by global hospitality group Delaware North (U.S. headquarters in Buffalo, New York), reportedly operates at 100% capacity regularly. It may be the most-visited state lodge in Ohio. An ODNR spokesperson did not respond to a request for comment to verify details like this or to address some of the stated concerns. Winchell and Ferrante say a concern is money not being put back into renovation of the property as it has been, which in turn might impact the sort of visitors who not only go there but funnel out to the area wineries that rely heavily on events and tourism. A portion of revenue generated by the lodge is set aside for these renovations, per conditions set by the county. “A lot of state lodges, there is not a lot of renovations being done,” Ferrante said. “They are older, not as modern, not as nice, and a little rundown. So we’re concerned that the quality and level of service at the lodge will suffer in time. It won’t happen overnight. But in time, if it does suffer, are we going to see the same quality of clientele coming here that is willing to spend money?”

‘It’s like our Cedar Point’ In accordance with arrangements worked out in the early 2000s, the state was set to assume ownership of the facility, which sits

on state-owned land in Geneva State Park, in 2040. All debt was on track to be paid off by 2031. The annual debt service through then comes out to approximately $1.3 million. State Sen. Sandra O’Brien, a Republican from Ashtabula County, pushed the 11th-hour addition to the budget that provides for the state acquiring the facility from the county. This late addition miffed some local officials and stakeholders who felt they had no say in the action. Regardless, per terms of the biennial budget, the state will pay $13.95 million for the property, erasing the outstanding debt. The state is set to take control of the facility by Dec. 31. O’Brien has said her motivation is to take that debt burden off the county’s shoulders, something that’s been a contentious element of the lodge since commissioners approved plans for the lodge about two decades ago. Indeed, Ferrante recalls the lodge being somewhat of a “white elephant” when it was constructed years ago because of the cost, though the region seems to have more than embraced it since those days. “It has certainly helped the tourism of this whole area,” Ferrante said. “It’s like our Cedar Point. It’s the biggest tourism draw on the eastern side of Cleveland.” The financing details for the lodge are complicated. But according to county officials, upward of $22 million has been paid by the county itself so far toward debt on the facility. Another $13.1 million was to be paid by 2031, at which point all

4 | CRAIN’S CLEVELAND BUSINESS | JULY 26, 2021

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TECHNOLOGY

Fairlawn firm could get business lift from stronger cybersecurity needs Kimmell Cybersecurity expects to serve broader market, add staff BY RACHEL ABBEY MCCAFFERTY

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debts would have been covered. Ashtabula County is making a payment of approximately $643,000 on the facility this year. Those annual payments fluctuate some and elevate to about $1 million in 2024. Additional money is kicked in annually toward that debt from revenue generated by the facility and by other groups, including the county convention facilities authority and the Village of Geneva-on-the-Lake, for example. Delaware North, which stakeholders say they are very pleased with, is in the middle of a 10-year contract for running the facility that expires at the end of 2026 but includes the possibility for extensions. The lodge’s general manager deferred any comments about the situation with the facility to corporate spokespeople, who did not immediately respond to a request for comment. Delaware North is paid a fixed management fee of $385,000 beginning with the first year in 2017. That rate increases 3% each year

after, according to terms of its current contract. It also collects an additional variable management fee of 1% of gross profits at the lodge annually. As far as how the property is managed in the future, and whether Delaware North will remain involved, the devil is truly in the details that have yet to be hashed out. Officials say negotiations are in progress. The uncertainty, though, is what makes winery and tourism officials anxious. “We are engaging in conversations with the state of Ohio and ODNR and having conversations about what the transition would look like,” said Ashtabula County Commissioner Casey Kozlowski. “But I do want to make it abundantly clear we are fully supportive of the lodge. It’s a beautiful facility that benefits our county tremendously, and the vision is that doesn’t change one bit.” Jeremy Nobile: jnobile@crain.com, (216) 771-5362, @JeremyNobile

Stronger cybersecurity requirements for defense contractors could mean big business for companies that work in that space, including Kimmell Cybersecurity in Fairlawn. Kimmell Cybersecurity, which got its start in 2013, has already seen growth driven by companies seeking pre-assessments for the federal Cybersecurity Maturity Model Certification. And it’s seeking authorization to conduct those assessments, too. There’s been a “rapid increase” in cyber attacks globally, said Candy Alexander, international president of the Information Systems Security Association in Virginia. The Cybersecurity Maturity Model Certification framework will give the Department of Defense a set standard on cybersecurity for its contractors. Everyone says they value security, Alexander said, but implementation varies for each company, based on factors like size, maturity and more. The current version of the CMMC has different levels of security. If a company is at a lower level, that won’t preclude it from receiving defense contracts, Alexander said. But the department may want the company to work on certain areas of cybersecurity and work toward continuous improvement. The CMMC projects already have led to a lot of work in the cybersecurity space, but deadlines at the federal level have been changing. Alexander said projects were originally supposed to be completed in November of 2020, but the Biden administration is now re-evaluating the program, so new deadlines are up in the air. Still, with hundreds of thousands of companies that could qualify as defense contractors in the country, this could mean more work for companies like Kimmell Cybersecurity. Kimmell Cybersecurity handles

— Brett Kimmell, principal and cybersecurity consultant at Kimmell Cybersecurity

everything from IT security assessments to penetration tests, said Brett Kimmell, principal and cybersecurity consultant. Kimmell said the company’s largest growth area right now is due to the CMMC requirements, but the areas outside of CMMC have been seeing moderate growth as well, as awareness of the risks of cyber breaches grows. The first step for most companies is to do a base cybersecurity assessment, Kimmell said. A penetration test, in which a company like Kimmell CybersecuAlkhulaiwi rity actually tries to break into a company’s system and data the way a hacker would, is premature if a company doesn’t have a cybersecurity system in place. Every company is different. That initial assessment is where they’ll get specific recommendations on where they should invest, said Abdullah Alkhulaiwi, partner and senior cybersecurity consultant. Alkhulaiwi has been with Kimmell Cybersecurity since 2015, when he

was hired as its second employee. He had been volunteering with a nonprofit client of Kimmell’s while waiting for his work permit. That authorization came the same day Kimmell landed a big contract. The two have been working together since. Today, Kimmell Cybersecurity employs about 10. Kimmell declined to share annual revenue. If authorized to perform CMMC assessments, Kimmell said the company would begin serving a broader market area and would add staff. Kimmell said the company has already started the process of becoming certified, and he expects to receive authorization to complete the assessments in late winter or early spring. And the company is already expanding its reach with a new office in the Austin, Texas, area, where Kimmell said there is a large concentration of defense contractors. Kimmell said physical office space had not yet been secured, but the company has existing clients in the area, and one of its employees is relocating in early August to run the new location. Right now, defense contractors are trying to get compliant in advance of those CMMC assessments, so Kimmell Cybersecurity has been offering consulting services and gap or pre-assessments, Kimmell said. “There’s a lot of work to be done with companies who are immature in their cybersecurity programs,” Kimmell said. Auditors need to be independent, so Kimmell Cybersecurity won’t be able to perform the CMMC assessments for companies it works with on consulting or pre-assessments. But altogether, it could mean a significant increase in available work for the company or companies like it. Rachel Abbey McCafferty: (216) 771-5379, rmccafferty@crain.com

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JULY 26, 2021 | CRAIN’S CLEVELAND BUSINESS | 5

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REAL ESTATE

Next generation takes reins at Krueger Family firm expands with TREO project BY STAN BULLARD

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Drive too fast on I-90 eastbound, and you might miss the sign near West 117th Street in Cleveland that Krueger Group, a construction contracting and real estate development firm, has on the south side of the highway at Triskett Road Storage, a mini warehouse among its holdings. But motorists won't miss a construction site at 2487 West 25th St., where the more than $30 million, five-floor TREO apartment building is starting to rise. Both locations emanate from the same family-owned outfit. The self-storage center reflects its foundation. TREO reflects its growth and scope as it begins the transition to a second generation of family ownership. Robert E. Krueger II, who founded the company, has moved into the newly created founder and chairman's position as his sons Bobby and Dan Krueger and son-in-law Jack Doheny begin a planned transition of the company's ownership. "They grew up with the world according to Bob," the elder Krueger said in an interview. "They have experience with big construction companies and are ready to take this on." In 2004, he constructed the self-storage project, which also has two other buildings that serve as Krueger Group's headquarters and warehouse. In all, it's a 10-acre property accumulation the elder Krueger made on Triskett Road, all the while doing small construction jobs, from storefronts to offices for nonprofits and big houses for select clients. Meantime, Bobby Krueger, who serves as president, has brought to Cleveland a Chicago-based commercial development firm, Mavrek Development, that he co-owns. Mavrek is developing TREO, while Krueger Group is its general contractor. TREO is the largest project undertaken by Krueger Group as a builder, Bobby Krueger said, but builds on the legacy his father created. The elder Krueger, the son of a pipefitter, started out as a residential real estate agent in the 1970s and began acquiring properties. He then ran the construction work the projects needed, and the jobs grew as he began acquiring larger properties, such as apartment and commercial buildings. "In 1978, we decided we could make a business out of this and do it for other people," the elder Krueger said. Meantime, the next generation was growing up. Fresh out of Miami University of Ohio, Jack Doheny, son-in-law and brother-in-law to the Krueger clan, joined the company, gained a real estate license and now heads its business development efforts. After college, the other Kruegers launched their careers in Chicago working for other construction companies.

Krueger Group founder Bob Krueger (right) is starting to turn over control of the construction and real estate firm to his family’s next generation. They are (from left) Bobby Krueger, president; Dan Krueger, vice president of predevelopment service; and Jack Doheny, vice president of business development. | STAN BULLARD/CRAIN’S CLEVELAND BUSINESS

The five-floor, $30 million-plus TREO apartments starting to rise at 2487 West 25th St., Cleveland, symbolize the stamp the next generation members of family-owned Krueger Group want to make in the region. | CONTRIBUTED

Bobby Krueger worked for four years there for Atlanta-based PulteGroup and, after the housing collapse in 2007, joined a boutique homebuilder in Chicago's Lincoln Park neighborhood. That led in 2010 to his co-founding of Mavrek, which undertook a mix of projects converting commercial buildings to mixeduse, with apartments as well as ground-up developments. Meantime, from 2005 to 2009, Dan Krueger also worked for homebuilders in Chicago, among them publicly traded Lennar, a Miami-based builder with associated financial businesses. He recalls it as a time he worked on hundreds of homes until "the bottom fell out." He returned home to join the family business as a way to continue his construction career. The elder Krueger puts a different, and typical Dad spin, on things: "All my children lived in Chicago until they married and had children, and then came home to raise them." Due to his Mavrek experience, Bobby Krueger became the Krueger Group's president. He now divides his professional time between Chicago and Cleveland. "We're expanding our capabilities with TREO," Bobby Krueger said. The firm might do such projects for itself in the future but not as a third-party building concern. In that respect, its focus is typically projects costing less than $15 million (Hyland Software Inc. in Westlake has been a repeat customer) to about $1 million. That's in addition to many smaller projects such as renovating offices or storefronts that the company, he said, "can do all day long." Today, about 80% of the company's construction volume is commercial. The remainder, which it

pursues selectively at the high end, is residential. Even with TREO rising, Krueger is pursuing its next project for its own account. Through an affiliate, the Kruegers just opened Breakwater Storage, a self-storage center they installed in an old industrial building at 1278 West 58th St. The reason: "There's new stuff all around," said Doheny, referring to apartments and townhouses that have cropped up all around the site in the Detroit-Shoreway neighborhood. All those units are in an area with no self-storage nearby. Also in the planning stage is a 30-suite apartment building at the corner of West 58th Street and Breakwater, a vacant parcel Krueger acquired as it put in the self-storage center. A particular niche is small projects for nonprofits, including jobs for Ruffing Montessori in Rocky River and University Circle, Gigi's Place in Lakewood and the West Side Catholic Center in Ohio City. Typical for growing up in a building business, the Krueger brothers worked for the concern. They have quite specific memories of working as teenagers on one job the company did for the West Side Catholic Center. Shoveling by hand and using buckets to remove soil, they lowered the site-constrained center's basement 2 feet. Over the years, Krueger has been a low-key player in the renovation of multiple old commercial buildings in downtown Rocky River and is little known beyond the West Side. Alex Jelepis, an executive vice president at the NAI Pleasant Valley realty brokerage, is familiar with Krueger Group through a longtime focus on the West Side. "I was introduced to (the elder) Bob Krueger three decades ago as a guy who does what he says. I've found that to be true on multiple jobs over the years," Jelepis said. "He's not a chest-pounder. He's quietly effective. If the next generation is anything like him, they'll do fine." The elder Krueger won't disappear from the picture. But his sons hope he'll use the freedom he'll have to travel with their mother. That’s slightly ironic given the elder Krueger’s Cleveland focus. "We built the company so we wouldn't have to get on jets to do business," he said. Stan Bullard: sbullard@crain.com, (216) 771-5228, @CrainRltywriter

6 | CRAIN’S CLEVELAND BUSINESS | JULY 26, 2021

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HEALTH CARE

Cleveland Cord Blood Center adds subsidiaries, expands partnerships BY LYDIA COUTRÉ

that you could do to potentially save somebody else’s life from what may As the work it’s been doing for just be medical waste; and so if not, it more than a decade gains broader in- also goes to research,” she said. “The terest from industry, researchers and possibilities are potentially limitless in academia, the nonprofit Cleveland what we could use stem cells for.” CCBC is growing its collection sites Cord Blood Center has taken steps in on the heels of a record-setting utilirecent years to be ready to respond. CCBC, one of only eight FDA-li- zation rate of 62% on average for all of censed cord blood centers in the 2020. At the start of the year, it was at United States, collects, processes, 44%. In May of this year, it had reached stores and distributes stem-cell-rich 74% utilization, meaning that roughly umbilical cord blood that is used for three of four units collected were then transplantation in patients with used for transplantation or research. One factor in that rate was life-threatening disorders as well as for research by scientists around the COVID-19, which presented an addcountry exploring cord blood’s po- ed hurdle in finding bone marrow donors who may have been hesitant tential therapeutic applications. This month, CCBC announced it to enter medical facilities. This could is expanding its partnership with have caused a shift toward the cord Kaiser Permanente, bringing its do- blood alternative for stem cells. Another major factor was the Cell nation and collection program to the Kaiser Permanente San Leandro Therapy Incubator, one of two social Medical Center — the second Cali- enterprise subsidiaries CCBC formed fornia hospital in the health system at the start of 2020 to help expand its to offer parents the opportunity to operations from collection and research to proof of concept, intellectudonate their babies’ umbilical cord. The Kaiser Permanente San Fran- al property and eventually to new cisco Medical Center became a products. Cell Therapy Incubator (CTI) partCleveland Cord Blood Center collection site in 2017, the center’s initial ners with external clients to offer access to the Cleveland Cord Blood stretch to the West Coast. The San Leandro collection center Center’s inventory and expertise, is supported by a statewide public and helps research move on the path initiative (California Umbilical Cord toward clinical testing and beyond. “That is one of the aspects that the Blood Collection Program) to collect industry is looking for: THE INCUBATOR IS DRAWING INTEREST People with LOCALLY, DOMESTICALLY AND EVEN know-how and people INTERNATIONALLY. with access a genetically diverse bank of cord to cord blood,” said Wouter Van’t Hof, blood units, which is in line with the director of the Cleveland Cord Blood Cleveland center’s efforts to expand Bank — the operational/main comthe diversity of its inventory of avail- ponent of CCBC — and CEO of CTI. The other enterprise, Advanced able units for transplant. The stem cells in the umbilical Immune Cellular Therapeutics cord, the majority of which are dis- (AICT), is focused more on in-house. carded after birth, can be used to help With both new subsidiaries, the centreat patients who have leukemia, ter’s employees have increased by lymphoma and other conditions, said 17% since the beginning of 2020. CTI has seen revenue growth of Dr. Michelle Gebhardt, assistant chief of outpatient maternity and care ex- 123% in the first two quarters of this perience at the Kaiser Permanente year compared with the entire year San Leandro Medical Center. Plus, of 2020, its first year as an indepenongoing research is looking into what dent enterprise. CTI began as a program of the else it can be used for. "It is one of the most altruistic things cord blood center in 2018, the same

year a new laboratory was completed for its work adjacent to the center’s main facility in Warrensville Heights. Van’t Hof said it began attracting interest for use of its facilities and expertise in sourcing and use of cord blood. Now its own LLC, the incubator is drawing interest locally, domestically and even internationally with some inquiries from Europe, Van’t Hof said. “We know how to fulfill strict requirements to collect, process and store these cord blood products,” Van’t Hof said. “(There’s) great interest in those units, but also in our experience. We can apply that knowledge and expertise that we have in helping out additional customers, so it really is a combination for us leveraging our existing inventory and the expertise we have developed in the labs for 10 years.” CCBC began in 2008 with two local collection sites: Cleveland Clinic Hillcrest and Fairview medical centers. Its progress since has been strategic and steady. It added two hospital sites in Atlanta: Piedmont Atlanta Hospital and Emory University Hospital Midtown in 2012 and 2013, respectively. In 2016, it gained FDA approval. In the past three years, Van’t Hof has seen an increased interest in CCBC’s frozen units. The center has been making some of its inventory available, and CTI is poised to help support some activities of smaller biotech entities, always in the interest of supporting the mission of the Cleveland Cord Blood Center, he said. “Cleveland Cord Blood is very proud, but it is also rather small organization,” Van’t Hof said. “So we are very good at what we do, but we’re well aware that there’s a certain limit in our capacity. So we’re really currently, with the CTI, focusing on partners that need our expertise and that need supplies and manufacturing at a smaller scale and not the earlier stages of clinical developments. And that’s where we see the near term — the next two to five years — that’s where we see that growth for us.”

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A CRAIN’S CLEVELAND PODCAST WITH DAN POLLETTA

The Cleveland Cord Blood Center collects, processes, stores and distributes stem-cell rich umbilical cord blood for transplantation and research. Units are collected from six collection sites.| PHOTO COURTESY OF THE CLEVELAND CORD BLOOD CENTER JULY 26, 2021 | CRAIN’S CLEVELAND BUSINESS | 7

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PERSONAL VIEW

The ‘early’ retirement wave isn’t exactly that

RICH WILLIAMS FOR CRAIN’S CLEVELAND BUSINESS

BY JUSTIN FOX | BLOOMBERG OPINION

EDITORIAL

Great expectations Spend even a little time in Cleveland and, even if you're not a sports fan, you'll understand this: The city is a Browns town. In good times and bad, people here are crazy for their football team. For most of the last 20-plus years, though, that passion has been unearned and unreturned, with Browns teams that were some variation of bad, very bad and worse. That makes it doubly satisfying, then, as the Browns prepare to open training camp on Friday, July 30, for the 2021 NFL season, that this team has the rarest of burdens: expectations. Big ones at that. On the field and off. The Browns last year won a playoff game for the first time since 1994 — a decisive one over the Pittsburgh Steelers, making it all the more satisfying — and put a scare into the eventual AFC champion Kansas City Chiefs in the next game. Nothing is guaranteed, and football is a sport where failed teams in one season can make quick turnarounds the next, but this iteration of the Browns figures to be quite good. We recognize sports betting isn't legal (yet) in Ohio, so we'll note purely for entertainment purposes that most oddsmakers have the Browns as a solid SPORTS IS (MOSTLY) FOR bet to return to the playoffs and, as at least outside conFUN, AND THIS VERSION tenders, to get to a place the has never been: OF THE BROWNS LOOKS franchise the Super Bowl. TO OFFER THE MOST The heartbreak of Cleveland fans is real, and POTENTIAL FOR FUN IN somesports fans no doubt are A LONG TIME. cautious about getting too hyped about the team. But why not, on the eve of training camp's start, get a little giddy about the prospects for a big season with some talented players we already know joined by promising rookies and free agent additions? Sports is (mostly) for fun, and this version of the Browns looks to offer the most potential for fun in a long time. Enjoy it while we can. Camp features 12 free practices open to fans, and when it kicks off, the team will do so with a new name for its training facility and administrative complex in Berea: "CrossCountry Mortgage Campus," the result of a long-term (specifics

weren't disclosed) naming rights deal announced last Thursday, July 22. The deal teams the Browns with a mortgage company now based in Brecksville that soon will move to Cleveland's Superior Arts District in a $46 million, 168,000-square-foot corporate campus that will bring more than 600 employees to the city. It makes CrossCountry the official mortgage partner of the Browns and a presenting sponsor of a digital streaming show, among other features. The Browns even in lean years were a hot corporate sponsorship commodity. But the CrossCountry deal, a first for a Browns training facility, likely is an indication that many more such marketing opportunities are about to arise. Everyone wants to associate themselves with a winner. It will be a good sign for fans if more corporate deals with the Browns are in the works. The team's potentially biggest deal of all got a significant boost last Wednesday, July 21, when the Ohio Department of Transportation awarded $2.5 million to the city of Cleveland for a preliminary traffic engineering and economic development impact study of a Haslam Sports Group proposal to build an elevated park over the Route 2 Shoreway to connect downtown to the city's big waterfront attractions: the Rock & Roll Hall of Fame, the Great Lakes Science Center and FirstEnergy Stadium. The $229 million proposal as outlined previously features a land bridge and 30 acres of green space around the stadium, and possibly a hotel, residential, retail and office spaces. The ODOT money is less than originally requested. Still, combined with the city's $2.5 million match, it makes $5 million available to take a detailed look at whether the proposal actually would lead to the type of economic development long envisioned through the creation of a stronger link from downtown to Lake Erie. When Cleveland Mayor Frank Jackson's administration and Haslam Sports Group rolled out the proposal in May, they estimated a comprehensive study would take about 18 months. Let's get this ball rolling as fast as possible, to get a clear picture by early 2023 if this plan from the Browns is the one that would give downtown another spark — potentially on top of that provided by the team's success on the gridiron.

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

Labor-force participation has fallen further among Americans 55 and older since the beginning of the COVID-19 pandemic than among so-called “prime-age” workers ages 25 through 54. Older workers’ participation rate has also shown little sign of recovery as the pandemic has eased, in contrast to the pattern among younger workers. The labor-force participation rate is the estimated number of people who are employed or actively looking for work divided by the estimated working-age population, excluding uniformed military personnel and those behind bars. Declines in the rate are often reflections of a weak labor market; people give up looking for jobs because prospects of finding something worth their while are bleak. Right now, though, there are more job openings than at any time since the Bureau of Labor Statistics started tracking them in 2006. Yet older workers’ labor-force participation rate isn’t rising. This persistent decline has already gotten lots of attention. Explanations offered have included lingering fear of a disease that is most dangerous for older THE LABOR-FORCE people, changed priorities in light of the events of the PARTICIPATION past year-plus, retirement DECLINE HAS BEEN accounts flush with investment gains and age dis- CONCENTRATED crimination in the job marAMONG THOSE 65 ket. I don’t have a better ex- AND OLDER. planation than the ones offered so far, or a foolproof method for sorting out which has been most important. But I do have a problem with the phrase often appended to this phenomenon — “early retirement” — and the reliance on broad 55-and-older labor market data to measure it. In fact, the labor-force participation decline has been concentrated among those 65 and older, while those in their late 50s, and to a lesser extent those in their early 60s, have been behaving more like younger workers. The reason the broad 55-and-older statistics have dominated discussion of the participation decline is just a data quirk. The BLS publishes numbers for the larger group on a seasonally adjusted basis, while data for narrower older-worker age groups are only available unadjusted. Seasonal adjustments smooth out things like the employment spike before Christmas and the summer cross-currents in which teachers take time off while their students often get jobs. Without them it can be hard to assess month-to-month changes that aren’t overwhelmed by seasonal noise.

Older workers are dropping out Change in labor-force participation rate since February 2020, by age group*

25-54

55+

0 percentage points -1 -2 -3 -4 Feb. April

July

Oct.

2020 U.S. BUREAU OF LABOR STATISTICS SOURCE:

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.

Jan. 2021

April *SEASONALLY ADJUSTED

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 | JULY 26, 2021

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OPINION

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Who’s been dropping out?

The change in percentage points of labor force participation rate by age from June 2019 to June 2021: 0.5 50-54

75+ 0

16-19

55-59

30-34 35-39

-0.5

40-44 45-49

60-64

Buy. Build. Sell. Lease. Manage.

We’re here to help!

-1

25-29 -1.5 20-24

65-69 70-74

SOURCE: U.S. BUREAU OF LABOR STATISTICS

-2

Property Management | Facility Management | Construction

Different effects for different workers The change in percentage points of retirement rates from 2019 to January-June 2021 4 No college degree

College degree 2

0 55-59

60-64

65-69

70-74

75-79 -2

SOURCE: THE NEW SCHOOL’S SCHWARTZ CENTER FOR ECONOMIC POLICY ANALYSIS, BASED ON CURRENT POPULATION SURVEY DATA FROM IPUMS CPS

Run your chart over a long enough period, though, and the seasonal noise fades into the background, making it pretty easy to see that the pandemic has been a much bigger big deal for the 65-74 set than for those ages 55 through 64. Another way of looking at the pandemic’s impact on the labor force is measuring change in participation from June 2019 to June 2021 (to avoid seasonal effects) for a wider range of age groups. The anomalous behavior of the 75-and-older age group begs some explaining. One reason for it is that that the oldest members of the giant baby boom generation began turning 75 in January, thus lowering the group’s median age a little every month. Another, awfully, is that about 1.5% of Americans 75 and older and 2.7% of those 85 and older have died of COVID-19 in the past 16 months. Many would have died of something else if it hadn’t been for the pandemic, but the latest adjustments to the population estimates used in calculating labor force participation rates reduced the number of 75-and-older Americans by 0.6%, and the deaths probably reduced the median age, too. As for teenagers, their willingness to jump into service jobs during the pandemic has been much discussed, although their participation-rate change looked a lot more impressive a couple of months ago (it was up 3.1 percentage points over 2019 in April). For the rest of the age distribution, the pattern seems to be that those at the edges — people in their 20s just starting out in the workforce and people past traditional retirement age in their late 60s and early 70s — were most likely to drop out. The especially low dropout rates for those in their 50s can also be partly explained by the fact that they’re less likely than younger adults to have young children at home. The Census Bureau survey-takers who gather the labor market statistics every month also ask respondents whether they’re retired, and while the answers don’t show up in the monthly employment report, they’re available for analysis. Researchers at the New School’s Schwartz Center for Economic Policy Analysis have been tracking the retirement numbers for their quarterly Older Workers Report and finding the same differences described above in behavior on either side of 65 years old, but also a telling divide between those with college degrees and those without. College-educated workers ages 55 through 64 are currently less likely to be retired than they were before

the pandemic. Those in that age group without college degrees are more likely to be retired than before, but the increase has been modest. So much for that early retirement wave! The big increases in retirement rates have been among those 65 and older, led by those with college degrees. The ability to work remotely during the pandemic has been closely linked to education. For the most part, people with college degrees have been able to do it, those without them have not. A lot of the retirees without college degrees, then, were probably to some extent forced out — either because they lost their jobs or felt it was too dangerous to go back. Most of the 29% of Americans 65 and older with college degrees (as of 2019, according to the Census Bureau) faced a different and more attractive set of choices. They were more likely to have the option to keep working, but also more likely to have benefited from the runup in asset prices that followed the initial shock of the pandemic. And they chose retirement in a big way. This was a reversal of a long-running trend. Until the pandemic hit, labor force participation among those 65 and older had been rising for a quarter century. The increase came even as labor force participation among prime-age Americans fell from 2000 to 2015 (after which it did begin a robust recovery, although it was still short of its late-1990s highs when the pandemic hit). Legislation banning mandatory retirement for most workers, adopted by Congress in 1986, played a key role in instigating the rise. So did the supplanting of defined-benefit pensions by defined-contribution plans such as 401(k)s, which also began in the 1980s. It has continued in part because, even as overall life expectancy in the U.S. stagnated in recent years, life expectancy at 65 kept rising. Those who reached 65 had ever more years ahead of them, which led many to keep working longer because (1) they could, (2) they found it fulfilling and (3) longer lifespans plus the aforementioned shift in retirement savings arrangements left some without adequate income and many others with incentive to keep working to maximize that income. The pandemic changed this equation, at least temporarily. Life expectancy estimates by age based on mortality data from the first half of 2020 found that 65-yearolds experienced the biggest percentage decline versus 2018 — 2.1%, or about five months — which will surely go up a lot when the full-year data is evaluated. It’s only natural that a shock like that would affect behavior.

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JULY 26, 2021 | CRAIN’S CLEVELAND BUSINESS | 9

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TRAINING STILL KEY Preparation, risk assessment can help companies plan for potential security breaches.

CYBERSECURITY

PAGE 14

SMALL BUSINESSES NO SMALL TARGET

Ransomware is a serious problem for companies no matter the size, experts say | BY DOUGLAS J. GUTH

“These attacks are very straightforward, because cyber criminals found out that businesses will pay large sums of money to get their information back,” said Randy Pargman, vice president of threat hunting and counterintelligence at Binary Defense, a Stow business that specializes in the field. “As word of ransomware spreads throughout the criminal underworld, attackers have focused more of their energy in this area.” Ransomware is typically activated when someone clicks a link in a phishing email or downloads a corrupted email attachment. Mal-

“THESE ATTACKS ARE VERY STRAIGHTFORWARD, BECAUSE CYBER CRIMINALS FOUND OUT THAT BUSINESSES WILL PAY LARGE SUMS OF MONEY TO GET THEIR INFORMATION BACK.” — Randy Pargman, vice president of threat hunting and counterintelligence at Binary Defense

ware can also sneak through security holes in unprotected networks — unsupported versions of Microsoft Windows are particularly vulnerable to ransomware hacks. Invaders accessing a network will steal sensitive materials — files, IP addresses, emails and more — encrypting the data so it can’t be used without a decryption key. Hackers will then demand a ransom payment for a copy of the key, sometimes insisting on an additional sum to not publish the data publicly. See RANSOMWARE on Page 12

GETTY IMAGES/ISTOCK PHOTO

Ransomware and malware attacks are not exactly top of mind for many small businesses. Considering the deleterious impact presented by an ever-evolving host of cyber threats, enterprises of all sizes should be eager to correct any vulnerabilities within their networks, according to industry experts interviewed by Crain’s. Ransomware is the software behind cyber extortion, an internet crime where company data or devices are quite literally held for ransom. Small businesses with fewer security measures in place are a tasty target — those affected may find their files inaccessible until they provide a hefty payoff.

10 | CRAIN’S CLEVELAND BUSINESS | JULY 26, 2021

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FOCUS | CYBERSECURITY

RANSOMWARE

The framework is organized by five key functions — identify, protect, detect, respond and recover. In practice, companies should classify critical enterprise processes and applications, continually backing up those assets on the cloud or physical disk. Saving data is not enough — businesses must also make a point to test their backups in preparation for a worst-case scenario. “Keep more than one copy of your backups,” said Pargman. “At least one should be offline and not accessible on the network.” John Nicholas, a professor of computer information systems at the University of Akron, said smaller entities lacking a robust IT budget or a full-time tech whiz should hire a consulting company to handle online security remotely. There are also best practices businesses can employ to protect themselves, such as training staff to beware of phishing emails that could download a virus into the network. Nicholas said, “If you’re not sure where an email is coming from and it has an attachment, don’t open it. You should also use complicated passwords. NIST recommends a 20-character pass phrase with symbols and letters.” Regularly updating both the operating system and applications installed throughout the network is another means of defending against attack. Busy executives can enable

From Page 10

Though computer viruses are always changing, older versions of ransomware can infect a system with just a few tweaks to the code. Nor are smaller companies invisible to online wrongdoers — if anything, they’re viewed by criminals as targets of opportunity. “In the physical world, a burglar driving down the street is looking for the easiest business to break into,” Pargman said. “There’s online forums where people are buying, selling and trading access to compromised companies. And most individuals behind attacks live in Eastern Europe or other areas with depressed economies, so a few thousand dollars from a small business is a huge sum of money for them.”

Pargman

How can a small business protect itself? Business owners need only scan the headlines to learn the financial and infrastructural dangers of a ransomware assault. Earlier this month, between 800 and 1,500 business, most of them smaller concerns like accountants' and dentists’ offices, were hit by ransomware centered on U.S. information technology firm Kaseya. Protecting your organization against ransomware starts with cre-

Nicholas

ating a cybersecurity framework, observes Pargman. To that end, the National Institute of Standards and Technology (NIST) offers businesses a quick start guide with tips and tactics for improved risk management.

automatic updates or use software tools that will scan devices for vulnerabilities. Meanwhile, 24/7 monitoring of company logs by a consulting firm will detect anomalies to systems or accounts. If a cybersecurity event is detected, your enterprise should be prepared to act quickly. Nicholas suggests contacting the FBI immediately, as cyber hacking is a criminal activity that a business owner is likely unprepared to handle alone. Pargman, a former FBI computer

“When I’ve been consulted, I say don’t pay the ransom,” said Nicholas. “When you do that, you’re contributing to the problem, and funding people who will make a more dangerous ransomware variant and come back after you anyway.” Cyber liability insurance is an option, with policies covering the cost of business interruption expenses as well as the ransom itself. Nicholas doesn’t view insurance as a sustainable model, however, because attacks are only going to ramp up in

“WHEN I’VE BEEN CONSULTED, I SAY DON’T PAY THE RANSOM. WHEN YOU DO THAT, YOU’RE CONTRIBUTING TO THE PROBLEM, AND FUNDING PEOPLE WHO WILL MAKE A MORE DANGEROUS RANSOMWARE VARIANT AND COME BACK AFTER YOU ANYWAY.” — John Nicholas, professor of computer information systems at the University of Akron

scientist, said going solo plays directly into a hacker’s hands. “Attackers will try to control the narrative and force owners into (the attacker’s) timeline,” said Pargman. “The idea is to convince owners to do things in the criminal’s best interest.” Paying a ransom is no guarantee that a company’s data will be restored. What’s more, complying with hacker demands doesn’t mean the criminal in question will simply disappear into the night.

severity and expense. Ultimately, it’s up to small businesses to recognize ransomware as a true threat to their operations. “It’s cyber warfare at this point — there needs to be ownership buy-in and an ongoing dialogue,” Nicholas said. “You’ve got to have discussions in the company and change the culture, similar to any paradigm shift in business attitudes.” Contact Douglas J. Guth: clbfreelancer@crain.com

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12 | CRAIN’S CLEVELAND BUSINESS | JULY 26, 2021

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FOCUS | CYBERSECURITY

BY RACHEL ABBEY MCCAFFERTY

The ransom threats — and the payouts — are getting bigger, but the basics of cybersecurity are the same. Back up your data. Make sure your password isn’t easy to guess. And don’t click on that link. “The current trends in cybersecurity are more evolutionary than revolutionary,” said Kenneth Atchinson, associate professor of computer science and program lead for the cybersecurity analyst program at Baldwin Wallace University in Berea. There have always been breaches and viruses, but the attacks have become more intentional and targeted over time. Now, it’s about ransomware, which can be profitable, Atchinson said. In a ransomware attack, hackers threaten to keep data encrypted, or even publish it, if the victim doesn’t pay up. One of the most notable attacks so far this year was the ransomware attack on Colonial Pipeline Co., which led to widespread fuel shortages. In response to a ransom request for cryptocurrency, Colonial shut down its entire gasoline pipeline in an attempt to contain the breach. It also paid the $4.4 million ransom, though some has since been recovered. Today, it’s easy for criminals to buy the necessary tools off the black market, meaning more people are able to carry out sophisticated attacks, even if they wouldn’t have had the skills

themselves. And it’s tougher to stop the people writing and developing the tools, because they aren’t the ones deploying them, Atchinson said. As cyber attacks continue to rise, both state and federal lawmakers are making moves to improve cybersecurity. At the federal level, a draft bill would reportedly require federal agencies and contractors, as well as companies in critical infrastructure, to report cyber breaches within 24 hours. In Ohio, House Bill 376, or the Ohio Personal Privacy Act, was introduced earlier this month. If passed, the legislation would establish a variety of personal data rights for individuals, such as the ability to request that personal data not be sold, while also requiring businesses to meet certain standards. The act would mostly apply to businesses that process large amounts of data or make at least $25 million in gross revenue in Ohio. Businesses would be encouraged to meet the National Institute of Standards and Technology Privacy Framework in their own policies in order to be given an affirmative defense against legal claims. The federal framework is voluntary, but gives tangible steps for companies looking to create or strengthen privacy policies. The legislation has not yet been assigned to a committee.

GETTY IMAGES/ISTOCK PHOTO

Training, awareness key for cybersecurity

On average, it’s estimated that there will be a ransomware attack every 11 seconds in 2021, said Steven Roesing, president and CEO of ASMGi in Cleveland, which offers everything from IT services to cybersecurity to software development. Ransomware can affect anyone. The attacks aren’t about the kind of data a company or individual has; those hackers aren’t looking for credit card numbers. They’re just looking for any data someone is willing to pay a ransom for, Roesing said.

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marily phishing attacks — emails that look like they’re coming from a trusted source, such as your bank or IT team — that are driving the breaches. The best way to prevent attacks is low-tech, too. For individuals, Nicholas suggested not opening any unexpected email attachments and checking with the supposed source first. For companies, password policies are critical, Nicholas said. Something like a pass phrase instead of a password could be beneficial. He suggested using a favorite song lyric or Bible verse, with a twist like changing S’s to dollar signs. Ultimately, it’s about awareness. “We just need to realize that as instant as everything can be, we don’t

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Most attacks are on known vulnerabilities, Roesing said. And many entry points for hackers are employee-based. Security awareness training is far from new, but the model has changed a bit. Roesing said the most popular offering is very short Roesing videos aimed at behavior awareness. And taking the time to explain why someone shouldn’t click on a link, instead of just telling them not to, helps change the culture of a company over time. Cyber attacks are coming from both criminals and nation-states right now, Ray said John B. Nicholas, professor of computer information systems and program director for the cybersecurity degree track at the University of Akron. But it’s still pri-

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14 | CRAIN’S CLEVELAND BUSINESS | JULY 26, 2021

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FOCUS | CYBERSECURITY necessarily need it to be that instant,” Nicholas said. “We need to just take a minute and think before we act.” Ransomware attacks are getting more sophisticated, as techniques that had previously been used mostly by state actors or criminal gangs become more widespread. But most cyber breaches still take advantage of “human error,” said Brian Ray, the Leon M. and Gloria Plevin Professor of Law and director of the Center for Cybersecurity and Privacy Protection at Cleveland State University. Employee training is key, as is ensuring company data is sufficiently backed up. It’s important that companies think through the risks and reactions before a breach occurs, Ray said, much like any other disaster response plan. Cyber risk insurance can be beneficial, too: not just the coverage itself, but the “road map” provided through the underwriting process, he said. When it comes to cybersecurity, companies need to assess their main risks, said Marc Punzirudu, director of cybersecurity at Chicago-based professional services firm Sikich LLP. They may have legal obligations to meet around cybersecurity. Beyond that, a company’s “risk appetite” may vary, Punzirudu said. Assets have different value, and the cost to protect them shouldn’t exceed the cost if they were entirely compromised. A lot of times, breaches happen when there’s no multi-factor authentication in place, or people use the same password over and over. Taking those kinds of simple steps and securing remote access go a long way, Punzirudu said. And that goes for companies of all sizes. It’s mainly the complexity that varies, he said. “Attackers are throwing things out there,” Punzirudu said. “It’s a lot of emails. It’s phishing campaigns. Things like that.” Rachel Abbey McCafferty: (216) 771-5379, rmccafferty@crain.com

Post-pandemic, Keyfactor unlocks passage to vast machine identity landscape BY JUDY STRINGER

Keyfactor CEO Jordan Rackie describes the coronavirus pandemic period as a “net wash” for the Independence-based provider of machine identity products and services. Delays in software orders and client onboarding, he said, were balanced by “new and magnified” network security demands born out of a surge in remote working. Business more recently, by contrast, is decidedly favorable. Income generated by the privately held company surged 164% in the last 12 months, according to Rackie, who declined to disclose specific revenue figures. Keyfactor also completed a merger with Swedish company PrimeKey this month and, earlier this year, it closed on a $125 million funding round led by existing investor Insight Partners. “Insight has now put over $200 million into this combined investment,” Rackie said. “And so there’s a lot of momentum in this, and there’s a lot of infusion capital that we could put to work for R&D and for growth purposes.” Rackie said one of the most exciting aspects of the Keyfactor-PrimeKey combination is the creation of the world’s first unified platform for machine identity protection. PrimeKey’s specialty is the generation of the cryptographic keys and digital certificates that devices (servers, computers, smartphones, etc.) use to connect and communicate securely with each other. Keyfactor helps companies manage their certificates and keys — identifying where they exist across the enterprise, ensuring they are updated and being used properly, and automating renewal — to avoid audit failures and costly outages and breaches. While there are competitors in

“low-hanging fruit” as one of the biggest growth drivers. Many companies had developed their own controls for keys and certificates over the years and are now realizing those homegrown technologies and practices can’t keep pace with expanding “... THERE’S A LOT OF digital ecosysMOMENTUM IN THIS, AND tems. And, even THERE’S A LOT OF INFUSION though machine CAPITAL THAT WE COULD identities (e.g., and certifiPUT TO WORK FOR R&D AND keys cates) continue FOR GROWTH PURPOSES.” to outnumber human identi— Jordan Rackie, Keyfactor CEO ties (usernames and passwords), competitive advantage for Keyfactor they are often left out of corporate during a watershed period in the IAM strategies, Rackie said. “The vast majority of the market, I burgeoning machine identity manwould say 90%-plus, is untapped.” agement sector. In March of last year, “Machine Identity Management” debuted on Complementary assets tech analyst Gartner’s 2020 Identity and Access Management Hype Cycle, Along with spawning the first comunderscoring the business case for mercial end-to-end machine identity identity management of machines in solution, Keyfactor and PrimeKey a world becoming ever more digital bring unique assets to their fledging and cloud-enabled. partnership, according to Rackie. As a whole, the global identity and Keyfactor has historically played a access management market (IAM) is larger role in its customer relationships $13.7 billion, according to Gartner. with “kind of a fully managed (cloud) Rackie estimates that machine identity offering,” he said, while PrimeKey cusmanagement currently makes up tomers can lease its software and roughly a third of that — somewhere self-manage their digital certificate isbetween $4 billion to $6 billion — but is suance and validation. growing rapidly at 10%-20% per year. “We’re bringing those complemenHe credits the sheer volume of tary offerings to this technology comeach of these spaces, “there’s never been a company out there that manages them and also has the ability to create the certificates and keys,” Rackie said. He expects that distinction to be a

munity,” he said, “which is exciting for our customers.” PrimeKey also has a significant foothold in the government and public-sector marketplace — a boon to the new combined entity, given President Joe Biden’s focus cybersecurity. Finally, Rackie added, while both companies had a global customer base prior to the merger, the vast majority of PrimeKey’s 100-person staff is in Europe, and the vast majority of Keyfactor’s 200-person staff is in the U.S. Thus, he said, locations of customers for each company were skewed toward their home regions. “The ability to have operatives now — like the old saying ‘feet on the street’ — in each of those geographical locations,” he said, “was a really attractive thing.” Looking forward, Rackie would not detail Keyfactor’s growth targets, but he did say the company is “definitely on a hyper-growth trajectory,” buoyed in large part by the Insight Partners investment. Although a portion of the recent capital infusion went to buy out PrimeKey’s previous investor, Rackie claims “a very sizable” sum was put on Keyfactor’s balance sheet, where it will be used to scale the organization. “At the speed that we’re growing, we are a company that is more focused on growth and using capital correctly than turning a profit immediately,” he said. Contact Judy Stringer: clbfreelancer@crain.com

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FOCUS | CYBERSECURITY

Technology advances also create vulnerabilities BY MATT RICHARDSON

ing campaigns, malware, ransomware and business email compromise (BEC) attacks. These are people-based maneuvers that have been causing Richardson is damage for years executive vice in various forms. president and Malicious actors head of product are drawn to them solutions for because the basic Citizens. strategy of playing on an unsuspecting victim’s gullibility and unpreparedness works. Phishing was once primarily a phone-based fraud scam. It relies on social engineering and impersonation to extract sensitive information from victims, usually login credentials and personal identities. Today it is largely carried out by email, and victims are most often lured to counterfeit websites where they are tricked into surrendering their credentials. Untrained and unprepared for the persuasive tactics, remote workers have been a prime target during the pandemic. The number of phishing attacks doubled in 2020, according to the Anti-Phishing Working Group. Malware, or malicious software, is right up there in terms of impact and prevalence. It’s considerably harder to

Online banking remains an appealing target for cyber criminals and attacks are on the rise. Two-thirds of companies surveyed experienced some kind of cyber incident in 2019, according to McAfee’s "The Hidden Costs of Cybercrime" report. Without even taking fraud into account, the average cost of downtime for a department is about $590,000. Globally, the monetary loss from cybercrime was estimated at approximately $945 billion in 2020. In treasury management, it seems that as businesses achieve greater digitization and connectivity, in areas like payables and receivables for example, security measures improve. But there are also more points of access for cybercriminals to exploit. The COVID-19 crisis was a powerful lesson for many companies in understanding how resilient their systems are, but also how vulnerable they are when faced with securing the future of work and a remote fleet of devices. And as we’ve learned, security breaches most often come down to the habits of the individual remote worker.

Familiar strategies, rapidly evolving tactics The threats we see having the most impact on businesses today are phish-

pull off compared with phishing, but it is much more effective and dangerous. The basis of a malware attack is a virus or piece of software that has been planted on a victim’s computer. Once it's installed, cyber criminals can steal data or take over online banking sessions. Ransomware, such as the recent Keystone Pipeline attack, locks up the victim’s computer or network, and only unlocks it once a ransom is paid — almost always via a cryptocurrency. Another cyber hot spot we are paying close attention to, especially as it affects the financial sector, is BEC. A specialized form of phishing, it has become very common as more companies are moving to remote and virtual transactions. BEC relies on impersonating or stealing the identity of a company employee, usually a senior executive, and tricking victims into exposing valuable information or transferring funds outside the company. Wire transfers and international payments are widely targeted and the volume of attacks is increasing.

New opportunities for cyberattacks The same technologies that have helped businesses move toward digitization and greater connectivity have also created new vulnerabili-

ties. Technologies, such as application programming interfaces (APIs), have made it possible to connect financial services and data in new ways and achieve faster more accurate transactions. But at the same time, there are more openings for criminals to infiltrate. Similarly, cloud-based email services and applications have revolutionized how many companies do email and created new flexibility and efficiencies. However, these services are showing to be popular targets for BEC scammers. In many threat scenarios, the actual integrity of the online banking or security system is usually not compromised, but rather a user has inadvertently become a victim of a social-engineering scam. In this regard, education is of the utmost importance, and any worthwhile cybersecurity strategy needs to ensure that cybersecurity is a top-of-mind priority for everyone across the organization.

Key takeaways for mitigating cyber risk 1. Support organization-wide education and awareness With so much riding on individual liability, it’s vital to make sure users are informed about cyber risk, following proper procedures and edu-

cated enough to recognize and flag social engineering tactics. It’s also very important to keep tabs on the latest trends, tools and technology. 2. Administer thorough system reviews Invest in understanding your systems, how your transactions affect your operations and where potential cyber risk could be lurking. It's hard to prevent something you don't see or understand. Thorough and regular systems reviews help ensure the right measures, permissions and account management tools are in place and up to speed to address specific threats. 3. Improve IT best practices Treasury needs to be a proactive partner with IT and work with the technology experts to ensure everything cybersecurity is working as a cohesive whole. 4. Do your due diligence It's easy to speed toward new technologies and new opportunities, but jumping in before you're ready can leave the door open to unnecessary risk. 5. Be transparent and communicate clearly Being open with customers and partners about cyber and understanding risk is essential for protecting all sides of the equation — and makes for stronger, more reliable relationships.

Winning companies are categorized as one of the following:

WEATHERHEAD 100

A P P L I C AT I O N N O W O P E N

Recognizing the fastest growing companies QUALIFICATIONS • • • • •

12-month period of net sales from 2015–2020 2014 net sales must be at least $100,000 Headquartered in Ashland, Ashtabula, Cuyahoga, Erie, Geauga, Huron, Lake, Lorain, Mahoning, Medina, Portage, Richland, Stark, Summit, Trumbull or Wayne County Not a franchise or subsidiary of another company between 2015–2020 Must be a for-profit organization

NOMINATION FORM NOW OPEN

Nominate your firm or another organization that has shown strong growth over the last five years. To learn more about our 2021 Weatherhead 100 Awards and to apply, visit weatherhead100.org. Application closes Friday, September 3

Companies whose net sales were at least $100,000 in year one of five years required for application and over $1 million in year five. Winning companies must have employed a minimum of 16 people full time in the last year.

UPSTARTS

Companies whose percentage of sales growth qualifies for the Weatherhead 100 and who employed 15 or fewer employees, and/or had less than $5 million in net sales in the last year.

CENTURIONS

Companies whose percentage of sales growth qualifies for the Weatherhead 100 in the past five years and net sales of $100 million or more in last year.

Questions about application criteria? Interested in sponsorship opportunities? Contact Ryan Zapolski 603-732-3552 or weatherhead100@case.edu

16 | CRAIN’S CLEVELAND BUSINESS | JULY 26, 2021

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CONGRATULATIONS 2021 WINNERS AND FINALISTS OVERALL EXCELLENCE, INDIVIDUAL PRIVATE COMPAN Y Jennifer DiFranco, senior director, talent, Apple Growth Partners FINALIST Lesa Evans, chief human resources manager, MAI Capital Management FINALIST Donna Rhodes, chief people office, COTSWORKS, INC. FINALIST PUBLIC Yentil Rawlinson, vice president, inclusion, diversity & equity, The Sherwin-Williams Company

Aug. 18 | 4 P.M.

GOVT/NONPROFIT George Sample, assistant vice president, diversity, equity and inclusion team, Federal Reserve Bank of Cleveland FINALIST

VIRTUAL EVENT

Kathy Menditto, AVP, Human Resources, Buckeye State Credit Union FINALIST

Crain’s Excellence in HR Awards will honor and highlight the full scope of work done by Northeast Ohio’s HR professionals, from companies large and small, and from all sectors, including the nonprofit realm.

Debbie Matese, executive VP of administration, YWCA FINALIST

OVERALL EXCELLENCE, TEAM

This year we are honored to host a thought-provoking conversation

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about diversity, equity and inclusion featuring a keynote conversation

Cleveland Cavaliers FINALIST Heinen's Inc. FINALIST Western Reserve Hospital FINALIST

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KEYNOTE SPEAKERS

PUB L IC Nordson GOVT NONPROFIT

CHINENYE NKEMERE

Cuyahoga County Board of Developmental Disabilities

Co-Founder, Director of Strategy Enlightened Solutions

EMPLOYEE ADVOCACY Amanda Pruett, director of human resources, Crum & Forster Pet Insurance Group

BETHANY STUDENIC Co-Founder, Managing Director Enlightened Solutions

RISING STAR L ARGE (MORE TH AN 501 E MPLOYE ES) Lauren Ferguson,manager of human resources, Weltman Weinberg & Reis Co. FINALIST Amanda Calabrese, human resources shared services specialist, MetroHealth FINALIST Claire Holmes, global HR services director, Nordson FINALIST

PRIVATE , S MAL L-ME DIUM Emily Hembree, director of HR, ExactCare GOV’ T N ON PROFIT, S MAL L-ME DIU M Brianna Monroe, human resources director, Stella Maris

SILVER SPONSORS

DIVERSITY TEAM MetroHealth IN DIVI DUAL Laura Almazan, senior manager, human resources, Eaton

Sponsorship Information: EBechler@crain.com

ACCIDENTAL HR Rachael Kern, payroll/benefits administrator, Cascade Auto Group

CRAIN'S LIST | IT SERVICES FIRMS DATA PROCESSING/ HOSTING

HARDWARE LIFECYCLE MGMT

HELP DESK SUPPORT

IT STRATEGY CONSULTING

MANAGED SERVICES

NETWORKING/ INTEGRATION

WEB DEVELOPMENT

VOIP MANAGEMENT

POMEROY TECHNOLOGIES LLC 6930 Treeline Drive, Brecksville 44141 800-846-8727/pomeroy.com

250 1

265 1

IT managed services and staffing provider

✔

REGENCY TECHNOLOGY 4550 Darrow Road, Stow 44224 888-801-3497/regencytechnologies.com

199

231

IT asset disposition and recycling company

✔

ACCENTURE 1400 W. 10th St., Floor 3, Suite 400, Cleveland 44113 216-535-5000/accenture.com

172

226

Professional services company in digital, cloud and security

✔

Severine De Wagheneire, office managing director, Cleveland

DELOITTE LLP 127 Public Square, Suite 3300, Cleveland 44114 216-589-1300/deloitte.com

156

498

Professional services firm

✔

Paul Wellener, Northeast Ohio managing principal

VOX MOBILE 6100 Rockside Woods Blvd. N., Independence 44131 800-536-9030/voxmobile.com

135

160

Managed mobility services provider

✔

Pete Paras, CEO

MCPC INC. 2 6001 Euclid Ave., Cleveland 44103 800-777-7178/mcpc.com

125

200

Managed service provider focused on end point of computing lifecycle

✔

US COMMUNICATIONS AND ELECTRIC INC. 4933 NEO Parkway, Garfield Heights 44128 216-478-0810/uscande.com

103

Network design and integration services firm

GENESIS10 One Cascade Plaza, Suite 1230, Akron 44308 330-597-4114/genesis10.com

90 1

100 1

Talent, workforce solutions and technology consulting firm

✔

FIT TECHNOLOGIES 1375 Euclid Ave., Suite 310, Cleveland 44115 216-583-5000/fittechnologies.com

Managed IT services firm

✔

HURRICANE LABS 4511 Rockside Road, Suite 100, Independence 44131 216-923-1330/hurricanelabs.com

Managed security services provider

PARK PLACE TECHNOLOGIES 5910 Landerbrook Drive, Mayfield Heights 44124 800-931-3366/parkplacetechnologies.com

464

Critical IT infrastructure support, services and software provider

MODIS 6150 Oak Tree Blvd., Suite 490, Independence 44131 216-447-1909/modis.com

75 1

90 1

Information technology and engineering staffing and consulting solutions

FORTRESS SECURITY RISK MANAGEMENT 2 6001 Euclid Ave., Suite 300, Cleveland 44103 440-268-3141/fortresssrm.com

Incident response, cybersecurity consulting and managed services provider

RSM US LLP 1001 Lakeside Ave. E., Suite 200, Cleveland 44114 216-523-1900/rsmus.com

—

Audit, tax and consulting services firm serving the middle market

ONIX NETWORKING CORP. 18519 Detroit Ave., Lakewood 44107 216-529-3000/onixnet.com

Google and AWS cloud services partner/provider

RAZORLEAF CORP. 3732 Fishcreek Road, Suite 291, Stow 44224 330-676-0022/razorleaf.com

Product lifecycle management, implementation integration and managed services

✔

BENNETT ADELSON PROFESSIONAL SERVICES 6050 Oak Tree Blvd., Suite 150, Independence 44131 216-369-0140/bennettadelson.com

Cloud consulting services firm

✔

QUALITY IP LLC 145 River St., Kent 44240 833-566-9748/qualityip.com

Managed IT services provider

✔

SIKICH LLP 274 White Pond Drive, Akron 44320 330-864-6661/sikich.com

101

Professional services firm specializing in accounting and technology

✔

BINARY DEFENSE 600 Alpha Parkway, Stow 44224 800-246-2792/binarydefense.com

Managed cybersecurity services provider and software developer

✔

MERITECH 4577 Hinckley Industrial Parkway, Cleveland 44109 216-459-8333/meritechinc.com

110

Managed services provider

✔

EXPEDIENT 15248 NEO Parkway, Garfield Heights 44128 216-373-8500/expedient.com

Enterprise cloud disaster recovery and managed services provider

✔

AVANTIA INC. 9655 Sweet Valley Drive, Suite 1, Valley View 44125 216-901-9366/avantia-inc.com

Software, web and app development and IT consulting firm

✔

PALITTO CONSULTING SERVICES INC. 150 Main St., Wadsworth 44281 330-335-7271/palittoconsulting.com

Provider of on-site managed services, VoIP, and custom web and API development

✔

KPMG LLP 1375 E. 9th St., Suite 2600, Cleveland 44114 216-696-9100/home.kpmg/us

155

Network of professional firms providing audit, tax and advisory services

✔

RANK

COMPANY NAME SUITE OR FLOOR

LOCAL IT SERVICES STAFF (FTE) 2021

TOTAL LOCAL STAFF (FTE) 2021

TYPE OF ORGANIZATION

CUSTOM SOFTWARE

CYBERSECURITY

Ranked by local IT services employees

✔

✔ ✔

✔

Mike Trebilcock, chairman, CEO

✔

Patricia Connole, CEO

✔

Nate Gram, managing director

✔

Chris Adams, president, CEO

✔

✔ ✔

✔

Andy Brouse, regional vice president

✔

Andy Jones, CEO

✔

David Andrews, Ohio market leader

Tim Needles, president, CEO

Eric A. Doubell, CEO

Nilesh F. Bandi, president; Timothy May, vice president

✔

Ryan Markham, CEO

✔

David A. Brockman, partner-incharge, Akron Mike Valentine, CEO

✔

Adam Tubbs, CEO; Fred Franks, chief strategy officer; Michelle Tomallo, chief people officer Bill Mathews, CTO, co-owner; Glenn Brzuziewski, managing partner, co-owner

✔

✔ ✔

✔

Chad Fangman, vice president, technical staffing services Jim Levine, president

✔

TOP LOCAL EXECUTIVE(S)

✔

Mary Ann Bednar, CEO

Joe Palian, market vice president; David Saliba, regional vice president Jennie Zamberlan, president

✔

Bryon Palitto, CEO

✔

James Mylen, Cleveland managing partner

Research by Chuck Soder (csoder@crain.com) | Information is from the companies. In case of a tie companies are ranked by total full-time equivalent Northeast Ohio employees. NOTES: 1. This figure includes IT staffing employees who work on behalf of other companies. 2. Fortress is a division of MCPc, but MCPc's numbers do not include Fortress employees.

Get 103 companies and +290 executives in Excel format. Become a Data Member: CrainsCleveland.com/data 18 | CRAIN’S CLEVELAND BUSINESS | JULY 26, 2021

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DATA SCOOP

Cybersecurity’s presence strong on IT Services list BY CHUCK SODER

Perhaps this speaks to the current demand for cybersecurity services: Seventy-five of the 103 companies on the full digital version of our new IT Services Firms list say they offer cybersecurity services. It’s the third most common specialty on the list, just behind IT strategy consulting and managed services (a phrase meaning that the company manages at least part of a customer’s IT operations). Of course, just because there’s a check mark in the cybersecurity column next to nearly two-thirds of the companies on the list doesn’t mean it’s a big focus for all of them. Only 18 companies with that check mark mention security or cybersecurity in their business description. Twenty-three appeared on the Cybersecurity Services Firms list Crain’s published in 2020. The top two companies on that cybersecurity list — Binary Defense was No. 1 and Hurricane Labs was No. 2, by number of cybersecurity-focused employees — appear in the No. 20 and No. 10 spots, respectively, on the broader IT Services Firms list. The company in the top spot on the list, which is ranked by full-time equivalent IT services employees in Northeast Ohio, is Pomeroy Technologies LLC. The company has 250 local employees, but they don’t all work out of its Brecksville office:

Pomeroy provides staffing services, so many of those employees essentially serve as the employees of Pomeroy clients. Two other staffing firms with local offices also made the top 25: Genesis10 is No. 8 and Modis is No. 12. The company in the No. 2 spot, Regency Technology of Stow, focuses on IT asset disposition and recycling, and after that come local offices for two global professional services firms, Accenture and Deloitte, which both provide a broad range of services. MCPc reported 125 local IT services employees, good enough for No. 6. The Cleveland-based company would’ve ranked third on the list, but it submitted a separate entry for a division called Fortress Security Risk Management, which is at No. 13 with 73 local IT services employees. MCPc’s fingerprints can be spotted elsewhere on the list as well. Vox Mobile, which specializes in services related to mobile devices, began life as MCPc’s mobility practice and became a separate company in 2006. It’s at No. 6 on the list. Likewise, in the digital version of the list you’ll find Logicalis US, which gained a local office at 1801 Superior Ave. when it bought MCPc’s data center division in 2015. Chuck Soder: csoder@crain.com, (216) 771-5374, @ChuckSoder

THE WEEK BRIBERY SCHEME: FirstEnergy Corp. will pay $230 million in penalties after the company’s leadership admitted to conspiracy charges related to fraud, bribery and kickbacks, according to a statement from the United States District Court of the Southern District of Ohio in Cincinnati. The Akron-based public utility holding company has been caught up in the $60 million bribery scheme allegedly set up by former Ohio House Speaker Larry Householder to secure money from FirstEnergy in return for passing and defending Ohio House Bill 6, which would’ve bailed out nuclear plants in Perry and near Toledo, then owned by a company subsidiary. Householder first lost his speaker’s position over the matter, and then, on June 16, was expelled from the Ohio House of Representatives by his fellow lawmakers in the GOP-controlled body. In court documents made public Thursday, July 22, FirstEnergy representatives admitted previous leadership conspired to pay millions of dollars to public officials as part of an illegal bribery scheme surrounding the passage of HB 6. MOVING FORWARD: A pair of city commissions approved conceptual plans Tuesday, July 20, for the Sherwin-Williams Co.’s new downtown Cleveland headquarters, a 36-story tower linked to a lowslung pavilion facing Public Square. That early thumbs-up, from the Cleveland City Planning

FirstEnergy Corp. will pay $230 million in penalties after the company’s leadership took part in a $60 million bribery scheme. | BLOOMBERG

Commission and the Cleveland Landmarks Commission, came with a flurry of conditions. Both boards, and most members of two advisory committees, seemed to like the overall layout of the project. But they pushed Sherwin-Williams to think bigger on Public Square and to look closely at traffic — on foot, by bicycle and in cars — around and through the site. CHANGING HANDS: Seeing opportunity in the 16 empty shops at Westgate Shopping Center in Fairview Park, an affiliate of retail-focused The R.H. Johnson Co. of Kansas City, Missouri, has acquired the re-

gional lifestyle center. That’s the word according to JLL Retail Capital Markets of Chicago, which announced Monday, July 19, that it had sold the center on the corner of West 210th Street and Center Ridge Road for the prior owner, IRC Retail Centers/DRA Advisors of New York City. A sale price was not disclosed by JLL. IRC Retail Centers/DRA Advisors acquired the property for $74 million in 2013, according to county records. The county assigned the lifestyle center anchored by Kohl’s, Lowe’s and Target a market value of $52.6 million for the 2020 property tax year.

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From

Akron to leverage ‘hard-tech’ roots BY DAN SHINGLER

Akron startups working in materials science may soon get new support, as investors and business advocates say they’re working on plans to focus on the sector and its entrepreneurs. The Akron ARCHAngels group will revamp its 15-member deal-flow committee to align it with the sector before it begins meeting again this fall, said Barry Rosenbaum and Gordon Schorr, both senior fellows at the University of Akron Research Foundation and leaders of the ARCHAngels network. The goal is to focus the ARCHAngels on what Rosenbaum and Schorr call “hard tech,” which includes polymers, the broader area of material science and related fields. “There’s a gap in the Northeast Ohio region, and the gap is funding, support, mentorship, integration and collaboration around these hardtech materials and manufactured products. They’re not receiving, to our mind, the kind of support from the ecosystem we think is appropriate. … We would like to focus on that gap,” Rosenbaum said. The ARCHAngels aren’t forming a special investment fund, but Schorr and Rosenbaum said the change in strategy is likely to help in that regard by getting hard-tech entrepreneurs in front of the group’s investors — and better prepared for strategic partnerships. The ARCHAngels network has about 600 members and its quarterly meetings draw about 100, Rosenbaum said. Not all are investors. Some are in academia, some are in industry, and some are entrepreneurs themselves. They’re all looking to help, and hard-tech startups routinely need more than money to survive and grow, he contends. They also often need help with scientific and engineering expertise, finding supply chain and industry partners and even securing space to work. “They (ARCHAngels) may be investing by sharing their network,

helping to run the company or providing resources themselves — we have a lot of corporate people in the network,” Schorr said. Rosenbaum said he thinks that if startups can get such resources, they’ll be better positioned to get investments, not only from ARCHAngels members, but from corporations and others. “We think the money will follow,” he said. The Greater Akron Chamber of Commerce is also starting an initiative in the materials science realm, this one specifically supporting the city’s polymer sector. The chamber has brought in a big gun to help in the fight: former Goodyear head of research and senior director for global innovation Surendra Chawla. Chawla said he joined the chamber as a consultant in January to help with the effort, which he thinks plays to the strengths of Akron’s major university and much of its industrial base. “Just in our area … there are 174 polymer-related companies. That’s a large number, and just within three counties (Summit, Stark and Medina),” Chawla said. “And there are 560 in Northeast Ohio.” The polymer sector, which to Chawla includes not only polymers, but also their supply chain, engineering and ultimately the products that use them, is not growing quickly enough, he said. And it does need more investment along with the other help. “We identified one of the biggest shortcomings we have is this region (as) not being able to attract enough venture capital investment,” Chawla said. “And when it is available, it goes to new technology — software development, artificial intelligence and data analytics.” The chamber isn’t yet ready to unveil its strategy to support polymer startups but will likely unveil its plan later this year, Chawla said. To help raise more capital, the sector needs a better connection between large corporations, like Good-

year, and local entrepreneurs considering startups, Chawla said. While big companies formerly didn’t invest much in startups, that’s changing, he added — and Akron’s startups can benefit by aligning their goals with those of potential corporate partners and investors when possible. “The companies, like Goodyear and Michelin, are changing their direction. Every one of these companies now has a venture fund, and they’re looking to invest in startups,” Chawla said. “These investments in startups have been a more recent phenomenon … but now, every one of these major corporations is looking for opportunities in startups.” Large companies are likely better investment partners for startups working in materials sciences, Chawla said, because such investments typically have longer timelines than individual investors will tolerate. They can get quicker returns on startups working in software or other soft technologies. If the new hard-tech efforts work, they’ll be welcomed by people like Kaushik Mishra, CEO of PolyLux, a company making special adhesives that release under certain wavelengths of light, for medical and other applications. Mishra has been working to bring the company’s technology out of laboratories at the University of Akron and into production by working out of the Akron Bounce Innovation Hub business incubator. He knows all too well how hard it is to raise capital for a materials science venture, though he understands why many investors are instead drawn to software companies. “That’s bound to be the case — it’s so much easier,” Mishra said. “You put in $200,000 (in a software startup) and you have four people working for a year, and that means a product can go from ideation to market. In just my lab, I have more than a million dollars’ worth of equipment.” But Mishra also agrees with the ARCHAngels that more than money is needed for people like him to suc-

The Goodyear Polymer Center at the University of Akron is emblematic of a long history of material science endeavors in the city and at the school. | UNIVERSITY OF AKRON

ceed. “What does not exist is an ecosystem to foster people and teach them to build companies,” Mishra said. He’s skeptical, but hopeful that the new initiatives will help. He’s been clamoring for such efforts for years, he said, and has often been frustrated to see regional economic development efforts focused on soft technology, potentially at the expense of materials science. Akron should play to what its strengths are, not what it wishes they were, Mishra contends. “We’re not going to be the next Silicon Valley,” Mishra said. “How about we focus on what we’re good at, and

NEIGHBORS

From Page 1

“You ask her about Case Western Reserve, she’s going to draw a blank stare and remember what happened in the old days,” he said. “I think the neighbors that are left will probably think the same way.” Students, though, seem to have a broader and more vested interest in their surroundings. Miller has seen that through his participation in a grassroots group of students, neighbors and alumni called Know Your Neighbors. They’re working together to help build stronger connections between the Case community and residents of nearby neighborhoods. The group outlined its mission in an early Instagram post: Recognize the effects of past institutional decisions. Establish positive relationships. Cultivate mutual pride. A hashtag summed it up: #ThinkBeyondTheBubble. About 25 to 30 CWRU students and alumni actively participate, and just about an equal number of residents are involved. Some organizational representatives also take part, in-

Members of Know Your Neighbors are working together to help build stronger connections between the Case community and residents of nearby neighborhoods. | DELANEY JONES/KNOW YOUR NEIGHBORS

cluding those from University Circle Inc. and the Famicos Foundation. Most of the relationship-building work has been online due to the pandemic. Things kicked off with a panel discussion between residents and

students last fall. A masked bike ride tour of Glenville led by a resident came next, followed by a Zoom trivia event on Cleveland history in the spring. There’s also a buddy system in which residents and students get

paired up together and are matched up on a one-to-one basis. Before the group, some students only interacted with nearby communities when visiting for service projects.

that means focusing on people that come out of the system here and young people willing to take risks.” If the region ignores the sector for too long, he said, it will lose future entrepreneurs like him. “If you want to keep highly educated, potentially highly paid people in your city, people who would foster more growth across shops and all sorts of commerce, you need to focus on your undue advantage. And our undue advantage is materials science,” Mishra said. Dan Shingler: dshingler@crain.com, (216) 771-5290, @DanShingler “It’s trying to create community across these socioeconomic, racial and generational lines of difference,” said Delaney Jones, a 2020 Case alumnus who founded the group last year. That includes helping students navigate off-campus. CWRU senior Jordan Reif remembers hearing about that during orientation week and the beginning of her freshman year. The narratives about where to go were consistent. Coventry and Little Italy are highlighted on the school’s website. So are various other attractions across town, including those in Ohio City and on East Fourth Street. Places to eat at or visit in Glenville aren’t mentioned much. One anecdote seemed to be repeated among students more than most, though: Don’t go under the bridge on Euclid Avenue that connects University Circle with East Cleveland. In a survey the group did of about 130 students and alumni, nearly 20% of respondents said a campus representative advised steering clear of that bridge or explicitly said East Cleveland should be avoided.

20 | CRAIN’S CLEVELAND BUSINESS | JULY 26, 2021

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OFFICES

From Page 1

At Goodyear’s headquarters in Akron, employees are coming into the office two days a week, VanderLind told the audience at a program hosted by the Greater Cleveland Partnership, the regional chamber of commerce. The tiremaker, which has 72,000 workers across the globe, picked its hometown and sites in China, Brazil and Belgium as return-to-office pilot locations. In downtown Cleveland, foot traffic is picking up inside office towers and on sidewalks. Buildings where occupancy hovered around 10% to 15% last summer seem to be more than 35% full, said Michael Deemer, president and CEO of the nonprofit Downtown Cleveland Alliance. In June, ridership across the Greater Cleveland Regional Transit Authority’s system was up 11% from a year before. And parking lots and garages are busier — though not consistently. “It has been kind of interesting to see. Some of the parking lots are full, and some of the parking lots still look like it’s a pandemic,” said Jason Surdock, operations director for Shaia’s Parking, which manages properties scattered across the central business district. At Key Tower, KeyCorp is revamping offices on two floors to accommodate employees who no longer have assigned desks. The regional lender is building on a flexible work policy that predated the pandemic, said Sarah Winters, a senior vice president on the return-to-office team. “It’s a change,” said Winters, who has worked at Key for more than two decades. “It’s an evolution that we, and I think others, are working through, right?” Some employees still are grappling with childcare challenges or personal obligations that make it difficult to venture back into an office. Others can’t wait to leave their houses. Winters joked about the challenges of finding work clothes that fit and remembering how to park downtown. But she’s rediscovering the small joys of commuting, of listening to news on the radio during her morning drive. “The first time I went into the office

Greater Cleveland Partnership’s recent forum. In the spring, the Clinic put almost 230,000 square feet of office space up for sublease at its business operations center in Independence. On Lakeside Avenue downtown, law firm Bricker & Eckler plans to close its office Nov. 30 and let its lease lapse on 11,000 square feet at the North Point Office Complex. Going forward, staffers will work at home or at COhatch co-working facilities in Beachwood and Cleveland’s Ohio City neighborhood. “We’re giving ourselves and our workforce flexibility,” said Matt Warnock, partner-in-charge of the firm’s local office. “I think the pandemic advanced our thinking in terms of ofCrossCountry Mortgage, based in Brecksville, recently reconfigured its offices to ensure fices by about five to 10 years.” that everyone has an assigned desk. Before the pandemic, some employees at the Other employers are not ready to fast-growing company had to share space in increasingly tight quarters. CrossCountry make decisions about their real esMortgage plans to move to a new, 168,000-square-foot headquarters in Cleveland next tate. Progressive Corp., with a sprawlyear. | CONTRIBUTED ing multi-building campus in the The Northeast Ohio Regional Sew- eastern suburbs, plans to reopen after a long period of absence, I think I went skipping out of my house,” she er District is rolling back many of its most of its offices Aug. 2. But the said. “I was just so excited to get away pandemic-related policies. On July 6, company isn’t requiring a return to the district’s Midtown headquarters in-office work anytime soon. from my teenagers.” “We’d like people to ease into it Detroit-based Rocket Mortgage, fully reopened, with an end to teleand figure things out for themselves,” which has a nearly 800-person office commuting. “We’re a very mission-driven orga- said Heather Murray, the insurer’s on Public Square, welcomed a first wave of workers back to the Higbee nization, and the service we provide director of real estate and facility serBuilding in late June. The mortgage not only protects the environment, it vices, during the Greater Cleveland giant is taking a phased approach, also protects public health. … We feel Partnership’s virtual event. Progressive sent 95% of its nearly starting with “hand-raisers” — em- that for our culture, we really do our ployees who were itchy to get back to best work together,” said Elizabeth 45,000 employees home in March of their desks. Additional groups of Brooks, the district’s human resourc- last year. Surveys show that many of those workers want to maintain some workers will follow through the late es director. Brooks said the district has lost autonomy. But it’s too early to say summer and fall. Mike Malloy, Rocket’s top human some employees who discovered how, exactly, the flexible post-panCRAIN’S CLEVELAND BUSINESS | resources executive, said the compa- they preferred remote work or who demic workplace will look, Murray ny is adopting a hybrid model, in were not comfortable returning to an said. “Our approach is to hold back on which workers split their time be- office environment. “The job market is on fire,” she making any major changes to any of tween offices and outside locations. “We’re working at this, as we be- said. “You’re seeing a lot of turnover our spaces right now. We can make lieve it will serve our business,” said in the job market in general. I think all the assumptions we want. The Malloy, who holds the title of chief our turnover is right in line with that.” bottom line is we just don’t know At the Cleveland Clinic, job appli- how our spaces are going to be occuamazement officer. “And we’ll obviously test and learn once we see how cations across all divisions are down pied or utilized in the future,” she almost 30% from a year ago, said Kel- said. things come together.” Real estate brokers predict that the Public agencies appear more in- ly Hancock, the health care giant’s clined to return to pre-pandemic chief caregiver officer. The Clinic has outlook will become clearer late this practices. The regional transit au- been rethinking how and where ad- year, since many employers are thority, for example, recently re- ministrative employees work and is talking about bringing workers back after Labor Day, once schools resumed a five-day-a-week schedule at trimming its office footprint. Before the pandemic, only 1,400 open. That’s the anticipated schedule its headquarters downtown. That main office, with 330 employees, employees — about 2% of the Clinic’s at the Federal Reserve Bank of Clevegradually reopened over the course global headcount — worked from land, which also will take an elastic home. Now, more than 12% of the approach to in-office work. of a year. George Sample, an assistant vice Employees with approved medical hospital system’s 70,000 employees exemptions can continue to work are on a hybrid schedule or are re- president who leads the bank’s diverfrom home, a spokeswoman said. mote, Hancock said during the sity and inclusion initiatives, also

during some required first-year student classes last year. They’re now working on an action plan to give orientation leaders and tour guides, often the first Case representatives prospective students meet, better language that avoids stereotypes. Group founder Jones stresses it’s not an “us vs. them” type of dynamic when it comes to working with the university. The group is neither an official student orga“IT’S TRYING TO CREATE COMMUNITY nization nor a nonprofit. Most events are ACROSS THESE SOCIOECONOMIC, done for free. According to neighRACIAL AND GENERATIONAL LINES borhood resident OF DIFFERENCE.” Miller, if anyone can help make progress — Delaney Jones, a 2020 Case alumnus expand on this front, who founded Know Your Neighbors it’s Julian Rogers. Rogers wears a lot of hats as Case’s periences. “It is important to have conversa- executive director of local governtions about how to make sure that ment and community relations. He’s you’re staying safe and being aware appreciative of Know Your Neighof your surroundings,” Reif said. bors’ efforts. The missions are simi“But it’s this really delicate balance lar. Plus, the office has struggled to between making sure that students directly connect with students. The university is an anchor in the stay safe while not incorrectly porneighborhood, he said, and with traying neighborhoods as ghettos.” The group arranged for local resi- that comes responsibility to condents to drop in as guest lecturers tribute to the success of nearby ar“A part of it is just students passing it down, not thinking about the fact that we’re telling people not to go to the Black neighborhoods in Cleveland, while we’re encouraging people to go to the white neighborhoods,” Reif said. Know Your Neighbors participants don’t want those anecdotes to be the only knowledge students use to shape their perceptions and ex-

eas. “Beyond that, selfishly, we are better off as an institution when we have great relationships with our surrounding communities,” he said. Civic engagement is important to many members of Gen Z. Students entering universities now want to contribute to where they’re living during their college careers, Rogers said, so institutions need to provide those types of opportunities. “I think that universities that don’t move in that direction are going to lose out on faculty and students that consider community engagement, community service and those types of things as important to their overall learning,” he said. The work continues as Know Your Neighbors enters its second year. The group will soon gain an intern with a community organizing background from the Mandel School of Social Work. Plans are now underway for an outdoor festival to welcome new students and introduce them to their neighbors later this summer. Amy Morona: amy.morona@crain. com, (216) 771-5229, @AmyMorona

serves as president of the Cleveland chapter of the Society for Human Resource Management. He said employers are struggling to keep up with swift changes in the work world that have ramifications for everything from payroll taxes to cybersecurity to equity in hiring, professional development and promotions. “It’s going to be a significant managerial challenge for organizations as they try to balance and manage hybrid workforces,” he said. “That will be a thing to pay attention to. ... I think there are going to be some outcomes from the pandemic that start appearing in the workforce two or three years from now that maybe won’t be apparent in real time.” In Brecksville, CrossCountry Mortgage recently brought hundreds of employees back to reconfigured offices, where cubicles are spilling into conference rooms and spreading into swing space in nearby buildings. The pandemic drove the lender to shift from shared desks to dedicated workspaces, with plexiglass dividers and other safety measures to put employees at ease. The events of the last 18 months had little impact, though, on CrossCountry’s plans for a new headquarters in the Superior Arts District, just east of downtown Cleveland. A virtual setting is not ideal for training, collaboration or serendipitous conversations. And it’s difficult to make new employees feel at home online, said Laura Soave, who recently joined the business as its chief brand officer. S E P T E M B E R 3 - 9 , 2 018 | PA G E 2 5 CrossCountry has implemented a “blended” schedule, with the option to work remotely for part of each week, she said. The opportunity for hybrid or home-based work comes up in every hiring conversation, and Soave herself has lost two team members who resigned to take remote jobs with far-flung employers. Like many companies, CrossCountry is proceeding cautiously — and avoiding mandates. “We didn’t get there overnight,” she said of transitioning to remote work last year, “and we weren’t just going to rip the Band-Aid and pull it off.” Michelle Jarboe: michelle.jarboe@ crain.com, (216) 771-5437, @mjarboe Stan Bullard: sbullard@crain.com, (216) 771-5228, @CrainRltywriter

Advertising Section

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PEOPLE ON THE MOVE

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

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FINANCIAL SERVICES

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Cleveland Pops Orchestra

Austin Carr and Adrienne Stemen join the Cleveland Pops Orchestra Board of Directors. Austin is a former NBA player Carr who played for the Cleveland Cavaliers, Dallas Mavericks, and Washington Bullets. “It’s an honor to be a board member of the Pops. I enjoy the music but, most importantly, I like the direction we are going in our community, trying to make a difference.” Adrienne serves as the Director of Legal Counsel, Employment and Compliance for Swagelok Company. “I joined a board focused Stemen on the arts because the arts are a building block of any great society. The arts enable expression, learning, and sharing of diverse perspectives. I joined the Board for the Pops because it is an outstanding musical arts organization that expertly performs a wide variety of musical genres, which affords a broader opportunity for shared experiences, outreach, and education.”

Salvatore “Sam” Totino and Evelyn Wright join the Cleveland Pops Orchestra Board of Directors. Sam is a Totino partner with Calfee’s Corporate and Finance practice group, advising clients on mergers, acquisitions, divestitures and sales of their businesses. “I was excited to join the board because the Pops are an undeniable force in Cleveland’s culture – it was a great opportunity to contribute to an organization that has created incredibly fun and lasting memories for so many people.” Wright Evelyn, a long-time friend of the Pops and professional vocalist for over thirty years, revels in the styles of jazz, R&B and pop. “I love being on the board to help extend and encourage this wonderful organization to reach the masses. A toast to the Pops!”

Dr. Keith Warner joins the Cleveland Pops Orchestra Board of Directors. Dr. Warner is board certified in general surgery and is currently the Program Director at the Hampson Mole Breast Health Suite at University Hospitals Elyria Medical Center. “I am at a point in my life where I may indulge in my appreciation and fondness of classical interpretation of popular music. I became aware that they offer concerts in Elyria and I am excited to help promote them.”

Adcom congratulates Jeff Culliton on his promotion to President, Engagement Strategy. Jeff’s positive energy, zeal, and digital expertise make him the perfect person to lead Adcom’s Engagement Strategy approach. Jeff’s experience and instincts drive him towards the development of creative and effective marketing strategies. Jeff is quick to laugh and puts those around him at ease. To learn more, visit engageadcom. com

CM Wealth Advisors is proud to recognize Amy R. Lorius has been promoted to Partner. Amy joined CMWA as a Client Service Director in March of 2020 and has 20 years of financial and estate planning experience with high-net-worth clients. Amy continuously helps clients navigate through difficult estate and financial planning issues and concerns through actively listening, showing compassion, and providing clients with various options and recommendations to meet their goals and objectives.

ADVERTISING / MARKETING

Falls & Co. Falls & Co. announces the promotion of Heather Evans to Vice President, Advertising Account Director. Heather has been a fabulous addition to the account team with her strong leadership and strategic thinking. She can jump into any client challenge and accomplish solutions at the highest levels to help solve their business goals. She builds strong relationships with both her coworkers and clients that generate trust and growth and we look forward to her continued success. www.FallsandCo.com

LEGAL

Porter Wright Morris & Arthur LLP Porter Wright welcomes Shelly LaSalvia as a partner in the firm’s Corporate Department. Shelly focuses her practice on corporate and real estate acquisitions and dispositions, capital raises, fund formation, commercial finance, private equity, joint ventures, succession planning and bankruptcy and creditors’ rights. She serves as outside general counsel to many of her corporate clients in a wide variety of industries and is recognized by Ohio Super Lawyers® in the area of creditor debtor rights.

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Falls & Co. Tom Tennant joins Falls & Co. as a Senior Content Strategist. Recently, Tom spent 10 years at Hyland Software as a brand journalist and content marketing manager. He’s also served as media relations and editorial manager for Insurance. com; a PR professional and speechwriter at National City Bank; and began his career as a news and trade journalist. Tom also served as a production assistant for commercials and feature films. He earned his bachelor’s degree from Ohio University. www.FallsandCo.com

22 | CRAIN’S CLEVELAND BUSINESS | JULY 26, 2021

REAL ESTATE

Biggins Lacy Shapiro & Co. Stephanie Mercado, Esq., has joined Biggins Lacy Shapiro & Co. (BLS & Co.) as Project Director. A top economic development and real estate finance attorney, Mercado has held leadership roles at Kohrman Jackson Krantz LLP, Team Northeast Ohio, Ohio Civil Rights Commission and the Northeast Ohio Hispanic Center for Economic Development. BLS & Co. provides site selection, incentives advisory, redevelopment, energy and economic development services across North America. More: www.blsstrategies.com

For more information, contact Debora Stein at dstein@crain.com or submit directly to

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