Crain's Cleveland Business, November 25, 2024

Cautious optimism’ for banking industry

Next Trump administration could bring a burst of tailwinds, but positives could be offset

By Jeremy Nobile

The next Donald Trump administration could bring a burst of tailwinds for a banking industry that has been grappling with a strict regulatory environment.

But there’s also some concern that some expected positives could be at least partially o set by other factors that could work against them.

While the phrase “cautious optimism” gets thrown around a lot in business circles, Evan Kleymeyer, senior vice president for government and external relations for the Ohio Bankers League, said that’s the best way to describe how many bankers are feeling about the future under President Trump.

What’s in the city’s WNBA franchise bid

Cleveland is one of nearly a dozen cities looking to add a team

By Joe Scalzo

In the summer of 1997, the upstart WNBA began its inaugural season with a team from Cleveland (the Rockers) and the slogan, “We Got Next.”

More than two decades after the Rockers folded, Cleveland wants to deliver a similar message.

Dan Gilbert’s Rock Entertainment Group (REG), which owns the Cleveland Cavaliers, is joining a crowded group of cities bidding on the WNBA’s 16th franchise, which is expected to be in place by the beginning of the 2028 season.

“We are a rm believer in the power of sports and entertainment,” Nic Barlage, the CEO of REG, the Cavaliers and Rocket Mortgage FieldHouse (RMFH), said in an exclusive interview with Crain’s Cleveland Business. “Given the trajectory of women’s professional sports, the endearing nature of the athletes and the passionate fan base we experience in Northeast Ohio — we are ready-made for women’s professional sports in a big way.”

Cleveland’s expansion team, which may or may not keep the Rockers’ name and colors, would play its home games at Rocket Mortgage FieldHouse and would use the Cleveland

See WNBA on Page 17

“Based on what former Presi-

dent Trump said during his campaign about reining in the administrative state, we feel cautiously optimistic that, rst and foremost, the banking regulatory agencies will have to start operating under the statutory authority and stop promulgating

rules that are outside their authority,” Kleymeyer said. “Our hope is that allows banks of all sizes to more e ectively serve their customers in a safe and sound manner.”

See BANKING on Page 16

How FirstEnergy may be risking millions with controversial plan

By Dan Shingler

FirstEnergy, the electric distribution utility that serves more than two million customers in northern and central Ohio, might be taking a huge gamble with the recent withdrawal of its pending Electric Security Plan. Some observers say it could cost the company at least tens of millions of dollars, and possibly much more, depending on an upcoming decision by the Public Utilities Commission of Ohio. In the meantime, however, the situation is causing uncer-

tainty for companies in manufacturing and other sectors that use large amounts of electricity. An Electric Security Plan, or ESP, is a plan that must be approved by state regulators and a ects what a utility can charge its customers. It’s meant to ensure the utility gets paid for investments it has made to bolster and secure its distribution system by adding charges to the market rate for electricity.  Such charges allow the utility to charge more than market rates for its power, so it doesn’t make those investments with-

out being compensated for them.

Since June 1, FirstEnergy has been working from its fth ESP. e PUCO modi ed the original version of the ESP V that was submitted by the company and approved the modi ed version in May. On Oct. 29 the company announced it was withdrawing ESP V and asked the PUCO to let it operate under its former ESP IV plan until it can devise a new ESP that regulators approve.

See FIRSTENERGY on Page 18

Former Fed economist talks risks to region’s post-election economy

By Kim Palmer

This month’s election stands to have huge ramifications for Northeast Ohio’s economy, particularly the region’s manufacturing sector, which has about $10 billion in economic impact.

That’s the view from Mark Schweitzer, a former Federal Reserve researcher and current Case Western Reserve University professor, who earlier this month addressed what’s next for the economy during MAGNET’s Annual Economic Forecast at the Tinkham Veale University Center.

The economy is stable and growing — for now.

"Inflation has been lowered, there is moderate gross domestic product growth (GDP), and unemployment rates are extremely low,” Schweitzer told the room of manufacturers and suppliers on Thursday, Nov. 14.

“We have not entirely left the pandemic behind, because the pandemic disrupted so many things that it has echoes and echoes,” Schweitzer said.  “Particularly in 2022 and 2023, we were still seeing some significant echoes from the pandemic, but now in 2024, the economy has actually started to look calmer.”

Schweitzer pointed to the Federal Open Market Committee (FOMC) decision in early November to reduce interest rates, and their agreement to target 2% growth going forward, as good signs for business.

The FOMC met before the election, he noted, and his assumption is that fiscal policy would not change significantly.

“When you have a new administration and they want to have some sort of fiscal policy initiative that could alter growth outlook more consequentially,” he added. “Any bad shock will make people nervous again about things like inflation, tight labor markets and unemployment.”

Current concerns for region

Automobile sales and housing, both sensitive to interest rates, are two areas Schweitzer is keeping an eye on because the market has been and continues to be a little “challenging.”

Northeast Ohio is a crucial part of the nation’s automobile supply chain.

The global supply chain disruptions, particularly the problems around procuring semiconductor chips, put a damper on vehicle production for Northeast Ohio which continues to be a crucial part of the nation’s automobile supply chain.

The issues are mostly resolved, but prices for cars remain high.

“We are seeing a lack of recovery in autos because they did get expensive,” Schweitzer said. “Consumers are just buying fewer of them, therefore production looks a little soft, and it is an interest rate-sensitive sector.”

Housing starts, both nationally and regionally, saw swings up and down during the pandemic, but now the sector is relatively weak and slow to recover sector. There is a housing crunch in Ohio, made worse in places such as Cleveland, which has an older housing stock.

“This is going to be one of the risks out there for the economy,” Schweitzer points out. “Higher interest rates make builders uncomfortable. And it is a slow process, more than a year lag, to actually get (a strong) housing market going again.”

Tariff risks

Across the board, sustained 15% tariffs — mentioned during the presidential campaign — are a big concern, particularly for manufacturers and suppliers that depend on foreign partners for finished products.

Tariffs are not good for GDP growth and can trigger a recession. If a 15% tariff is met with a similar tax by the nation’s biggest trading partners — Mexico, China and the European Union — it will hurt importers and exporters, Schweitzer said.

“Higher costs are not just limited to consumers," he said. "They affect capital goods and lower the profits of businesses that import. They lower the profits of businesses that are exporting and results in higher costs and lower profits that will depress business income."

He added that businesses are not likely to invest when profits are low

Tariffs are a one-time change in prices which boosts inflation, but it doesn’t persist, Schweitzer said.

“We could see an inflation rate of about 4%. It’s not as bad as the pandemic, which is good, but it’s a big inflation number,” he added.

Another concern would be a new fiscal policy that focuses on deep tax cuts, which could increase the county’s already substantial debt.

“We’ve got a lot of debt, and the market requires a higher interest rate to meet that debt,” Schweitzer said. “This is an economy where you want to see the deficit coming down, you don’t want to see it going up, because it would help with the interest costs for businesses.

Immigration and workforce

Mass deportations were a hallmark promise by the returning Donald Trump administration.

What effect removing millions of working-age people from the country’s economy will have is a question that is difficult to answer, but with a historically low unemployment rate, the labor market could tighten.

“There are lots of different areas where we’ve been relying largely on immigrants as a working population — legal and illegal and temporary,” Schweitzer said. “It could be a large constraint, because we don’t have the domestic growth in our population, and we don’t have the unemployed people to replace those workers.”

Bridgestone plots out Akron’s

first new plant in 70 years

By Dan Shingler

Here’s something you haven’t heard more than once in the last 70 years: A major tiremaker is opening a new plant in Akron.

Bridgestone Americas, which employs about 45,000 worldwide, says it has begun work on a new plant in the city, at 381 W. Wilbeth Road, to produce butadiene, a key ingredient in synthetic rubber — and therefore also a key component in nearly all of the tires on the road today, not to mention at mines, farms, racetracks and other places tires are used.

Bridgestone is getting a big boost in terms of public money from the Department of Energy and is partnering with the Pacific Northwest National Laboratory, one of the federal government’s 17 national labs across the country.

The DOE reports it’s putting $9.2 million toward the project, which Bridgestone says will be a pilot plant focused on producing butadiene from ethanol.

On its website with grant information, the DOE says the project “aims to demonstrate an ethanol to butadiene process enabled by a novel catalyst developed by Bridgestone Americas Tire Operations’ project partner, the Pacific Northwest National Laboratory.”

That technology is part of an effort to create “near-circular” tire production that entails using old tires to produce the ethanol that will be used to make butadiene, and with that, new tires, the DOE says.

The project fits with Akron’s recent designation as a national industry cluster and hub for sustainable polymer development, something the Greater Akron Chamber has organized and championed for at least the last three years.

Brian Anderson, the chamber’s vice president for the polymer industry cluster — and the person largely responsible for the industry hub winning more than $80 million in recent state and federal

funding — said he doesn’t have a lot of details on the plant’s eventual size or payroll, but expects the development to be an important one for Akron.

It’s just the latest of many investments Bridgestone has made in Akron, many of which are near the company’s big Bridgestone Americas Technical Center which already employs more than 700 people in Firestone Park.

“It strikes me as something that’s potentially quite impactful,” Anderson said. “I live in Firestone Park and I’ve seen the big investments Bridgestone has made there. They put a test track in there a couple of years ago and an advanced tire manufacturing plant. It seems like Bridgestone is kind of doubling down on their investment in Akron.”

That tire manufacturing plant Anderson refers to is Bridgestone’s $21 million Advanced Tire Manufacturing plant, which was announced in 2022 and now employs about 60 people. It produces tires for Indy-series race cars, which reportedly go through about 25,000 tires a year.

That’s also the last plant to be built in the last 70 years. Like the other facilities, that plant sits near the company’s Bridgestone Americas Technical Center, just across Main Street, on the other side of the Akron Rubber Ducks’ Canal Park baseball field.

Details on the upcoming butadiene pilot plant are still scarce and Bridgestone said it was not ready to say what it plans to invest in the facility, how big it will be or how many people it might employ. But it appears to be a significant investment for the company as well as the federal government. It will take three years to design and build, said Bridgestone Director of Advanced Polymer Science Mark Smale, a Hudson resident.

“The project officially kicks off this month and is expected to span at least three years,” Smale said via email. “In the first year,

we’ll focus on designing the pilot plant. In the second year, construction of the plant will take place in Akron. Then, in the third year, we’ll be staffing and beginning operations at the pilot plant.

Smale said the pilot plant will be located within the existing Bridgestone Polymer Engineering Pilot Center.

Davis Adams-Smith, Bridgestone Americas director of public relations, said that site, where the company already does some of its other research and develops testing technologies, is 35 acres in size and has 49 employees.

The size of the new plant within that site, and its costs, will be determined as it’s designed, Smale said, but he views the investment as a significant one for Bridgestone, and the tire industry.

“This project is a strategic priority for us, as it will drive advancements in science and technology essential to making the industry more sustainable,” Smale said. “We view this as an investment in both our future and the future of the tire industry.”

It could have positive ramifications for the rest of us, too, since the plant intends to focus on ethanol derived from sustainable sources and reduce the amount of carbon generated in butadiene production.

“The pilot plant’s initial goal is to assess and prove the economic viability of deriving butadiene from ethanol conversion versus fossil fuel conversion in testing scenarios. If the economics prove viable, then low carbon intensity ethanol (derived from bio-based or recycled materials) could replace the use of fossil fuels in the process to obtain butadiene,” Smale said.

“If this project proceeds as expected during the testing phase, then Bridgestone will look to expand, scale and commercialize butadiene converted from ethanol in future product development.”

Bridgestone Americas has built a large footprint in Akron in recent years, principally around its research and testing work in and around the Firestone Park neighborhood and South Main Street. The company plans to open a new plant on Wilbeth Road. | BRIDGESToNE

Cleveland-Cliffs idles blast furnace at Cleveland Works

By Dan Shingler

Cleveland-Cliffs Inc. has idled one of its two blast furnaces at its Cleveland Works mill in the flats, according to the company’s recent earnings statement, in which it reported a rare quarterly loss.

Sources familiar with the company say this is a cold shutdown, however, which usually indicates a furnace will be idle for a significant amount of time.

That said, the company has not filed a WARN Act notice with the state of Ohio, indicating that, for now at least, it’s not planning to lay off more than 50 of its nearly 2,000 Cleveland Works employees, as required by the act.

Cliffs did not provide anyone to speak in detail, but in a statement said: "During Cleveland-Cliffs’ last quarterly earnings, we announced the temporary idling of one of our blast furnaces at Cleveland Works to better align production with current demand. This does not have any impact on the plant’s hourly staffing levels."

In reporting a third-quarter loss of 52 cents for diluted share on Nov. 4, Cliffs Chairman and CEO Lourenco Goncalves cited market conditions as the reason for the loss, and for idling the Cleveland furnace.

“In Q3, weaker demand and pricing drove tighter margins and ultimately led us to temporarily idle our Cleveland #6 blast furnace. We achieved our lowest unit cost since 2021, exceeding our already aggressive cost reduction targets, but that was not enough to offset the negative impact of two of our top four automotive clients who continue to underperform their own expectations,” Goncalves said in his earnings release. “Due to our high exposure to the automotive sector, Cliffs was more affected than our competitors."

definitely following an outage for maintenance in October.

The furnace is one of two at the mill, one that Cliffs has used to stage events in support of its pursuit of an acquisition of U.S. Steel earlier this year and which the company has boasted is one of the cleanest and most efficient in the U.S. Those two furnaces, in recent good times, have kept about 1,800 local U.S. Steelworker union members busy as their local has bounced back in recent years at the site.

A source that relies on the mill for business was aware of the shutdown but declined to discuss the matter on the record. A Cliffs customer, the local service center Majestic Steel, also confirmed the shutdown.

The market for flat-rolled steel has gone flat itself and prices are down dramatically from recent highs following the COVID-19 pandemic and Russia’s invasion of Ukraine.

But in the world of steelmakers, there is a big difference between idling a blast furnace for a short period of time while keeping it hot and letting it go cold for a longer shutdown.

Blast furnaces operate as a continual process, so letting them go cold entails higher costs. It also means more time and money will be needed to restart a furnace, as operators need to deal with the cooling of molten metal and a remelt later.

Sources familiar with the mill confirmed the furnace is now cold.

Argus Media, a provider of market data and price benchmarks reported in September that it was hearing reports the furnace would be shut down in-

Chris Billman, market research manager for Majestic and the a uthor of the company’s weekly CORE Report on market conditions, said he’s aware of the shutdown, which he said reflects a weak market for flat-rolled steel. Billman said he has heard that the company hopes to restart the furnace sometime in the second quarter of next year, a process he said likely will take about two weeks.

Majestic buys steel from Cliffs and then sizes it for its own customers, who generally need smaller or thinner coils that big users like the automakers might buy. The company is a major player across the U.S., with service centers on the West Coast, in Arkansas (where it built a

550,000-square-foot service center in 2023) and Bedford, where it operates the largest service center in Northeast Ohio. Billman said Majestic processed more than 500,000 tons of steel last year.

Automotive is the major market for flat-rolled steel, Billman said, though a smaller amount of it also goes into industries like construction, where it’s used for interior duct work and other applications.

The market for flat-rolled steel has gone flat itself, though, and prices are down dramatically from recent highs following the COVID-19 pandemic and Russia’s invasion of Ukraine.

“I think we’ve pretty much hit the bottom in this recent cycle,” Billman said. “The price now for coated (flat-rolled steel) is about $900 a ton. Going back to peak in 2021 we were well over $2,000 a ton.”

While some steel, such as the bar stock that many machine shops and other fabricators use, will likely see price increases due to tariffs expected to come from the incoming Trump administration, Billman isn’t predicting flatrolled steel will get a similar boost.

That’s because flat-rolled prices aren’t being depressed and held down due to foreign competition, but rather because there’s been a lot of domestic production that’s either already in the market or is coming due to new mills built in the U.S.

“I think the way it’s trending now, for the domestic sheet market it’s going to be a net neutral,” Billman said of the potential impact of any new or increased tariffs on foreign steel.

“We have a lot of new capacity coming online … particularly in

the southern states.

Unlike northern states like Ohio, southern states tend to be nonunion, he noted, which can make it cheaper to both produce steel and to build or expand a plant.

Many of the new mills planned or recently started up use arc furnaces, which rely on electricity rather than coal or other fuels to melt their steel. Those mills can be more easily shut down and restarted than a traditional blast furnace, but they will likely also be affected by future increases in electricity costs across the U.S. being driven by the advent of power-hungry artificial intelligence and other data centers.

Blast-furnace mills typically are bigger and more efficient than their

arc-fired competitors, but they rely on big industries such as automotive to take the volume of steel they can produce.

Higher interest rates, higher vehicle prices and the failure of U.S. automakers to sell electric vehicles are all factors behind a slowdown in automotive.

That’s been seen in Ohio recently when Stellantis announced it was laying off more than 1,000 workers in Toledo due to a soft market for its Jeeps and other vehicles.

Another Toledo automotive company, Mobis North America, announced in a Nov. 8 WARN Act filing that it was laying off more than 200 people in Toledo, due to a lack of demand for the batteries it produces for electric vehicles.

The Cleveland-Cliffs Cleveland Works bLoomberG

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Report measures big loss for city from the Browns’ proposed move

By Kim Palmer

e Cleveland Browns’ proposed move from downtown to the city of Brook Park would leave an estimated $30 million hole in the city’s economy, according to a study commissioned by City Hall.

Cleveland also would su er a loss of $11 million in annual tax revenue loss from team and stadium operations as well as from visitor spending.

e 36-page memorandum from Philadelphia-based Econsult Solutions Inc., also determined that Cleveland’s loss is not Cuyahoga County’s gain, even as it only shifts the NFL team’s economic impact 10 miles southwest.

according to the report.

Moving just one of the events — for example, the three-day Monster Jam hosted at Rocket Mortgage FieldHouse — out of Cleveland would pull approximately 50,000 patrons out of the city.

Both Bibb and County Executive Chris Ronayne have come out against the move.

Ronayne, a former city planner, stressed that the urban core is the engine of the region and that a move to the suburbs would not be a net bene t to the county, a sentiment the authors of the study share.

Browns pay for the stadium’s property tax.

Events at Huntington Bank Field generated about $7.3 million in admissions tax revenue in 2023 and $7.4 million as of August 2024. Estimates are that, by year-end, the tax revenue will total about $8 million.

ere’s also parking revenue. A majority of fans attending Browns games come from outside the city and even Cuyahoga County, which means plenty of fans shelling out money for coveted parking. Using a formula that estimates that 75% of the just over 640,000 annual attendees to stadium events pay an average of $25 for parking, the report calculates a loss of nearly $400,000 in parking tax revenue for the city.

e study, rst reported by Cleveland.com, was released publicly a month after Cleveland Mayor Justin Bibb announced that Browns owners e Haslam Sports Group (HSG) had chosen to focus on building a $2.4 billion domed stadium in Brook Park to occupy when the team’s lease at its current lakefront home is up in 2028.

e Haslam Sports Group had been o ered more than $461 million toward renovating the current lakefront stadium or the chance to build a domed stadium on the site of Burke Lakefront Airport, contingent on the shuttering of the facility.

Both plans were rejected by HSG. One of the sticking points was that the current stadium could not be completely enclosed whereas the Brook Park stadium, owners Jimmy and Dee Haslam have said, would be built to attract about 50 events a year regardless of the season.

e Brook Park plan not only moves the Browns home games away from the city, but would also draw events and activities away from Rocket Mortgage FieldHouse, Progressive Field, Huntington Convention Center of Cleveland and the I-X Center,

“Given slow regional economic growth and the County’s declining population, the success of the proposed development would be dependent on drawing market demand from other parts of the (c)ity and (c)ounty, which would have an adverse impact on downtown Cleveland,” the study said.

As part of the Brook Park move, HSG is planning on developing multiple residential housing, retail and hotel properties on the 167-acre site just east of Cleveland Hopkins International Airport.

e proposed building of 645 multifamily units would also be a strain on Cleveland, which is in the midst of growing its downtown resident population. e new Brook Park development would draw higher-income, existing and new renters from Cleveland — speci cally from downtown — hurting that nascent housing market, the report states.

“ is, coupled with continued decline of the o ce market post-pandemic, would adversely impact (d)owntown’s retail market and overall vibrancy leading to further economic and scal decline,” the report concluded.

ere are other economic losses associated with the Browns’ move out of Cleveland.

For instance, the city would lose nearly $800,000 that the

About $10 million annually would be lost in direct tax revenue from a combination of income, property and ticket sales taxes. Of that $10 million, approximately $900,000 was paid to the city in the form of income tax in 2023.

Contractors subject to city income tax for the stadium operations and maintenance are estimated, in the report, to earn, in total, approximately $30 million, resulting in $300,000 in annual income tax for the city.

e memo, too, found that approximately $58.6 million was spent by attendees outside of the stadium, supporting approximately hundreds of jobs in the city and county.

e average day visitor spends $125 in what’s considered direct spending when coming to the current stadium. e amount is more than double ($303) for an overnight visitor.

e economic analysis also estimates that 80% of stadium attendees are day visitors, and 20% are overnight visitors and stay in a Cleveland hotel room for at least one night. e city collects about 3% in hotel tax on those stays which brings in an estimated $273,000 in revenue annually.

Cleveland would lose $11 million in annual tax revenue from a Browns move to Brook Park, according to a recent study. DAN SHINGLER

Port board approves $50M in bonds for Cavs' training center

By Kim Palmer

The Port of Cleveland board voted to issue a total of $171 million in bonds, including $50 million for the first multi-storied construction project of the $3.5 billion Cuyahoga Riverfront Master Plan.

The Cleveland Clinic Global Peak Performance Center will use two taxable lease revenue bonds to help fund the construction of a four-story athletic practice and training facility for the Cleveland Cavaliers and a threestory medical facility overseen by Cleveland Clinic.

Money for that facility and three other projects was approved at the Thursday, Nov. 14 board meeting, bringing the total of port financing projects to about $753 million for the year to date.

“Today’s approvals assist in moving forward a riverfront development to bring Cleveland closer to an 18-hour, 15-minute neighborhood, give nonprofits access to the tax-exempt bond market, provide PACE financing … and rehabilitate a low-income property in downtown, Cleveland,” Rhonda Winslow, the port’s vice president of development finance, said in a statement.

Bedrock Real Estate, an arm of Cavs owner Dan Gilbert's Rock companies, and Cleveland Clinic are partnering on the $200 million Peak Center, which will replace the NBA team's current training facility in Independence.

The Peak Center’s two facilities will be built on a 35-acre stretch of

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land near the river, recently approved as a large-scale Tax Increment Financing (TIF) district designed to divert more than $4 billion in new tax revenue over the next 30 years to infrastructure and green space projects within the city of Cleveland.

The port will issue $48 million in bonds for the 100,000-square-

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foot practice/training facility and approximately 83 parking spaces.

The new building will have practice basketball courts, weight room, kitchen/dining area, locker rooms, owner suites, hospitality space and offices for team support and coaches.

More than $84 million in bank financing, $20 million in govern-

ment grants and $18 million in TIF make up the remainder of the capital stack for the $170 million practice facility.

The more than 55,000-squarefoot medical facility will use $2 million in bonds to construct 228 parking spaces around the center’s offices, treatment rooms, half-court basketball gym and running track.

Bedrock has agreed to pay 100% state prevailing wage rates to the construction and trade workers. The port will receive an estimated closing fee of $850,000 after payment of closing costs; 10% will be allocated to a community investment fund.

In addition to the Peak Center, the port board approved $34 million in tax-exempt multifamily housing revenue notes for the $60 million renovation of 199 Section 8 units in the Allerton Apartments at 1802 East 13th St.

A University Circle nonprofit will use $80 million in variablerate revenue bonds to refinance and fund the expansion and improvements to a steam plant that services the district.

And Central Mutual Insurance Co. will use $7.4 million in PACE bonds to fund a total of $12.3 million in repairs to its Van Wert, Ohio, headquarters.

A rendering shows the Cleveland Clinic Global Peak Performance Center. | CoNTr bUTeD

Great Lakes Restoration Initiative must be renewed by end of year

Asmall but powerful federal program known as the Great Lakes Restoration Initiative (GLRI) has enjoyed strong bipartisan support since it was launched in 2010 to support and accelerate efforts to protect the largest system of fresh surface water in the world.

That support is on display again as four members of Congress — Reps. Dave Joyce and Marcy Kaptur of Ohio, and Reps. Debbie Dingell and Bill Huizenga of Michigan — are working to speed up reauthorization of the GLRI, which is set to expire in September 2026, at the end of that fiscal year for the federal government.

Joyce, a Republican from Geauga County, and Kaptur, a Toledo Democrat, on Tuesday, Nov. 12, joined their Michigan colleagues (Dingell's a Democrat and Bill Huizenga's a Republican) in sending a letter to the House Committee on Transportation and Infrastructure urging consideration of H.R. 7257, the Great Lakes Restoration Initiative Act of 2024, "as soon as possible."

There's no time like the present, as the saying goes, and it would be hugely beneficial to the future of the Great Lakes to get the GLRI reauthorized before the end of this calendar year — and before whatever change is on the way in Washington, D.C., come Jan. 20, 2025.

The GLRI shouldn't be particularly controversial, because it accomplishes its big goals at a modest price.

The Great Lakes Restoration Initiative Act of 2024, introduced Feb. 6, would re-

authorize the GLRI for an additional five years, through the end of FY 2031. It would provide a small boost in the current annual spending level, to $500 million from $475 million.

GLRI is valuable because it both looks back, in addressing legacy pollution in the lakes around major urban areas, and ahead, in supporting projects that are proactive and help secure a stronger future for our waterways. Since GLRI's inception, it has provided more than $3.7 billion to more than 7,500 individual projects that, as the congressional letter writers put it, "clean the lakes, stop the spread of invasive species, restore coastline, and prevent future contamination."

Just one example, among many, in Northeast Ohio: GLRI funding in 2020 supported a partnership that built an aquatic nuisance species barrier along a five-mile stretch of the Ohio and Erie Canal towpath near Akron.

25.8 million jobs generating over $1.3 trillion in wages," and some of those jobs are at risk if the waters aren't free from pollution, algal blooms and invasive species such as Asian carp.

There are tangible economic and social benefits to these types of efforts.

In Ohio and throughout the industrial Midwest, our drinking water; fishing, boating, shipping and leisure economy; and millions of jobs depend on a healthy Great Lakes ecosystem. Joyce, Kaptur and the Michigan members of Congress estimate that the Great Lakes "support

Editor: Ann Dwyer (adwyer@crain.com)

The Great Lakes Commission, a nonpartisan compact of eight U.S. states (including Ohio) and two Canadian provinces. estimates that every $1 spent on the GLRI generates an estimated $3.35 in additional economic activity. The members of Congress noted in their letter that as a result of GLRI-supported projects, five Areas of Concern — geographic areas significantly polluted by human activity — have been delisted, more than 6,700 river miles "have been cleared of dams and other barriers," and "nearly 479,000 acres of habitat, including 65,000 acres of coastal wetlands, have been restored to improve ecosystem resilience."

As an investment in the Great Lakes economy and the region's environment, the GLRI has been a clear winner.

That doesn't mean its future is necessarily clear or guaranteed.

We don't know — no one does just yet — exactly what a second Trump term will mean for economic policy and the federal government.

But it's not a stretch to think that the new Department of Government Effi-

ciency (DOGE), headed by billionaire Elon Musk and Columbus entrepreneur Vivek Ramaswamy and tasked by the president-elect to “dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies,” might put the GLRI in that "wasteful expenditures" bucket.

Trump three times as president proposed budgets that would have slashed funding for the program dramatically, though he ultimately signed into law a reauthorization that increased GLRI funding.

It's entirely possible that the GLRI can survive, thrive and be reauthorized next year. But we'd be far more comfortable if Congress acted swiftly and passed the reauthorization before the end of this year.

The stakes are high for the Great Lakes, which have made tremendous progress in cleaning up industrial pollution but still have much work to do.

As Joyce, Kaptur, Dingell and Huizenga wrote in their letter, "A lapse in consistent authorization would risk reversing years of progress, dramatically reducing GLRI’s impact, and jeopardizing the environmental and economic health of the region of Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, Wisconsin, and its federally recognized tribes for generations to come.”

It shouldn't come to that. Get the GLRI's renewal done now.

Joyce

Kaptur

Moody’s revises CSU’s outlook, but of cials bet on strategic plan

By Joe Scalzo

Moody’s recently revised its outlook for Cleveland State University from stable to negative, but university o cials are hopeful the school’s cost-cutting measures and new strategic plan will soon lead to an upgrade.

Moody’s decision, announced Sept. 25, centered around CSU’s $422 million in outstanding debt, as well as the challenges the university faces due to declining enrollment and demographic headwinds.

to perform renovations, CFO Nicole Addington said at CSU’s Board of Trustees nancial a airs committee meeting on ursday, Nov. 14. CSU owes $17 million on Fenn Tower alone.

“I will say the negatives are industry-wide,” Addington said. “I think any institution of higher education that is going before the credit ratings is being evaluated based on the operational challenges and de cits that are occurring as well as the debt burden and the age of plants. So I don't think that’s unique to Cleveland State.”

Moody’s decision centered around CSU’s $422 million in outstanding debt, as well as the challenges the university faces due to declining enrollment and demographic headwinds.

Moody’s also cited CSU’s rising age of plant and limited spending on capital, “placing pressure on both wealth and liquidity, and, over time, brand and strategic positioning.”

e biggest reason for the negative outlook was CSU’s decision to close its Fenn Tower residential hall for at least this academic year

Despite the challenges, CSU’s

A2 issuer rating remains intact thanks to the fact that the university has $342 million in total cash and investments and holds strategic importance as Cleveland’s only four-year public university.

A2 ratings are considered high quality with a very low credit risk.

Moody’s also noted CSU’s com-

petitive pricing and diverse program o erings, and the fact that its leadership team has been proactive, introducing measures like voluntary separation programs for faculty and sta to stabilize the situation. e organization also a rmed CSU’s A3 rating (uppermedium grade and low credit risk) on its Euclid Avenue Development Corporation bonds.

Here are the key variables that will impact CSU’s outlook moving forward:

◗ Improving operating performance

◗ Managing enrollment challenges

◗ Finalizing and implementing a strategic plan

◗ Minimizing draws on reserves (CSU will use up to $10 million in reserve funds to balance this year's budget.)

◗ Avoiding an increase in debt

“Over the next 12 to 18 months, they will be evaluating us on these criteria,” Addington said. “At that point, the agencies typically either a rm our rating and then change our outlook to stable, or they would downgrade us.

“So we will be focused on obviously maintaining our credit rating.”

Cleveland State has spent the

last six months addressing a projected $40 million budget gap, including o ering a Voluntary Separation Incentive Plan (VSIP).

CSU expects to save $10 million this year due to the VSIP. As of Sept. 30, 54 faculty members and 95 sta ers had already accepted the VSIP or planned to accept it by May of 2025. CSU has also lost 22 faculty members to non-VSIP departures and laid o nine sta members.

CSU estimates it will save $20,320,561 through faculty and sta reductions, which is close to its goal of $20,525,400.

e university also saw encouraging enrollment numbers for the fall, which ultimately came in 4% above projections in CSU’s fall census. Cleveland State surpassed its budget projection in seven of

eight enrollment categories — the outlier was international graduate students — allowing the university to grow its full-time enrollment year over year.

“I think you saw that in the rst quarter we are on target for improving operational performance and eliminating the de cit,” Addington said. “And to the extent we're able to show that we have made progress in each of these ve, we're hopeful that we would lose our negative rating. at's the plan.”

Among Northeast Ohio’s public four-year universities, Moody’s gave both Kent State (in June 2022) and Youngstown State (in August 2023) stable outlooks in their most recent ratings, while the University of Akron earned a negative outlook in January 2024.

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Bedrock plans hotel and music venue for riverfront

By Stan Bullard

A 17-story building dubbed “Rock and Roll Land” with an immersive music and theater experience along with a hotel and new retail space is proposed by Bedrock Cleveland as the next building at its development along the Cuyahoga River.

The proposed 500,000-squarefoot building — a little more room than Oswald Tower in the Flats East Bank Neighborhood — and associated infrastructure improvements would have more than $424 million in costs eligible for about $40 million in Transformational Mixed Use Development tax credits pending with the Ohio Department of Development.

The real estate company affiliated with Cleveland Cavaliers owner Dan Gilbert said the proposed building would be connected to both Tower City’s retail center and Rocket Mortgage Fieldhouse.

The structure would have a central lobby that Bedrock said would serve as “the vortex where guests and music fans will be able to dine, socialize and see performances. From arrival to departure, guests will be treated to a full rock and roll experience.”

The structure builds on Cleveland’s growth as a destination center for visitors and fills a hole in the town’s offerings. Bedrock also underlined the role of projects providing public access to the riverfront and lakefront through the city’s Shore-to-Core-to-Shore plan.

“What has consistently been missing is a centerpiece of our community for the benefit of all Clevelanders,” the application stated, “and what has been continuously communicated and demand is embracement of and access to our waterfronts.”

The number of seats in the entertainment venues, as well as the

number of rooms and brand of the proposed hotel, are not included in the application, along with costs for constructing the project.

A likely prospective flag is that of Shinola, the hotel among Bedrock’s Detroit real estate projects. The building is one of about 20 proposed by Bedrock for the slope. The framework for the riverfront redo already is enshrined in previous conceptual plans Bedrock developed with city

SpringHill Suites in Independence sold to Seattle group for $18.7M

By Stan Bullard

The four-floor SpringHill Suites in Independence was acquired Wednesday, Nov. 13, by an affiliate of a Seattle-area hospitality firm pushing east for investments.

The new owner is an affiliate of Trimark Hospitality which paid $18.7 million for the 121-room building. Al Jiwani, Trimark president, wrote in an email that the deal is the hotelier's first in Ohio and part of a "strategy of expanding our holdings further east."

The seller was JAGI SpringHill Suites, an affiliate of Janus Hotels & Resorts, a Boca Raton, Florida-based developer that built it in a joint venture in 20016. The project was developed on an unused portion of the parking lot of Holiday Inn Rockside, which another Janus affiliate owns. The

SpringHill Suites overlooks the Rockside Road interchange with I-77.

Michael Nanosky, Janus president, said in a phone interview that the company shed the property because "it was a good time to sell. We're opportunistic." In addition to the Holiday Inn, the company owns the Candlewood Suites in Independence and Comfort Inn in Middleburg Heights. It has no immediate plans to sell more properties here, but he added that it depends on someone making an offer.

Opportunistic sale, indeed. The sale price for the SpringHill Suites is about $155 a key, the secondhighest price paid per room in Northeast Ohio in the past two years, according to a report by CoStar, the online realty data provider.

officials and other stakeholders.

Additional elements of Bedrock’s plan for revitalizing the riverfront including other buildings and steps to provide better access to the river help justify the funding request. Those include multiple buildings and the creation of public use areas on the riverfront, now crisscrossed with roads leading to huge parking lots on both sides of Canal Road.

The application also refers to fu-

ture residential components of its plan with mixed-income rental and home ownership, likely apartments and condominiums. However, it will not be undertaken until the proposed Rock and Roll Land and Global Peak Performance Center are underway. Construction of the Global Peak Performance Center began in October.

The application noted about 600 units are rising on Scranton

Peninsula across the river from Tower City that will open in 2025 and that recent downtown apartment buildings and office-toapartment conversions have “increased the city’s overall vacancy rate.” Downtown Cleveland Inc. currently puts downtown apartment occupancy at about 90%.

The application also indicates that Bedrock in the future would revitalize the retail section of Tower City with a “central eatery and food hall” combined with undisclosed entertainment destinations.

In response to questions about the proposed plan, Kofi Bonner, Bedrock CEO wrote in an email, “Bedrock can confirm that preliminary planning is underway for a variety of mixed-use development in downtown Cleveland, and we look forward to sharing additional information soon.”

Discussion of the plan is hypothetical, as the application notes the transformational mixed-use credit is essential for the project to proceed. That is in part because of the challenges in making the 100-foot drop from the Tower City parking lots to the river accessible to public use through a staircase, the project’s buildings and parks.

Competition for the state grants is intense. About 30 projects from around the state have sought a total of $250 million in state grants, but the state has only $100 million to award.

Bedrock is competing with other large local projects for funds, including a mixed-use district proposed by the Cleveland Browns for a site on Lou Groza Boulevard in Berea and additional funds to support the latest building at the Van Aken District in Shaker Heights.

The TMUD applications were disclosed following a public records request. NEOtrans blog and WEWS-TV 5 previously reported on the plans.

The price is exceeded only by the $201,901 price per room paid by Richmond, Virginia-based Apple Hospitality REIT (NYSE: APL) when it acquired the  Courtyard Cleveland University Circle in 2023.

Cuyahoga County assigns the SpringHill Suites a market value of $12 million for property tax purposes. Trimark acquired the SpringHill Suites in a joint venture with Apex Rockside, a private equity group, which owns 33% of the building according to county land records.

SpringHill Suites is a moderately priced upscale brand of Marriott. Trimark owns 16 other hotels, all in Arizona, California and Washington, according to its website. Trimark also owns and operates gas stations and a Seattle-area chain of coffee shops.

Dan Gilbert’s real estate company proposed an entertainment and retail space with a rock-and-roll theme behind Tower City. | STAN BULLARD

A rendering shows Bedrock’s vision for a stretch of riverfront land behind Tower City in downtown Cleveland. BEDRoCK/ADJAYE ASSoCIATES

The SpringHill Suites hotel in Independence | CoSTAR

Beachwood to pursue housing on Fairmount property

By Alexandra Golden

Following resident feedback and a community engagement forum, the city of Beachwood chose to pursue residential housing on the former Anshe Chesed Fairmount property during a committee of the whole meeting on Wednesday, Nov. 13.

The city purchased the 16.8 acres of property at 23737 Fairmount Blvd. for $8 million in June and took ownership on July 30.

On Oct. 1, the city of Beachwood sent out a survey via email asking residents to share their feedback on the future use and to choose from four different categories: arts and culture, religious institutions, residential housing, and sports and recreation.

Residents were asked to rank the different categories from one (highest priority) to four (lowest priority.)

Of the four, residential housing was ranked the top property by 238 residents with sports and recreation coming in a close second with 221. Arts and culture was ranked highest priority by 132 residents and religious institutions was last with 48.

A community engagement forum was held on Nov. 7 and attended by 114 residents virtually and 80 in person, said Ben Lombardi, communications manager for the city. One common theme from residents, Lombardi pointed out to the council, was the future traffic and potential traffic issues that could arise regardless of what type of residences are built. (According to a Google map of the location, there is only one entrance point to the land off Fairmount Boulevard.)

All of the council members present agreed that housing was the next step for this property, but Beachwood Mayor Justin Berns stated that the administration is recommending a community of homes for residents 55 and older. (Council members June Taylor and Joshua Mintz were not present).

“We believe that this aligns with the majority of people who are here,” Berns said. “ ... This will give people who currently reside in Beachwood a place to age.”

Housing for aging residents was one of two options in a PowerPoint presentation from the community engagement forum, the other being single-family homes.

With the property taking up almost 17 acres, councilwoman Ali Stern pointed out that with such a large amount of space, the city could possibly zone part of the property for residential needs and another part to “meet other needs that we have in the community.”

“I think that housing is the most suitable solution,” councilmember Ali Stern said. “I think it allows us as a city to get a return on our investment different from recreation spaces, which would require

further investment from the city.”

Councilman Eric Synenberg mentioned the city should “maximize the amount of housing they can do there.” Rather than multiple high-rises, though Synenberg suggested having at least one or two condominium buildings in the front of the property facing Fairmount Boulevard for those who may want to downsize and don't want to live in a singlefamily home.

Regarding the future of the building of the former Fairmount Temple, the city’s assessment deemed that it is “cost prohibitive to rehab even a portion of it for different use or a future use,” Lombardi said.

Due to the “deep emotional ties” people have to the temple and the property, Stern asked if there were ways to preserve any element or

physical structure of the physical building. It was stated that it could be possible to incorporate those elements and possibly even the architectural style.

The city is currently doing surveys on the site, said Tina Turick, city administrator, including a utility survey to see what is available there and an asbestos survey relative to the building.

The next step for the city is presenting council with a detailed plan for the process at their Dec. 4 meeting, which includes outlining all the steps and what they are recommending. But Turick said the city believes this could take nine to 12 months to complete.

This includes the city creating a request for qualification (RFQ) for contractors to work on the project, putting a team together to review the qualifications, narrowing down

the candidates to two or three and then putting out a request for proposals (RFP). After receiving proposals, they would be reviewed and then those plans would be brought before the council. Additionally, there are zoning changes that will have to be made before closing on the deal. The property is currently zoned for U-5, which is for institutional-type use. City Planner George Smerigan stated that the council will likely have to create a new zoning district as none of the ones they currently have would work for the future plans.

Smerigan added that he would like to write the zoning around the design rather than anticipate it and end up having to grant dozens of variances in the future for it. Zoning takes a minimum of 90 days.

First Federal of Lakewood sells building to COHatch for $1.5M

By Stan Bullard

An affiliate of COHatch, the Columbus-based co-working provider, acquired a building in downtown Lakewood for $1.5 million on Friday, Nov. 15 for what will become its third Clevelandarea location.

The building on the west end of the 14800 block of Detroit Avenue was sold by First Federal Savings & Loan Association of Lakewood. The financial institution intends to retain its landmark headquarters on the same block.

The building COHatch bought was previously a former Society Corp. (now KeyCorp) branch the S&L bought in 1993. The structure dates from 1920.

Erin Maxson, COHatch head of national digital and marketing, confirmed the purchase in an

email and said it fits the company's criteria perfectly.

"The building is exactly what we look for," Maxson said, a "historic renovation opportunity, great space for community gathering,

and in the right neighborhood. We are doing our usual mix of coworking space, private offices, meeting rooms, and event space."

She said COHatch has had a location in Lakewood on its mind

for several years and its members have frequently requested it add a location there.

"We hope to be open by the end of 2025," Maxson said.

officer for First Federal, said in a phone interview that selling the one-time bank branch afforded it an opportunity to support additional business growth and promote community activities in Lakewood.

"This aligns with our values to support the community we serve," she said. "And it gets us out of the real estate business with this property."

Kovacs said the S&L remains committed to keeping its headquarters in downtown Lakewood. It will continue to own the remainder of the block on the north side of Detroit where its main entrance and large banking room is behind a classical facade.

COHatch has a location in Ohio City and another at Beachwood Place Mall in Beachwood. Besides Columbus and Cleveland, it has locations in six other large cities.

The 16.8 acres of property of the former Anshe Chesed Fairmount Temple will be turned into housing. JASoN SmALCer WITH LIZASUeProDUCTIoNS.Com

Valerie Kovacs, chief marketing

COHatch acquired the building at the northeast corner of Detroit and Cook avenues in Lakewood for its third Cleveland location. | CoSTAr

Investors accuse Solon-based Locus Solutions of fraud

By Jeremy Nobile

A group of investors in Locus Solutions, a biotechnology company headquartered in Solon, is accusing some of the business’ key leaders of fraud, “operational incompetence” and running the business to the “brink of financial ruin,” according to a recently filed federal lawsuit.

The lawsuit claims that company leaders have kept the business going through financial challenges — which investors were allegedly not clearly informed of — by repeatedly taking on debt.

As a result of the company allegedly defaulting on one of its loans, however, a restructuring plan reportedly was proposed that would effectively wipe out the equity and debt held by the plaintiffs, whose combined investments in the company may total around or more than $5 million.

Those investors are attempting to get their money back.

The related complaint was filed on Oct. 28 in U.S. District Court for the Northern District of Ohio.

Listed plaintiffs include Blue Ocean Legacy Trust; David Horsford; Quorum Alternative Investments LLC; Jim Levin; Orion Legacy Trust; Thomas J. Zaffiro, Richard C. Perlen; and PS Investment Group LLC.

Representing plaintiffs in the case is attorney Stephen Rosenfeld of law firm McDonald Hopkins.

“The plaintiffs have lost millions of dollars and are on the verge of having their entire investments in Locus wiped out,” Rosenfeld said in a statement. “They filed their lawsuit for fraud and breach of fiduciary duty after they uncovered extraordinary details about the company’s management decisions and financial transactions. We think the allegations of the lawsuit speak for themselves.”

Listed defendants include Locus co-founder and former CEO Andrew Lefkowitz; David Heidecorn; Trisha Lukasik; Thomas Vetrano; and Locus Solutions LLC.

An attorney for defendants is not currently listed in court documents.

However, Locus general counsel Michele Smolin told Crain’s that Locus “will not discuss any litigation and has no comment other than to affirm that the claims have no merit and Locus will defend the case vigorously.”

Company background

Locus, which comprises a variety of subsidiaries, is an ag-tech business that has billed itself as a maker of green biosurfactants and agricultural biologicals.

According to a company description, Locus Fermentation Solutions, which was launched in 2014, “uses patented biomanufacturing technology to deliver biological alternatives to chemicals that accelerate the profitable meeting of decarbonization goals for clients. These solutions are tailored to address global ESG challenges—including climate change, food security, product sustainabil-

ity, water contamination, oil and mineral demand, and more. Once field proven, the biobased ingredients are commercialized through industry-specific operating divisions.”

One of those divisions is Locus Agriculture, which operates a carbon farming business called CarbonNOW that Crain’s profiled in 2022.

As of May 2023, Locus had more than 160 employees in 11 offices across five states, according to court filings, plus more than 600 patents.

Allegations of ‘ineptitude, greed and deception’

The lawsuit claims that “through their ineptitude, greed, and deception,” defendants “swindled Plaintiffs out of millions of dollars and eventually ran Locus into the ground.”

“Perhaps with what began as wide-eyed naiveté, Defendants hawked Locus’s intellectual property in green biosurfactants (valued at a half-billion dollars) as a sure-fire commercial hit,” according to the complaint. “But when their operational incompetence led Locus to the brink of financial ruin, Defendants lied to their investors to maintain their positions and then, ultimately, to further their conspiracy to steal the still-valuable intellectual property from the investors.”

The lawsuit claims that plaintiffs invested in the business while it was in startup mode.

By 2021, though, Locus had allegedly fallen into a “precarious cash flow position” and was unable to secure “sufficient additional equity investment,” according to the complaint.

The company sought a $150 million loan from Jefferies Group but that amount “shrank” to $117 million after the global investment bank’s “due diligence unearthed massive resume fraud by cofounder Sean Farmer” related to his scientific credentials, according to court documents.

Farmer and Lefkowitz are the cofounders of Locus. Farmer became the company’s chief science officer, and Lefkowitz became CEO.

In April 2023, Locus announced raising $117 million in debt from Jefferies — an amount that brought its total financing at the time to more than $250 million.

"The immediate need for solutions that reduce the global carbon footprint has never been more urgent; but production limitations, high costs and inconsistent performance have hindered implementation of biological alternatives," Lefkowitz said at the time. “Through scientific breakthroughs backed by intellectual property, strategic funding and corporate partnerships, we're accelerating the pivotal role customized biologicals can play in advancing the decarbonization and ESG goals for our clients.”

However, Locus netted just $63 million from that $117 million loan, according to the complaint. The suit alleges this is because Jefferies

charged more than $7.7 million in legal and underwriting fees for the loan on top of requiring a $15 million insurance policy against the risk of default, plus a $30 million interest reserve account.

Details about the original loan amount being reduced due to Farmer’s resume fraud and the “draconian” terms of that loan itself allegedly were concealed from the plaintiffs.

“Had investors known that the Jefferies Group only gave Locus the loan because of the insurance policy (which ultimately paid off the loan), investors would not have agreed to proceed as they did with subsequent conversions, investments and agreements to restructure their notes to the Company,” according to the lawsuit.

The lawsuit describes the Jefferies loan as a “short-term BandAid” and alleges that the Locus board “floundered in executing the next equity round,” which led to the company realizing in October 2023 that it needed to borrow more money.

Lefkowitz and Heidecorn, a Locus board member, reportedly participated in a two-month bridge loan that allegedly netted the latter $100,000 in fees and a $1.6 million equity interest on the $2.5 million that he provided.

“But even more egregious than depleting Locus’s meager funds with such an outrageous shortterm profit was the proverbial hook it gave him to take over Locus,” according to the complaint.

“And the Board apparently waived the preemptive rights of all the other equity holders — to benefit Heidecorn — as no other equity holder was given this opportunity.”

Jefferies reportedly provided $1 million toward that bridge loan while collecting an arranger fee of $214,375 and an upfront fee of $40,000, according to the lawsuit, while Lefkowitz put in $500,000 but did not collect any fees.

Conspiracy to defraud

By January 2024, Locus was looking for more money.

That month, according to the lawsuit, the board closed on a $50 million loan with Nuveen, a Chicago-based subsidiary of the Teachers Insurance and Annuity Association of America.

A $30 million portion of that loan was immediately funded, and the remainder was to be drawn later in the year.

Locus discussed the $30 million debt raise with AgFunder News, framing it as part of a strategic restructuring, though it did not disclose the lender.

According to the complaint, the net for Locus from that loan was decreased by $10.7 million in fees charged by Nuveen. Heidecorn also reportedly participated in that transaction by investing $700,000 of the proceeds from the bridge loan.

“What the Board concealed from investors was that this loan effectively gave the company to Nuveen (and Heidecorn),” according to the complaint. “It included revenue covenants so unrealistic and oppressive that Locus had no chance of meeting them — indeed, Locus violated them within weeks. And a breach of the covenants gave lenders control over Locus’s valuable IP portfolio that secured all of the loans.”

While details regarding those covenants have not been disclosed, they allegedly included goals for revenue growth beyond anything the company had previously met.

“This led the lenders and the Board to undertake a restructuring that essentially wipes out the interests of the equity holders and unsecured lenders and hands ownership of the company and its valuable IP over to the secured lenders (i.e., Nuveen and Heidecorn),” according to the complaint.

The lawsuit claims that “Heidecorn’s actions — together with other Board members and Nuveen — to denude existing investors of their value and ... to install him as the head of the expected new company to emerge from the current restructuring plan constituted conspiracy to defraud.”

The lawsuit alleges that in May 2024, at the direction of the Locus board and Nuveen, Lefkowitz was terminated as CEO and replaced by interim CEO Joseph Concannon of FTI Consulting.

According to his LinkedIn page, Lefkowitz did, in fact, leave Locus in May.

Smolin did not respond to a request to clarify who is leading Locus following the departure of Lefkowitz.

Locus Solutions’ Solon headquarters | CoSTAR

Judge dismisses fraud lawsuit against Society Brands

By Jeremy Nobile

A Stark County Court of Common Pleas judge has dismissed a lawsuit against Canton-based Society Brands that was brought by the owner of one of its portfolio companies who accused the business and its owners of fraud.

Trina Felber, the founder of Primal Life Organics, a Fairlawnbased maker of natural and organic skincare and dental products, accused Society and its leaders — CEO Michael Sirpilla and President Justin Sirpilla, who are brothers — of making “serial misrepresentations” about its enterprise that allegedly induced Felber to agree to a sale that she otherwise wouldn’t have.

Judge Frank Forchione dismissed the case on Wednesday, Nov. 13.

As Crain’s detailed earlier this year, Felber alleged that Society failed to follow through with the sort of support that she was expecting post-acquisition, including hiring additional employees and providing marketing help. Her

advertising budget was allegedly cut in half just weeks after the deal closed, according to the complaint.

Felber further claimed that Society’s purported tech stack, which was expected to help “supercharge” her company, according to the complaint, barely exists.

After the partnership soured, Felber claimed that she and the business she founded 12 years ago suffered damages “in excess of” $15 million after Primal Life was acquired by Society in a deal that was publicly celebrated in January.

“Relying on Sirpillas’ false representations, Felber eventually agreed to sell (Primal Life) to defendants in December 2023,” according to a complaint filed in May. “Felber relied on Sirpillas’ specific and repeated representations that their company’s ‘techenabled platform’ and their ‘team of experts’ would help her grow and supercharge her company, while Felber would continue to run her company as ‘as usual.’”

As Felber allegedly raised questions and concerns with the Sirpil-

las about issues like these and the plan for growing her brand, they “quickly turned hostile, concocting a litany of false grounds to terminate Felber for cause,” according to the lawsuit.

In his ruling, Forchione stated, “ ... accepting the factual allegations made in Plaintiff’s Amended Complaint as true, the Court sees no facts that would lead it to conclude that Defendants breached their fiduciary duty, breached the Employment Agreement or the terms of the LLC Agreement.”

“Plaintiffs were represented by competent counsel and negotiated at arm’s length the terms of the agreements; they were not tricked into signing anything and the

terms were clear,” according to the ruling. “They received generous compensation. While Plaintiffs may not, at present, be satisfied with the outcome of the business transaction does not necessarily render it fraudulent or create a justiciable action.”

Richard Vasquez, an attorney representing Felber, said, “We will be appealing the ruling, which we respectfully believe was incorrect under settled Ohio law. We have no further comment at this time.”

Andrew Stebbins, an attorney representing Society Brands, provided the following statement on behalf of the company: “We were happy to receive the news that the Primal Life Holdings case has

been dismissed. As we have stated from the beginning, we have built Society Brands through hard work and dedication, and we have spent countless hours building our reputation through strong relationship with our brand founders.""We have always believed the best way to establish these relationships is through this honesty and ethical dealings," the statement continues. "We have always stood by our actions with Primal Life Holdings and Ms. Felber and are glad that the Court agreed that the claims in the lawsuit were without merit. We will continue to build Society Brands, and work with brand founders, as we have for the past several years.”

CRAIN’S PARTNER

Haslam family gifts $30 million to Cleveland Clinic

By Paige Bennett

The Bailey-Haslam family has given Cleveland Clinic $30 million to support and expand research in cardiovascular genetics.

The funds will establish the Haslam Family Section for Cardiovascular Genetics at the Sydell and Arnold Miller Heart Vascular and Thoracic Institute on the health system’s Main Campus and provide genetic testing to family members of patients diagnosed with an inherited heart condition.

They have also created the Haslam Family Endowed Chair in Cardiovascular Medicine.

The Clinic announced the donations Monday, Nov. 18 in a news release.

“While heart disease remains the leading cause of death for both men and women in the United States, it’s essential our research expands to better understand those who may be at risk, guide treatments and develop new therapies,” Clinic president and CEO Dr. Tom Mihaljevic said in a provided statement. “We are grateful to the Bailey-Haslam family for their generous support that is helping push this vital patient care and research forward.”

The gifts come from Jim Haslam, founder of Pilot Corporation, and his wife, Natalie; Browns owners Jimmy and Dee Haslam; former

Tennessee Gov. Bill Haslam and his wife, Crissy; and Ann HaslamBailey and her husband, Steve. The family made its first donation to the Clinic in 2014.

Ann Haslam-Bailey described the donations as “deeply personal” to the family as she and her brothers, Jimmy and Bill, lost their mother and grandfather to aortic dissections. She said Clinic

doctors saved her life when she had a full aortic dissection 10 years ago.

“We understand the critical role of genetic research in this disease and hope this gift can positively impact other families,” she said in a provided statement.

The Clinic says caregivers in the Haslam Family Section for Cardiovascular Genetics hope to fur-

Cleveland Foundation creates a city-centric donor investment pool

By Kim Palmer

In October, The Cleveland Foundation quietly launched a first-ofits-kind mission-related fund that invests exclusively in locally based public companies.

The $37 million Impact Cleveland Pool combines popular philanthropic tools: place-based giving and mission-related investment for donors looking to invest in Greater Cleveland. It allows donors to invest their philanthropic dollars with Clevelandbased public companies and then have those returns used in Cleveland through Foundation grants.

The Cleveland Pool includes over 20 of the region’s strongest performing public companies — which Rosanne Potter, the foundation's chief growth officer and chief financial officer, said will fluctuate over time — including SherwinWilliams, Applied Technology, Avery Dennison, Cleveland-Cliffs, Eaton and FirstEnergy.

Potter settled on grouping the nearly two dozen large market cap companies for the donor fund after she found out about the Cerity Partner's Cleveland Index, a list that shows local public companies that consistently outperform the Standards & Poor’s 500.

“We had been talking about how we could create a placebased investment tool,” Potter said. “Then we saw the Cleveland

Index at the Greater Cleveland Partnership annual meeting. I actually took a picture and said, ‘Here is our pool.’ ”

Potter pulled nearly two dozen of the Cleveland Index companies to make up the majority of the assets alongside 15% invested into two local venture capital funds, the Ohio Fund and JumpStart's Next Fund.

With the inclusion of the local entrepreneurial venture capital funds, the Cleveland Pool fits the definition of a mission-based investment: a tool popular with investors who want their money to go to companies that provide a positive social impact in return.

The Foundation has more than $770 million in mission-related investments as 2024 draws to a close.

Following the ESG — environment, social and governance — model, the foundation focuses on investments that support local job creation, real estate improvement, business startups sustainable energy, equitable financial services, health care and biotechnology.

The Cleveland Pool is the first philanthropic investment offered by a community foundation to combine both a hyper-local investment and grant funding option.

“It is a unique proposition to have the impeccable stewardship

of assets and the assurance affecting things locally that will pull donors and organizational partners into this new mission-related investment work,” Potter said.

The place-based mission fund, even with a required minimum investment of $10,000, is expected to be popular with the foundation donors, Potter said.

Having a Cleveland-centric donor fund has already attracted some important donors. After the foundation pulled $30 million to begin the fund, within a month, Huntington Bank, KeyBank and a few other members added $7 million more in total to the fund.

Sean Richardson, Huntington Bank’s regional president, said the bank donated to the Cleveland Pool as a way to help bolster the regional economy and workforce.

"We see our support for the Impact Cleveland Pool as part of our local community investment strategy, which is focused on helping people achieve affordable home ownership, supporting small business success, and investing in community development like the social impact work being done by the Cleveland Foundation."

It is also not the first time the foundation used its massive $3.3 billion endowment to boost returns on an investment directed at local economic development. Earlier in the year, the Cleveland City Council approved a plan to house

clinicians to detect inherited heart conditions, allowing for more personalized care plans.

The Haslam Family Endowed Chair in Cardiovascular Medicine is held by Dr. Milind Desai. He is also the director of the Hypertrophic Cardiomyopathy Center, medical director of the Aorta Center and vice chair of the Heart Vascular Thoracic Institute at Cleveland Clinic.

“I am grateful to the BaileyHaslam family, whose longstanding commitment to giving back will now help save the lives of those who may otherwise not know they are at risk for cardiovascular disease,” Desai said in a provided statement. “It’s estimated around one in 500 people have hypertrophic cardiomyopathy, the most common inherited heart condition, which is a lot of people, so it’s vital family members of anyone who has an inherited heart condition be evaluated.”

ther research and discover new genetic markers in cardiovascular diseases using genetic patient data.

Cardiovascular genetics focuses on the diagnosis and treatment of genetic conditions affecting the cardiovascular system, including cardiomyopathy, heart failure and vascular disease. Genetic testing makes it possible for

The Clinic ranked No. 1 in the nation for cardiology, heart and vascular surgery for the thirtieth consecutive year in U.S. News & World Report’s 2024-2025 Best Hospitals ranking.

Last fall, Jimmy and Dee Haslam announced a $20 million gift to University Hospitals, the health care provider for the Cleveland Browns, for the new Haslam Sports Innovation Center.

a $50 million site readiness fund at the foundation.

Under the agreement, the foundation will manage the fund — created to assemble, remediate and prepare vacant property for commercial development — reinvest the returns while soliciting private donations and grow it to $100 million over the next decade.

Place-based investments can be a targeted vehicle for companies like KeyBank — which contributed both $20 million to anchor the city's site fund and "between $1-5 million" to the Cleveland Pool.

The Cleveland-based bank, and other large banks have been pressed by council members to find ways to reinvest in the city's perpetually under-banked neighborhoods. Programs like the Cleveland Pool provide companies a means to focus philanthrop-

ic giving on specific communities and issues, Potter points out.  Huntington said in a statement that the work it does with the foundation is rooted in a belief in the power of local investments to create lasting change and "a shared commitment to create lasting change and to foster growth and opportunity through placebased investing."

The plan, Potter said, is to get the Cleveland Pool to $50 million so that it can support the biggest and newest local companies without sacrificing the tax benefits donors would get from a high-yield investment.

“We don't have any formal rate of returns yet, because it's just November, but we did back-test and anticipate a 25% or double-digit return by this time next year,” Potter said.

The Cleveland Foundation’s new Impact Cleveland Pool aims to connect place-based giving with mission-related investment. | VoCoN

Connecting Talent

Medical Mutual CEO Glass steps down from role

By Crain’s Staff

There's a change at the top at health insurance company Medical Mutual, as it announced on Wednesday, Nov. 13, that Steven Glass has stepped down as president and CEO as of Tuesday, Nov. 12.

In his place, Tony Helton, executive vice president and CFO, will serve as interim CEO, with Glass staying on as a consultant to the company "to ensure a smooth transition through June 30, 2025."

In a press release announcing the move, Medical Mutual said its board of directors "feels no rush to name a permanent CEO."

Robert King Jr., the board chair, said in the company's statement, “We thank Steve for his service to Medical Mutual, and we wish him the best going forward. During his time as CEO, Steve has helped us develop new capabilities and opportunities while moving our strategic plan forward and ensuring we have a strong path ahead. We have every confidence that Tony will provide exemplary leadership as we provide continuous, seamless service for our customers.”

in 2005. Prior to working at the Clinic, Glass was vice president of finance for MedStar Health, a nonprofit health care provider in the mid-Atlantic region.

Glass was also a member of Leadership Cleveland's class of 2024.

Like Glass, Helton came to Medical Mutual from Cleveland Clinic where he worked for 18 years, overlapping with Glass and even serving as interim CFO for the Clinic following Glass's departure for Medical Mutual.

Tony Helton, executive vice president and CFO, will serve as interim CEO, with Glass staying on as a consultant.

No reason was given for Glass's departure or its suddenness. Crain's has reached out to Medical Mutual for further comment.

For his part, Glass said, “I am very proud of the role I played in helping steer Medical Mutual in an exciting new direction. Tony Helton and the executive leadership team are well-positioned to execute the strategic plan and deliver outstanding outcomes for Medical Mutual. The organization is well positioned for success with even greater prospects for the future."

Glass's departure comes just two-and-a-half years after he assumed the president and CEO roles, succeeding then-CEO Rich Chiricosta. Glass joined Medical Mutual after two decades at Cleveland Clinic where he became CFO

JumpStart names new board chair, successor to Coughlin

By Jeremy Nobile

JumpStart Inc. has installed a new board chair and six other new board members as the organization continues to reshape itself for the future.

The organization’s new board chair, effective Nov. 14, is José Vasquéz, founder and CEO of Cleveland-based Quéz Media, who JumpStart describes as a “pioneer in leveraging cutting-edge technology and innovative strategies to drive business growth.”

Vasquéz also is chief marketing officer at Growth Opportunity Partners Inc., which provides lending and coaching assistance to small businesses looking to grow.

Vasquéz has served on the JumpStart board for the last seven years, most recently serving in the role of vice chair. As chair, he succeeds Jeanne Coughlin, CEO of the Coughlin Group, who “led JumpStart through three pivotal years of growth and transformation, including navigating a CEO transition and shaping a new three-year strategic plan,” according to JumpStart.

comes at a critical time for JumpStart as we continue to evolve and reimagine how we serve our clients and community,” Jacono said.

“His deep understanding of entrepreneurship and inclusion will help guide new opportunities and partnerships. I am excited to work alongside him and the rest of the board to shape JumpStart’s next chapter.”

In a statement, Helton said of his move to interim CEO at Medical Mutual, “I join the Board in thanking Steve for his impactful service, and I wish him all the best. I look forward to serving in this new capacity and assisting the Board as we all build on the positive momentum of our new strategic plan.”

In November 2022, Medical Mutual moved its HQ from its long-time home at the corner of East Ninth and Prospect Ave. to its operations center in Brooklyn. (In June 2024, it was announced the building would be redeveloped into a mixed-use project that includes apartments, a boutique hotel and some retail space.)

In January 2024, the company announced it was acquiring Paramount Health, a Toledobased health insurance company owned by ProMedica. Paramount, which offers Medicare Advantage, Individual ACA, commercial group and short-term insurance plans, does business primarily in Ohio and Michigan.

That CEO transition led to the installation of Julie Jacono in November 2023. The organization’s second-ever chief executive, she succeeded founding CEO Ray Leach, who shifted away from JumpStart to focus on standing up The O.H.I.O. Fund, which marked its first close and investment this summer.

“José’s visionary leadership

Along with Vasquéz being named chair, the venture development organization also announced six new board members: Ann Graffice, executive vice president of global marketing and public affairs, Hall of Fame Resort and Entertainment Co. Dean Uher, senior vice president, regional underwriting executive, Credit Products Group, PNC

Jim Ellis, managing director of pre-market innovations, Cleveland Clinic

Karan Jolly, managing director at Ernst & Young Capital Advisors LLC

Marco Grgurevic, managing vice president of minority business growth, Greater Cleveland Partnership

Paul Wellener, retired vice chair, Deloitte

“The strength of our board lies in its diversity of thought, experience and passion,” Vasquéz said in a statement. “I am excited to lead in this new capacity as we connect entrepreneurs to the resources and connections they need to succeed, creating pathways for innovation and wealth generation for communities across Ohio.”

Nordson names next director of foundation, community relations

By Paige Bennett

A longtime Sherwin-Williams Co. employee has been tapped to serve as director of the Nordson Foundation and Community Relations.

Maria Spangler, director of community engagement at the Sherwin-Williams Foundation, will join the Westlake-based organization effective Dec. 2, Nordson Corp. announced Tuesday, Nov. 19.

Spangler will succeed Cecilia Render, the foundation’s leader of 25 years, who, over the summer, announced her plans to retire. Render will remain with the organization through the end of the year. The pair will work together in the interim “to ensure a smooth transition,” the company says.

Spangler brings more than 15 years of experience in program development, growth and impact measurement to her new role, according to Nordson. She has held several positions at SherwinWilliams.

Her latest role saw her lead

“the development and activation of a community engagement strategy to deploy high-impact and mission-aligned investments through the Sherwin-Williams Foundation, as well as building and advancing a corporate giving program.”

Spangler said in the announcement that she has long admired Nordson’s giving program, as well as Render’s work through Nordson Impact, which includes the company’s employee volunteer

programs, matching gifts, scholarship opportunities and international giving.

“Nordson’s commitment to giving truly stands out,” Spangler said. “It is beyond a dream for me to have an opportunity to be part of that effort. I look forward to partnering with Naga (Nordson President and CEO Sundaram Nagarajan) and the leadership team to achieve the company’s giving objectives and to empower all employees to make a difference in their communities.”

Nagarajan said in a statement that he welcomed Spangler’s experience building relationships with nonprofits and her focus on creating opportunities and engaging Nordson teams from around the world.

Nordson Corp., founded in 1954, engineers and manufactures precision technology for various markets. Its foundation has awarded tens of millions in grants for education, arts and culture, civic affairs and human welfare.  Spangler was not available for a phone interview on Nov. 19.

Maria Spangler

Steven Glass Medical Mutual’s headquarters

Caribbean-based group makes splash with $327M acquisition

By Dan Shingler

Bleachtech, a chemical company in the Medina County community of Seville that produces products for water purification and other applications, has been purchased by a Caribbean-based conglomerate for $327 million.

That’s the largest acquisition ever for ANSA McAL, a large, multi-industry company based in Trinidad and Tobago, a small island nation in the far southeast corner of the Caribbean Sea just off the coast of Venezuela.

But it might not be the last acquisition the group makes in Northeast Ohio, where it says it’s already talking to some other possible candidates for purchase as it seeks to build its chemical business.

“Bleachtech is the beginning of our foothold on the chemical sector in the U.S.,” ANSA McAL Group Head of Marketing and Communications Sarah Inglefield said in discussing the Nov. 6 acquisition.

ANSA McAL is not a well-known name in Northeast Ohio, but it’s a very big deal in Trinidad and Tobago and aims to become a big name in chemicals.

The company has holdings in the automotive, finance, real estate and construction industries, among several others. In 2023 it reported earnings of $130 million on revenues of just over $1 billion.  Bleachtech, which Inglefield said employs about 30 people in Seville and another 36 at its operations in Virginia, produces sodium hypochlorite (bleach), sodium hy-

BANKING

From Page 1

Friendlier regulations

So what does a friendlier regulatory landscape look like?

It begins with Trump revamping the heads of some key regulatory bodies. That includes immediately installing new leaders for the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency, which process and propose new banking regulations, and naming a new director of the Federal Housing Finance Agency.

New appointments there also would play a role in reshaping the makeup of the Federal Deposit Insurance Corp. board currently chaired by Martin Gruenberg. Gruenberg’s five-year term was not slated to end until 2028, but he has previously announced that he would step down — which comes in response to a scandal over sexual harassment and other misconduct — when a successor is confirmed.

The elimination of Rohit Chopra as director of the CFPB is a big one.

“What you’re going to find in (Chopra’s) place is a much more bank-friendly agency than in the past,” said Kevin Jacques, a former economist and bank regulator

droxide (caustic soda) and hydrochloric acid.

Those chemicals are primarily used in the water purification industry, which ANSA McAL has identified as a growth market, Inglefield said. Due to increased awareness of water-quality issues, as well as increasing concern about contaminants such as viruses and bacteria, several sources say the water purification market is poised for growth. In 2023 Forbes cited market research indicating the global water-purification market was at $43.2 billion in 2022 and was expected to grow to $120.38 by 2032.

There will be no job loss at ei-

with the U.S. Department of the Treasury, who spent a chunk of his career advising the administrations of former presidents Bill Clinton and George W. Bush. “If you look in terms of regulatory oversight power and rulemaking authority, the CFPB is about to be weakened considerably.”

“It is not going back to where it was pre-financial crisis, but it will be closer to pre-financial crisis than post,” Jacques said. “And if you believe there is a need for the CFPB — and I do — the oversight of financial institutions as it relates to consumer lending just got softened.”

In terms of more tangible impacts, an administration that is more friendly and less adversarial for banks is expected to result in some key regulations being scaled back or tossed entirely.

Groups such as the OBL hope this translates to looser capital requirements — compared to what’s been crafted under the Basel III Endgame rules — and possibly scrapping the FDIC’s brokered deposits rule, both of which have drawn strong resistance from the banking sector.

Kleymeyer also highlighted the potential for Section 1071 of the Dodd-Frank Act, otherwise known as the small-business data collection rule, to not go into effect.

“The rules that could be delayed or amended or withdrawn

ther Bleachtech facility as a result of the acquisition, she said.

Rather, ANSA McAl says it will be investing in the facilities it just purchased and hiring more people as it expands them.

“We can 100% confirm that there are no layoffs as a result of this acquisition,” Inglefield said. “In fact, there will be an expansion of new roles — we’ve already identified about 15 new roles with the plant.”

One reason ANSA McAL was attracted to Bleachtech was the fact that it has room to expand, she said In addition to its existing facilities, which include 26,000 square feet of production and op-

would help our banks get credit out there to their communities in a more efficient manner,” he said. “A lot of rules that are pending would add overly burdensome box-checking that makes applications for credit, the distribution of credit, more expensive and more time-consuming.”

Boost for M&A?

This expected friendlier regulatory landscape also brings the potential to spur M&A activity, which was been more tightly scrutinized under the Joe Biden administration. If capital requirements are lessened, and deal scrutiny is lighter, that could help inspire some deals to come together.

In a recent investor note from Piper Sandler & Co., bank analysts Scott Siefers and Frank Williams suggest a Trump presidency coupled with Republican control of both the House and Senate are “certainly positives for bank stocks, in our view.”

“From capital requirements (where fears of punitive increases were already being dialed back, anyway), to areas such as ‘junk fees’ and overdraft, to M&A,” they write, “the list of burdens that could be eased seems extensive.”

As far as deal activity, within the large regional bank space, they said, “We can at least put M&A back into the discussion; whereas

“There’s a significant investment being made immediately and that will continue to develop,” she said.

The expansion also fits with ANSA McAL CEO Anthony N. Sabga III’s quest to double his company’s revenues, with chemicals playing a major role.

“Bleachtech is a significant addition to our overall business portfolio. We intend for this to grow over time, so we will be creating new career opportunities almost immediately as we enhance our service to our loyal and new customers across the United States,” Sabga said when the deal was announced.

In that same announcement, former Bleachtech owner Richard Immerman said he was glad his company was going to be part of ANSA McAL.

erations space in Seville, the company sits on 40 acres and has about 30 of those acres available for expansion.

“The idea is to retain all of the existing customers and expand the offerings we offer to them,” Inglefield said.

The company is already investing in upgrades at Bleachtech’s existing facilities, which it plans to expand further in the future, Inglefield said.

The anticipated growth in water treatment is a big factor driving ANSA McAL’s decision to make a large, but undisclosed, investment to expand Bleachtech, Inglefield said.

it has been largely nonexistent over the past few years on a punitive regulatory backdrop.”

That applies to several prominent Ohio banks viewed as “large regional buyers,” they added, which includes Cincinnati’s Fifth Third Bank, Columbus’ Huntington Bank and Pittsburgh-based PNC Bank.

Cleveland’s KeyBank could also be in the market for deals next year as a result of the aforementioned regulatory factors as well as KeyCorp’s increased capital pool, which comes from its $2.8 billion capital infusion from The Bank of Nova Scotia (Scotiabank).

Cautious optimism

In general, a more hospitable regulatory environment could lead to reduced expenses for banks and open up more lending opportunities. These are viewed as net positives for the industry.

But these benefits could be affected by other factors. And that’s where the cautious side of this industry optimism comes into play — along with the obvious uncertainty of how the future plays out. After all, it’s worth noting that Trump campaigned on dismantling the Dodd-Frank Act “disaster” during his first presidential run, but that didn’t exactly happen.

“I think the expectation is that

“I have been impressed with the care, professionalism, and rigor ANSA McAL brought to this process,” Immerman said. “Their intention to invest and grow this business is good news for all of us who helped build, and work for, BLEACHTECH, as well as for our suppliers and customers. ANSA McAL has shown a willingness to listen and engage both internally and externally, which speaks volumes about their commitment to local priorities, as well as the communities’ needs going forward.”

Now ANSA McAL is looking for more acquisitions in the chemical sector, including in Northeast Ohio, Inglefield said.

“It is a very attractive region for us, I’ll say that and we’re in conversations with a couple of players now,” she said.

(the Trump administration) should be a little bit more business-friendly environment. So that should be something that gives some incentive for customers to think about it’s time to start investing,” Bryan Preston, Fifth Third’s chief financial officer, told investors at a recent BancAnalysts Association of Boston Conference.

“From our perspective, we are cautious around the fiscal situation still and what it means from a long rate perspective,” he said. “We are cautious that inflation could potentially come back. And if long rates were to move up further, that would be something that would potentially be a crosswind that would kind of balance some of the benefits that people are expecting out of the election.”

Meanwhile, the consensus among most economists is that Trump’s plans for tariffs and mass deportation could have a negative impact on the economy, which could weaken loan demand, not boost it.

“If (Trump) puts in tariffs the way he is talking about — tariff policy was a primary driver of the Great Depression — and institutes this immigration policy, that could lead to a very significant recession and higher prices, not lower prices," Jacques said. "You could have inflation and recession simultaneously. And that combination would be a disaster economically.”

Bleachtech’s main facility in Seville is being expanded, thanks to the capital of its new owner and high expecations for growth. | CoNTRIBUTED

Clinic courts in Independence as its practice facility. The Cleveland Cavaliers will vacate that practice facility in 2027 following the completion of the Cleveland Clinic Peak Performance Center, the first vertical development for Bedrock’s $3.5 billion Cuyahoga Riverfront Master Plan.

The WNBA currently has 12 teams and will add the Golden State Valkyries in 2025, along with teams from Toronto and Portland in 2026. Portland team owners Alex Bhathal and Lisa Bhathal Merage paid a leaguerecord $125 million for their expansion franchise, which was awarded in September. That was triple the cost of the Valkyries and $10 million more than the $115 million paid by the Larry Tanenbaum-led Kilmer Sports Ventures, who were awarded the Toronto franchise in May.

At least 10 other cities are planning to bid for the 2028 expansion team: Austin, Texas; Philadelphia; Milwaukee; Kansas City, Missouri; Miami; Nashville; Charlotte; Houston; Orlando and Denver. The bids are due at the end of January.

The WNBA has enlisted the New York investment bank Allen & Company to facilitate the expansion process, and some bids already have ascended to between $200 million and $250 million, according to Sports Business Journal. (REG is also a customer of Allen & Company.)

One reason for the interest, SBJ noted, is that the WNBA recently negotiated a $2.2 billion media rights deal that starts in 2025 and could exceed $3 billion if the league exercises its opt-out clause in 2028 and renegotiates.

“Rock Entertainment Group is committed to diversifying our platform to provide access to sport and equality on many levels," Barlage said in REG's official statement confirming the news. "It has long been woven into our mission to utilize our platform to unite our community in ways that drive equal opportunities across the board. To that end, we are actively pursuing bringing a WNBA expansion team to Cleveland. Cleveland’s vibrant ecosystem of world-class assets, passionate and engaged sports fans, coupled with a culture that has allowed professional sports to thrive, make our Team and city uniquely positioned to provide an ideal home for the W’s next franchise.

in 2005. The Rockers were owned by former Cavs owner Gordon Gund, who folded the franchise following the 2003 season, citing a lack of revenue and poor attendance (a franchise-low average of 7,400 fans per game). The Cavs had also just won the NBA's draft lottery and the right to select LeBron James, turning the Rockers into an afterthought.

But after losing money for decades, the WNBA is on a major upswing, thanks in part to rookie phenomenon Caitlin Clark of the Indiana Fever. After helping this year’s Women’s Final Four in Cleveland set attendance and ratings records, Clark turned pro and immediately lifted all of the league's boats. TV audiences increased 170%, year over year, while in-game attendance grew by double digits for every team. Clark’s Fever led the league in attendance with a record 17,035 fans per game, 319% more than last year, according to Front Office Sports.

While REG's leadership had been intrigued by the WNBA for years, expansion discussions didn't turn serious until January. REG executives officially began work on a potential bid in June and made an initial presentation to the WNBA in early September, building its case around four areas:

and front office personnel with both the Cavaliers and Charge.

Culture: The Cavaliers are off to a franchise-best 15-0 start and have sold out 108 consecutive games. REG has seen significant success with the Monsters, who led the AHL in attendance last season with a franchise-record 10,347 fans per game. The Charge also has seen significant growth since moving from Canton to Cleveland and the team is poised to break into the top five in the G League in gate receipts. REG’s message to the WNBA was clear: We have a track record of building successful teams, and we'll use our considerable resources to ensure the WNBA team is successful as well, on and off the court.

Fan base: While Northeast Ohio doesn’t have the explosive population growth of markets like Austin, Charlotte and Houston, it’s still a top 20 market in the U.S., one with more than 3.7 million people across Cleveland, Akron and Canton. While there’s always a risk of sports saturation, REG believes Cleveland can support a WNBA team, especially since the league plays in the summer and appeals to a more female-heavy fan base than the city’s other professional teams.

sponsorship of Cleveland’s WTA’s event, “Tennis in the Land,” and by supporting the Cleveland Sports Group’s bid for a NWSL team. Female hoopers are the fastestgrowing segment of the organization’s Cavs Academy business and REG believes the success of this year’s Women’s Final Four proves the city can — and will — support women’s basketball.

“This is about creating platforms and opportunities for women and for leveling the playing field,” Barlage said. “And I think there's an appetite for that on many, many, many levels.”

The counterargument is that women’s basketball already failed in Cleveland, but REG officials point to the fact that four of the original eight WNBA franchises folded between 2003-2009 — the Rockers, Charlotte Sting, Houston Comets and Sacramento — while a fifth, the Utah Starzz, have since relocated twice, first to San Antonio and later to Las Vegas. As noted above, both Charlotte and Houston are now hoping to land an expansion team. While some of the WNBA bids have been highly public — highprofile athletes like Chiefs quarterback Patrick Mahomes (Kansas City) and Suns guard Kevin Durant (Austin, where he played one season of college basketball with the University of Texas) — the Cavaliers are taking a more low-key approach, in part because that’s the way the league prefers it.

REG will launch a website and social media handles and plans to engage the community with some activations involving the brand and the colors, but it won’t resemble Cleveland Sports Group’s “Back the Bid” campaign for an NWSL team, which asked fans to spend $26 for a T-shirt and the right to secure priority tickets when they went on sale. Instead, REG will be more subtle. Instead of “We Got Next,” it’s more like, “We want to be next, and we’re willing to do what it takes to get there.”

“There's no reason why we can't have in Northeast Ohio what everybody else has,” Barlage said. “We have the same opportunities in front of us. It's just incumbent upon us to harness them and grow them and build them and do it the right way.”

EXECUTIVE RECRUITER

"Over the past few years, Cleveland has held some of the most significant sporting events in the world, including the 2021 NFL Draft, the 2022 NBA All-Star Weekend and the most impactful 2024 NCAA Women’s Final Four in the history of the event. This energy and momentum give us the confidence that a WNBA Team will thrive in Northeast Ohio.”

Gilbert has been intrigued by the idea of adding a WNBA team for years, and would likely have kept the Rockers if they still existed when he bought the Cavaliers

Ownership: Gilbert is one of the most successful business executives in America, with an estimated net worth of more than $25 billion, and he has been willing to make significant investments in his sports properties over the years, particularly when it comes to rosters, facilities and the fan experience.

Infrastructure: Rocket Mortgage FieldHouse completed a $185 million renovation in 2019 and is considered one of the best venues in the country, which is why it was able to secure both the 2022 NBA All-Star Weekend and the 2024 Women’s Final Four. And while the Cleveland Clinic Courts date to 2007, the practice facility is still one of the best in the NBA. The organization also has a talented group of coaches

“There’s no reason why it can’t be us,” Barlage said. “We control and manifest our own destiny in so many ways. You could argue, ‘Why would you build a Cleveland Clinic Peak Performance Center in Northeast Ohio? Why would you invest tens of millions of dollars in our venue on an annual basis? Why would you be the third-largest landlord behind the Cleveland Clinic and the Catholic Diocese in Northeast Ohio? Why would you make all of the investments that Dan has made in Detroit and Cleveland?”

The answer, Barlage said, stems from one of Gilbert’s favorite “isms”: “You’ll see it when you believe it.”

“And we see it every day,” Barlage said. REG has looked to build on the momentum surrounding women’s sports in recent years through

FIRSTENERGY

From Page 1

The company intends to submit a new plan, ESP VI, early next year, but can’t guarantee if and when regulators will approve that plan, said Lauren Siburkis, the company’s supervisor for state and regulatory communications.

No one’s arguing that the utility can’t go back to its former plan. Ohio law says it can, though state regulators need to approve that move, which they are now considering.

Until then, FirstEnergy is operating under its current modified plan without the modifications it sought.

FirstEnergy says that in going back to ESP IV, it will automatically

be able to include extra surcharges, or riders, that were attached to rates under that plan.

Some consumer advocates and energy experts either question whether that’s the case or deny outright that the utility can automatically re-attach its old riders to its prior plan.

If FirstEnergy is right, it would likely be no big deal for the company. It previously operated under the former ESP IV plan with the riders attached. But it does not want to operate for long under its current modified plan, Siburkis said.

If it’s not right, and FirstEnergy’s critics are correct, the company stands to lose huge amounts of revenue that the riders to ESP IV would provide. The longer it takes to get a new plan approved, the longer it would be in that position.

How the issue is resolved will affect how FirstEnergy can set rates for its Ohio Edison, Toledo Edison and Cleveland Electric Illuminating Co. subsidiaries.

The outcome could hinge on a case currently before the Ohio Supreme Court involving a similar situation with AES subsidiary Dayton Power and Light, which also sought to revert to its former ESP by withdrawing a pending plan. It also seeks to keep the riders that were attached to that plan.

In that court case, consumer advocates argue that the Dayton utility can’t simply revert to its old ESP with the riders but can only go back to its standard service offering based on the market rate for electricity.

PUCO spokesman Matt Schilling said the commission ultimately will

PEOPLE ON THE MOVE

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FINANCIAL SERVICES FIRM

Clearstead

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decide whether FirstEnergy can reinstate its former ESP with the riders attached. But the outcome of the Dayton case, which is now awaiting a decision, is likely to play a large role in that outcome.

“The commission will ultimately make that determination,” Schilling said. “Having said that, the AES Ohio case is the only other time a utility reverted back to its previously authorized ESP, so it serves as a precedent. You’ll notice most of the commenters in the docket referencing it, including PUCO staff.”

For its part, FirstEnergy insists its interpretation of the law is correct and that it can revert to the old ESP, riders included.

“The ESP statute (Ohio Revised Code Section 4928.143) and PUCO precedent provide that when an ESP is withdrawn, the electric utility company will operate under the provisions, terms and conditions of the prior ESP. This includes riders,” said Siburkis, via email.

The Ohio Consumers’ Council disagrees.

former PUCO Chair Sam Randazzo, who died by suicide a few months after he was indicted in the House Bill 6 bribery scandal. In the wake of the HB 6 scandal, FirstEnergy admitted to bribing then-Ohio House Speaker Larry Householder to get state legislators to approve subsidies for the nuclear and coal-fired generation plants that FirstEnergy owned at the time.

Householder was found guilty of accepting those bribes and is now in federal prison, while FirstEnergy has paid substantial fines and jettisoned some of its top executives, including former CEO Chuck Jones.

House Bill 6 passed but its provisions were rescinded as a result of the scandal, which federal prosecutors said was the largest bribery case in Ohio history.

Matt Brakey, CEO of Chagrin Falls-based Brakey Energy, who consults with many consumers of large amounts of power to help them plan and budget for their future costs, tends to agree with the OCC regarding whether riders are guaranteed when a company reverts to a previous plan, though he said he did not have a position on the alleged side agreements.

Clearstead is pleased to announce that Jean Heath, CIMA®, has joined the firm as Senior Managing Director, Advisor Solutions National Sales. Jean will be a member of the firm’s Sales and Marketing Team, leading sales efforts for Clearstead’s Advisor Solutions offering within their newest division, Clearstead Advisory Solutions. Jean brings over 20 years of experience in sales and national accounts within the RIA industry. She earned her Bachelor of Arts from New Jersey City University.

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Frantz Ward LLP

Frantz Ward welcomes Susan M. White to the firm as a partner. Susan represents clients in the construction industry across transactional and litigation matters, navigating complex claims from initial notice to resolution and providing strategic legal support to general contractors, subcontractors, project owners, and suppliers. Susan earned her J.D. from Cleveland State University College of Law, where she contributed to the Cleveland State Law Review, and her B.A. from Ohio Wesleyan University.

The Firm welcomed Associate Taylor Carlucci (née Smoske) to its Cleveland Trusts & Estates team. Carlucci focuses on probate and fiduciary litigation, estate and trust administration, estate planning and has administered both probate and non-probate assets, and estates throughout Northeast Ohio. She has been named among Ones to Watch in each of the last two years by Best Lawyers in America. Carlucci earned a J.D. from Brooklyn Law School and a B.A. from the University of Massachusetts Amherst.

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“FirstEnergy seeks to reinstate its most recent electric security plan (ESP IV) … But Ohio law requires a different, more protective result for FirstEnergy’s consumers,” the OCC said in stating its opposition to FirstEnergy’s plans on Nov. 14.

“Ohio law requires a utility withdrawing from an electric security plan to revert to its latest approved ‘standard service offer.’

A standard service offer relates to generation charges only—and does not include the many costly distribution charges the PUCO approved for FirstEnergy under its ESP IV,” the OCC added.

Ohio Attorney General Dave Yost’s office, representing the PUCO, filed in the Dayton case, stating that claims that a utility can’t include provisions such as riders in returning to a former plan are not correct.

Brakey said FirstEnergy is taking a risk that could cost it “at least tens of millions of dollars.”

“The magnitude of the risk to FirstEnergy is that it could lose all of its PUCO riders. ... That would be no-man’s land for them and they could potentially lose a lot of revenues,” Brakey said.

Brakey also said when FirstEnergy withdrew its ESP V plan and this controversy emerged, it “potentially pulled the rug” out from under some big customers with their energy plans already in place.

Customers in two FirstEnergy programs, a transmission pilot program and another program under which customers agree to interrupt their power usage to help the company avoid service interruptions, could be dramatically affected.

“This assertion lacks any merit,” the AG stated. “Under the governing statutes, an ESP qualifies as a standard-service offering. As the Commission correctly recognized, an electric utility may fulfill its obligation to provide an SSO with either an ESP or a market-rate offer.

With regards to FirstEnergy, the OCC also claims the surcharges that FirstEnergy was allowed to add to ESP IV were the result of “undisclosed side agreements between the former PUCO Chair and FirstEnergy.”

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“If we go to ESP IV with the riders, participants in those programs should be largely fine. The problem is if we go to a market-rate option, without the riders, those programs could be scrapped — those riders are what allow for those programs,” Brakey said.

He said some customers could see their rates triple if that happens.

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