Crain's Cleveland Business by Crain's Cleveland Business

MIDDLE MARKET The marketplace’s large-scale positivity doesn’t mean the so-called ‘return to normal’ is uniform. PAGE 12

CRAIN’S LIST: Cleveland’s highest-paid athletes. PAGE 3

CRAINSCLEVELAND.COM I SEPTEMBER 13, 2021

A new crop of nonprofit leaders take the helm Variety of reasons lead to uptick in turnover BY LYDIA COUTRÉ

The Peyton Lynn C, the ship servicing the Cleveland-Europe Express, recently arrived at the Port of Cleveland. | KIM PALMER

GLOBAL CONNECTION

Port of Cleveland adds first Great Lakes container-only shipping route to, from Europe

`BY KIM PALMER Since 2014, when the Port of Cleve-

land created a shipping route to and from Europe, port leadership has been eager to see that service grow. “The container business pretty much went away on the Great Lakes in the mid-’70s when the vessels started getting much larger and containerization really exploded,” said Dave Gutheil, chief commercial officer at the Port of Cleveland. “The Great Lakes was forgotten about from a containerization standpoint.” See SHIPPING on Page 20

A slew of nonprofits and foundations in the region have new leaders at the helm or are in the midst of candidate searches for new presidents. Baiju Shah was named president and CEO of the Greater Cleveland Partnership in February, the same month George Gund Foundation president David Abbott announced his plans to retire at the end of the year after nearly two decades leading one of the area’s largest grantmakers. In June, Michael Deemer was tapped as the new CEO of the Downtown Cleveland Alliance. In August, United Way of Greater Cleveland’s president and CEO Augie Napoli announced he will retire next year, and Chris Ronayne announced he’d step down as president of University Circle Inc. this fall to prepare for a run for Cuyahoga County executive in 2022. Just to name a few. See LEADERS on Page 21

Report points to migration, education as keys to Cleveland’s economic revival BY MICHELLE JARBOE

MICHELLE JARBOE

To grow Greater Cleveland’s economy — and improve the lives of its residents — regional leaders ought to focus more on two things: migration and education. That’s the crux of a new report produced by Rust Belt Analytica, a local company that is using artificial

NEWSPAPER

P001_CL_20210913.indd 1

THE

intelligence to mine huge data sets for insights. The research, commissioned by Global Cleveland, creates a blueprint for the decade-old nonprofit but also suggests a broader framework for economic development. “The more dynamic our region is by people migration, the more dynamic our economy will be. And the

LAND SCAPE

more growth and prosperity there will be in our region,” said Baiju Shah, president and CEO of the Greater Cleveland Partnership and a Global Cleveland board member. “In economic development, we speak often about the companies that migrate in or expand into an See REPORT on Page 20

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CLEVELAND’S HIGHEST-PAID ATHLETES Find the full list on Page 18 |

KEVIN LOVE FORWARD, CAVALIERS

Age: 33; year entered league: 2008 Base salary: $31,258,256 2021 cash: $31,258,256 Contract: Four years, $120,402,172 (2019-23) Here’s the deal: Signed to a lucrative extension in the weeks after LeBron James left for the L.A. Lakers, Love has played in just 103 out of a possible 219 games the last three seasons. He has two seasons and $60.2 million left on his contract, and his playing time figures to diminish significantly this season.

JARVIS LANDRY

WIDE RECEIVER, BROWNS

Age: 28; year entered league: 2014 Base salary: $12.5 million 2021 cash: $13,211,765 Contract: Five years, $75.5 million (2018-22) Here’s the deal: Another trade for a former LSU wide receiver — the Browns’ March 2018 deal with the Miami Dolphins — has worked out much better for Cleveland. Landry has led the Browns in receiving in each of the last three years. He was a Pro Bowl selection in 2018 and ’19.

BY KEVIN KLEPS

JARRET T ALLEN

CENTER, CAVALIERS : 2017 Age: 23; year entered league Base salary: $20 million 2021 cash: $20 million

RICKY RUBIO GUARD, CAVALIERS

Age: 30; year entered league: 2011 Base salary: $17.8 million 2021 cash: $17.8 million Contract: Three years, $51 million (2019-22)

ion Contract: Five years, $100 mill (2021-26) uired Here’s the deal: Allen was acq James in a four-team trade in which n Harden was dealt to the Brookly Nets in January. The center, who 3 figures to team with rookie No. overall pick Evan Mobley in the gure middle, was inked to a nine-fi agent. extension as a restricted free

Here’s the deal: The Cavs picked up the 10-year NBA vet in an August trade with the Minnesota Timberwolves. The savvy Rubio is expected to fill a majo r problem area for the Cavs: backup point guard. He’s averaged 7.6 assists per game in his career.

JOEL BITONIO

JACK CONKLIN

TACKLE, BROWNS : 2016 Age: 27; year entered league Base salary: $10 million 2021 cash: $10 million

ion Contract: Three years, $42 mill (2020-22) und Here’s the deal: The 308-po ous Conklin proved to be a monstr . wns Bro the for ing sign free-agent one The right tackle started all but ro game, and was a first-team all-p Press selection by The Associated has and Pro Football Focus. Conklin ps in played in 94% of his team's sna each of the last two years.

GUARD, BROWNS

LAURI MARKKANEN

FORWARD, CAVALIERS : 2017 Age: 24; year entered league Base salary: $15,690,909 2021 cash: $15,690,909

WIDE RECEIVER, BROWNS

Age: 28; year entered league: 2014

,906 Contract: Four years, $67,470 (2021-25) est Here’s the deal: The Cavs’ bigg am deal e-te thre a was e trad on seas off in which the club acquired the the sharp-shooting Markkanen from ular pop t sen Chicago Bulls and Portland forward Larry Nance Jr. to the ricted rest a , nen kka Trail Blazers. Mar r -yea four a to ed agre nt, age free l. dea the of extension as part

Age: 29; year entered league: 2014

J.C. TRET TER

Base salary: $9.5 million

CENTER, BROWNS

2021 cash: $9,970,588

Age: 30; year entered league: 2013

Contract: Six years, $51,164,777 (2017-22)

Base salary: $9.1 million

Here’s the deal: It turns out Bitonio, not Johnny Manziel or Justin Gilbert, was the prize of the 2014 draft for the Browns. The guard has started every regular-season game since 2017 and has been selected to three consecutive Pro Bowls. Bitonio is due $9.5 million salaries in each of the next two seasons.

ODELL BECKHAM JR.

2021 cash: $9,435,294 Contract: Three years, $32.55 million (2020-22) Here’s the deal: The anchor of the Browns’ line has played every snap on offense since signing as a free agent in 2017. In November 2019, the Browns signed Tretter to a second three-year contract. At $10.85 million per season, the president of the NFL Players Association ranks sixth among centers.

Base salary: $14.5 million 2021 cash: $15.75 million Contract: Five years, $90 million (2019-23) Here’s the deal: The electric wideout is recovering from a torn ACL that halted his 2020 season in Week 7. This is an important season for Beckham , who has only seven touchdowns in 23 games with the Browns. The club, should it decide to move on, can cut Beckham and save $15 million on the salary cap for 2022.

JOSE RAMIREZ

THIRD BASEMAN, INDIANS Age: 28; year entered league: 2013 Base salary: $9 million

2021 cash: $9 million Contract: Five years, $26 million (2017-21) Here’s the deal: The three-time All-Star is in the final year of a contract that, at $5.2 million per season, is a bargain for one of the best players in the game. The Tribe can exercise a pair of club options, with respective salaries of $12 million and $14 million, for the 2022 and ’23 seasons.

SEPTEMBER 13, 2021 | CRAIN’S CLEVELAND BUSINESS | 3

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New brick-and-mortar retailers set up shop amid a dicey market BY STAN BULLARD

Where the Walmart menswear venture Bonobos closed a brickand-mortar store in the COVID-19 pandemic’s first year, LADDER, a curated clothing boutique, is now open at the Van Aken District in Shaker Heights. Across town at Crocker Park in Westlake, the former Lucky Jeans store is now Whimsy Willow, a home decor and gift store. The startup shops are a product of the spunk and strategies of their owners amid retail market conditions that made slots available at two of Northeast Ohio’s most recent multimillion-dollar mixed-use districts with shopping, residential and office spaces. In the midst of a largely downbeat shopping scene, a mix of fun and derring-do also come into play. LADDER’s spark came as April Fleming, a co-owner of the boutique, advised Andrea Wien, a co-owner and a friend from their days in New York City, on clothes styling, and they realized they had trouble finding what they were seeking. “I almost jokingly asked if she wanted to open our own store,” Fleming said. “She didn’t take long to answer.” Both women feel there are fewer designer-focused apparel stores here than in New York City, but quickly note there’s more of every-

Cheryl Bauer and John Norris have opened Whimsy Willow, a home decor and gift store in Westlake. Norris said retail rent terms are the best in years, but startups need more than that to make a go of it. | STAN BULLARD

from the get-go, they planned events at the store, such as a “sound bath” for meditation, yoga instruction, musicians, artists and chefs — though the Delta variant’s rise has quelled them for “REMEMBER, SHOPPING CENTERS WANT now. A lucky factor was that the TO FILL A VOID IN THEIR PLACE. YOUR Bonobos store STORE HAS TO ADD A PRODUCT AND A fixtures were still in the place and, SHOPPING EXPERIENCE THEY DON’T perhaps the HAVE IN THE CENTER.” luckiest, Van Ak— John Norris, co-owner of Whimsy Willow en’s owner, an affiliate of RMS thing in New York, so new designers Investments of Shaker Heights that had recouped the space, was open help boutiques stand out. The other factor, Wien said, is that to their ideas. “From the time we saw the they saw the store as a way to meet “more like-minded people” here. So space,” Wien said, “until we

opened the doors, it was nine weeks. All the fixtures and shelving were in place, so we had a really fast turnaround.” Background also came into play; the two realized their backgrounds matched the undertaking. Fleming has 20 years of retail experience, including stints at two Brooklyn boutiques in New York. Wien had experience in marketing, social networking and the web. At Whimsy Willow, co-owners Cheryl Bauer and John Norris took advantage of the bones left by Lucky. “It was all white, but we repainted it,” said Bauer, who worked out the design as a calming, fresh space. See RETAILERS on Page 22

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PERSONAL VIEW

A cleaner Lake Erie is good for business

RICH WILLIAMS FOR CRAIN’S CLEVELAND BUSINESS

BY HOWARD A. LEARNER

EDITORIAL

Ready for action T

he fun stuff is coming back to the I-X Center. But it’s the more basic stuff that is most exciting about the future for the massive property on Cleveland’s West Side. In a deal that closed Aug. 31, Industrial Realty Group acquired the stock of I-X Center Corp., the company that controls the 2.2-million-square-foot venue. Stuart Lichter, IRG’s founder and president, now has a lease with the city of Cleveland, which owns the property, and has begun the process of bringing consumer shows back to the I-X Center while simultaneously marketing portions of the building to industrial tenants and pursuing development of the potentially valuable surrounding land next to Cleveland Hopkins International Airport. That’s a lot on the plate, but IRG — reviver of properties including the former Goodyear headquarters in Akron and the old American Greetings campus in Brooklyn, through partnerships with investor Chris Semarjian — has demonstrated the patience and expertise here and in markets nationwide to make big turnarounds happen. (It helps even more that Semarjian, owner of Industrial Commercial Properties of Solon, is an investor in the I-X Center deal.) In quick order, big consumer shows have lined up dates for return engagements at the I-X Center. The Cleveland Auto Show, the Great Big Home and Garden Show, the Ohio RV Supershow and the Progressive Cleveland Boat Show and Fishing Expo all will be back next year at the venue, which comfortably hosts large crowds and offers logistical advantages not available elsewhere in the region. The plan, though, is to host those events in a smaller portion of the I-X Center space while opening up more room for commercial leases that keep the building consistently busy and generate jobs. IRG is working with another heavy hitter on the leases in real estate broker Terry Coyne — another good sign that action is ahead. The focus on sustained use of the building is critical to making the I-X Center a valuable regional asset again following its COVID-related dormancy. The building itself is big, but so is the I-X Center property — about 159 acres. Creative use of that space, combined with the impact of a proposed $2 billion master plan to overhaul Hopkins with features including a larger terminal and four new concourses, stand to bring a new vitality to a property ready to hit its full potential.

Nicely done

Success in one endeavor doesn’t necessarily guarantee success in another. We’re not, at least for now, going to draw a line between the excellent work Chris Ronayne has done as president of University Circle Inc. and his suitability for the next job he wants: Cuyahoga County Executive. There will be plenty of time to assess whether Ronayne is a good candidate for the position now held by fellow Democrat Armond Budish, who has yet to announce whether he will seek a third term once his current term expires in 2022. (The race already has an accomplished Republican candidate, former Cuyahoga County commissioner Lee Weingart, for next fall’s general election.) But as Ronayne prepares to exit UCI after 16 years leading the nonprofit development corporation serving Cleveland’s premier higher education, medical and museum district, we’d be remiss not to offer an appreciation of a job well done — and hope that candidate Ronayne proves as forward-thinking as he has been in the current gig. UCI during Ronayne’s tenure partnered in the construction and renovation of more than 2,300 housing units, and it oversaw $3 billion in new construction in the neighborhood, which is home to about 10,000 residents, 50,000 workers and more than 3 million visitors per year. It also launched a business education program called NextStep that has graduated 60 small business owners, as well as a clean-and-safe ambassador campaign and important public art and youth education programs. By any objective standard, the district looks great. That’s certainly not all Ronayne’s doing. But if a sign of a job well done is having left a place in better shape than when you got there, UCI under Ronayne has set a high standard for the region. Ronayne’s departure from UCI shows his commitment to pursuing the County Executive job. He stands to elevate the quality of debate in that race, which is a significant early victory for all of us.

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

Summer is still here, it’s hot, and people are out on Lake Erie’s shores and in the water. Enjoying swimming, fishing, boating, and lounging on beaches with friends and families. Many more people would come and enjoy their water time more, however, if there weren’t recurring toxic algae outbreaks and green sludge on Lake Erie. Howard A. No one wants to paddle or have their Learner is kids swim in contaminated water. Who executive wants to sail a boat, take a boat tour or director of the go walleye fishing in scummy water? Environmental Less fun. Not healthy. Not good for Law & Policy business. And, not acceptable any- Center, a public interest more. Lake Erie pollution is reducing tour- environmental ism revenues and hurting businesses legal advocacy that depend on the lake for their liveli- and hood. Ohio’s Lake Erie region supports sustainability about 120,000 tourism-related jobs in organization the $13 billion to $15 billion tourism with offices in industry. Recent economic studies Chicago, show that harmful algae blooms also Columbus and harm the economy in both Northern across the Ohio and Canada. Cleaning up Lake Midwest. Erie is good for Northern Ohio’s businesses. Ohioans want a clean Lake Erie. It’s a top priority and can make a difference in how they spend their tourism dollars and how they vote in upcoming elections. According to a new poll conducted by nationally recognized pollster Ann Selzer for the Environmental Law & Policy Center, the top issue for Northwest Ohio voters is safe water, and cleaning up Lake Erie. Here’s what the topline poll results show: ` 93% of voters ranked ac- LAKE ERIE cess to safe clean water and cleaning up Lake Erie POLLUTION IS as their most important REDUCING TOURISM issue. That intense support is higher than for REVENUES AND health care, jobs and wag- HURTING es, and COVID-19. ` 81% favor enforceable BUSINESSES THAT regulations to reduce ma- DEPEND ON THE LAKE nure from concentrated animal feeding opera- FOR THEIR tions (CAFOs) and com- LIVELIHOOD. mercial fertilizer runoff from crop fields. They recognize that voluntary measures aren’t working. ` 78% of voters favor requiring permits for all CAFOs, and a majority support a moratorium on new CAFOs. ` When asked to choose between a candidate prioritizing cleaning up Lake Erie even if it means more regulation and a candidate favoring allowing current practices and voluntary programs, the findings are 7-to-1 for the candidate who prioritizes cleaning up Lake Erie: 77% to 11%. ` 54% of people say that cleaning up Lake Erie will be a major voting issue as they consider candidates to support, and more regulation of CAFOs is important. Northwest Ohio voters recognize the problems and increasingly understand the necessary solutions for a healthy Lake Erie. These poll results are striking. People are fed up with recurring severe algae bloom outbreaks.

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.

See LAKE ERIE, on Page 7

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

6 | CRAIN’S CLEVELAND BUSINESS | SEPTEMBER 13, 2021

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OPINION

LAKE ERIE

From Page 6

What should be done about the agricultural runoff phosphorus pollution — manure from CAFOs and commercial fertilizers from crop fields — that flows into western Lake Erie and causes severe recurring toxic algae outbreaks? Adopt enforceable regulations to reduce this pollution by enough to clean up Lake Erie, require permits for all CAFOs, not just some, and put a moratorium on new CAFOs. Why are these regulations necessary? Because according to the Ohio EPA, 88% of the phosphorus pollution causing the toxic algae is due to manure and commercial fertilizers. According to expert Ohio scientists, voluntary measures alone are not sufficient to reduce pollution enough to solve the Lake Erie toxic algae problems. Scientists have extensively studied the problem. A binational U.S./ Canada science team concluded that the phosphorus flowing into Lake Erie must be reduced by at least 40% by 2025 to alleviate recurring toxic algae blooms. The U.S. EPA, Climate Change Canada, Ohio, Michi-

gan, Indiana, New York and Pennsylvania signed Annex 4 of the Great Lakes Water Quality Agreement in 2012, with each governmental entity committing to take actions sufficient to reduce phosphorus pollution by 40% by 2025. Ohio’s progress so far: almost none, despite millions of dollars for H2Ohio and other voluntary programs. There are more CAFOs and more manure runoff pollution, and harmful algae outbreaks most summers. That impairs safe drinking water supply, damages fisheries, loses millions of dollars of tourism and recreation revenues for the Cleveland regional economy, and means less enjoyable outdoor activities for all. Northwest Ohio voters get it. Enough is enough. They strongly support enforceable regulatory standards as necessary to reduce manure and commercial fertilizer runoff pollution in order to alleviate the recurring severe toxic algae outbreaks and clean up Lake Erie. Gov. Mike DeWine should live up to his and Ohio’s commitment under Annex 4 of the Great Lakes Water Quality Agreement by implementing enforceable regulatory standards now to reduce phosphorus pollution into western Lake Erie by 40% by 2025. The health of Lake Erie depends on it — and so does the regional economy.

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For-profit entity should run West Side Market

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It’s no secret that the West Side Market is one of our region’s finest assets. From an architectural perspective of the building to the bustle of scores of vendors enticing shoppers with their meats, fish and fresh produce, the atmosphere cannot be readily recreated in another location. This synergy is the result of a century-plus momentum of merchants and shoppers coming together in a tradition that extends through families for generations. Yet, with this base, the West Side Market’s success has been squandered. The city of Cleveland, its owner, doesn’t understand the dynamics of retail selling in the modern era. Local officials, merchants and well-meaning supporters have suggested that the management of the West Side Market be turned over to a nonprofit entity to operate. That would be a serious mistake. Nonprofits typically are not adept at running a successful business. At its core, the market is a business. Its merchants do the tedious and difficult work so that they can make a decent profit for themselves and their families. What is needed is a for-profit entity with a tightly written scope to take over operations, because instinctively it understands the profit motive that drives merchants

9/22/2020 1:14:55 PM

to show up regularly and could finance much-needed improvements by tapping into federal and state historic tax credits. If the city partnered with such a profit-driven owner/ operator, it could retain an interest as well as input into operations during the six years until the tax credits burn off. Then, the city could buy back the balance of the ownership for a nominal amount and decide whether to continue the management arrangement. At least at that point the West Side Market would have had a solid run and could better evaluate its future. Rick Foran is a real estate developer focusing on historic preservation redevelopment projects, primarily on the West 25th Street corridor.

A retractable-roof-only solution Architect William T. Eberhard’s Aug. 23 op-ed (“9 reasons why the Indians’ ballpark renovation deal stinks”) is quite a rant, but he makes several good points. What he didn’t say, however, is a blinding glimpse of the obvious: Whatever we call the team, we need a retractable dome. Pouring more money into our ballpark is a waste. Brent R. Grover Chagrin Falls SEPTEMBER 13, 2021 | CRAIN’S CLEVELAND BUSINESS | 7

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PERSONAL VIEW

The importance of corporate giving BY GEORGE SULLIVAN

In a world that is increasingly focused on the environmental and social responsibility profile of a given organization, corporate philanthropy is as much of a “should do” as it is a “nice to do.” It stands to boost the company profile, look good for investors and engage hard-working employees. In fact, Chief Executives for Corporate Purpose, the leader in corporate philanthropy benchmarking, estimated that of the 250 companies surveyed in 2020, nearly $25 billion was given to causes and organizations that support health and social services, community and economic development, and education initiatives. While corporate giving programs have benefited the reputations of those businesses that give, have we lost sight of what corporate giving does for organizations that are determined to create real and lasting change?

Community impact of local giving When businesses donate time and resources to local groups, it is important to seek out opportunities that embody your organization’s mission and values. For me and my colleagues at Equity Trust Co., there is no better partnership than the one we have forged with the American Heart Association (AHA), where I am serving as the chair of the 2021 Greater Cleveland and Lorain Heart Walks. When working with AHA, my colleagues and I feel confident knowing that we are contributing to an organization that mirrors our goals. As a longtime partner of the AHA, I understand that the vision of the AHA aligns with my organization’s values — integrity, excellence and dedication. Corporate giving makes an impact on the local community, your friends and your family. Local giving is where you can see and feel tangible results. There has been no greater need for community support than right now, as the world continues to navigate the challenges associated with the COVID pandemic. Organizations like AHA are working to

er Cleveland and Lorain Heart Walks, you stand to make an impact in your community.

Addressing a vital need From supporting neighbors to lifting up employees, the AHA has a comprehensive approach to partnering with Sullivan, the companies through its Heart CEO of Equity Challenge, a suite of events Trust Co., is chairman of this and initiatives challenging all year’s American of us to reach more people and get them involved and to adHeart dress overall health and Association’s well-being. Greater Heart disease is the No. 1 Cleveland and killer of Americans, and this Lorain Heart situation is likely to remain beWalks. cause of the pandemic, with research showing that more people in the U.S. are sitting more and moving less than they did prior to the pandemic, which could have a lasting impact on our community’s overall heart health. With record-high rates of stress and burnout on top of rising health care costs, the workplace is more complex now than ever before. Right now, work-related stress is associated with a 40% increased risk of cardiovascular disease, such as heart attack and stroke. So, as people return to the in-person work environment, it is important to find new ways to engage the health and well-being of employees and for companies to find and to reinforce meaningful ways to rally employees around philanthropy.

Collective power for good

Today, the AHA is funding $17.6 million in local research grants. With every step we take and every dollar we raise, we are building a legacy that will save and improve the lives of those in our community. Through the Greater Cleveland and Lorain Heart Walks, our team at Equity Trust Co. and our other corAS PEOPLE RETURN TO THE IN-PERSON WORK partners can ensure ENVIRONMENT, IT IS IMPORTANT TO FIND NEW WAYS TO porate that more cardiovascular reENGAGE THE HEALTH AND WELL-BEING OF EMPLOYEES search is funded, more hospitals administer the highest AND FOR COMPANIES TO FIND AND TO REINFORCE standards of care, and that fewer people suffer and die MEANINGFUL WAYS TO RALLY EMPLOYEES AROUND from heart disease and stroke. PHILANTHROPY. We are raising money, walkbring Northeast Ohio back together after being dis- ing and fighting for the health and well-being of our connected and socially isolated during the past year community. and a half. This is why local giving, whether finanTo join our efforts, register for Greater Cleveland cially or with time, is so important. When you sup- and Lorain Heart Walks and encourage your friends, port local organizations and programs like the Great- family or team to do the same.

8 | CRAIN’S CLEVELAND BUSINESS | SEPTEMBER 13, 2021

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AKRON

Builder takes construction business up a notch BY DAN SHINGLER

Todd Tober is a builder, but every year he seems to become more of a manufacturer. The owner of Richfield’s Tober Building Co. still does traditional construction, but he continues to find new business in the world of prefabricated construction for his other company, Seville-based Tober Volume Elements, also known as ToVee. His latest efforts, making prefab elevator assemblies and metal studs to replace traditional wood 2x4s, have impressed his fellow contractors, as well as clients, and brought in new revenue, Tober said. The private company doesn’t disclose its revenues, but Tober said it has been growing rapidly for some time. “We’re up 100% year over year, every year, for eight years now. We’re up to 50 employees,” Tober said. In 2015, Tober said, he had six. His most recent work, done by ToVee, was to make the machine room for a new elevator recently installed on the roof of Charles H. Wesley Tower in Akron. The 100-unit apartment building for seniors in the city’s Wallhaven neighborhood is owned by Alphi Phi Homes and was built in 1981 and equipped with a hydraulic elevator. When Alpha Phi wanted to replace the elevator with a more suitable and reliable traction elevator as part of the building’s $8 million renovation, it

A 30,000-pound elevator control room was lifted to the top of Akron’s Charles H. Wesley Tower on July 28. | CONTRIBUTED

turned to Tober and Cuyahoga Falls company Gable Elevator. While hydraulic elevators work via huge pistons that move in underground shafts, traction elevators work from cables controlled and powered in a machine room that’s usually on the roof of a building. Tober proposed building that room at his ToVee factory in Seville with its equipment pre-installed, then hoisting it to the roof of Charles Wesley in one piece. Tober pulled it off, and the room was delivered via crane to the roof of the tower on July 28. “It was a complete installation of a

traction elevator converting from a hydraulic elevator,” Tober said. “It’s less money than it would have been if he’d have done a traction elevator another way.” Not that there weren’t skeptics, including Gable Elevator president Phil Isaac. But he says he’s a believer now. “It was unbelievable,” Isaac said of the process. “I think that thing weighed 30,000 pounds.” Such construction requires precision, Isaac said. Being off by just half an inch or so can result in problems. There were no such issues. “You’ve got to be dead on, and ev-

erything turned out great,” Isaac said. Now Isaac says Gable probably will use the process again, because it saves workers from having to move as many materials and makes the construction process easier and less expensive. “I think we worked more efficiently because we weren’t taking materials up and down steps,” Isaac said. Alpha Phi also was pleased, because it got a better elevator at a lower cost, with less disruption for tenants, who were still in the building during construction, said Alpha Phi executive director Tom Fuller. “They basically created one room over the course of a couple of months and started putting the elevator equipment into that room in their factory in Seville,” Fuller said after the install was complete. “Then ... they brought that room up and planted it on top of the elevator shaft. Now they’re replacing the hydraulic cabs with the new traction cabs. I don’t know that it’s never been done before, (but) it’s certainly unique.” Now Tober hopes to take the method to other developers, and he thinks the reduced cost and increased safety and convenience — especially in harsh winter climates — will convince some others to use ToVee and its methods. In the meantime, he’s folding metal about as quickly as he can in Seville to make metal studs. ToVee began making the studs for

its own use, but has since found huge demand for them nationally, driven in part by a shortage of lumber and other building materials, Tober said. Others make metal studs as well, but Tober is applying prefab construction methods to the product by working closely with builders to determine exactly what studs they need, and then deliver them to job sites pre-cut and arranged in the order in which they’ll be used. “With our system it’s more like a Tinkertoy or Erector Set,” Tober said. “We call them ‘production packs.’ We send them to the job site, and the carpenter literally snaps them together.” The elevator work and metal studs serve as a way for Tober to introduce potential clients to his prefab construction concepts generally. He said he hopes to begin using ToVee to supply other developers. So far, that hasn’t happened, but Tober said he’s confident that will soon change, as he’s currently in discussions with several interested developers. Contracts won’t be signed until their projects are funded, though, but Tober said he believes his efforts are about to pay off. “We have six developments in progress right now,” Tober said. “It’s been a long road and a scary road, but we just put our chin down.” Dan Shingler: dshingler@crain.com, (216) 771-5290, @DanShingler

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Crypto ATMs growing trend throughout Northeast Ohio BY JAY MILLER

The next time you stop to fill up your car’s gas tank or to pick up an item at the grocery store, you may also be able to buy into one of the growing cryptocurrency markets at a terminal that looks a lot like a traditional automated teller machine. These terminals are even called crypto ATMs, a nod to the latest twist in the financial world. There are about 250 crypto ATMs installed in convenience stores and other retailers around Northeast Ohio, according to Coin ATM Radar, a website that promotes and tracks the cryptocurrency ATM business. But these machines don’t work like traditional ATMs. They don’t connect to a bank account where you can deposit a check or withdraw cash. Instead, they are part of what are called peer-to-peer payment systems that allow you to exchange your currency — dollars, pesos, euros — into digital currencies such as Bitcoin, Ethereum, Dogecoin or one of dozens of others. These ATMs also are used to carry out secure transactions that are encoded and stored on a network of computers using blockchain ledger technology. Nick Fordos recalls people coming into his store, Everything Computers and Electronics on Madison Avenue in Lakewood, carrying envelopes with thousands of dollars in them. They weren’t there to buy computers or pay for computer repairs. They were there to put their money into

the cryptocurrency automated teller machine that, until recently, was tucked in a corner of his shop. He took it out because he was uncomfortable with people coming into his small storefront operation with large amounts of cash. Perry Kramer, a managing partner at Retail Consulting Partners, a Boston retail management consulting firm, said the use of cryptocurrencies and their ATMs is growing rapidly. “You know, there's no one single answer to why there's some adoption out there, but it’s certainly growing,” he said. “Think about the number of migrants and other people in the country, working every week and sending money back home. And then, obviously, you’ve got the younger generation who just think it’s cool or who think, ‘If I put money in there, it might be worth more, and Big Brother can’t watch you.’ ” Kramer added that since the ATMs take up little floor space — typically, 2 feet by 2 feet — they don’t have to generate much income to the store owner to be worthwhile. Fees paid by the cryptocurrency exchanges that own the ATMs range from $300 to $500 for rent, though in more active locations the exchanges may offer a store owner a small percentage of the amount of the transactions. “I would compare it to a Red Box (the video rental kiosks seen at convenience stores, pharmacies and other retailers),” Kramer said. "Anytime (a retailer) can get into something that makes a little bit of money

and requires no labor, it's a win." Kramer also noted that retailers see cryptocurrencies helping their businesses in other ways. A retailer is happy, he said, if they don't have to handle cash or pay credit card fees. He said that coffee retailer Starbucks now allows regular customers to reload their Starbucks cards using Bitcoin, the most widely held cryptocurrency. “The more you get in on the ground floor and find ways to accept payments that have lower interchange rates than credit cards and less friction than cash, you know, it's coming,” he said. Ryan Howard, chief operating officer of Truenorth Energy LLC, which operates 145 convenience stores (and sells gasoline to another 185 independent operators), said the company hasn't put crypto ATMs in, but it has been examining the products. “The biggest reason for doing it is to make our guests' life easier, to provide all the convenient activities, all the convenient products that they're looking for, and (crypto ATMs) would just be something along that line,” he said. Howard said one reason his firm’s stores are not accepting cryptocurrencies is because the digital currencies are so volatile. In addition to the crypto ATMs, consumers can also connect with the digital currency world at many supermarkets in Northeast Ohio through the kiosks of Coinstar LLC. Among the supermarkets that

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A customer uses a Bitcoin ATM in a kiosk in Barcelona, Spain. | ANGEL GARCIA/BLOOMBERG

have Coinstar kiosks that connect to cryptocurrencies is Giant Eagle. The company declined an interview for this story, but spokesman Brock Schmaltz offered an emailed statement: “At Giant Eagle, we are pleased to offer our guests a variety of services to provide a convenient onestop shopping experience,” the statement said. “In response to the recent elevated interest in cryptocurrency, we are excited to offer our guests the

opportunity to complete Bitcoin transactions utilizing the Coinstar machines that are available in the majority of our supermarket locations.” People use the machines to invest in cryptocurrencies, which have been a hot investment vehicle for the last dozen years. The value of a Bitcoin — the world’s first and most popular cryptocurrency — has been running above $47,000 recently, with

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10 | CRAIN’S CLEVELAND BUSINESS | SEPTEMBER 13, 2021

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wide up and down fluctuations from when it was created in 2009 at $1. The crypto exchanges are a kind of broker that provides the customer the necessary secure connection to the internet to buy and trade cryptocurrencies. Users can create an account called a wallet at the crypto ATM, giving them a platform for exchanging national currencies like dollars for digital assets. The best crypto exchanges have good security and low fees, making it safe

and easy to buy and sell the digital currencies. There is $2.2 trillion in digital currencies as of Sept. 1, according to CoinMarketCap, a website that tracks the currencies. Unlike nation-backed currencies such as the dollar, the value of a digital currency is determined by whatever the trading market sets for them. To use a crypto ATM, a user logs in with a crypto wallet address and inserts cash, which is sent to the wallet. If the user puts $1,000 in the

account and the value of the cryptocurrency rises 10%, the account holder can withdraw $1,100, minus fees. In addition to investing and speculating in digital currencies, the ATMs have also been used by immigrants to send money to family back home. It’s easier and faster than Western Union or other kinds of money transfers. They are also used by people who choose to avoid banks. Which means they also have a dark side, attracting money launderers and other schemers. That dark side of cryptocurrencies is another reason Truenorth stores haven’t put crypto ATMs in their stores, Howard said. “Early on, there was some concern that the (ATMs) brought negative activity,” he said. “So far the people that I've engaged with across the country have said that it has not been the case, but there is a kind of fear. But so far, everyone that I've spoken with has said that that was not the case there.” Cryptocurrencies are regulated like any other way of transferring value. In July, the U.S. Department of the Treasury appointed the first digital currency adviser to its Financial Crimes Enforcement Network (FinCEN), the agency that oversees and enforces the Bank Secrecy Act. Cryptocurrencies are part of what FinCEN calls “convertible virtual currencies” or CVCs. The agency declined to comment for this story, but in an email Jayna Desai of its office of strategic communications referred interested parties to a 2019 advisory, “Advisory on Illicit Activity Involving Convertible Virtual Currency,” for information on its policies.

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TAX TIPS How the ERC works to help employers today and how it’s changed over time. PAGE 14

MIDDLE MARKET

Ref str

A SPLIT RECOVERY GETTY IMAGES/ISTOCK PHOTO

Optimism (mostly) reigns as middle market companies head into autumn

BY DOUGLAS J. GUTH

The U.S. middle market has returned to strong year-overyear growth following 12 months of stagnant or declining revenue and employment development rates. Though an uptick in key indicators suggests a widespread recovery across industry sectors, not everyone is enjoying the fruits of these labors quite yet. Data from the 2Q 2021 Middle Market Indicator — released July 28 by the National Center for the Middle Market (NCMM) — revealed an 8% increase in yearly growth, a significant change from the 1.2% decline reported in the last quarter of 2020. Optimism reigns when casting ahead as well, as middle market execs project a 9.8% revenue spike over the next 12 months.

“EVEN THOUGH 45% OF SURVEY RESPONDENTS SAID THEIR REVENUE WAS GROWING BY 10% OR MORE, ON THE OTHER END OF THE SPECTRUM, ALMOST 35% WERE STAGNANT OR DECLINING.” — Doug Farren, NCMM managing director

However, the marketplace’s large-scale positivity doesn’t mean the so-called “return to normal” is uniform, notes NCMM managing director Doug Farren. A quarter of companies surveyed in June said business was lagging compared with the period before the pandemic, and an additional 8% reported struggles merely to stay above water. “Digging deeper, our biggest takeaway is that this is a split recovery,” said Farren. “Even though 45% of survey respondents said their revenue was growing by 10% or more, on the other end of the spectrum, almost 35% were stagnant or declining.” As retail and wholesale markets

continue to flounder, other midmarket leaders are raring to invest. About 59% of executives interviewed for the MMI said they had immediate plans to put money into their businesses — a 7% jump from the same time last year. For some firms, flexibility provided by bank loans or new lines of credit brought innovation and adaptation to the forefront. “Some companies were able to shift and adapt their product line," Farren said. “We had a plastic extrusion company out of Philadelphia that supplied the automobile industry. After a month, they shifted their production line to PPE equipment. The CEO said the shift was for two reasons — to

12 | CRAIN’S CLEVELAND BUSINESS | SEPTEMBER 13, 2021

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Refurbishing a growth strategy The MMI, a collaboration between Ohio State University Fisher College of Business and Chubb, delved into major sectors including health care, construction, retail and financial services. Companies providing business services — law firms, IT, tech companies and more — have weathered the COVID storm better than their contemporaries. The very nature of these industries allowed for a smooth transition from office life to a work-at-home situation. “They were able to continue their work once making adjustments to system needs,” Farren said. “They had it easier than a manufacturing company working from a plant, or retailers having workers in a warehouse shipping e-commerce.” Akron-based professional service provider Sikich had been heading down the path of remote operations pre-pandemic, a process fast-tracked by the virus crisis. “We were able to easily (move to) remote work right when the coronavirus hit,” said Sikich CEO Christopher Geier. “There were a few hundred people working remotely prior (to March 2020) — now we have 60% of our staff as full-time remote.” For Sikich and the midmarket firms it advises, the expected permanence of remote work has its downsides. Employee engagement is one major issue for the new Zoom generation; another is a competitive labor market where geographic proximity doesn’t matter as much. Geier said, “Companies can be on the West Coast and take our employees from the East Coast. Remote work is opening up the market for all of us, so it’s become a double-edged sword.” Sikich, which provides accounting, technology and advisory services to companies of all sizes, counts the middle market among its core clientele. Over the last 18 months, the firm has been working with owners on corporate tax-code changes and how to spend their stimulus dollars. Although Sikich itself is experiencing double-digit growth from both an organic and mergers-and-acquisitions standpoint, industries including manufacturing and distribution will take longer to rebound. Localizing a tangled international supply chain can help manufacturing bounce back quicker, though bringing supply networks on-shore is not the industry’s only option. “How do we create some insulation during economic downturns with classic business school cases like diversifying revenue streams?” said Geier. “We’re pushing hard on helping clients understand that their growth strategy should include additional services and products.” Similar to the bullish position of the MMI, positive trends were the highlight of a second-quarter 2021 study conducted by KeyBank, where 40% of company respondents identified an “excellent” outlook, compared with 31% in the year’s opening quarter. “Excellent” and “very good” out-

looks increased at the national and state level as well, climbing to 68% for the state economy and 61% nationwide, up from 51% and 41%, respectively. In a separate 2Q report, Key announced record second-quarter revenue, driven by jumps in noninterest income, upticks in investment banking fees and other factors. Key senior vice president and commercial team lead Matthew Nipper said that while the banking institution’s clients are having a better year from a revenue standpoint, high valuations have left companies cautious about undertaking potentially transformative acquisitions. “Businesses are doing smaller tuck-ins for expansion,” said Nipper. “Our sentiment with clients is, everyone has to be very nimble.”

‘A much different place’ Even as economic certainty surpasses pre-pandemic levels, approximately one in five midmarket businesses are struggling to claw back lost ground, per MMI data. Greater Cleveland Partnership president and CEO Baiju Shah points to supply chain stress and a cutthroat labor market as two areas particularly bewitching to the middle market. On the talent front, Shah is seeing a focus on retention through higher wages. Cleveland rubber-parts manufacturer Custom Rubber Corp. made national headlines recently by utilizing PPP money to significantly raise hourly pay. According to a recent Wall Street Journal report, the company elevated pay for machine operators by $4.55 per hour, with those workers now making $18.25. The company has since added 33 new employees to its roster. “We’re acutely aware practices have to change around wages and benefits to make a work environment where people want to stay, especially in a moment when there’s so much competition for talent,” said Shah. “As long as there’s high demand (for services), there is reason for optimism.” This summer’s MMI study did not take into account potential Delta variant fallout. Farren of NCMM said continued spread of the more contagious variant could tamp down industry expectations, which his organization will know for certain upon coordinating the next MMI survey in late November. “We are still in a much different place than March 2020 — there has been a lot of learning across the board,” Farren said. “Thinking back to when the coronavirus first hit, there was so much uncertainty on how to address it.” Geier, the Sikich CEO, thinks about Delta’s potential industry ramifications “all the time.” Even so, he remains optimistic about what the future holds for the middle market. “The sector has proven itself over time to be resilient,” said Geier. “It hasn’t been as impacted as many smaller businesses by COVID, and larger enterprise clients are less agile to pivot quickly. The middle market is poised with good leaders to pivot if it needs to.” Contact Douglas J. Guth: clbfreelancer@crain.com

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The Employee Retention Credit (ERC) was first introduced in March of 2020 to incentivize employers to keep their workers during the pandemic. Employers are eligible to receive the credit through the end of 2021 (unless new legislation ends it earlier). To get a better understanding of how the ERC works today, let’s review how it has changed over time.

March 27, 2020 In response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed on March 27, 2020, creating the ERC. ` The credit was calculated on eligible wages paid between March 12, 2020, and December 31, 2020. ` The credit was 50% of up to $10,000 of qualified wages per employee. ` The credit was available if: ` The business had an initial 50% or more reduction in gross receipts against the same quarter from 2019 and maintained a 20% or more reduction in subsequent quarters, or ` The business’s operations were fully or partially suspended due to a government order. ` Employers with more than 100 full-time employees were “large employers.” Large employers' most significant limitation was they could only use wages paid to employees to not work (not all qualified wages). ` The ERC was not available to recipients of Paycheck Protection Program (PPP) funds. ` The ERC could not be calculated using wages that were used to qualify for paid family and medical leave credits or for the Work Opportunity Tax Credit (WOTC).

Dec. 27, 2020 The Consolidated Appropriations

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Act (CAA) made a few major changes to the ERC. Some of the changes were retroactive, but most applied beginning Jan. 1, 2021. ` The credit was Ciccotelli is e x t e n d e d partner-inthrough June 30, charge of 2021. Meaden & ` In 2021, the Moore’s Tax credit became Services Group . worth 70% of up to $10,000 of qualified wages per employee per quarter, instead of annually. ` The gross receipts test changed in two ways for 2021: (1) Businesses needed a 20% reduction in gross receipts (compared with 50%); and (2) The assessment could be made using the current quarter compared with the same quarter from 2019 or using the immediately preceding quarter compared with the same quarter from 2019. ` The definition of “large employer” was changed to those with more than 500 full-time employees. ` The CAA allowed most PPP loan participants to claim the ERC using wages they did not use for PPP forgiveness.

March 1, 2021, and April 2, 2021 IRS Notice 2021-20 and IRS Notice 2021-23 formalized Frequently Asked Questions previously published to the IRS website and also provided guidance for CAA updates to the credit. These notices clarified questions, including: ` What constitutes a partial shutdown of a business? ` How excess wages used for PPP forgiveness are treated for ERC purposes. ` Are health plan expenses consid-

ered qualified wages? ` Clarified the election to use the preceding quarter comparison to qualify.

March 11, 2021 The American Rescue Plan Act of 2021 (ARPA) modifications made to the credit were effective July 1, 2021. ` The ERC was extended through Dec. 31, 2021. ` Certain startup businesses — those that started after Feb. 15, 2020, and that had an average of $1 million or less in gross receipts — could be eligible for a quarterly credit of up to $50,000 beginning in July 2021 (maximum $100,000 total). ` Severely financially distressed employers (SFDEs) are defined as businesses whose gross receipts fall at least 90%. Beginning in July 2021, SFDEs are not bound by the “large employer” limitations.

Aug. 4, 2021 IRS Notice 2021-49 takes the form of a FAQ document. It answers some of the following questions: ` What is the definition of a fulltime employee vs. a full-time equivalent? ` Are owner and owner’s spouse wages eligible for the ERC? ` Should a taxpayer who already filed their tax return amend their return if they want to use wages toward the ERC instead?

Aug. 10, 2021 IRS Revenue Procedure 2021-33 introduces a safe harbor that allows employers to exclude forgiven PPP loans from gross receipts when determining eligibility. The IRS may release more guidance about the ERC before the year is out.

Tax law implications of the Employee Retention Credit CARES Act

CAA

ARPA

Eligibility dates

March 12, 2020 – Dec. 31, 2020

Jan. 1, 2021 – June 30, 2021

July 1, 2021 – Dec. 31, 2021

Credit calculation

50% of up to $10,000 of wages per year

70% of up to $10,000 of wages per quarter

Maximum credit

$5,000 per year

$7,000 per quarter

Maximum credit for startup businesses

None

Up to $50,000 per quarter beginning July 1, 2021

Reduction in gross receipts needed to qualify

50% initially, 20% after 50% threshold met

20%

Comparable quarters for gross receipts calculation

Comparable quarter in 2019

Comparable quarter in 2019 or immediately preceding quarter compared to same quarter in 2019

Large employer definition

100 or fewer FTE

500 or fewer FTE

SOURCE: MEADEN & MOORE

CRAIN’S CLEVELAND BUSINESS GRAPHIC

14 | CRAIN’S CLEVELAND BUSINESS | SEPTEMBER 13, 2021

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BY S

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Kuno Creative goes the ESOP route BY SCOTT SUTTELL

Clients of Kuno Creative who have a question for the digital marketing agency now can go straight to the owner. Because everyone at Kuno is an owner. Kuno last month announced that it transferred 100% ownership of the company to employees via an Employee Stock Ownership Program, or ESOP. It's a move that Chris Knipper, 52, founder and CEO of Kuno, said had been in the works "for a very long time" and that follows a strong 2020 that was, as Knipper noted, "our most profitable year to date." The company has 42 employees, and support for the move to an ESOP structure has been "overwhelmingly positive," said Knipper, who continues to serve as Kuno's CEO. (The company is managed by a third-party advisory, ESOP specialist Kyle Spader of Acumen Advisory Services.) Knipper said the ESOP structure helps make employees more fully invested in their work by being part of the success of the agency and its clients. The ESOP structure incentivizes employee creativity while also underscoring that with whatever initiatives an employee might undertake, "you're spending your own money," Knipper said. In the ESOP announcement, Knip-

per said clients stand to benefit, too, because an ESOP makes it easier for a firm to attract top talent; improves retention and account management consistency; and allows the company "to reduce disruption and maintain relationships with clients, partners and management if an owner were to retire or step back from the company." An ESOP is a qualified retirement plan that buys, holds and sells company stock for the benefit of the employees, providing them with an ownership stake in the company. According to data from ESOP Partners, the firm that helped Kuno Creative make the transition in structure, there now are about 6,600 ESOPs nationwide, representing about 14.1 million participants and total plan assets of about $1.5 trillion.

ployee ownership has some key advantages. For instance, ESOPs give employees a more direct stake in the company's fortunes and help them feel more engaged. Companies with higher rates of engagement, in turn, see significantly lower rates of absenteeism, according to Gallup data. ESOP Partners noted that studies have demonstrated that ESOP companies outperform their non-ESOP counterparts in other areas. For instance, a recent study from the National Center for Employee Ownership "demonstrated that employee-owned companies are 235% better at job retention than their non-ESOP counterparts," according to ESOP Partners. The move to an ESOP isn't the only big change for Kuno. Kuno employees haven't been in

A RECENT STUDY FROM THE NATIONAL CENTER FOR EMPLOYEE OWNERSHIP “DEMONSTRATED THAT EMPLOYEE-OWNED COMPANIES ARE 235% BETTER AT JOB RETENTION THAN THEIR NON-ESOP COUNTERPARTS,” ACCORDING TO ESOP PARTNERS. In Northeast Ohio, companies that recently made the transition to employee ownership include Norwalk Furniture and Phoenix Coffee. Advocates of ESOPs argue that em-

the office together since March 2020, at the start of the pandemic. Nothing unusual there, at least in the professional-services world. But unlike many firms, Kuno has gone fully re-

GETTY IMAGES/ISTOCK PHOTO

FOCUS | MIDDLE MARKET

mote and will not return to its 6,500-square-foot office in Avon, where the lease ends in December. The company has been in Avon for 13 years (and seven before that in Lorain), but now operates virtually, with employees in seven states. "Our productivity is way up," Knipper said, and 2021 is on pace to top the revenues of 2020. (The pandemic-era growth for Kuno stems in large part, Knipper said, from the company serving clients primarily in the technology and medical space. Those companies also have spent less on travel and more tradtional marketing such as trade shows, and are able to invest more in digital marketing, he

said.) He said employees do, on occasion, use co-working spaces when a physical location is needed, and the company is encouraging social events for employees to remain connected. Still, he said the company's fully remote status has been helpful in attracting talent, giving it a broader pool of applicants. "Your creative contribution to Kuno is based entirely on your output, now where you're at," Knipper said. Scott Suttell: ssuttell@crain.com, (216) 771-5227, @ssuttell

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SEPTEMBER 13, 2021 | CRAIN’S CLEVELAND BUSINESS | 15

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FOCUS | MIDDLE MARKET

Ozanne Construction is building Cleveland to new heights BY DOUGLAS J. GUTH

Dominic Ozanne, the current president and CEO of Ozanne Construction Co., had two distinct choices when deciding whether to enter the family business and work for his father, Leroy Ozanne. “The two options were to work for the company, or to work for the company,” Ozanne said with a laugh. Though the younger Ozanne worked in law before joining the Cleveland construction firm in 1980, the lion’s share of his career has been spent maintaining — and expanding upon — his father’s rich legacy. Ozanne Construction is a multidisciplinary firm doing business throughout the Midwest and southern United States. With at least $50 million to $60 million in projects under contract annually, the 25-person shop at East 25th Street and Payne Avenue offers design-build expertise and management on housing, mixed-use development and an assortment of federal contracts. High-profile projects include renovation of FirstEnergy Stadium, where the company spearheaded end-zone reconstruction and improvements to indoor hospitality spaces. Ozanne Construction’s eclectic portfolio also encompasses parking redevelopment at Cleveland Hopkins International Airport and the complete reconstruction of Cleveland Heights High School. Ozanne’s law background — honed at Harvard Law School and three years as an associate at the Thompson Hine law firm — comes in handy when managing jobs for the heavily regulated federal sector. The company counts NASA, the Federal Bureau of Prisons and the U.S. Department of Justice among its clientele, a portfolio that incorporates stringent rules alongside reams of paperwork. “Federal is the biggest dog in the yard as far as spend,” said Ozanne. “We don’t like the taxes involved, but we do like the work. Regulations are like a set of specifications — you study them to figure out what needs to happen, then comply with a level of excellence. Because the industry is so regulatory, you learn early that if you do slip up, the consequences are severe.”

A time for change Any business must spend time handling taxes, legal documents and administrative duties. Nor was Ozanne unfamiliar with construction before coming on full time — he worked summers for the firm when attending St. Ignatius High School and college. While Ozanne always wanted to connect with his dad on a more permanent basis, law school served to test his limits before that day came. “There’s an exuberance of youth to prove yourself to your father,” Ozanne said. “We get to a point in life where we rebel and show we can do something else.” Construction in the late '70s and early '80s ran on handshakes and trust, or working directly off a purchase order or short-form agreement. Although the company still relies on the occasional handshake

Cleveland Hopkins International Airport’s new Ground Transportation Center was a $3.5 million project built by Ozanne Construction Co. and DLR Group as the design-build team.

This rendering shows the proposed $22 million transformation of the Northern Ohio Blanket Mills property in Cleveland’s Clark-Fulton neighborhood into affordable housing units, a project involving Ozanne Construction as construction manager. | PHOTOS COURTESY OF OZANNE CONSTRUCTION

deal, Ozanne came on to organize contracts and tighten up any business practices that needed tightening. “Most of my father’s friends had no respect for me. They’d say, ‘You’re a lawyer, what do you know?’” said Ozanne. “I had to get Ozanne them to trust me one step at a time, especially in a field where I may know my way around a contract. I had to prove I knew something about construction.” Spurring change didn’t mean the firm had struggled before the second generation arrived. One of Cleveland’s first African Levin American building inspectors, Leroy Ozanne incorporated Ozanne Construction in 1956, overcoming an era inhospitable to minority entrepreneurs. After two years in business, the company won contracts to build Gulf Oil and Sinclair filling stations, later moving on to a branch bank for Cleveland Trust and a transfer station for Ohio Bell. Ongoing success resulted in a partnership with Turner

Construction Co. on the Martin Luther King Jr. shopping plaza, marking a pioneer moment for the Black-owned construction concern. Dominic Ozanne said procuring federal contracts — as well as traveling for out-of-state projects — indicated less of an internal evolution than ensuring the company didn’t stagnate. Ozanne said, “It’s all about growth, even though the company was already successful in 1980. My dad gets 100% credit. We tried to grow the business and adapt to changes in technology and terms of agreement, or traveling when before we weren’t doing that. It was about bringing in different opportunities that fit our profile.”

Earning respect Mort Levin, a Cleveland developer and founder of private real estate development firm Levin Group Inc., was introduced to Ozanne Construction in the mid-‘70s upon orchestrat-

“DOMINIC HAS TAKEN THE FIRM TO ANOTHER LEVEL BY DOING PROJECTS ON HIS OWN AND NOT JUST COLLABORATING WITH BIG COMPANIES.” — Mort Levin, a developer and founder of Levin Group Inc.

ing renovation of Rockefeller Park Towers. Levin describes Leroy Ozanne as a “strong personality” who imparted his well-earned wisdom to his son. “Leroy was forthright and honest, and taught Dominic well,” Levin said. “Dominic has taken the firm to another level by doing projects on his own and not just collaborating with big companies.” Levin points to Dominic’s legal upbringing as a separator within the industry. “Having that legal and construction background, he understands the issues and can identify potential problems,” said Levin. “Dominic is a Renaissance man with big projects and small ones.”

Ozanne is still motivated by his father’s teachings, whether that means fearlessly protecting his principles or never thinking himself as lesser. “Dad said to put the time in and if you can’t figure it out, keep working,” said Ozanne. “If you’re successful or not, it’s your fault.” Ozanne won’t stand for excuses today, considering that his pioneering father’s success came during a time of state-sponsored segregation. Leroy, now 95, is busy texting his grandchildren while Dominic’s son, Dominic II, is being prepared for a leadership role at the firm. Now past retirement age, Dominic Ozanne continues to manage construction projects involving hundreds of people from diverse backgrounds. He expects the next generation of company leaders to carry the same values that built Ozanne Construction to its current heights. “We’ve got a lot of talented young guys here,” Ozanne said. “I need to get out of the way and let them thrive. They’re the future of the company. I’m just trying to make sure I don’t screw things up.” Contact Douglas J. Guth: clbfreelancer@crain.com

16 | CRAIN’S CLEVELAND BUSINESS | SEPTEMBER 13, 2021

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SPONSORED CONTENT

“

CONVENED BY CUYAHOGA COUNTY PUBLIC LIBRARY

As broadband connectivity has finally become a centerpiece of our nation’s infrastructure plans, we felt it was important to host a local conversation with diverse perspectives to understand where opportunity exists in Cuyahoga County and where we need to focus our collective efforts to address digital equity and inclusion. - Tracy Strobel, executive director, Cuyahoga County Public Library

”

Overcoming digital disparities requires more than hotspots and handouts By JUDY STRINGER Crain’s Content Studio-Cleveland

MODERATOR:

• Angela Siefer, executive director, National Digital Inclusion Alliance

THE PARTICIPANTS:

• Dr. Nazleen Bharmal, associate chief, Community Health & Partnerships, Cleveland Clinic Community Care; staff physician, Department of Internal Medicine • Eric Fiala, head of corporate responsibility, KeyBank • Mayor Katie Gallagher, City of Brooklyn • Dr. Charlie Keenan, superintendent, Maple Heights City School District • Marty McGann, executive vice president, advocacy and strategy, Greater Cleveland Partnership • Jeff Patterson, CEO and safety director, Cuyahoga Metropolitan Housing Authority • Michele Pomerantz, director of regional collaboration, Cuyahoga County • Angee Shaker, director of economic development, City of Solon • Roshonda Smith, vice president, regional community development manager, Huntington National Bank • Tracy Strobel, executive director, Cuyahoga County Public Library • Leon Wilson, chief of digital innovation and chief information officer, Cleveland Foundation

rior to the pandemic, leaders at the Columbus-based National Digital Inclusion Alliance felt a bit like Chicken Little, said executive director Angela Siefer. The organization had been sounding alarms about the dire consequences of digital inequities to largely unmoved audiences. The COVID shutdown, however, changed that. Suddenly, it became clear that connection matters, according to Siefer and a panel of local government, business and nonprofit leaders convened by Cuyahoga County Public Library in partnership with Crain’s Content Studio-Cleveland. The purpose of the private virtual discussion: Discuss the needs – and opportunities – linked to digital equity and inclusion in Greater Cleveland. Cuyahoga County Public Library, like public libraries across the nation, has served for years as a bridge across the digital divide, providing access to public computers, a reliable highspeed broadband connection, and staff who can assist residents lacking basic digital literacy skills. When the pandemic forced libraries to close their buildings to the public, the community’s broadband safety net essentially disappeared. While laptop and hotspot giveaways were constructive early responses, those stopgaps are not enough, participants in the virtual discussion noted. Bridging the digital divide, they said, will require long-term, affordable solutions on the technology side, as well as systemic change aimed at rooting out socioeconomic inequalities that accompany digital exclusion. “Digital equities are just a subset of the equity issues that we need to address in this county,” said Maple Heights City School District Supt. Dr. Charlie Keenan. “The digital part can be a part of it, but I think we have to keep in focus that there’s a bigger picture here of equity that we need to address to get this resolved.”

Keenan was one of 11 county leaders who took part in the hour-long Aug. 19 conversation, which was led by Siefer with participants reflecting on the role COVID has played in bringing awareness to digital disparities.

COVID REALITY CHECK

Eric Fiala, head of corporate responsibility for KeyBank, said the pandemic not only illustrated the depth of the disparity in terms of the number of people affected, but it highlighted “the implications across education, across health care, across finance, in terms of how the digital divide impacts people’s daily lives.” Students in homes without computers or internet connectivity didn’t have the option of logging into online classes. Digitally disconnected seniors couldn’t see their doctors virtually and struggled to register for early vaccination appointments; families who relied on internet access in library branches and community centers found themselves without a place to pay bills, apply for jobs or keep in touch with friends and loved ones. Brooklyn Mayor Katie Gallagher said her inner-ring Cleveland suburb struggled to communicate with its lowincome, elderly and immigrant residents -- many of whom traditionally relied on a printed newsletter for information on services. “When people needed rental assistance or they needed some kind of (COVID) screening and they needed information fast, that’s where we saw a huge void,” she said. Dr. Nazleen Bharmal, associate chief of Community Health & Partnerships, Cleveland Clinic Community Care, said digital inequities made it difficult to connect “vulnerable patients” to remote health monitoring technologies during the pandemic. This included not only older adults, she explained, but patients who suffer from conditions already “rooted in health inequities.” Several participants stressed that one silver lining arising from the crisis was the formation of new collaborations, including the Greater Cleveland Digital Equity Coalition, which is spearheaded by The Cleveland Foundation and the Greater Cleveland Partnership. “Out of this came a lot of decisions that had to be made to create something that should have been created a number of years ago,” said Jeff Patterson, CEO and safety director of the Cuyahoga Metropolitan Housing Authority. “All the priorities that you can see now as it relates to digital inclusion were there before, but there was not enough motivation or reason behind it for people to take it seriously.”

THE BARRIERS

Despite the pandemic push, participants detailed several lingering barriers to widespread and robust digital inclusion in the county. Marty McGann, executive vice president for advocacy and strategy at the GCP, talked about language in the American Rescue Plan Act that restricts state or local funding of broadband infrastructure in areas with existing but slow and outdated broadband connections. “That essentially creates an urban exclusion,” he said. The Digital Equity Coalition partners, McGann added, “have been pushing our members of Congress and pushing our state leaders to really understand this nuance and the importance of ensuring that there are urban solutions here that go beyond the Emergency Broadband Benefit program.” Other barriers that were discussed include: • Affordability. Participants said federal funds to install new or better connectivity in urban areas will do little good if the families who live there can’t afford to pay monthly carrier service fees. “If we don’t look at affordability as well as the infrastructure, we’ll continue to be chasing our tails and

left behind,” said Michele Pomerantz, director of regional collaboration for Cuyahoga County. • Digital literacy. Cuyahoga County Public Library executive director Tracy Strobel said education is another important part of the puzzle. Strobel recalled teaching a library class to help seniors get online in 1997. “I thought certainly by 2021 we’d be out of the business of digital literacy, but clearly we’re not,” she said. • Sustainability. The lightning-fast processors and high-speed connections of today will be outdated “at some point in the next few years,” said CMHA’s Patterson. “And then where’s the money going to come from?” He and other participants said there needs to be the development of a process for sustaining digital equity investments as technology advances.

WHERE DO WE GO FROM HERE?

As for moving forward, the assembled leaders underscored the importance of considering digital inclusion initiatives in the context of broader social justice issues. Roshonda Smith, vice president, regional community development manager, Huntington National Bank, said “digital connectivity should be utilitarian” and noted that because of discriminatory practices like digital redlining “we’ve really fallen short on just addressing the needs of some of our most vulnerable families and individuals.” Solon’s economic development director Angee Shaker maintained that digital inequity is a factor in the current labor shortage “crisis” and ultimately contributes to less upper mobility among low-income Clevelanders. “Within a one-hour radius, we are seeing a lot of unemployed and underemployed folks,” she said, “and the digital divide has much to do with why we can’t connect them to some really great opportunities right here in Solon.” Leon Wilson, chief of digital innovation and chief information officer at The Cleveland Foundation, said he worries about how the migration toward digital currency and telehealth will impact those who can’t or don’t know how to use digital applications. “I’m thinking about where the [new] dollars aren’t going that still may have a digital equity influence, and maybe that’s where I need to be focusing my energy because no one else is,” Wilson explained. “Yes, I want these dollars to come and be used prudently and appropriately, but I know that is not going to solve it. … This is a social equity, social inclusion issue.”

This advertising-supported section/feature is produced by Crain’s Content Studio-Cleveland, the marketing storytelling arm of Crain’s Cleveland Business. The Crain’s Cleveland Business newsroom is not involved in creating Crain’s Content Studio content.

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CRAIN'S LIST | HIGHEST-PAID ATHLETES (CONTINUED FROM PAGE 3) Ranked by base salary for current or upcoming season RANK

NAME, AGE POSITION, TEAM

BASE SALARY

SALARY CAP HIT/ MLB PAYROLL SALARY 1

CASH RECEIVED THIS YEAR

TOTAL CONTRACT VALUE

CONTRACT LENGTH (YEARS)

CONTRACT EXPIRES 2

YEAR ENTERED LEAGUE

COLLEGE

CEDI OSMAN, 26 Forward, Cavaliers

$8,133,334

$31,120,000

2024

2017

EVAN MOBLEY, 20 Center, Cavaliers

$8,075,160

$36,664,449

2025 3

2021

University of Southern California

DARIUS GARLAND, 21 Guard, Cavaliers

$7,040,880

$29,083,315

2023 3

2019

Vanderbilt University

ISAAC OKORO, 20 Guard, Cavaliers

$6,720,720

$29,083,315

2024 3

2020

Auburn University

COLLIN SEXTON, 22 Guard, Cavaliers

$6,349,671

$20,175,111

2022 3

2018

University of Alabama

DAVID NJOKU, 25 Tight end, Browns

$6,013,000

$15,538,095

2021

2017

University of Miami

CASE KEENUM, 33 Quarterback, Browns

$6,000,000

$7,333,333

$6,000,000

$18,000,000

2022

2012

University of Houston

ROBERTO PEREZ, 32 Catcher, Indians

$5,500,000

$14,500,000

2021

2014

Florida Gateway College

AUSTIN HOOPER, 26 Tight end, Browns

$4,500,000

$8,250,000

$11,500,000

$42,000,000

2023

2016

Stanford University

CHRIS HUBBARD, 30 Offensive tackle, Browns

$3,500,000

$4,961,755

$3,661,755

$36,500,000

2021

2013

University of Alabama at Birmingham

AUSTIN HEDGES, 29 Catcher, Indians

$3,280,000

2021

2015

JADEVEON CLOWNEY, 28 Defensive end, Browns

$2,500,000

$3,870,588

$7,470,588

$8,000,000

2021

2014

University of South Carolina

TAKKARIST MCKINLEY, 25 Defensive end, Browns

$2,500,000

$3,676,470

$4,250,000

2021

2017

University of California, Los Angeles

BLAKE PARKER, 36 Pitcher, Indians

$2,500,000

2021

2012

University of Arkansas

AMED ROSARIO, 25 Shortstop, Indians

$2,400,000

2021

2017

RASHARD HIGGINS, 26 Wide receiver, Browns

$2,240,000

$1,127,500

$2,377,500

2021

2016

Colorado State University

DYLAN WINDLER, 24 Guard, Cavaliers

$2,239,200

$10,449,718

2023 3

2019

Belmont University

RONNIE HARRISON JR., 24 Safety, Browns

$2,183,000

$3,388,032

2021

2018

University of Alabama

WYATT TELLER, 26 Guard, Browns

$2,183,000

$2,714,123

2021

2018

Virginia Tech

DAMYEAN DOTSON, 27 Guard, Cavaliers

$2,000,000 4

$4,000,000 4

2022 4

2017

University of Oregon; University of Houston

NICK WITTGREN, 30 Pitcher, Indians

$2,000,000

2021

2016

Purdue University

DEAN WADE, 24 Forward, Cavaliers

$1,782,621 4

$3,675,602 4

2022 4

2019

Kansas State University

MFIONDU KABENGELE, 24 Center, Cavaliers

$1,701,593 4

$3,706,764 4

2023 4

2019

Florida State University

TACKO FALL, 25 Center, Cavaliers

$1,669,178 4

2022 4

2019

University of Central Florida

LAMAR STEVENS, 24 Forward, Cavaliers

$1,517,981 4

$3,952,968 4

2023 4

2020

Penn State University

JEDRICK WILLS JR., 22 Offensive tackle, Browns

$1,505,587

$4,477,935

$1,505,587

$19,702,914

2023

2020

University of Alabama

ANDREW BILLINGS, 26 Defensive tackle, Browns

$1,350,000

$3,500,000

$1,350,000

$3,500,000

2021

2016

Baylor University

KAREEM HUNT, 26 Running back, Browns

$1,300,000

$4,870,588

$12,000,000

2022

2017

University of Toledo

ANDY JANOVICH, 28 Fullback, Browns

$1,300,000

$1,437,500

$5,700,000

2022

2016

University of Nebraska

JOHN JOHNSON III, 25 Safety, Browns

$1,250,000

$3,650,000

$13,250,000

$33,750,000

2023

2017

Boston College

Research by Chuck Soder (csoder@crain.com) | Data is from spotrac.com, espn.com and league websites. Players with the same base salary are ranked by cap hit/MLB payroll salary. NOTES: 1. These figures often include only a portion of signing bonuses, which are typically amortized over multiple years when calculating salary caps. 2. Represents the player's final season under contract. NFL contracts technically don't expire until the following year. 3. Includes club options. 4. Non-guaranteed.

Get 50 athletes with a base salary of $1 million or more in Excel format. Become a Data Member: CrainsCleveland.com/data 18 | CRAIN’S CLEVELAND BUSINESS | SEPTEMBER 13, 2021

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DATA SCOOP

Cavs occupy top four spots on list of highest-paid athletes BY KEVIN KLEPS

An athlete who played an important role on a Cleveland Cavaliers team that won an iconic championship is now derided for the nine-figure contract he landed once the city’s marquee athlete bolted for Hollywood. Kevin Love, entering the third season of a $120.4 million contract extension he signed in the weeks after LeBron James’ departure, is Cleveland’s highest-paid athlete for the fourth straight year. How much longer Love remains with the Cavs, though, has been a topic of much debate because of the 33-year-old’s long list of injuries in the last few years. Love, who will make more than $31 million this season, isn’t part of the Cavs’ long-term future, and two key members of the team’s young core could be competing with Love for minutes. One, Jarrett Allen, debuts at No. 2 on the list. The 23-year-old center was signed to a five-year, $100 million contract in August — nearly seven months after he was acquired in a four-team trade that featured James Harden going to the Brooklyn Nets. Two more Cavs trade acquisitions — point guard Ricky Rubio and 7-footer Lauri Markkanen — check in at Nos. 3 and 4. Rubio, on his third team is as many years, is in the last year of a contract he originally signed

Kevin Love, who is entering the third season of a four-year, $120.4 million contract, has missed 116 of 219 games the last three seasons. | NIC ANTAYA/GETTY IMAGES

with the Phoenix Suns. Markkanen, meanwhile, could be a building block after a 2020-21 season in which he made 40.2% of his 3-pointers for the Chicago Bulls. Two 28-year-old Browns wide receivers from LSU — Odell Beckham Jr. and Jarvis Landry — are fifth and sixth, respectively. In an odd twist, Beckham, despite a lot of turnover on the list (only nine players remain from last year’s top 20), has been No. 5 in each of his three years in Cleveland, and Landry is No. 6 for the second straight year.

Baker Mayfield is in the final season of his four-year rookie deal. The quarterback, who can play on an $18.9 million option in 2022, is likely to command a huge extension. | CLEVELAND BROWNS

The list ranks players by base salaries, which means players on the Browns don’t fare nearly as well as some of their counterparts on the Cavs. NFL contracts don’t contain the full guarantees that NBA and MLB deals do, and players rely on signing bonuses (which are spread out over the life of a contract for salary-cap purposes) and roster bonuses to pad their earnings. Three Browns offensive linemen — right tackle Jack Conklin, left guard Joel Bitonio and center J.C. Tretter — are Nos. 7-9. Third baseman Jose

Ramirez, one of just two Cleveland Indians players in the top 20, is No. 10. The Cavs’ last four lottery picks — Evan Mobley, Darius Garland, Isaac Okoro and Collin Sexton — occupy the Nos. 12-15 spots on the list. A total of 50 players have base salaries of at least $1 million. The Browns (27) and Cavs (15) account for the vast majority of the top 50, which includes eight Indians players. The full digital list is available to Crain’s Data Members. Myles Garrett, likely the Browns’ best player, is 46th with a base salary

of $1.019 million. The defensive end, though, is doing OK. In July 2020, Garrett agreed to a five-year, $125 million extension that included a $21 million signing bonus, plus option bonuses of $20.7 million this year and $18 million in 2022. Three more Browns stars, including the city’s most marketable athlete, aren’t in the top 50. Quarterback Baker Mayfield, cornerback Denzel Ward and running back Nick Chubb aren’t ranked because they each have base salaries of $920,000. Mayfield — who has endorsement deals with the likes of Progressive, Hulu, Nissan, Nike, Bose and BodyArmor — is under contract through 2022, but could be in line for an extension that would pay him at least $35 million a season. Ward, like Mayfield, is entering the fourth year of his rookie deal and could play on a $13.3 million club option for 2022. (Mayfield’s fifth-year option is $5.6 million higher than Ward’s.) Chubb, one of the game’s best backs, recently landed a three-year, $36.6 million contract extension. The deal included a $12 million signing bonus, and the average annual value of $12.2 million ranks sixth at the position. Kevin Kleps: kkleps@crain.com, (216) 771-5256, @KevinKleps

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SHIPPING

From Page 1

Currently, container vessels haul about 90% of the world’s non-bulk cargo. But the massive ships needed to transport the tens of thousands of containers the larger vessels can hold have been affected first by COVID-19 slowdowns and then by the surge in consumer demand that’s overwhelming coastal ports around the world. In the last 12 to 18 months, container shipping prices have skyrocketed, Gutheil said, while congestion at the ports of Los Angeles and Long Beach, as well as the ports of New York and New Jersey, has created logistical nightmares for businesses relying on foreign imports and exports. The timing could not be better for a “niche service” that avoids the congestion issues on the coasts, Gutheil said, which is what the new transatlantic container service here, the Cleveland-Europe Express, offers. Dutch company Spliethoff has partnered with the Port of Cleveland to provide container-only, regular monthly service through the St. Lawrence Seaway between the ports of Antwerp, Belgium; Picton in Ontario, Canada; and Cleveland. In the past, similar routes in and out of Cleveland brought multipurpose vessels, transporting goods, raw materials, steel, heavy equipment and adding a few containers. By contrast, the new service will ship containers only. The route, which takes 12 days to travel from Antwerp to Picton and a total of 15 days from Antwerp to Cleveland, is attractive to Ohio and other Midwest companies looking to shorten travel times, Gutheil said. “These are shorter shipping times because you don’t have to send something all the way out to the East Coast or West Coast by rail to get it on an actual ship, and then wait once the cargo gets into those ports because there’s so much activity there,” Gutheil said. Containers are sitting idle in the larger ports for days and sometimes weeks, he said, as shipping demand increases every August to October in preparation for holiday shopping, and labor shortages have exacerbat-

REPORT

From Page 1

area,” he added. “And that’s very important. We speak less of the people and the talent migration and the importance of that talent migration at all levels of our economy.” Study author Richey Piiparinen quietly published the report last month on the website of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University, where he serves as director of urban theory and analytics. Global Cleveland is preparing to talk up the research as the group observes Welcoming Week, a celebration of newcomers that started Friday, Sept. 10, and runs through Sunday, Sept. 19. “The story about immigration in Cleveland has always been a heartstrings story. … This is the kind of stuff that we hope moves the needle with the people in Cleveland who are corporate leadership, civic leadership,” said Joe Cimperman, the nonprofit’s president. Piiparinen and co-authors Jim Russell and Joshua Valdez stress a point that researchers in long-shrink-

The Peyton Lynn C and the many containers it carries is prepared for a recent trip to Canada and Belgium. | KIM PALMER

ed loading and unloading wait times. These problems do not exist in Cleveland, where it takes cargo only a day or two to get unloaded and out for delivery. “We can react to that fairly quickly, whereas you go into a big coastal port and there’s just nowhere to go,” Gutheil said. “There’s a lack of space for containers and there’s a lack of trucking availability.” The reasoning for Midwest companies to move shipping away from the coast to the Great Lakes is sound. The challenge, said Claus Sorensen, vice president of the Great Lakes and Midwest for Spliethoff, is convincing these businesses there is container shipping available on Lake Erie. “We speak to professionals in our industry, claiming that it’s not possible to bring in a ship like this into the Great Lakes,” Sorensen said. That, he said, illustrates how the Great Lakes region needs better marketing. “If you don’t know that there’s something else, you’re not going to go look for it,” Sorensen said.

His company plans to take advantage of being the first and only shipping company to run a container-only vessel on the Great Lakes in this volatile market, he said. Benefits such as reduced shipping times are crucial now, he said, as backups mean the supply of available shipping containers is low, causing customers to delay exports. “We decided that this is a good time to ramp up our efforts and offer even more alternatives to the customers around here, versus going through the East Coast or West Coast,” Sorensen said. Cleveland’s smaller scale means cargo is easier to track and turnaround times and over-the-road distances are shorter, Sorensen said. He added that Great Lakes shipping rates are “competitive pricewise” with the bulk rates at coastal ports. In Cleveland, as with other smaller ports, a business can track exactly when a container comes off the ship and can even travel to the port and visually confirm the location of the goods. “Everything is so transparent,” So-

rensen said. “What it will come down to for customers is do they want to deal with the hassle of the East Coast and pay a little bit less, or do they want to take it straight to their back door and pay a little bit more?” Trade through the St. Lawrence Seaway does have a unique hurdle, as the entire route shuts down in January for maintenance on the series of seven locks that enable commercial travel. The route typically reopens in mid-to-late March. Cutting off transport for nearly three months is problematic. However, for companies able to ship and store goods, the Port of Cleveland established a Foreign Trade Zone, which permits the indefinite deferral on import duties as long as those goods remain on site. “If you want to bring in material, say from south Germany, you could bring it in and stockpile it at the Port (of Cleveland). Then you will have it for distribution through those three months,” Sorensen said. The foreign trade zone permits businesses importing millions of dol-

lars of goods to defer paying import taxes — currently at about 20% — until the goods are shipped out to customers, preserving cash flow. The Peyton Lynn C, the name of the ship servicing the Cleveland-Europe Express route, arrived in Cleveland last Tuesday, Sept. 7, having set sail from Antwerp in late August with fewer than the 860 containers it is able to transport. However, the trip was on schedule and cargo began off loading the next day. The containers include goods with destinations around Ohio and as far as Iowa. The Peyton then headed off to take Ohio exports to Ontario and through the seaway to Europe. Gutheil and Sorensen are optimistic this is the first of many trips. “The more cargo we handle, the more revenue flows through the port, and that means more jobs,” Gutheil said. “We will keep pushing. Eventually, we want to make this a weekly service. That’s the goal.”

ing Rust Belt cities increasingly are making: Population growth is not the best way to measure a region’s productivity and potential. “In today’s idea economy, measures that can get at the quality of life in a city — not just the quantity of lives — are ideal,” Piiparinen writes. That point is particularly salient in the wake of the recent release of U.S. Census data showing that Cleveland’s population dropped by 6.1%, or about 24,000 people, from 2010 to 2020. Cuyahoga County’s population dipped slightly. The regional population held flat. Rather than focusing on headcount, Rust Belt Analytica used a machine-learning model to identify predictors of productivity — measured by gross domestic product per capita — based on an analysis of more than 380 metropolitan areas over a 10year period. Educational attainment and migration, from other parts of the country and other countries, emerged as the most important themes. A city’s college graduation rate was the top auger of productivity, followed by the number of counties in a metro area, the share of highly educated residents and the percent

of the population born in another state. On some of those metrics, Cleveland performs well. The metro area ranks eighth in the nation for its concentration of foreign-born people with advanced degrees, for example, falling just below Washington, D.C., and just above Seattle (though well behind Pittsburgh). The share of foreign-born residents in Cuyahoga County has been climbing slowly over the last two decades, after first plummeting and then stagnating between 1940 and 1990. In other key areas, though, Cleveland still lags many major U.S. cities. According to 2019 Census survey data, the city ranks 33rd out of the 40 largest metro areas based on the share of the population with a bachelor’s degree. Cleveland ranks 23rd for the percentage of residents who hold advanced degrees. And the region has struggled to draw residents from other states. The vast majority of U.S.-born people living in the metro area hail from the Buckeye State. To boost productivity, the report shows, Cleveland needs to do a bet-

ter job of recruiting and keeping domestic and international talent — a strategy that, if it is executed right, also can improve education, employment prospects and well-being for existing residents. “It’s not an either-or choice,” Shah said. “I think too often in migration and immigration, you get reduced into a false choice of do you focus your efforts on the people that are already here or do you focus your efforts on the people that you’re recruiting here. And it’s a false choice. You have to do both.” Civic leaders and universities are exploring ways to connect college students, including international students, to employers in the region through internships and apprenticeships. The Cleveland Innovation District initiative announced early this year calls for bulking up graduation from degree programs in life sciences, technology and other growth fields. And a consortium of economic development groups is working on broader strategies to lure workers to the region from beyond Ohio’s borders. “If more migrants come to Cleveland, that ultimately translates into

better technology, creation of companies and more high-tech jobs,” said David Fleshler, Global Cleveland’s chairman and vice provost for international affairs at Case Western Reserve University. “And how do organizations help to try to do that for the benefit of themselves, because that’s good for them and their bottom lines, and for the benefit of our community? That’s really what I think the next phase of the work is.” In helping immigrants settle here, Cimperman sees a deep well of talent — and a diverse range of perspectives — that is not being tapped, despite a severe labor shortage. Armed with data, he hopes that Global Cleveland can work with employers to open their eyes and address their concerns about hiring a foreign-born intern or employee. “You can’t argue with numbers,” he said. “This isn’t a kumbaya moment at the convention center where we’re all singing we love Cleveland. ... When you bring immigrants and foreign-born talent to Cleveland, these are the economic benchmarks that get hit.”

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

Michelle Jarboe: michelle.jarboe@ crain.com, (216) 771-5437, @mjarboe

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CRAIN’S CLEVELAND BUSINESS

LEADERS

From Page 1

Though no database tracks these types of changes, Rick Cohen, chief communications officer and chief operating officer at the National Council of Nonprofits, said anecdotally there’s has been a bit of an uptick beyond the usual turnover for a variety of reasons. “Sometimes, timing just happens to be coincidental where a few prominent folks all leave around the same time, but we are seeing the effects of the pandemic weighing on that a little bit, where some people who intended to pursue another opportunity or retire last year felt a moral obligation to kind of stick things out during a very difficult time for a lot of nonprofits,” Cohen said. “You’re seeing kind of a confluence of regular turnover as well as some slightly delayed turnover that didn’t take place over the last year.” Plus, a lot of people might be burned out, moving to retirement or shifting to opportunities at other organizations where they may have discovered or renewed a passion within the past year, Cohen said. “It’s a trend that will probably continue a little bit ... because we’re just not all the way through this yet,” he added. Especially in nonprofits, Napoli believes that it’s important for organizations to keep in mind that it’s not about the individual leading it but about the mission, vision and values of the nonprofit and the direction it is headed. Since 2016, when he took on the leadership position at United Way of Greater Cleveland, Napoli has led the organization through a significant strategy shift in how the nonprofit serves the community. It now aims to go beyond addressing the immediate needs of people living in poverty and also work to confront the root causes of poverty and create long-term, comprehensive solutions to upend the generational cycles that keep families and individuals in its grasp. As Napoli passes the torch upon

Abbott

Napoli

his retirement next summer, how that is tackled will be up to the next leader. “We coalesced — and organizations do this all the time; I think it’s a healthy thing — around that direction,” he said. “Now the interpretation of how you go after that direction, I think that’s where the creativity comes with new leadership coming in, and I think it’s exciting and bodes very well for the future of Cleveland.” Napoli said that many of the outgoing nonprofit leaders have paved the way for the next generation of leaders, and he is excited to see them “pick up the baton and run with it.” “I’m a big fan of setting sights on what you are attempting to do, come in and do it, assemble the right team of people to work to accomplish those goals and objectives, and look for talent, develop a bench of talent within your organization and the community as well that could step in and take over,” he said. He points to Nancy Mendez as one such example of talent development. After more than a decade with United Way, she was tapped to lead Starting Point and took over as its president and CEO in May. Mendez said she was motivated in part by a desire to carry on the work of the childcare and early education nonprofit’s founder, Billie Osborne-Fears, who died last year. The events of the past year were also a driving force behind her move into nonprofit leadership. “This has been a rough year,” Mendez said. “COVID has really shaken our country — not just COVID. The national dialogue around race and equity has really shaken things up. So a lot of us in the community — and I consider myself one of them — really want to continue to push ourselves

THE WEEK ACTION IS IMMINENT: The Cleveland-Cuyahoga County Port Authority is taking the first step toward eminent domain on Irishtown Bend, where members of the George family are the lone holdouts to land assembly for stabilization of an unsteady hillside and the eventual creation of a riverfront park. At a public meeting Thursday, Sept. 9, the port’s board of directors unanimously voted to lay the groundwork for taking a key parcel at West 25th Street and Detroit Avenue from the Georges. The agency’s engineering consultants have deemed the property essential to shoring up the hillside, which slopes down toward the Cuyahoga River shipping channel. Eminent domain — the appropriation of private property by a public entity — would take months, at the very least. HELPING HANDS: United Way of Greater Cleveland has received two grants totaling $4.6 million from the Cleveland Clinic and KeyBank. The gifts — $2.5 million from the Clinic and $2.1 million from KeyBank — each represent milestones in the United Way’s Community Hub for Basic Needs and its Impact Institute, both formed in 2019. KeyBank’s contribution is the single largest commitment to the United Way’s new

Mendez

Shah

and get ourselves in key positions in the community so that we can keep pushing the conversation.” Mandez, a 2020 Crain’s Cleveland Business Notable LGBTQ Executive and Woman of Note, also has been named a Distinguished Hispanic Ohioan by the Ohio Latino Affairs Commission. Leadership turnover has aligned before, “but it never had this excitement,” said Mendez, who’s also a member of the board of trustees of the Gund Foundation. “It never had this thoughtfulness or strategy behind it to purposefully be inclusive.” That’s not to say that every new leader will be a minority, but the heightened focus on social justice and diversity, equity and inclusion is an opportunity for intentionally inclusive candidate pools to be thoughtful in finding the best new leaders, she said. Napoli agreed that there is a great opportunity right now for people of color to step into leadership positions and to move “from just talking about it to actually doing it as a com-

munity.” New leaders coming onboard around the same time can allow them to become an informal cohort, Cohen said. And there’s now an even greater opportunity for leaders to — as they get settled with their new organizations — work with one another to look at the lessons from the distant and recent past and learn together. “This last year has been an opportunity to learn from forced experiments, and being able to share those learnings with someone with a similar length of tenure, it’s something that gives comfort,” Cohen said. “It’s good to have people who are in a similar boat to you, and those kind of opportunities lend themselves well to helping those executives, as well as the organizations that they’re leading.” Collaboration is hard and time-consuming, but it can be “exponentially more powerful,” said Abbott, the outgoing Gund Foundation leader. “It just has to be a continuing guiding principle that far more can be accomplished working together than working alone, and that’s true really for everybody,” he said. We live in a “lamentably fragmented society,” which is to our detriment, Abbott said. It makes the region and nation less economically competitive and less collegial. Lack of collaboration, in particular, can be a challenge in the philanthropic sector, which occupies “an extremely privileged place in society because no matter what we

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do, people thank us and tell us how great we are, and that too often is believed by philanthropy,” he said. “That contributes to simply doing whatever we want to do as individuals or as individual foundations, as opposed to working together, because when you work together, credit gets shared and you maybe don’t get the focus of attention and, you know, you lose that ability to play Santa Claus as an individual or as an organization that brings you that kind of gratitude and attention,” Abbott said. “That’s got to be fought against all the time because it just isn’t as effective as working together.” Shah, the new leader at Greater Cleveland Partnership, said he’s optimistic that the past year has rekindled a broad spirit of collaboration as everyone recognized during the pandemic “we’re all in this together.” That has enabled a collective commitment to one another in the community to work on the most significant issues and opportunities. Also part of the current context of these changes is the broad social awakening about equity and inclusion. These and other lessons of the past year mean these leadership changes come during “a huge moment for all of us,” Shah said, “and a huge opportunity for, I think, new leaders to forge alliances around these opportunities for our region.” Lydia Coutré: lcoutre@crain.com, (216) 771-5479, @LydiaCoutre

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ON SECOND THOUGHT ...: Cleveland-based TransDigm Group Inc. announced it will not move forward with an offer for United Kingdom company Meggitt Plc, clearing the way for another Northeast Ohio suitor, Parker Hannifin Corp., to acquire the aerospace and defense supplier. In a statement issued Tuesday, Sept. 7, TransDigm chairman W. Nicholas Howley said, “We have long admired and studied the Meggitt business and believed that a combination between the two companies could provide value to investors of both companies. However, based on the quite limited due diligence information that was made available and the resulting uncertainties, TransDigm could not conclude that an offer of 900 pence per Meggitt share would meet our long-standing goals for value creation and investor returns.” SEPTEMBER 13, 2021 | CRAIN’S CLEVELAND BUSINESS | 21

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PEOPLE ON THE MOVE

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UBS

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Westfield Bank is pleased to announce Abbie Fawcett has been promoted to senior vice president, financial leader. With prior experience in financial reporting and accounting, she started her career with Westfield Bank nine years ago as an accountant before being promoted to financial reporting manager. Fawcett earned a Bachelor of Science in Business Administration in Accounting from Bowling Green State University.

Jordan Guzman joins the North Pointe Wealth Management Group at UBS as Team Administrator. In his role, Jordan will oversee and manage all of the organization’s operational standards and workflow processes while supporting the four advisor partners. Jordan brings over 8 years of financial services experience and has a Bachelor’s degree from Baldwin Wallace University. The North Pointe Wealth Management Group at UBS manages over $1 billion in assets for high net worth individuals and families.

Mika Metal Fabricating names Rebecca Cole Director of Sales & Marketing. Ms. Cole has a breadth of knowledge and experience in manufacturing; her career spans the corporate world, with roles in sales, product management, and market research. Her background sets the foundation for a comprehensive inbound & outbound marketing strategy to drive top line revenue. Rebecca’s datadriven strategic thinking, combined with her creative flair, made her the clear choice for this role. www.mikafab.com

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Westfield Bank Westfield Bank is pleased to announce Rick Kies has joined the agency banking team as vice president, agency banking commercial loan officer. In his role, Kies is responsible for the development of agency banking services to independent insurance agencies, with a focus on agency lending, deposit services, and premium finance. He has over 30 years of experience in the insurance industry and has a certification in agency mergers and acquisitions. He is a graduate of the University of Mississippi.

INVESTMENT FIRM

North Point Portfolio Managers North Point Portfolio Managers is proud to announce that Patrick Kelly has joined our firm as Vice President/ Research Analyst. Pat has more than nine years of experience in securities research. He is a magna cum laude alumnus of Cleveland State University, and we look forward to having him help in our research process. Pat previously worked at Victory Capital Management and Northcoast Research.

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Norris converted the former fitting rooms into a nook for displaying personalized products and a machine that carves names and greetings. He did the work himself to save the time involved in hiring a contractor. The shop opened in June, 90 days after they struck a deal for the space with Stark Enterprises of Cleveland, Crocker Park’s developer and co-owner. Bauer and Norris opened the shop because the couple enjoyed shopping together and exploring stores as they traveled. Norris had discussed a shop intermittently with Crocker Park’s landlord over the years as he operated pop-up Christmas stores there. He also has a retail background that includes operating as many as 20 mall kiosks and has two Hallmark gift stores located in enclosed malls in North Olmsted and Strongsville, respectively Great Northern and SouthPark. Norris knows the change in the retail realty climate first-hand. He said he and Bauer launched the shop in Crocker Park because it has walk-ins from the kids’ splash pad across the street and people who have had dinner at Crocker’s restaurants or live or work in the complex. “Terms are definitely more favorable than in the past three years,” Norris said. “Remember, shopping centers want to fill a void in their place. Your store has to add a product and a shopping experience they don’t have in the center.” Whimsy Willow offers a variety of gift items from cups to towels, which account for about 60% of its inventory. However, the remainder is wood signs with cheeky or inspirational sayings that Norris sources from one of his other businesses, Second Nature by Hand — which produces them in Wisconsin from reclaimed wood from old buildings such as a sewing machine factory and barns — and ornaments from Polar X. That means Whimsy Willow can sell products at a competitive price without a middleman’s mark-up. Such an advantage is important,

Norris said, because a brick-andmortar retailer needs every edge he or she can find. The failure rates for small businesses and retailers are wellknown. However, the market is opening doors for some retail innovation the same way that incubators do. Steve Eisenberg, president and CEO of the retail brokerage Arnold J. Eisenberg Inc. in Beachwood, said openings depend on which shopping center it is and where it is. “The tenant has to have a business plan the landlord can believe in,” he said. Eisenberg noted that many of his established local clients are seizing this period as a chance to expand, as they have track records and may find a prized corner that in other times might not be available. Other retail realty agents say the online environment only makes it dicier for landlords and would-be shopkeepers alike. Credit-worthy national retailers will usually come out on top if landlords can snag them. David Ferrante, the owner of Visible Voice Books in Tremont who has also advised other retailers in the past, sees this time as posing a dilemma for would-be retailers. “There are so many unknowns, I feel it might be best to just be ready to go,” he said, referring to when the pandemic fog clears. “You could get a good deal on property. I’m sure some landlords will cut deals. However, the supply chain is goofed up. If they’re not careful, they could be waiting for goods when the (vital) holiday season hits.” Along with the brick-and-mortar stores, both ventures have websites as well. LADDERS’ site just went up, in response to friends from other cities where the two have ventured separately who want to visit, Wien said. So far, so good at Whimsy Willow and LADDER, where the owners — all four of them — say they are exceeding expectations and are profitable. “To make it keep going,” Fleming said, “you have to make money.” Stan Bullard: sbullard@crain.com, (216) 771-5228, @CrainRltywriter

LAW FINANCIAL SERVICES

Ancora Ancora is happy to announce that Ms. Michelle Hruska has joined the firm as a Vice President of Human Resources. Prior to joining Ancora, Michelle led human resources and marketing functions for K2M Design after spending 14 years with Equity Trust Company. The early years of her career were spent at Fortune 500 companies Sherwin-Williams and Kohl’s Corporation. Michelle earned a Bachelor of Science degree in Business Administration from Michigan State University.

Benesch Law Daniel Briggs has joined Benesch as an associate in the firm’s Corporate & Securities Practice Group. Daniel provides counsel to clients on a variety of corporate matters, including business formation, reorganizations, M&A, commercial contracts, and corporate governance. He has experience drafting and negotiating corporate and transactional documents, including asset and stock purchase agreements, operating agreements, and incorporation and organizational documents, among others.

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

CRAINSCLEVELAND.COM/COTM

Whimsy Willow, a local startup gift and home decor store, has snagged a storefront at Crocker Park in Westlake for its debut. Developer and co-owner Stark Enterprises say it loves local retailers. A Whimsy Willow principal said terms for retail space are the best he’s seen in years. | STAN BULLARD

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Crain’s Cleveland Business is published by Crain Communications Inc. Chairman Keith E. Crain Vice chairman Mary Kay Crain CEO KC Crain Senior executive VP Chris Crain Secretary Lexie Crain Armstrong Chief Financial Officer Robert Recchia G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 (216) 522-1383 Volume 42, Number 33 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except no issue on 1/4/21, combined issues on 5/24/21, 6/28/21, 8/30/21, 11/22/21, at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright © 2021 by Crain Communications Inc. Periodicals postage paid at Cleveland, OH, and at additional mailing offices. Price per copy: $2.00. Postmaster: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, MI 48207-2912. 1 (877) 824-9373. Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, MI, 48207-9911, or email to customerservice@crainscleveland.com, or call (877) 824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax (313) 446-6777.

SEPTEMBER 13, 2021 | CRAIN’S CLEVELAND BUSINESS | 23

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BDB 2021 Cybersecurity outlines.indd 1

9/3/2021 9:34:39 AM

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^Based on average savings with Spectrum Business promo rates vs. competitors' non-promo rates for Internet & 2 phone lines. Actual savings may vary. Limited-time offer; subject to change. Qualified new business customers only. Must not have subscribed to applicable services w/ in the last 30 days & have no outstanding obligation to Charter. *$49.99 Internet offer is for 12 mos when bundled w/ TV or Voice & incl. Spectrum Business Internet starting speeds. Spectrum Internet modem is req'd & included in price.  Spectrum Business Internet Gig requires Spectrum Gig capable modem. Additional Installation fees apply. Speed based on download speed on wired connection. Wireless speed may vary. Available speeds may vary by address. **$19.99 Voice offer is for 12 mos. when bundled with Internet & incl. one business phone line w/ unlimited local & long distance w/ in the U.S., Puerto Rico, & Canada plus 2,000 long-distance minutes to Mexico. Includes phone taxes, charges and fees. Other telephone services may have corresponding taxes and rates. °Speed claim based on Internet speeds of competitors' current customers vs 200Mbps Internet starting speed from Spectrum Business. ◊◊Wireless Internet Backup offer requires a subscription to Spectrum Business Internet, and Static IP or Business WiFi services. Supports up to 4 devices and includes download speed up to 10 Mbps, with 8-hour battery backup. LTE modem is required & included in price. Devices connected to the LTE modem cannot receive Gig speed. Static IP and Business WiFi not supported when Wireless Internet Backup service is engaged. +Based on the most annual `Best Protection' AV-TEST awards, industry-leading advanced attacks detection capabilities confirmed by MITRE ATT&CK® evaluations, and 2020 Customers' Choice for Vulnerability Assessment in Gartner Peer Insights. §99.9% network reliability based on average HFC Availability, Jan 2019 - Feb 2021. Visit business.spectrum.com/network-reliability for details. Services subject to all applicable service terms & conditions, which are subject to change. Services & promo. offers not avail. in all areas. Standard pricing applies after promo. period. Installation & other equipment, taxes & fees may apply. Restrictions apply. Call for details. © 2021 Charter Communications, Inc.

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